SMART COUNTRY

During the six months of the COVID-19 pandemic, the world has gone through serious changes in the conventional rules of operation of industrial, financial and trade enterprises, as well as in consumer behavioural algorithms. Quarantine restrictions and measures for social distancing have significantly increased the demand for digital technologies and accelerated the processes of virtualisation of social and economic life. According to experts, these new trends are very clearly manifested in Azerbaijan, where it is planned to accelerate the development of electronic public services and digital transformation of various sectors of the economy and social sphere.

Constrained virtualisation

Currently, more than 7 billion people have to agree to more or less limited movement. About a third of the world's population is in quarantine and self-isolation. The state of emergency encourages the world community to pay more attention to the introduction of 21st century technologies to mitigate the effects of the epidemic. Even the institutions that have resisted change for decades are forced to reformat their activities, shifting to digital platforms partially or completely. This unprecedented situation contributes to the invention of new ways to virtualise economic and social processes and to use them to derive economic benefits.

Social pressure of the pandemic on the markets, organisations, societies, and individuals has generally accelerated the Fourth Industrial Revolution (4IR), which continues to blur the line between traditional relationships and the digital world. Quarantine restrictions have increased the need for services and e-commerce, banking and insurance sectors to fully implement artificial intelligence in their day-to-day activities and communication with customers. High-speed 5G network made it possible to start the use of the telemedicine system widely. At the same time, medical applications provide communication between patients and doctors, pharmacies, giving useful tips on combating the virus.

Naturally, the use of the Internet has significantly increased globally (60%), making the services of data centres and cloud services more popular. This demand is growing rapidly, taking into account the needs of electronic and social media. At the same time, there is a worldwide interest in the introduction of the Internet of Things (IoT) solutions, Smart City system, digital training platforms, access to augmented and virtual reality (VR), the massive use of drones, etc.

Growing demand

The pandemic has seriously changed the behaviour of consumers, employees, teachers, schoolchildren and students in Azerbaijan too. Quarantine and social distancing in Baku and other large cities of the country have stimulated the demand for digital technologies in education and medicine, increased the need for remote access to e-government services, as well as online services of companies, mobile and e-banking services in e-commerce. At the same time, many companies switch to remote working mode and have to transfer their services to digital format. As a result, despite the recession and decline in production in a number of sectors, the pandemic accelerates the digital transformation of various sectors of the national economy.

In the long term, world economic growth will depend on human intelligence and innovation more than on natural resources.

In general, Azerbaijan is flexible enough to respond to new challenges, and this work began long before the COVID-19 pandemic and the following changes. Relevant authorities implement large-scale projects in the country to develop the e-government system, continue to create a digital trading hub and to expand the coverage of electronic communication tools.

The government of Azerbaijan is developing a five-year State Strategy for Digital Transformation aimed at digitalising economic and social processes, expanding the use of artificial intelligence in all areas of life.

Moreover, due to the unpredicted timing of the pandemic, the issues of remote control and operation of company offices and state organisations, as well as distance learning become even more relevant. And these challenges urge the expansion of Azerbaijan’s cooperation with leading world companies.

In his recent video conference with Microsoft Vice President Philippe Rogge, Azerbaijani President Ilham Aliyev said that Azerbaijan’s basic strategy is to reduce dependence on hydrocarbon resources and achieve sustainable development based on innovation, new technologies and modern management. “Azerbaijan is already becoming a regional hub of the industrial revolution. During the recent Davos Economic Forum, we signed a document with Microsoft to establish the Davos Regional Centre for the Fourth Industrial Revolution in Baku, which is going to cover not only Azerbaijan, but also the regional states,” president said during a video conference. He emphasized that the partnership, which has been going on for more than 15 years after the start of Microsoft’s activities in Azerbaijan, has great potential and future. At the same time, the government’s agenda includes issues related to the detailed development of an artificial intelligence strategy, as well as cybersecurity aspects, since this is a problem that all countries should be prepared for.

According to President Ilham Aliyev, it is clear that the pandemic is forcing us to consider distance education from a new perspective. “Although we did not have enough time to adapt to the situation, we could take certain steps, since our schools and universities have been closed since March. We must prepare for the new school year, which begins September 15th. We do not know what the pandemic situation will be by then; we do not know whether we can open schools and universities, so we must be prepared for the worst case scenario. We should think about this right now, including issues related to the distant educational system,” Mr. Aliyev said and underlined his willingness to expand cooperation with Microsoft in this matter.

Mr. Rogge proposed expanding the use of Microsoft’s international experience in  telecommunication by creating virtual desktops to provide people with secure access to infrastructure at any time. “One of our main achievements was establishing communication for nearly 1 million Azerbaijani students and students: together with partners and employees of the Ministry of Education, this work was completed in just a few weeks,” Rogge said. In addition, Microsoft will cooperate with Azerbaijan in preventing cyber attacks, as well as in cloud computing. Moreover, Microsoft's artificial intelligence platform will soon master the Azerbaijani language. Azerbaijan has great potential for creating a Silicon Valley analogy in the Absheron Valley.

These measures will enable Azerbaijan to become a centre of innovation in the region. According to experts, given the prospect of investment in this area, this idea can and should be implemented as soon as possible.

Smart technologies for Smart City

Azerbaijan’s cooperation with CISCO, another world leader in digital technologies, is advancing equally well. According to American expert Greg Weiner, joint projects of Baku with CISCO contribute to the transformation of Azerbaijan into a regional digital hub. “We live in a world of creeping information war, which can be called the Third World War,” Weiner said.

According to the Minister of Transport, Communications and High Technologies, Ramin Guluzade,  CISCO’s network technologies and the Azcloud platform were used to create an infrastructure to conduct high-level video conferences in Azerbaijan. This is the Connected Government project for video conferencing, which is an important and safe means of organising work during the COVID-19 pandemic. Both parties are studying the cooperation in improving control over water reserves, as well as a the joint educational project Connected Schools.

Since almost a large part of human activities is subject to virtualisation, Azerbaijan will have to speed up work on the Smart City, which involves the large world companies. The Ministry of Communications is discussing with companies CISCO and Quantela their participation in the Single Country Panel concept for the integration of all smart systems in Azerbaijan.

Azerbaijan was one of the first countries of the region to launch the Smart City project, first in Baku and then in other cities of the countries. In recent years, Smart City systems have been established in Europe, the US, Japan, and other developed countries of the world, providing for the integration of several IT technologies and the introduction of IoT systems for managing city property, including, in particular, connecting schools, hospitals, libraries, public transport, power plants, water supply and waste management and other public services to information systems to allow for optimising control over urban infrastructure and improving the quality of life of the population.

“We went even further and began to work on the Smart Nation program. Digitalisation of our country, the use of IT in all areas is our priority,” President Aliyev said.

Step into the future

The goal of all the above projects is to ensure Azerbaijan’s participation in the global trend of the Fourth Industrial Revolution (Industry 4.0). “Everyone should know that this area is a step into the future. We cannot be late. If we are, we will lose. Therefore, we have mobilised all our resources, including financial, intellectual and human ones. I am sure that in the coming years, Azerbaijan will further improve its leading position in information and communication technologies,” Mr. Aliyev said.

This means the automation and robotisation of production, the widespread use of artificial intelligence, creation of big data systems, introduction of digital technologies in all areas of the economy and public infrastructure. The Azerbaijan Digital Hub program can play a crucial role in the implementation of Industry 4.0 projects in Azerbaijan. Implemented by Azerbaijan’s backbone Internet provider AzerTelecom, it provides for the construction of an optical backbone infrastructure within the country and beyond (in the Central Asian region), transformation of Baku into an Internet traffic exchange point (IXP), and the construction of a large regional data centre. Designed for three stages, it will make an important contribution to the development of the digital economy and, as a result, the establishment of a digital ecosystem that ensures the dynamic development of startup projects.

According to most experts, for the effective development of IT startups and the establishment of innovative production, Azerbaijan needs to accelerate the process of creating venture funds and attracting business angels specialising in investing startups and other initiatives in high technologies. Since 2018, the country has been exploring the possibility of establishing an Investor Club in IT (analogue of venture funds) including large local IT companies as members. The club will focus on the commercialisation of promising startup projects through equity participation. Accordingly, despite the difficulties caused by the pandemic and the decline in world oil prices, it is necessary to provide funds in the investment policy for 2021-2022 to support innovative projects and the most promising infrastructure initiatives in the IT sphere.