




































AGORA International Journal of Economical Sciences, http://univagora.ro/jour/index.php/aijes 

ISSN 2067-3310, E-ISSN 2067-7669 

Vol. 17, No. 2 (2023), pp. 170-180 

 

170 

 

MAIN DIRECTIONS OF ACCELERATING REGIONAL SOCIO-

ECONOMIC DEVELOPMENT IN THE DIGITAL ERA 

 

A. T. RUHANGIZ, A. F. ZAUR 

 

Aliyeva Tofik Ruhangiz1, Aliyev Zaur Farid2 

1 Azerbaijan Architectural and Construction University (AzACU), Azerbaijan, ORCID ID 

0000-0002-5214-006X, E-mail: ruhangiz.aliyeva@azmiu.edu.az 
2 Azerbaijan State Economic University (UNEC), ORCID ID 0009-0003-1190-6991 

                              

Abstract: International experiences show that one of the most important indicators for 

the sustainable and balanced development of each country is the socio-economic development 

level of the country's regions. The digital information presented by the digital economy is 

widely used in the direction of solving the socio-economic problems of the regions and opens 

great opportunities for increasing the effectiveness of the economic policy of the regions. 

Ensuring sustainable economic and social development of regions is part of the regional 

economic policy implemented by the state. Currently, in the international practice, the regional 

policy of the state is evaluated as an activity of managing economic and social development in 

the country through the creation of economic relations between the state and the regions of the 

country.  Despite the implementation of a number of state programs in the field of socio-

economic development of regions in the country, as well as the attention paid to regional 

development issues in a some  program documents of the government and the achievement of 

certain progress in this direction, sharp differences and inequality between the levels of socio-

economic development of the country's regions continue. does. This difference is particularly 

sharp between the Baku-Absheron zone and all other regions of the country. In the article, the 

current state of inequality in regional socio-economic development is analyzed based on 

official statistical data and its causes are investigated. Then, the policy steps implemented by 

the government so far in order to eliminate this problem are examined.The article examines 

the impact of measures resulting from the analysis of state programs and strategic road maps 

on the socio-economic development of regions. In the end, the economic benefits of digitization 

in economic regions were specified and presented in the form of recommendations. 

 Keywords: region, socio-economic development, economy, international experience, 

digital technologies. 

 

INTRODUCTION 

 In the digital era, equal development of regions remains the main way of economic 

development. It has become the main source of sustainable economic development in 

developed countries by creating conditions for attracting the natural, labor and financial 

resources of underdeveloped regions to the economic cycle in order to ensure interregional 

equal development. The cheap labor reserves of underdeveloped regions, rich natural 

resources, and favorable geographical location require investors to invest in these regions. 

Even today, the issue of ensuring the balanced development of the country's regions has 

become one of the very important factors that ensure the fairness and usefulness of the state's 

regional policy in our country. This, in turn, ensured that the solution of a number of issues 

related to economic development was brought to the fore both theoretically and practically.  

mailto:ruhangiz.aliyeva@azmiu.edu.az


Aliyeva Tofik RUHANGIZ, Aliyev Zaur FARID 

 

171 

 

The main goal of the article is to develop economically sound scientific and 

methodological approaches to identifying the socio-economic aspects of sustainable 

development of regions in the digital economy. 

 

   RESEARCH METHODOLOGY 

The methodological basis of the study was research by domestic and foreign scientists 

on various aspects of assessing the socio-economic development of regions, and articles from 

specialized journals. The article used research methods: comparative and SWOT analysis, 

systems approach. The regions are diverse according to their potential, according to the 

structure of their natural resources, according to the level of employment. The main factors that 

distinguish economic regions from the economic, geographical and historical point of view can 

be shown as follows: natural conditions and resources; economic-geographic location; 

territorial and field structure of regions; population settlement level; historical development 

features. (Ağayev, Mehtiyev, 2021) 

One of the stimulating forces of the economic development of any country is the 

organization of state regulation in the economic sphere. Today, at a time when economic 

subjects are given maximum freedom in the conditions of market economic relations, state 

intervention in the economy can only be done with certain regulatory instruments. We can note 

that for the realization of optimal public administration, it is necessary to ensure the full and 

careful use of the existing potential in this sphere, as well as to ensure the sustainable 

development of this field. 

As a result of the implemented economic policy, our country has progressed on the 

international level and the per capita national income has increased significantly. According to 

the classification based on the World Bank's atlas methodology, our country is included in the 

group of poor countries according to the level of national income per capita. According to that 

classification, Azerbaijan was then included in the group of low-middle-income countries, and 

then in the group of upper-middle-income countries. 

One of the important conditions for sustainable and balanced development in the country 

is ensuring that the general social and economic development of the country affects all its 

population and all regions at the same level. (Qasımov, İsrafilov, Hacızadə & Ağayev, 2006) 

 The territory of Azerbaijan seems to be divided into 2 parts, which differ from each other 

according to the level of socio-economic development and economic potential: 

1) approximately 75-80% of the country's economic potential is concentrated in the city of 

Baku and the Absheron-Khizi peninsula, which is only 6.8% of the country's territory and 

where up to 32% of its population lives; 

2) only 20-25% of the country's economy is formed in other areas covering 93.2% of the 

country's geography and 68% of its population.  (Azərbaycanın regionları,2023) 

At the same time, serious differences are observed between the mentioned individual 

regions according to the level of socio-economic development and economic potential. To 

better see and understand these differences, first, let's look at the regional territory and 

population structure of Azerbaijan by economic regions. 

 

 



MAIN DIRECTIONS OF ACCELERATING REGIONAL SOCIO-ECONOMIC 

DEVELOPMENT IN THE DIGITAL ERA 

 

172 

 

Table 1. Regional territory and population structure of Azerbaijan by economic regions in 

2022 (data as of January 1, 2023) 

 Territory  Territory  

 

 

 

100 

0 m2 

 

Share in 

the total, 

% 

Number, 

thousand 

people 

Share of 

total,% 

Baku city 2,14 2,5 2336,6 23,1 

Nakhchivan Autonomous 

Republic 

5,50 6,3 465,7 4,6 

Absheron-Khizi economic region 3,73 4,3 874,1 8,6 

Nagorno-Karabakh Shirvan 

economic district 

6,13 7,1 317,8 3,1 

Ganja-Dashkasan economic 

region 

5,27 6,1 596,0 5,9 

Karabakh economic region 8,99 10,3 736,4 7,3 

Gazakh-Tovuz economic region 7,03 8,2 674,4 6,6 

Guba-Khachmaz economic region 6,96 8,0 543,8 5,3 

Lankaran-Astara economic region 6,07 7,0 930,6 9,2 

Central Aran economic region 6,69 7,8 716,2 7,1 

Mil-Mugan economic region 5,67 6,5 520,2 5,1 

Sheki-Zagatala economic region 8,84 10,2 623,6 6,2 

East Zangezur economic region 7.47 8,6 300,4 3,0 

Shirvan Salyan economic region 6,08 7,1 491,3 4,9 

Republic of Azerbaijan, total 86,6 100 10127,1 100 

Source: Azərbaycanın reqionları ,2023 

 

The main differences in regional development in Azerbaijan are primarily reflected 

more prominently between the city of Baku and other economic regions. The differences 

between the regions in terms of the level of economic well-being of the population in the 

republic arose primarily as a result of the development of relevant production and service areas 

concentrated in Baku and the Baku suburbs. The development of regions requires large 

investments. However, the majority of foreign companies and enterprises are concentrated in 

the Absheron-Khizi economic region, especially in the capital city of Baku, therefore, the 

creation of a system for promoting the attraction of foreign investments to the regions remains 

relevant. 

The observed situation in the development of the regions in the country requires raising 

the level of socio-economic development of the regions and minimizing the difference between 

them by using the existing potential effectively. The fact that the problems of the development 

of the regions are closely related to each other implies their systematic solution, which acts as 

an important condition for the development of the regions. In this regard, at the current stage 

of development, the need for fuller use of the potential of the regions and their effective 

coordination requires the implementation of complex measures aimed at the socio-economic 

development of the regions. This could be achieved through the development and 

implementation of a new effective regional policy system. 



Aliyeva Tofik RUHANGIZ, Aliyev Zaur FARID 

 

173 

 

The existence of differences in socio-economic development between the regions of the 

country depends on many factors. The disproportionate distribution of productive forces 

between regions has created a sharp difference in the level of their socio-economic 

development. Thus, the concentration of the main part of the economy, especially the industry, 

infrastructure areas in Baku city, along with its faster development than in the regions, led to 

the worsening of the socio-economic situation in the regions and the flow of the population 

from the regions to Baku. (Azərbaycan Respublikasının iqtisadiyyat Nazirliyi, 2023). 

The economic policy implemented in the country in recent years has contributed to the 

comprehensive development of the country as a whole and the regions, to the rise of the special 

quality of the regions in macroeconomic indicators across the country, to the improvement of 

the provision of infrastructure in the regions, to the improvement of the level of communal 

services, to the creation of new production and processing facilities, socio-cultural facilities, 

investments, employment. has led to the increase, the further acceleration of the development 

of local entrepreneurship, the opening of new jobs, as a result, the reduction of poverty and the 

further improvement of the population's standard of living. (Əliyev,2016) 

It should be noted that during the period covering the last 5 years, the real GDP 

increased by an average of 6.4 percent (Fig. 1). We can note that the nominal GDP has 

increased by 65 percent. A 62 percent increase in the volume of GDP per person was observed 

during this period of time, with which our country rose from the 134th to the 85th place among 

the countries of the world. The social status of the population has changed significantly, and 

the poverty level has decreased from 40.2 percent to 4.9 percent in 10 years. (Azərbaycanın 

statistik göstəriciləri, 2023) 

 

Figure 1. Gross domestic product growth dynamics (in million manats) 

 
               Source: AR State Statistical Committee,2023 

  

The economic growth model implemented during the period of increasing oil revenues 

has created conditions and opportunities for the creation and increase of strategic currency 

reserves on a large scale, and as a result, it will be able to ensure the elimination of possible 

threats that the republic's economy may face. In addition, it should not be forgotten that it can 

be an important tool for the process of financing future economic growth. According to the 

information provided by the State Statistics Committee, the growth rate of economic 

development in the period covering the years 2018-2022 was 7.9 percent on average. The level 

of investment decreased by 6 percent compared to previous years. The fact that the economic 

growth model successfully implemented during 2018-2022 has reached the limit of "saturation" 

0,0
20000,0
40000,0
60000,0
80000,0

100000,0
120000,0
140000,0

  2018    2019    2020   2021     2022

ÜDM 80092,0 81896,2 72578,1 93203,2 133825,8GDP



MAIN DIRECTIONS OF ACCELERATING REGIONAL SOCIO-ECONOMIC 

DEVELOPMENT IN THE DIGITAL ERA 

 

174 

 

has revealed the importance of switching to a qualitatively new economic growth approach. 

(Dövlət Statistika Komitəsi,2023) 

Historically, the oil sector has been the main factor of economic development in 

Azerbaijan for many years. From 2018-2022, the contributions of non-oil sectors to economic 

development began to increase. According to statistical data, in 2022, an increase of 6.2 percent 

in the non-oil sector, 8.8 percent in the construction sector, and 7.6 percent in the service sector 

were observed. In addition, 11.5 percent economic growth was recorded as a result of the 

reforms carried out in the non-oil sector. (Dövlət Statistika Komitəsi, 2023) 

      SWOT analysis is widely used in the analysis of the current state of economic 

development in the strategic road map. (Azərbaycan Respublikasında kiçik və orta 

sahibkarlığın inkişafına dair Strateji Yol Xəritəsi,2016) 

 The SWOT analysis of the regions of the Republic of Azerbaijan is given in the table 

below (table 2). 

 

Table 2. SWOT analysis of the current economic situation in the regions of the Republic of 

Azerbaijan 

Strengths Weaknesses 

-Ensuring the stabilization of the macroeconomic 

environment in the regions 

- High labor force 

-Development of telecommunications 

infrastructure 

- Availability of wide opportunities for lifelong 

learning 

- Low labor costs 

- Satisfactory level of food self-sufficiency in the 

regions 

-It is difficult to get initial capital for entrepreneurship 

- Lack of interregional transport facilities at any level 

- Inability to develop the regional infrastructure at the 

desired level 

- Low state support for research and development 

- Inadequate coordination between the educational 

institution and the labor market 

- High military costs 

Opportunities Threats 

- Access to the European market 

- International cooperation and research 

opportunities in the field of science 

-Opportunities for new investors to enter 

- Development of local branches of foreign 

companies 

- Being able to stimulate regional economic 

growth with low taxes and low costs 

- The possibility of running out of natural resources 

- Low profitability of non-oil sector areas 

- Release of skilled workers to another country 

- Directing investments to infrastructure projects rather 

than to production areas 

 

As it is known from the analysis, there are wide opportunities and conditions for the 

regions of the Republic of Azerbaijan to reach a high level of economic development. So, 

today, the main strengths in the economic development of the country's regions are the stability 

of the macroeconomic environment, the abundance of the workforce, the development of the 

telecommunication infrastructure at a certain level, the availability of wide opportunities for 

lifelong education, low labor costs, and the satisfactory level of food self-sufficiency of the 

regions. which is one of the factors that create opportunities and conditions to overcome a 

number of obstacles in front of economic development. However, currently, the biggest 

potential opportunity of the country's regions is that the non-oil products produced in these 



Aliyeva Tofik RUHANGIZ, Aliyev Zaur FARID 

 

175 

 

regions are competitive in the European markets due to their quality and ecological purity. On 

the other hand, the creation of research and development centers by the state in the regions can 

be one of the main factors that stimulate development. 

In the country, the social development of the regions is as important as the economic 

development. One of the main factors of social development is the income level of the 

population. As a result of the economic development of the regions, the attraction of 

investments, especially in the non-oil sector, creates conditions for the creation of new jobs in 

this field and the employment of more people. 

 

Figure 2. Model for developing a forecast of socio-economic development of regions 

 

 
 

Study of the problem of socio-economic development of regions 

Analysis of the region's 

competitive advantages 

• Natural resource potential 

• Production potential 

• Human potential 

• Infrastructure potential 

 Institutional potential 

Analysis of the development of the region's 

external environment 

• Consumer regions 

• Supplier regions 

• Competitor regions 

• Intermediary regions 

• Factors of national and world market 

SWOT-analysis 

Strengths and opportunities of the 

external environment 

Weaknesses and threats from the 

external environment 

Using opportunities and minimizing threats 

Forecast of socio-economic development of regions 

Analysis and 

assessment of 

regional 

development 

alternatives 

Economic and social consequences 

of regional development 

Development 

of regional 

development 

scenarios 



MAIN DIRECTIONS OF ACCELERATING REGIONAL SOCIO-ECONOMIC 

DEVELOPMENT IN THE DIGITAL ERA 

 

176 

 

The following laws, decrees, orders and instructions were adopted by the President of 

the Republic of Azerbaijan, the Milli Majlis of the Republic of Azerbaijan and the government 

of the Republic in accordance with their authority to implement the regional policy and regulate 

the internal economic development of the republic. 

1. Law of the Republic of Azerbaijan on environmental safety. 

2. Law of the Republic of Azerbaijan on environmental protection. 

3. Law of the Republic of Azerbaijan on specially protected natural areas and objects. 

4. Law of the Republic of Azerbaijan on municipalities. 

5. State program of socio-economic development of the regions of the Republic of 

Azerbaijan (2004-2008) 

6. The State Program for the Socio-Economic Development of the Regions of the 

Republic of Azerbaijan (2009-2013) 

7. State program for socio-economic development of the regions of the Republic of 

Azerbaijan (2014-2018 years) 

8. State Program on Poverty Reduction and Economic Development (2005-2015) 

9. State Property Privatization Program 

10. State Program of Small and Medium Business Development 

11. We can give an example of laws as the main directions of the strategic roadmap for 

the national economy and the main sector of the economy. 

Despite the extensive development of the large-scale areas of the republic, there are still 

many unsolved problems in the field of state regulation and management of regions. Such 

problems are related to the new establishment of a single central authority for the management 

and regulation of regional development in many countries, including the Republic of 

Azerbaijan. Various functions of the state are performed by local and regional administrative 

bodies, that is, committees, ministries, national councils, and local self-government bodies. The 

state's regional management bodies are considered the main management bodies created in 

democratic societies. (Azərbaycan Respublikası regionlarının 2019–2023-cü illərdə sosial-

iqtisadi inkişafı Dövlət Proqramı,2019) 

Four State programs on socio-economic development of regions were adopted and 

implemented: the first state program (2004-2008); the second state program (2009-2013); the 

third state program (2014-2018); the fourth state program (2019-2023). 

The main goals set in the framework of this program are to support the development of 

business entities, especially to support the activities of small, medium, and micro 

entrepreneurial entities, to continue infrastructure projects, to increase the income level of the 

population, to develop the non-oil sector, to increase the activity of young people in the regions, 

to increase personnel training, to support the development of tourism services, to ensure the 

availability of financial services, to further strengthen social protection, to improve the 

environmental situation, to improve road infrastructure, and to carry out protection measures. 

(Babayev,2022) 

In recent years, digitalization has become one of the key areas of socio-economic 

development of regions. Access to digital technologies in the regions changes: the quality of 

life of people, makes the activities of industrial enterprises and agriculture more efficient, 



Aliyeva Tofik RUHANGIZ, Aliyev Zaur FARID 

 

177 

 

simplifies access to information, and simplifies access to clients for small and medium-sized 

businesses. (Sadıqov, Balayev,2020) 

The economic benefits of digitalization in the regions are: an open and accessible 

market; rapid receipt and processing of data, significant contribution to economic growth; 

creation of new jobs in industries; increase in labor productivity; accelerating the pace of small 

and medium-sized businesses; simplifying financial transactions for businesses; the emergence 

of new organizations interested in qualitatively new technological solutions. (Samara, 

Andronikidis, Komninos,Bakouros&Katsoras,2022) 

Social benefits from digitalization in the regions are: creation of digital public services; 

overcoming social inequality; the emergence of new opportunities to ensure people's lives; 

automation and robotiс of treatment processes, thereby improving the quality and accessibility 

of medical care; poverty reduction; reducing negative impact on the environment; increasing 

the availability of financial services. [Батракова,2019] 

It should be noted that the digital economy is a new type of economic relations in the 

regions. For its development, it is necessary to create digital infrastructure, new business 

models, build trust in the reliability and security of digital infrastructure, assess risks, train 

specialists, and increase the level of proficiency in information technology. 

In recent years, Azerbaijan has focused on such large projects as the creation of “smart” 

regions, cities, streets, and houses. With the deoccupation of Karabakh, the relevance of these 

ideas has increased. President Ilham Aliyev has repeatedly stated that such “smart” cities and 

villages will be created in the liberated territories. “Cities and villages in the liberated territories 

must be created based on the concept of “smart-city”, “smart-village”, that is, “smart city”, 

“smart village”. Work is already being carried out to ensure that the most advanced 

technologies in the world are used when carrying out urban planning and implementing projects 

there. (Azərbaycan 2030: sosial-iqtisadi inkişafın Milli prioritetləri, 2021) 

 It is planned that the Karabakh region will become a center of interest for technological 

investments, and will also play the role of an experiment in the application of smart urban and 

rural technologies in other regions of the country. 

Currently, 54% of the world's people live in cities, and the global population is projected to 

reach up to 9.7 billion people in 2050. Along with overall population growth, urbanization will 

add another 2.5 billion people to cities over the next three decades. 

        As migration from regions to cities continues, urban overcrowding is becoming a real 

threat to the quality of life of the people living in them. If optimal solutions are not 

implemented, cities will face many challenges in the near future. Among them are growing 

economic crises, poverty, environmental pollution, disease and others. (Corchado &Trabelsi, 

2022) 

The concentration of large numbers of people in cities has become one of the main 

causes of climate change. Cities account for more than 70 percent of global greenhouse gas 

emissions, according to a United Nations Development Program report. Urban residents 

themselves are more susceptible to many of the impacts of climate change caused by 

urbanization, especially heat stress, floods and health emergencies. 

The creation of smart cities and regions in the modern world can also eliminate many 

of the problems caused by globalization and the 4th industrial revolution. In addition, making 



MAIN DIRECTIONS OF ACCELERATING REGIONAL SOCIO-ECONOMIC 

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cities and regions more resilient, inclusive and safe is identified as one of the United Nations 

Sustainable Development Goals. 

It should be noted that for the concept of a “smart city” to become a reality in territories 

liberated from occupation, it is necessary to first study sustainable international practices, apply 

and promote them at the next stage, and make extensive use of information and communication 

technologies. [Quliyeva,2021]By implementing «smart city» solutions, it is possible to 

influence various quality of life indicators such as safety, time and convenience, health, 

environmental quality, social connections and civic participation, jobs and cost of living. 

[Corchado &Trabelsi, 2022] As an analysis of scientific literature has shown, it is possible to 

distinguish 5 areas in which the implementation of the “Smart Region” is taking place: 

1. Mobility of the population (road infrastructure, means of transport). 

2. Economics (support for innovative entrepreneurship, local initiatives, creative 

industries, providing citizens with opportunities for personal growth). 

  3. Environment (rational use of natural resources, their efficient consumption, waste 

management and prevention of negative impacts on the environment). 

4. Human potential (special education opportunities, social awareness, collaboration 

opportunities). 

5. Living conditions (safety, health, cultural opportunities, housing, leisure activities, 

availability of general education). 

Analysis of each area allowed us to identify certain problems. Increasing the level of 

digitalization of the region requires the identification of measures to ensure the necessary 

conditions for sustainable development. 

However, there are certain problems in the development of digitalization of regions. 

Among the main ones, we highlight the following: insufficient funding for IT projects in the 

regions, personnel shortages, inconsistency of actions between different levels of government. 

In addition, in remote and sparsely populated regions there is a problem associated with the 

absence or poor development of regional information and telecommunications infrastructure. 

 

RESULTS 

As a result of the study, the most significant factors influencing the socio-economic 

development of the regions were identified and classified. The dependence of these factors on 

the development of regions in the digital economy has been established. A forecast model for 

the socio-economic development of regions has been developed. The conducted analysis leads 

to the conclusion that despite the implementation of 3 state programs aimed at the socio-

economic development of regions in Azerbaijan since 2004, as well as the completion of the 

implementation period of the "Azerbaijan 2020: Vision of the Future" Development Concept, 

the socio-economic development of the regions in the country there are still serious problems 

in the field of elimination of sharp differences. Summarizing the analysis, it can be said that 

there are still sharp differences between the country's regions on all socio-economic 

development parameters of the country. 

Therefore, in order to ensure a more efficient and balanced development of the socio-

economic development of regions in the country, we consider it appropriate to implement 

measures in the following directions, both in the field of regional development management 



Aliyeva Tofik RUHANGIZ, Aliyev Zaur FARID 

 

179 

 

and regulation, and in the field of mechanisms for stimulating the economic development of 

digital technologies in the regions: 

1. It is important to use digital technologies in the regions. With this aim, it was possible 

to provide resource saving and control system in the regions by computerization and skillful 

use of information technologies. 

2. In order to speed up social and economic development in the regions, a separate 

"economic analysis and information center" should be established in each region in order to 

regulate financial problems and detect its activity based on deep economic analysis. Such 

centers should be created in the regional centers first of all. 

 3. Special programs should be prepared in economically problematic regions. Proper 

distribution of key manpower between regions should be ensured and also sustainable 

development of this manpower should be ensured. Using digital technologies will save people 

time, money and energy. 

4. Production or processing facilities in each economic region should be located close 

to the sources of raw materials. With this, we will be able to use the resources efficiently and 

economically. 

5. Competitiveness of regions should be assessed. Naturally by using the resources 

properly, additional income will be obtained. We must ensure that this income is invested in 

other sectors. However, at this time, it is also necessary to ensure the protection of ecology. 

6. Plans should be prepared for optimal use of labor resources. 

In order to ensure the sustainable development of regions in the digital era, we need to 

approach each region separately, analyze it, and draw up development plans based on this. 

 

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