Baku, November 28, AZERTAC

Azerbaijan's strategic location between Europe and Asia offers the potential to become a bridge between East and West in innovation. The country strives to develop a sustainable innovation ecosystem by integrating local startups into global technology chains. The government, businesses, and international experts play a key role here, jointly creating infrastructure and attracting investment.

Alfredo Gomez Soria, an expert on partnerships, technology, innovation, and ecosystem development for government agencies and corporations, answered questions from AZERTAC on this topic.

- Based on your international experience, what are the key components needed to create a sustainable and effective innovation ecosystem in emerging markets like Azerbaijan?

- Based on our experience in over 60 locations worldwide, including emerging markets like Uzbekistan, Egypt, Cambodia or Brazil, building a sustainable innovation ecosystem in Azerbaijan comes down to several components.

The first is establishing a strong public-private partnership, meaning the government must actively commit to the initiative by providing both top-level support and a favorable regulatory environment.

Then, international integration is key: we are consistently bringing in world-class mentors and capital while giving local startups direct access to global markets.

Plus, targeted industry specialization would be necessary, where the program focuses on sectors with local competitive advantages or urgent needs, let’s say FinTech or EnergyTech, to maximize relevance and corporate engagement.

Equally important is building a comprehensive support infrastructure, offering not just the incubation or acceleration program itself, but also continuous talent training and a vibrant culture where taking risks is encouraged through bootcamps, hackathons, startup pitch competitions, investor rooms, etc.

Finally, we must cultivate a robust funding environment by actively educating and engaging local angel and venture capital networks to ensure that successful startups can secure the essential follow-on funding they need to scale and achieve long-term growth.

- What role should government institutions play in stimulating innovation? Where do you draw the line between support and overregulation?

- Our experience with government partners in different countries shows that their role should be that of a strategic enabler, not a daily operator. Specifically, the government needs to first provide a mandate by officially prioritizing innovation and establishing a strong, dedicated local champion — great example here is the Startup Lithuania in Lithuania. Crucially, they must use their power to remove friction—that means offering attractive tax incentives, creating regulatory "sandboxes" where new technologies can be tested and simplifying visa processes for international talent and investors.

Where do we draw the line? We believe the government should delegate the operational details — like running the innovation programs—to experts like Plug and Play. Their job is to establish the foundational infrastructure, fund the ecosystem, and act as a crucial first customer for local startups, but they absolutely must avoid excessive bureaucracy and control over investment decisions that would stifle the agility and risk-taking essential for true innovation.

- What concrete steps can countries in the South Caucasus take to integrate their startups and technology solutions into global innovation chains?

- For countries like Armenia, Azerbaijan, and Georgia to get their tech startups fully integrated into global innovation chains, the most critical move is to act as a unified front, essentially becoming a single "Caucasus Tech Hub." This means they need to achieve regional alignment by agreeing on common-sense things like easier visas for tech talent and shared rules for protecting intellectual property, making the whole region much more appealing to foreign investment.

At the same time, they need a clear export focus: companies must be encouraged to switch from doing local IT services to building scalable tech products in specific areas like AI.

Lastly, they have to remove the roadblocks—the "soft infrastructure"—by making international banking and fundraising much easier for startups, allowing the money and expertise from their global diaspora to flow freely back home.

- You actively promote collaboration between governments and corporations. Which public-private partnership (PPP) formats have proven most effective in supporting startups and technology clusters? Can these formats be adapted for Azerbaijan?

- Across our 60+ global locations, the most effective Public-Private Partnership (PPP) model for tech clusters is what we call the "Open Innovation Ecosystem Hub." It’s highly adaptable for Azerbaijan because it defines clear roles: the government acts as the strategic anchor, providing legitimacy, initial funding, and a crucial stable regulatory environment. Crucially, the government delegates operations—startup selection, acceleration, and bringing in global VCs—entirely to the private expert, like Plug and Play.

The hybrid model would also engage the local industry as the official customer, with large local corporations—often state-owned but not necessarily—committing to pilot projects with the startups. A good example of this is our hub in Hoboken, New Jersey where we partnered with New Jersey Economic Development Authority, Steven’s Institute of Technology and Prudential. Azerbaijan could be a great example of PPP Partnerships by bringing players like SOCAR or Veyseloglu.

- How can Azerbaijan leverage its strategic location between Europe and Asia to create a "bridge" between the innovation ecosystems of the East and West?

- Azerbaijan is perfectly positioned to be the true innovation "bridge" between the East and West, and we are excited to be part of the journey and turn that geography into a massive competitive edge. The need to shift and diversify their traditional energy and transit role into a digital and talent corridor.

This means two things: first, fully completing and leveraging big projects like the Digital Silk Way to make Baku the fastest, most reliable data hub between Europe and Asia.

Second, they must use that stability to create a neutral, welcoming environment with simplified visas and specialized clusters—like GreenTech and EnergyTech—that directly attract, host, and facilitate projects between Western corporations and Central Asian startups. With the focus on bridging the flow of data, green technology, and human capital, Azerbaijan can become the indispensable gateway for Eurasian innovation.

- Do you see potential for developing South-South Cooperation (e.g., between Latin America and the Caucasus) in the field of innovation and digitalization?

- Absolutely, the potential for South-South Cooperation between the Caucasus and Latin America in innovation is huge. We see it firsthand because Plug and Play operates globally, including a strong presence in places like Brazil, where we run programs in FinTech, AgriTech, and other industries.

Both regions are comprised largely of emerging markets dealing with similar challenges—things like attracting foreign capital, and the need to quickly digitalize government services for a fast growing population. They can bypass the mistakes made by developed countries and share solutions that are context-specific and affordable.

The key is to organize cross-regional soft landing programs, and create peer-to-peer knowledge exchange platforms focused on practical challenges, and focus on sectors where both regions share strengths, like AgriTech or EdTech. This type of cooperation accelerates their shared digital focus.