AZERBAIJAN RURAL DIGITAL NEEDS ASSESSMENT 1 © 2024 The World Bank Rights and Permissions 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; The material in this work is subject to copyright. Because Internet: www.worldbank.org The World Bank encourages dissemination of its knowl- edge, this work may be reproduced, in whole or in part, Some rights reserved for noncommercial purposes as long as full attribution to this work is given. This report was produced with the financial support of the European Union under the Azerbaijan Rapid Technical Attribution—Please cite the work as follows: World Bank. Assistance Facility (AZTAF). AZTAF is a technical assis- 2024. Azerbaijan Rural Digital Needs Assessment. Wash- tance program for the Republic of Azerbaijan, financed ington, DC. by the European Union and implemented by the World Bank. The contents of the document are the sole re- All queries on rights and licenses, including subsidiary sponsibility of World Bank staff and do not necessarily rights, should be addressed to World Bank Publications, reflect the views of the European Union, the World Bank, The World Bank Group, 1818 H Street NW, Washington, its affiliated organizations, its executive directors, or the DC 20433, USA; Fax: 202-522-2625; governments they represent. The World Bank does not Email: pubrights@worldbank.org guarantee the accuracy of the data included in this work. i Acknowledgments Preparation of this report was led by Erik The authors thank peer reviewers Cristob- Johnson, Lead Social Development Spe- al Cobo, Maria Claudia Pachon, and Anna cialist (Social Sustainability and Inclusion O’Donnell for their respective comments (SSI) Global Practice), in collaboration and suggestions which were of benefit. with Himmat Singh (Digital Development Specialist, Digital Development Global Data was collected by the research firm, Practice), and Ifeyinwa Bonhuer (Senior A2F Consulting, of which team included Private Sector Specialist, Finance Com- Diti Chatterjee (Team Leader), Poulo- petitiveness and Innovation Global Prac- mi Dasgupta, and Tamilyam Memanova. tice). Khalisa Shahverdiyeva (Consultant, Azerbaijan’s Innovation and Digital De- Sustainability and Inclusion Global Prac- velopment Agency and its Ministry of tice) provided valuable contributions as Agriculture provided support through- a member of the team. The World Bank out the design, research, and preparation Country Manager for Azerbaijan, Ste- process. fanie Stallmeister, provided valuable guidance as well as did Saida Bagirli, Nigar Sadikhova, Leyla Taghiyeva, and Sabina Majidova from the country management team. The work was carried out under the guidance of Helene Carlsson Rex (Prac- tice Manager, SSI Global Practice). Editing of the report was undertaken by Margie Peters-Fawcett. ii Table of Contents Acknowledgements ii Table of Contents iii Abbreviations v Executive Summary 1 1. Introduction 0 2. Methodology 2 2.1 Overview 3 2.2 Community and Household Survey Samples 3 2.3 Selection of Respondents for Focus Group Discussions 6 2.4 Selection of the Respondents for Key Informant Interviews 7 3. Community Digital Infrastructure 8 3.1 Current State 9 3.1.1 Policy and Institutional Context for the Development of Broadband 9 3.1.2 Fixed Broadband Market Service Providers 10 3.1.3 Mobile Internet Usage in Azerbaijan 10 3.1.4 Efforts to Improve the Digital Landscape 11 3.1.5 Broadband Expansion: The Challenges 13 3.1.6 Planned Interventions 13 4. Respondent Profile 16 4.1 Demographic Characteristics 17 4.2 Socioeconomic Characteristics 18 5. Digital Skills and Usage 20 5.1 Household Digital Connectivity 21 5.1.1 Digital Access 21 5.1.2 Digital Device Ownership 21 5.1.3 Type of Internet Services Accessed 22 5.1.4 Ease of Connection 23 5.1.5 Current Services 24 5.1.6 Service Satisfaction 24 5.1.7 Service Preference 26 5.2 Digital Literacy 29 5.2.1 Internet Use 29 5.2.2 Purpose for Using the Internet 30 5.2.3 Digital Government 32 5.2.4 Digital Security 37 5.3 Training and Capacity Building Needs 39 6. Recommendations 42 Annex 1 iii Box Box 1: Select Levels of Smart Readiness Index 5 Figures Figure 1: Selected Rayons 6 Figure 2: Age Breakdown of Sample 17 Figure 3: Gender Breakdown of Sample 17 Figure 4: Number of Members per Household 18 Figure 5: Marital Status of Respondents 18 Figure 6: Top Five Devices by Ownership 21 Figure 7: Top Five Devices by Ownership by Rayon 22 Figure 8: Type of Internet Access 22 Figure 9: Internet Access by Rayon 23 Figure 10: Ease of Initial Internet Connection 23 Figure 11: Satisfaction with Connection Quality 25 Figure 12: Satisfaction with Connection Quality by Rayon 25 Figure 13: Top Five reasons for Favoring Mobile Connection (overall sample) 27 Figure 14: Top Five Reasons for Disfavoring Mobile Connection (overall sample) 27 Figure 15: Top Five Reasons for Favoring Broadband Connection 27 Figure 16: Top Five Reasons for Disfavoring Broadband Connection 28 Figure 17: Top Five Reasons Households Do Not Connect to Broadband 28 Figure 18: Internet Use 30 Figure 19: Top Five Internet Activities (overall) 31 Figure 20: Top Five Purposes for the Internet 31 Figure 21: Top Three Purposes for the Internet by Rayon 32 Figure 22: Digital Government e-Service Portal Registrations 33 Figure 23: Digital Government e-Service Portal Registrations by Rayon 34 Figure 24: Top Four Reasons to Use Digital Government e-Service Portals 35 Figure 25: Perception of Government e-Services 36 Figure 26: Security Practices 37 Figure 27: Security practices by Rayon 38 Figure 28: Frequency of Critically Evaluating Online Information 38 Figure 29: Frequency of Critically Evaluating Online Information by Rayon 38 Figure 30: Digital Training 39 Figure 31: Perceived Need for Future Digital Training 40 Figure 32: Online Skill Demand by Age Group 40 Table Table 1: Focus Group Discussions by District 7 iv Abbreviations ASAN Azerbaijan Service and Assessment Network EU European Union EU4Digital European Union for Digital FGD Focus Group Discussion IDDA Innovation and Digital Development Agency ISP Internet Service Provider KII Key Informant Interview MDDT Ministry of Digital Development and Transport SVRI Smart Village Readiness Index v Glossary An administrative division equivalent to a district; the primary level of local government Rayon below the national. In the context of this report, a community is defined as the locality where the data collection was conducted. Based on the type of locality, it is as follows: Community • Rural rayons – village • Urban areas – localities within the rayons of Nesimi and Khazar from where households and other stakeholders were selected The interconnected network of technology that enables Internet access, digital services, Digital infrastructure and devices, ultimately providing residents with improved communication, education, healthcare, and economic prospects. Ability to access and use the Internet through various devices and networks. This access Household digital enables communication, information gathering, education, entertainment, and various connectivity online services, significantly impacting the household’s lifestyle and opportunities. A high-speed Internet connection delivered through physical lines (e.g., cable, digital Fixed broadband subscriber line (DSL), or fiber optic) to a fixed location, such as a home or business. Often used interchangeably with mobile data, mobile broadband is wireless Internet Mobile broadband access, delivered through cellular networks typically using 3G, 4G, or 5G technologies. Digital government services (or Online platforms and tools provided by the government to deliver public information government on services and resources to citizens and businesses efficiently and conveniently. e-services) Training and capacity- Covers topics related to past participation in digital training, the perceived need for building needs digital training, in-demand digital skills, and the mode of preferred digital training. vi Executive Summary This report identifies the unique technologi- advanced fiber-optic networks, while in others cal challenges and opportunities that are be- (e.g., certain areas in the rayon of Sharur) have ing faced by various Azerbaijani communities no home broadband access whatsoever. Those when using digital tools and services, partic- households that do have broadband access, ularly with regard to rural areas. The findings however, typically rely on Wi-Fi Internet connec- will support the Government of Azerbaijan in tion. Despite efforts to meet the needs of their its design of the interventions necessary to cre- various customers, ISPs often face challenges in ate a more equitable digital landscape for all, expanding their services, the result of several as well as to bridge the gap that exists between factors. These include the difficulty of installing the urban and rural areas. The assessment is cables in certain buildings due to the saline soil comprehensive, the threefold data collection and the lack of facilities during construction; the of which included (a) a survey of household and higher cost of broadband connection in rural ar- village needs, (b) focus group discussions (FGD), eas, thus deterring adoption; the to modify the and (c) semi-structured interviews. To compre- telecommunication legal and regulatory envi- hend the current existing digital landscape, the ronment in order to overcome network instal- survey established the current digital skills and lation challenges (e.g., sharing of infrastructure, needs of village households; the FGDs includ- streamlining permits, and process authorization, ed a diverse population segment that provided among others) so as to reduce costs and facil- qualitative insight into community digital access itate broadband network construction in rural and usage; and the interviews were held with lo- areas. cal stakeholders (i.e., Internet service providers (ISP), small businesses, and local government of- Azerbaijan has embarked on a comprehensive ficials). These three approaches helped to iden- journey to enhance its digital governance, im- tify the various challenges relating to rural and prove service delivery, foster innovation, and urban communities, as well as the opportunities ensure that its digitalization is climate- pos- available to them, thus informing the strategies itive. One of the country’s key initiatives has by which to establish Azerbaijan’s digital future been the establishment of service and assess- more inclusively. The assessment was conducted ment (ASAN) centers, which is a network that under the Azerbaijan Rapid Technical Assistance not only prevents corruption and increases cus- Facility (AZTAF), financed by the European tomer satisfaction but also makes public services Union (EU) and implemented by the World Bank. more easily accessible and less bureaucratic. In addition, under the government’s Innovation a) Community Digital Infrastructure and Digital Development Agency, an online government (gov.az) portal offers a centralized While Azerbaijan has made progress in ex- portal for public access to various government panding its digital infrastructure and offering services. Another portal, my.gov.az, provides diverse Internet services, there are significant a personalized space in which to manage inter- disparities between urban and rural areas, as action with government entities. In terms of its suggested by the data. Some areas, such as the education sector, Azerbaijan has dopted digita- administrative districts (from hereon, rayons) lization to enhance the learning experience of its of Oghuz and Hajigabul, already have in place students. Furthermore, there has been a signif- 1 icant amount of investment in its e-healthcare broadband connection; (c) broadband penetra- initiatives (e.g., electronic health records, tele- tion is relatively high; and (d) while there is a sig- medicine, appointments, and health informa- nificant gap between urban (99 percent) and ru- tion) to improve the delivery of healthcare and ral (87 percent) households, most nevertheless monitor patient outcomes. Azerbaijan also has have access to the Internet, either through only committed to the COP29 Green Digital Action fixed broadband or fixed broadband and mobile Declaration as part of its commitment not only Internet combined. The quality of the connec- to slow the pace of climate change but also to tion, however, varies, which calls for significant enhance accessibility of green digital technolo- improvement. On the one hand, speed and reli- gies. ability across rayons are reasons one would pre- fer to have a combined mobile and fixed broad- Azerbaijan is actively enhancing its digital in- band connection in the home if able to do so; frastructure and regulatory framework to fur- on the other hand, however, the most common ther strengthen its overall digital landscape for complaint is the inability to do so, with more the future. One of its principal strategies is to than 90 percent of households access their In- collaborate with the World Bank and the Euro- ternet connection only with their mobile phone. pean Union’s EU4Digital Initiative through the AZTAF program, an initiative that will align the c) Digital Literacy European Union’s norms and practices in digital transformation. Azerbaijan has taken significant In general, reaction from the research regard- stride in its digital development, particularly in ing the use of a smart device and the Internet expanding its broadband Internet access through is positive. It is well recognized that the Internet the Online Azerbaijan project implemented by has tremendous potential in terms of education, a public-private partnership, which has signed a entertainment, banking and payment services, Memorandum of Understanding with the Unit- and retail shopping, among other offers. Nev- ed Arab Emirates Government to strengthen ertheless, reservation exists around the nega- Azerbaijan’s digital infrastructure by developing tive impacts of digital technology and Internet its data centers. access, a major concern being that of the health effects relating to excessive screen time, partic- b) Household Digital Connectivity ularly on vision and sleep patterns. Also, while there is a fascination with artificial intelligence Most households in Azerbaijan have Internet (AI), it nevertheless is apprehensive to many. access via Wi-Fi connection to a fixed broad- band service—more so used to access a smart- The share of respondents in the overall sample phone in comparison to the use of laptops, who use the Internet is 98.9 percent, broken desktops, and tablets. This is provided by lo- down to 98.6 percent in rural areas and 100 per- cal ISPs to the home. There are nevertheless cent in urban. This is much higher than the share variations in the quality and speed of Internet of individuals who used the Internet in Europe connection, forcing some users to access mobile and in Central Asia in 2021 (88 percent).1 The use data only when outside the home. Various data of the Internet is primarily facilitated by smart- collected show that (a) the usage of computers is phone (98 percent), the predominant method not determined by gender; (b) it is far easier to for communication, in addition to telephone/ set up a mobile Internet connection than a fixed video connection (89 percent), instant messag- 1 Ritchie, H., E. Mathieu, M. Roser, and E. Ortiz-Ospina. 2023. “Internet.” OurWorldInData.org. https://ourworldindata.org/Internet. 2 ing (86 percent), and social network participa- interventions must be able to enable individuals tion (75 percent). and businesses to thrive within the digital econ- omy. Furthermore, the agriculture sector would In rural Azerbaijan, digital government services benefit from the adoption of smart farming appear underutilized and poorly comprehend- methods, including new techniques, precision ed by the general public. Insight from FGDs re- farming, digital marketing, and e-commerce, all veals that while some individuals use basic digi- by way of the Internet. tal payment platforms and educational portals, the broader spectrum of government e-services d) Training and Capacity Building remains largely untapped. Surveys reflect that registration on gov.az and my.gov.az portals re- There is a high demand for digital skills training mains somewhat low, at 13 percent and 12 per- in rural areas, reflected by 66 percent of sur- cent, respectively. Survey data also indicate that vey respondents, preferably with face-to-face the most common use of a government e-ser- or online courses. This finding highlights the vice is for education (43 percent) and payment fact that most of the respondents have had no transfers (42 percent). Overall, a significant 37 opportunities to access any such programs. The percent of respondents rated education e-ser- demand in training is highest for online banking, vices as useful, followed by the payment ser- buying/selling, and access to health-related in- vices (25 percent). The vast majority of respon- formation. The need to invest in rural communi- dents (69 percent) reported that they do not ties is high, not only to increase the digital con- engage in regular digital security practices. The nectivity infrastructure and establish training most common security practice is a strong pass- centers, but also to empower people with the word with regard to Wi- Fi, at 43 percent, with a necessary skills to thrive in a digital age. significant majority, at 37 percent, never having critically evaluated the security information. This Communities in Azerbaijan have varying de- indicates a potential vulnerability to misinfor- grees of digital literacy needs, each of which mation, most likely due to limited digital threat requires practical training to its own specif- awareness. ic needs, particularly in the rural areas where residents seek economic advancement. Older Access to a comprehensive variety of digital individuals, in contrast to younger generations, services is typical among micro-size enterpris- primarily seek basic Internet navigation skills and es, despite the limit in their digital technology information on health issues. Young people are skills. Insight from key interviews with micro-size more interested in coding, data management, businesses that are owned by women reveals and online entrepreneurship. Rural residents that the need for digital skills for their work, par- in Barda Rayon, for instance, have expressed ticularly in rural areas, is indeed high. The most a strong desire for practical training, such as critical needs, according to the interviewees e-commerce and digital marketing, in relation to are training (i) to enhance digital literacy (e.g., their agricultural products, while in the rayons of computer usage, Internet navigation, software Gakh and Aghdash, the priority is for basic com- application); (ii) in e-commerce skills and online puter and online banking training. Therefore, financial management; (iii) in digital marketing basic and advanced digital literacy training pro- and business development; (iv) for government grams must be personalized for each communi- support and resources (e.g., government pro- ty and focus on improving the livelihoods and grams, financial resources). To address these economic opportunities of its residents. training needs across rural regions, government 3 Recommendations Despite the demonstrated willingness of Azerbaijanis to learn digital liter- acy skills for individual, household, and business development needs, the country continues to lack the necessary infrastructure for improvement and affordable broadband access, compounded by a low awareness of digital services by many in the general population. What infrastructure and digital services already exist vary in quality and affordability, thus limiting the ex- tent to which digital tools can be used reliably. Recommendations to address the challenges are as follows: • Adopt a national standard for the development of digital literacy and skills • Provide awareness campaigns and outreach events • Invest in the expanded use of digital technology by rural public service providers • Develop a digital skills training program for rural micro-size, women-owned enterprises • Implement smart agriculture initiatives • Enable affordability and quality of service improvements of broadband services and private sector participation to expand digital access • Establish innovation and digital community centers • Improve mobile Internet accessibility • Integrate computer science and STEAM2 in schools Detailed recommendations can be found in section 6 of the report. 2 STEAM education is an approach to learning that uses Science, Technology, Engineering, the Arts and Mathematics. 4 12 1. INTRODUCTION By identifying the unique challenges and op- The study, which is broad in scope, takes into portunities faced by rural communities in Azer- account the digital needs and skill gaps that baijan in their efforts to effectively make use exist, mainly in rural areas and in a select num- of digital tools and services, this report aims ber of urban communities in Azerbaijan. A to contribute to a more equitable digital land- survey of 1,048 households was conducted, of scape for all. Post-COVID-19, transition to digi- which 1,000 were considered complete. Eight tal modalities has become a critical necessity for focus group discussions (FGD) took place with the delivery of various types of services, includ- various population subgroups. In order to un- ing distance education, healthcare, and financial derstand the existing digital landscape and the literacy. Access to a comprehensive set of digital needs of service providers and businesses, 32 services is also essential for farmers, agricultural semi-structured interviews were held with key enterprises, and micro-, small-, and medium-size stakeholders. The sample included Internet and enterprises. Identification of the specific digital telecom service providers, women-owned small skill gaps and training needs across the various re- businesses, schools, health centers, and local gions and demographics will enable the tailoring government representatives across the nine ray- of interventions specific to each individual and ons. The outputs of these exercises serve to in- business so they can thrive in a digital economy. form the specific interventions and investments required to implement a Smart Village program By assessing the digital needs and skills of in- at the national level in Azerbaijan. They also will dividuals and stakeholder groups in specific contribute to the development of strategies Azerbaijani districts (rayons), this report aims that will address the digital divide by promoting to build on the research conducted by Azer- digital inclusion, particularly among women and baijan’s Ministry of Digital Development and vulnerable groups. Transport (MDDT) in 2023 and that of the In- ternational Telecommunications Union, par- The report has seven sections, including the In- ticularly in relation to the digital skills of the troduction and an Annex. Section 2 outlines the individual. This report evaluates the digital research methodology applied to assess the dig- needs and skills within nine rayons (i.e., Agh- ital skills and needs among the various Azerbai- dash, Barda, Gakh, Hajigabul, Kangharli, Khazar, jani groups. It provides a discussion on the data Nesimi, Oghuz, and Sharur) but will also include collection strategy, sampling frame, and the the broader aspects of digital connectivity (e.g., signing up of respondents. Section 3 details the types of devices, access to the Internet, and se- community-level digital infrastructure and land- curity practices), in order to identify the barriers scape, such as the current state, the challenges against and opportunities for digital inclusion. faced in terms of digital expansion, and forth- The comprehensive set of data that was gathered coming interventions in nine rayons. Section 4 from households, service providers, and tele- provides the profiles of individuals surveyed in communication companies for this study serves the exercise. Section 5 discusses the digital skills to not only assess Azerbaijan’s digital landscape and their usage by individual Azerbaijanis, in- but also to inform policy recommendations cluding the digital infrastructure of households for the country’s ongoing digital development. and their related literacy. Section 6 provides a number of recommendations to address those challenges identified in the study. Lastly, the Annex complements this report with additional data. 1 14 2. METHODOLOGY Instead of seeking self-reported data, survey 2.1 Overview respondents were provided a set of questions to establish the level of their digital skills. While self-reporting may provide a better understand- ing of individual needs and perceptions, particu- The Digital Skill Needs Assessment relating larly when combining quantitative with qualita- to Azerbaijan evaluates the various digital re- tive data, it tends to limit the ability to clearly quirements and the extent to which digital determine the competency levels. skills have advanced among individuals and stakeholder groups in select communities. The study included a household survey and FDGs with various population subgroups to gain 2.2 Community and qualitative insight into digital access and usage. Semistructured interviews were conducted with Household Survey service providers, small enterprises, and local governments in nine sample rayons so as to Samples comprehend the existing digital landscape. The study includes numerous individual Community and household samples were based citizens and various stakeholder groups in 9 on a multistage sampling methodology, the first rayons. Data was collected from respondents of which included 9 rayons that were random- across a wide range of demographic character- ly selected from various levels of the SVRI. In istics (i.e., gender, age, disability, internally dis- each of the selected rayons, two to eight set- placed persons, and level of education in urban tlements—depending on population size—were and rural areas, among others). By using the randomly selected as having the same SVRI val- Computer-Assisted Personal Interviews system, ue as the overall rayon value. The second stage 1,048 surveys were conducted, of which 1,000 included 100 households within each rayon that were considered complete. Household surveys were randomly sampled by way of statistical were split between rural (80 percent) and urban lists. A random walk methodology was adopted (20 percent) so as to gain not only an insight into for those communities where the list of house- the rural situation, but also a clear comparison of holds was not available. The final selection of the two. The selection of rural rayons was based respondents was carried out by using a quota on the World Bank’s Smart Village Readiness In- sampling technique to control indicators such as dex (SVRI) relating to Azerbaijan’s rural areas.3 age and gender. The survey sample was broken To obtain information from key stakehold- down by rayon, as follows: ers, such as public officials, service providers, schools, health centers, Internet service provid- • Baku: 200 respondents (approximately 0.04 ers (ISP), telecom providers, and women-owned percent of a total population of 419,900 businesses, the key informant interview method within the Nesimi and Khazar rayons). Since (KII) was applied. Baku is the capital of Azerbaijan, its urban rayons offer ample job, study, cultural, and 3 For more information on the Smart Village Readiness Framework, see World Bank. 2021. Smart Villages in Azerbaijan: A Framework for Analysis and Roadmap. Washington, DC: World Bank. https://openknowledge.worldbank.org/entities/publication/62450b9c-b3a9-5827-bb67-4f7d39212c6b 3 social opportunities that attract people from • Aghdash: 100 respondents (approximate- not only other regions of Azerbaijan but also ly 0.09 percent of a total population of from other countries. 103,700). As part of the Central Aran eco- nomic region, the population is primarily en- • Sharur and Kangharli: 100 respondents in gaged in agriculture. each (approximately 0.08 percent of a total population of 117,400 and around 0.3 per- • Hajigabul: 100 respondents (approximately cent of a total population of 32,700, respec- 0.1 percent of a total population of 73,300). tively). Both rayons are located in the Nakh- As a part of the Shirvan-Salyan economic re- chivan, a landlocked exclave of Azerbaijan gion, the population is primarily engaged in that is bordered by Armenia, Iran, and Tür- agriculture. kiye. The two rayons are known for their his- torical sites, traditional crafts, and agricultur- • Gakh: 100 respondents (approximately 0.2 al activities, with both sharing many cultural percent of a total population of 57,300). and demographic characteristics held by a Gakh is in northern Azerbaijan, bordering strong sense of community and close-knit the Kakheti region of the Republic of Geor- social fabric. gia and the Republic of Dagestan, Russia. Gakh has a diverse population, including • Barda: 100 respondents (approximately 0.06 significant minority groups represented by percent of a total population of 153,100). Georgians and Tsakhurs. The rayon is known The city historically has been a regional hub for its mountainous terrain and lush forests, and remains so. It is located in the Karabakh with agriculture as a major economic activity. economic region of the country and hosts numerous internally displaced persons. Bar- • Oghuz: 200 respondents (approximately da rayon’s economy relies heavily on cattle 0.4 percent of a total population of 43,200). breeding, vegetable farming, and the cultiva- Oghuz is located on the southern slopes of tion of cotton. the Greater Caucasus, bordering the Repub- lic of Dagestan, Russia. The population is pri- marily engaged in agriculture. 4 The selection of respondents included repre- account global and national data from various sentative groups based on age. The age of re- sources on matters such as economic develop- spondents was restricted to a range between 14 ment, human capital, and infrastructure. Regions and 65, with the view that those who are young- are prioritized based on their capacity to support er than or beyond the range would prejudice the the use of digital infrastructure while emphasis is results, given their assumed lack of exposure to placed on enhancing digital literacy, particularly digital technology or their ignorance of house- among vulnerable populations. The random se- hold dynamics. To consider those beyond the age lection of rayons was based on the value placed of 65 would render conflicting results in terms by the SVRI on the majority of territories within of their digital needs. While Azerbaijan does not each rayon. Rayons were selected with an SVRI have a set definition of its elderly in terms of age, value of 5 (i.e., most ready for a Smart Village it does for its young, based on the Law on Youth program); 3 (more or less ready for such a pro- Policy of the Republic of Azerbaijan (2002), gram); and 1 (least ready for such a program) which establishes them as being within the range (Box 1). of 14 and 29, the minimum of which was taken into account in the study. With regard to its el- Within each community, the field team ran- derly, Azerbaijan follows the definition set by the domly selected the number of households Organization for Economic Co-operation and required. For the sampling, the fieldwork team Development (OECD), which is 65 and above. obtained a list of households so as to be able to randomly sample the individuals with accuracy Seven rural rayons were selected from the within a set of demographic quotas. The quotas SVRI. This analytical tool was developed by the were determined at the rayon level to ensure World Bank to evaluate the readiness of rural that the gender and age of residents would re- areas for “smart village” initiatives; it takes into flect the district’s population composition. Box 1: Selected Levels of Smart Village Readiness Index (SVRI) Smart Villages are defined as villages with existing assets and potential for eco- nomic development that use technology and innovation to improve services, income and governance. SVRI enables the identification of potential smart vil- lage clusters across Azerbaijan, ranking villages based on objective criteria to prioritize clusters for support and allowing for comparison between clusters. The Index is structured around five broad parameters with 36 indicators. • Amplify (Level 5): Most equipped for accelerating or improving the applica- tion of digital technology and smart approaches for local development • Accelerate (Level 3): Moderately well equipped for the application of smart approaches • Activate (Level 1): Least prepared for the application of smart approaches. 5 Figure 1: Selected Rayons Source: World Bank the exception of Oghuz (highlighted in brown), wherein 200 households were surveyed. Within the Nesimi and Khazar rayons, 100 households were surveyed in each. 2.3 Selection of Re- spondents for Focus Group Discussions Eight FGDs were conducted to collect quali- tative insight into the digital needs of a select group of Azerbaijani rayons. Discussions were held in the rayons with various population sub- groups based on age and gender. For Baku, two A random walk was adopted for those com- FDGs were held, given its size. Candidates for munities where the list of households was not the FGDs were recruited by the fieldwork team available. The initial start of the walk was based during their household survey exercise. In rural on the community boundary. Where bound- settlements, the team worked with local public ary maps were not available, the Essential Pro- community officials to identify venues for their gramme on Immunization methodology was discussions, such as community centers and adopted.4 This involved selecting a point from schools. In the case of Baku national minorities, where to start, such as the local central market, the team occupied one of its facilities for the dis- and then heading in any direction to survey the cussions, while for persons with disabilities, the required number of households. If the house- venue was easily accessible and nearby. hold agreed to participate in the survey, house- hold members were classified by gender and age and checked against the demographic break- down in the district to ensure that the sample would match the population composition as much as possible. The quota for each gender/ age population subgroup was determined at the rayon level, based on demographic composi- tion. Figure 1 illustrates the selected rural rayons (highlighted in red) that were sampled, where- in 100 households were surveyed in each, with 4 The Essential Programme on Immunization is a cluster sampling methodology developed by the World Health Organization to estimate immu- nization coverage among children in developing countries where complete sampling frames are often unavailable. 6 Table 1: Focus Group Discussions by Rayon Rayon Focus Group Sharur Adult women from age 19 to 60 Internally displaced persons (men and women from age 18 to 60, with men Oghuz from age 19 to 60) Hajigabul Male youth from age 16 to 18 Barda Female youth from age 16 to 18 Gakh Elderly men and women from 61 and above National minorities (men and women from age 18-60); persons with disabili- Baku City ties (men and women from 18 to 60) Source: World Bank In addition, the team conducted interviews with 2.4 Selection of Re- women-owned small enterprises to understand how the digital infrastructure impacted their spondents for Key business growth. Recruitment of women-owned Informant Inter- businesses was managed by a twofold strate- gy, whereby for urban areas, women’s business views associations were tapped into for a list of busi- nesses from which to recruit, while in rural areas, the relevant information was obtained by the team while conducting the survey. In each sampled community, three to four KIIs were conducted in order to comprehend the supply-side of digital services. Stakehold- er groups comprised local public officials, ISPs, digital skill training providers, local schools, health service providers, and small businesses. 7 20 3. COMMUNITY DIGITAL INFRASTRUCTURE 3.1.1 Policy and Institutional Context for 3.1 Current State the Development of Broadband Azerbaijan’s government has made broadband development a central pillar of its socioeco- nomic strategy. The Azerbaijan 2030 agen- Azerbaijan’s digital infrastructure is currently da and the 2022–2026 Social and Economic undergoing a transformative phase, marked Development Strategy 2022–26 categorize by its significant progress despite persistent broadband access as essential for achieving a challenges. The study discovered that while the competitive economy, an inclusive society, and country has made strides in expanding its In- an innovative workforce. Various actions un- ternet coverage, particularly as a result of the dertaken by the Government of Azerbaijan rollout of fiber optic networks, certain rural ar- have demonstrated its commitment to leverage eas nevertheless continue to lack broadband broadband technology to achieve its broader infrastructure. Urban centers, in general, enjoy socioeconomic goals. The focus on infrastruc- better connectivity and faster speeds, while ru- ture, innovation, and institutional support is ex- ral communities often face limited access and pected to drive digital transformation toward a poor quality of service. Mobile Internet usage is more technologically advanced society. Actions widespread, especially among the younger pop- will include the following: ulation; however, affordability remains a con- cern, especially in rural areas. The government’s • Institutional reform: The country has re- commitment to government e-services has led named the Ministry of Transport, Commu- to the development of various digital platforms nications, and High Technologies to that of and portals, although adoption rates vary across the MDDT, defined above, thus reflecting various segments of the population, with older an emphasis on digital transformation. Also generations and the rural population particularly newly established is the Innovation and Dig- lagging behind. Moreover, there is deep digital ital Development Agency (IDDA) to coordi- skill gap, highlighting the need for specific train- nate and implement digitalization efforts, ing programs to empower individuals and busi- including supporting innovative projects and nesses to fully leverage the benefits of digital providing financial expertise. In addition, the technologies. Despite the challenges, Azerbai- State Commission on Radio Frequencies was jan’s ongoing efforts to invest in infrastructure, formed to ensure the efficient use and coor- promote digital literacy, and expand e-services dination of radio communications. President nevertheless demonstrate a strong commit- Ilham Aliyev, furthermore, issued an order on ment to build a more inclusive and connected April 19, 2021, to establish a working group digital society. to accelerate the implementation of “Smart City” and “Smart Village” concepts in Azer- baijan. The working group is led by the Min- ister of Digital Development and Transport. 9 • Policy Measures: The country identified the nificant growth from 2010 to 2016, primarily telecom sector for private sector investment in urban centers, it has stagnated since. This is and privatization to stimulate economic re- partly due to market saturation in urban areas covery after the COVID-19 pandemic. Na- and the slow adoption of broadband services in tional broadband development aligns with rural areas, where Aztelekom, the main provider, the World Bank Group’s Country Partner- continues to rely on outdated technology. While ship Framework objectives, such as improv- the digital divide between urban and rural areas ing access to public services, strengthening poses a significant challenge for Azerbaijan, the connectivity, and enhancing competitive- rollout nevertheless has begun in certain areas. ness in various sectors. The MDDT has also For instance, the KIIs with ISPs in Baku (Baktele- established minimum quality of service re- com) and the rayons of Aghdash (Aztelecom), quirements for broadband access to all in- Hajigabul, and Oghuz have revealed that in cer- dividuals, aiming to connect all settlements tain areas, they provide several high-speed In- to minimum 25 Mbps broadband services by ternet options, including fiber optic and gigabit 2025. In support of that objective and over- connections. However, the type of connectivity all market development, the Ministry is pre- services offered is limited. In addition, the lack paring a new legal framework for the sector of content filtering, parental controls, and oth- aligned with the European Commission’s new er advanced technologies that manage access communication code as well as a new law on to online content and devices highlights that the infrastructure sharing. The establishment of entire ecosystem is at a nascent stage. ICTA is a significant step in developing the technical resources to implement such legal 3.1.3 Mobile Internet Usage frameworks and the agency’s strengthening (of mandate and capacity) will be critical to Due to barriers of affordability and the in- successful implementation. sufficient infrastructure in rural areas, it is a challenge to develop widespread mobile con- 3.1.2 Fixed Broadband Service Providers nectivity, as well as adopt mobile broadband. Since 2008, mobile connectivity has driven the Azerbaijan’s fixed broadband market is dom- growth of Azerbaijan’s information and commu- inated by two state-owned enterprises. This nications technology (ICT) market, becoming holds back competition and creates a signif- the dominant method for digital communica- icant digital divide between urban and rural tion. The country’s mobile penetration reached areas. Azerbaijan’s fixed broadband market is approximately 115 percent in 2021, with wide- dominated by two state-owned enterprises, spread coverage of 2G networks and over 95 Aztelekom and Baktelecom, both of which ac- percent coverage of 3G and 4G networks.5 De- count for approximately 85 percent of the mar- spite this, only 66 percent of the population cur- ket share. This duopoly, along with ambiguous rently owns a unique mobile device, and only 41 regulations for smaller providers—particularly in percent uses mobile broadband.6 In rural areas, rural areas— has stifled sector competition and bereft of fixed broadband infrastructure, mobile innovation. The lack of distinction between the broadband is the primary means of Internet ac- regulatory and operational roles of the MDDT cess, thus limiting the capacity of mobile broad- further raises concern among investors. Al- band networks to meet growing demand. A com- though the market did, in fact, experience sig- parison of similar countries shows Azerbaijan to 5 GSMA Intelligence database for 2022 at https://www.gsmaintelligence.com/data/ (accessed xxxx). 6 Ibid. 10 have been slower in adopting the newer 3G and moting the adoption of electronic payment 4G mobile technologies, with the overall usage solutions.9 This involves development and rate as low. Nevertheless, there is evidence of a implementation of electronic payment sys- positive trend in users now upgrading to newer tems, including the digital wallet, mobile pay- mobile broadband technologies which, in Azer- ments, and payment cards so as to enable baijan in particular, is comparatively expensive individuals and businesses to make secure when taking other developing nations into con- and convenient transactions. Azerbaijan also sideration. For instance, in terms of USD/GNI is fostering the growth of online and e-com- per capita, users in Azerbaijan spend a higher merce payments, supporting financial inclu- proportion of their income, on average, for 1GB sion efforts, and implementing regulations of mobile data.7 to ensure consumer protection and data pri- vacy. Through collaborating partnerships, the 3.1.4 Efforts to Improve the Digital Landscape Government of Azerbaijan aims to expand access to electronic payment services, drive Azerbaijan has been actively pursuing various innovation, and enhance the overall payment digital initiatives to enhance governance, im- experience for citizens and businesses, thus prove service delivery, and promote innova- contributing to the country’s digital transfor- tion. Initiatives include the following: mation agenda. • Service and assessment network: Azerbaijan • Azerbaijan’s Ministry of Labor and Social Pro- has established various Azerbaijan Service tection of the Population has been actively and Assessment Network (ASAN) centers, digitalizing its services through initiatives a “one-stop” shop providing citizens with a such as e-sosial, a unified platform for social wide range of services. The aim is to stream- services, as has the Agency for Sustainable line bureaucratic processes, reduce corrup- and Operational Social Security which pro- tion, and enhance customer satisfaction. The vides integrated public services. The ministry services offered include, among others, the is proactively focusing on its service delivery issuance of passports, drivers’ licenses, birth and migrating its systems to the government certificates, marriage certificates, and vari- cloud, as well as developing mobile appli- ous permits. Notable features of the ASAN cations to enhance accessibility and conve- centers are the emphasis placed on efficien- nience for citizens. Such efforts are intended cy, transparency, customer service, minimal to streamline access to social benefits, im- wait time, and streamlining of procedures, all prove transparency, and reduce administra- of which are based on the technology used tive burden. and process standardization.8 • Significant efforts have been undertaken by • Digital payments initiative: The objective the Government of Azerbaijan in digitalizing of this initiative is to modernize the financial its education system to improve accessibility sector and drive economic growth by pro- and the learning experience.10 Existing initia- 7 Cable.co.uk database for 2022 at https://www.cable.co.uk/mobiles/worldwide-data-pricing/ (accessed xxxx). 8 Mammadov, S. 2024. “Azerbaijan’s Revolutionary ASAN Public Services.” BNE Intellinews, January 22. https://www.intellinews.com/azerbaijan-s-revolutionary-asan-public-services-308823. 9 Government of Azerbaijan. n.d. Digital Payments Strategy of the Central Bank of the Republic of Azerbaijan for 2021-2023. Baku: Central Bank of Azerbaijan. https://uploads.cbar.az/assets/Digital_Payment_Strategy_public_final_08.06_v02_ENG_final.pdf. 11 tives involve integrating technology into the training, informative sessions, and bilateral various aspects of education from the level meetings with relevant organizations. One of schools to that of universities. The coun- of its key goals is to nurture ICT specialists try’s universities and higher education insti- and facilitate their employment within the tutions, in particular, are increasingly adopt- regions. To achieve this, the project oper- ing online learning platforms and digital tools ates in tandem with the Technest Scholarship that allow students to access resources, par- Program, and provides training in innovative ticipate in virtual classrooms, and collaborate professions as well as interactive discussions on projects online. Furthermore, AI-driven with mentors and leading educational cen- educational platforms are being used to per- ters. Participants are selected by way of on- sonalize the learning experience of individual the-spot testing. students by tailoring lessons and exercises to their specific needs. AI also assists with grad- • e-Healthcare Initiatives: Azerbaijan has ing and assessment exercises, making the ed- been investing in improving its healthcare ucation process more efficient. These efforts delivery and patient outcomes. It is devel- collectively aim to modernize and enhance oping electronic health record systems, Azerbaijan’s quality of education. Digitaliza- telemedicine services, and online platforms tion efforts could further involve the training for scheduling appointments and accessing of teachers to effectively use the technolo- medical information. With regard to the elec- gy for educational purposes, essential for tronic health record system, e-Təbib offers a successful classroom integration of digital centralized environment that is already in op- tools.11 eration, primarily in Baku clinics. Healthcare providers are able to manage patient infor- The following are a few of the more significant mation digitally, including medical histories, initiatives under the IDDA: test results, prescriptions, and referrals. The portal is designed to streamline healthcare • Technest scholarship program: This was es- processes, improve efficiency, and enhance tablished in October 2021 to create a skilled patient care. The application of e-Təbib has ICT workforce for the country. Open to only been corroborated by the team in an inter- citizens from ages 13 to 65, scholarships are view with a health clinic in Baku. Another na- offered for ICT courses in leading education- tional telehealth initiative is the Salam Dok- al centers. The selection process includes an tor platform, particularly of value in remote online application, a competitive examina- areas, whereby the patient is able to connect tion, and an interview. Successful candidates to her/his doctors via video link for consul- receive either 70 percent-, 90 percent-, or tations and other medical services. It is a key 100 percent-funded scholarships. initiative in expanding access to healthcare and is even used by Azerbaijani doctors liv- • Online Azerbaijan project: This aims to en- ing abroad to support healthcare initiatives hance digital literacy and ICT skills across the within their country. regions of Azerbaijan. It involves educational 10 “Digitalization of Education in Azerbaijan.” Xalq qazeti, April 1, 2023. https://xalqqazeti.az/en/tehsil/151630- digitalization-of-education-in- azerbaijan#:~:text=Universities%20and%20higher%20education%20 institutions,engage%20in%20collaborative%20 online%20projects 11 Participants in one of the focus groups shared the fact that some of the school teachers are ill-equipped to teach digital technology. With the growing practice of online teaching, among other digital activities, the need for adequately preparing teachers becomes even more essential. 12 3.1.5 Broadband Expansion: The Challenges eas is slightly less, at manat 20 per month com- pared to manat 21 in urban areas, a comparison Within its regulatory framework, Azerbaijan’s of monthly household income, however, reveals broadband market faces a number of challeng- that the gap is much higher, with rural survey es that include the need for infrastructure in- respondents reporting a monthly household vestment and meeting the significant demand income of manat 500–750 compared to urban for connectivity and digital skills. Broadband survey respondents at manat 1,250– 1,500. A expansion has been thwarted by the absence of KII with an ISP in Baku divulged that a number of an enabling environment and lack of investment. builders fail to provide the necessary broadband While the regulatory body is relatively newly es- cables during construction, thus exacerbating in- tablished, regulations are outdated and there is stallation of cables in many buildings. a call to strengthen the agency to enable it to foster competition and attract investment. The Expansion of Internet services in Azerbaijan is dominance of state-owned providers is a major hampered due to the lack of awareness among threat that stifles innovation and market growth. the general population about the benefits of Furthermore, the inadequacy of infrastructure using the Internet. This particular observation investment, especially with regard to fiber op- was made by an ISP in one of the rural rayons tics, impedes network expansion and prevents where broadband connectivity is an issue. The necessary upgrades, all of which curb the deliv- low level of acquaintance with and awareness of ery of high-speed broadband services to urban how the Internet can improve lives, businesses, and rural areas alike. and communities has resulted in little demand. ISPs are therefore discouraged from investing in KIIs with ISPs have shed light on certain chal- the expansion of infrastructure, particularly in lenges. One key issue is Azerbaijan’s geographic the rural and remote areas where costs tend to diversity, whereby its rural and remote areas cre- be higher. Moreover, without an understanding ate much difficulty in deploying and maintaining of the value of the Internet, individuals are hesi- the necessary infrastructure. The rugged terrain tant to adopt new technologies or pay for Inter- makes it challenging to install the underground net services, thus further limiting market growth cables and establish reliable communication and creating a self-perpetuating cycle, where lines—an issue that has been highlighted by Ha- limited demand leads to inadequate investment jigabul rayon. ISPs often must invest in repairing which, in turn, perpetuates low awareness and infrastructure that has been disrupted beyond usage. their control, an example of which is Oghuz ray- on, whereby the provider is required to carry out 3.1.6 Planned Interventions repairs on a regular basis. Azerbaijan is rapidly advancing its digital land- Rural residents often are not able to afford scape through several key initiatives. One fo- broadband connection. This is evident in the cus is to improve its digital infrastructure. For Aghdash and Barda rayons where, according to instance, the Online Azerbaijan project is revo- those ISPs interviewed, rural residents often lutionizing Internet access by upgrading existing complain about the high price of their monthly infrastructure to fiber optic technology, specifi- broadband subscription, a reason for which could cally the Gigabit Passive Optical Network.12 This be the price of broadband being much higher in ambitious undertaking will provide high-speed rural areas. While the survey data shows that the broadband Internet (up to 100 Mbps) to the en- median monthly cost of broadband in such ar- tire population by the end of 2024. As of 2023, 13 the project has already connected over 1.1 mil- A key strategy for the Government of Azerbai- lion households and businesses, representing 66 jan involves collaborating with the World Bank percent of the total population. In parallel, Azer- and the EU’s EU4Digital Initiative, as well as baijan is strengthening its digital infrastructure aligning itself with EU norms and practices so by partnering with the United Arab Emirates as to support its own digital transformation. Ministry of Investment to develop various data The EU4Digial initiative focuses on key areas centers.13 This initiative addresses the growing such as telecom rules and regulations, e-Trust need for reliable data storage and processing and cross-border digital services, e-Trade, ICT capabilities as the nation’s digital economy ex- innovation, e-Health, and digital skills. Through pands. By leveraging the United Arab Emirates’ technical assistance, capacity building, aware- expertise and collaboration, Azerbaijan’s da- ness raising, and financial support, the initiative ta-handling capacity will be enhanced, innova- seeks to improve digital infrastructure, enhance tion in data-driven technologies can be encour- digital literacy, foster a stronger digital economy, aged, and further investment in the technology improve public services, and enhance a coun- sector will be forthcoming. try’s competitiveness in the global digital mar- ket. Ultimately, the EU4Digital Initiative would contribute to Azerbaijan’s economic growth, job creation, and improvement in the quality of life of its citizens. 12 Government of Azerbaijan. 2024. “Azerbaijan’s digital development path–ARTICLE.” Baku: Ministry of Digital Development and Transport. https://mincom.gov.az/en/media-en/news/azerbaijans-digital-development-path- article (accessed December 6, 2024). 13 Government of the United Arab Emirates. 2023. “UAE and Azerbaijan Sign a Memorandum of Understanding Set To Facilitate Digital Infra- structure Investments.” December 15. Abu Dhabi: Ministry of Investment. https://www.investuae.gov.ae/announcement/uae-and-azerbaijan- sign-a-memorandum-of-understanding-set-to- facilitate-digital-infrastructure-investments (accessed December 6, 2024). 14 28 4. RESPONDENT PROFILE of four or less. The size of households is small- 4.1 Demographic est in Nesimi Rayon followed by Khazar Rayon. Among the rural areas, the average household Characteristics size is lowest in that of Aghdash. The share of single respondents is highest in the urban areas of Nesimi and Khazar, perhaps due to these ray- ons having a higher share of younger ones. A total of 1,000 respondents were interviewed, More than half of the respondents reported of which 50 percent were male and 50 percent that Grade 11 is their highest educational level were female, with most respondents (41 per- of education. In all except two rayons (i.e., Kha- cent) being within the age range of 31 to 50. The age distribution is somewhat similar across Azerbaijan’s rayons, the only exceptions being Figure 3: Gender Breakdown of Source: World Bank in the Aghdash and Khazar rayons where most Sample respondents were within the range of 14 to 30 years of age. Among respondents, approximate- ly 36 percent represented heads of households, of whom most were male (80 percent). Figure 2: Age Breakdown Source: World Bank of Sample More than two-thirds of respondents (69 per- cent) reported a household size of four or less and a majoritya (66 percent) were classified as married. The distribution of household size across rayons does not vary significantly, except in that of Hajigabul where more than 50 per- cent of respondents reported a household size 17 Figure 4: Number of Members Figure 5: Marital Status of Source: World Bank per Household Respondents Source: World Bank 4.2 Socioeconomic cent, and lowest in the rayon of Kangharli, at 20 percent. For those not seeking work (e.g., home- Characteristics makers), the figure is highest in Aghdash Rayon, at 26 percent, and lowest in Nesimi Rayon, at 4 percent. Respondents from the urban areas of Nesimi and Khazar rayons rely mostly on em- zar and Nesimi), Grade 11 is the highest educa- ployment for their income (Annex Table A1). tional attainment. For the two exceptions, at- tainment level is a university degree, with Khazar The rural economy of Azerbaijan is largely de- at 41 percent and Nesimi at 45 percent. Among pendent on agriculture. The share of respon- the rural regions, Kangharli Rayon has the high- dents working in agriculture is highest in the ray- est share of university graduates, at 29 percent, ons of Barda (78 percent), Aghdash (79 percent), followed by Sharur Rayon. The share of respon- and Gakh (53 percent), suggesting their signifi- dents with a vocational/professional degree was cant livelihood reliance on agricultural activities. highest in Oghuz Rayon, at 31 percent. Only one In the overall sample, more than 23 percent of respondent in the rayon of Barda reported hav- the respondents surveyed are employed either ing no formal education whatsoever. in education or training. Disaggregation by rayon shows the highest share in the rayon of Sharur The variation in the status of employment is (41 percent), followed by those of Hajigabul (37 significant across rayons. While Kangharli Ray- percent), Kangharli (36 percent), Khazar (29 per- on leads with 62 percent of respondents in ei- cent), and Oghuz (24 percent). Industrial sectors ther formal or informal employment, the share such as mining, manufacturing, and electricity, of self-employed is highest in the rayon of Bar- among others, have relatively low employment da. In the latter, formal and informal work that shares in most rayons, indicating limited indus- is remunerated is lowest, at 6 percent, with the trial development. The data reveals significant share of those unemployed but actively seeking regional disparities in employment patterns; for work highest in the rayon of Oghuz, at 12 per- instance, Barda Rayon heavily concentrates on 18 agriculture while Oghuz Rayon has a more diver- sified economy with notable shares in trade and education (Annex Table A2). In general, most people (32 percent) have an in- dividual monthly income in the range of manat 250 and manat 500, with a small percentage within the middle or high range. Nesimi Ray- on stands out as having a higher percentage of individuals with high incomes and a lower per- centage of zero-income individuals compared to other rayons. Those with the highest percentage of zero income are in the rayons of Aghdash (44 percent) and Gakh (38 percent), while that of Nesimi has the lowest (18 percent). Most people in the rayons of Barda (65 percent) and Aghdash (67 percent) have a monthly income of less than manat 250, while Nesimi Rayon has the lowest (22 percent). Significantly few people across all rayons fall into the high-income category (more than manat 1,000), with Nesimi having the high- est percentage (18 percent) and Aghdash and Sharur rayons with the lowest (1 percent) (Annex Table A3). 19 32 5. DIGITAL SKILLS AND USAGE urban (i.e., rayons of Nesimi and Khazar) and 5.1 Household the rural rayons (i.e., the balance) is in the own- ership of tablets and e-readers, whereas the Digital Connectivity ownership pattern of smart TVs is quite even across rayons, with households in most report- ing more than 50 percent ownership, except for those of Gakh Rayon and Hajigabul Rayon. 5.1.1 Digital Access Figure 6: Top Five Devices, Source: World Bank Most households have Internet access, primar- by Ownership ily through Wi-Fi in the home, with the most common device the smartphone. The quality of service and speed connection varies, with some participants using mobile data outside the home. Another digital device used by respon- dents is the laptop, whereas desktops and tab- lets are less common. Laptops are mostly used by those who have income-generating employ- ment. The use of computers, based on the sur- vey, is gender neutral and from some of the dis- cussions, it was found that the younger children in the household are not usually permitted to use the Internet due to its potential health risks. A few respondents noted that elder members of the household face difficulty in using the devic- es. In the remote areas of Sharur Rayon, there When categorized by individual income, the is broadband service. Discussions also brought group with the least (i.e., manat 0–250 per to the fore an emphasis on household mem- month) has the lowest overall device owner- bers mostly using Wi-Fi to access the Internet, ship. However, this has been modified to exclude while mobile data is used only when outside the students as well as the unemployed who are home. Respondents with disabilities, in partic- seeking, as well as not seeking, work from the 29 ular, admitted using multiple devices, including percent surveyed and who reported no income. smartphones, without difficulty. The above find- Device ownership by the zero-income group (3.6 ings from the survey corroborate those relating percent) is questionable, given that 68 percent to digital access. of those reporting an individual income of zero stated that when taking into consideration the 5.1.2 Digital Device Ownership total household income, it amounts to manat 500 or more. A closer examination of the em- Smartphones are the most popular digital de- ployment status of respondents who claimed vice, with almost all respondents owning one. zero income shows that more than 73 percent This is followed by the smart TV, at 71 percent perform unpaid work within the household or of ownership. Other devices with high owner- have a home business and another 18 percent ship shares are headphones/earbuds (28 per- are self-employed, thus implying that other cent), laptops (22 percent), and tablets/e-read- household members are the ones employed and ers (11 percent). The major difference between able to afford the devices. 21 Figure 7: Top Five Devices by Ownership and by Rayon Source: World Bank 5.1.3 Type of Internet Services Accessed Almost half (46 percent) of those surveyed Figure 8: Type of Internet Access Source: World Bank access the Internet by mobile and broadband, while 43 percent only have a fixed broadband connection. Disaggregation by rayon shows that the high share of respondents accessing the In- ternet by mobile as well as fixed broadband is driven mostly by those respondents from the urban areas of Khazar Rayon and Nesimi Ray- on. The share of respondents using only fixed broadband is high in the rural areas, with the ray- ons of Aghdash (78 percent) and Gakh (74 per- cent) reflecting the highest shares. The rayons reporting the highest share of respondents with only mobile access to the Internet is Sharur (38 percent), followed by Barda (18 percent). Sur- vey findings in Sharur Rayon confirm the insight gained from FGDs conducted in the rayon—that broadband connection is not available in remote 22 areas, which explains the spike in Internet us- a high individual monthly income of manat 500 age by mobile there. The rayon with the highest and above as more likely accessing the Internet share of respondents with no access to the In- by mobile and fixed broadband, the highest per- ternet is Barda, at 5 percent. Disaggregation by centages representing the rayons of Kangharli, individual income shows respondents reporting Nesimi, and Khazar. Figure 9: Internet Access by Rayon Source: World Bank 5.1.4 Ease of Connection Figure 10: Ease of Initial Connection Source: World Bank The vast majority (84 percent) of respondents surveyed found it “very easy” or “somewhat easy” to connect their new mobiles to the In- ternet, while only 7 percent found it “very dif- ficult.” Broken down, approximately 56 percent found it significantly easy for mobile connection, with 14 percent somewhat easy and 16 percent with difficulty. Overall, new mobile connection is perceived easier than broadband connection. Disaggregation by rayons also shows a simi- lar trend. A higher percentage of respondents found it “very easy” or “somewhat easy” to connect their new mobile compared to broad- band. This implies that mobile service providers 23 have streamlined their onboarding processes 5.1.6 Service Satisfaction more effectively than have broadband provid- ers. Nevertheless, there are significant differ- A larger proportion of respondents is satisfied ences between rayons based on how easy it is with the quality of fixed broadband connection to connect a mobile. Most (50 percent) found it service rather than that of mobile. This may significantly easy, but the share varies between suggest that fixed broadband providers in those 56 percent in Aghdash Rayon and 96 percent in rural parts of the Azerbaijan rayons surveyed Gakh Rayon. Those respondents in the “very deliver a higher quality of service than do mobile difficult” and “somewhat difficult” categories providers. A disaggregation by rayon shows are reflected highest in the rayons of Aghdash significant differences in satisfaction between and Kangharli, respectively. The ease with which each. When considering mobile and broadband one can set up a broadband connection is lowest connections, some regions (e.g., Baku) rate in Sharur Rayon, with 41 percent reporting sig- satisfaction as high, while others (e.g., rayons of nificant difficulty. Barda and Hajigabul) report a lower rate. Service quality and infrastructure in the rural areas, 5.1.5 Current Services therefore, may not be at par with those in the urban areas of the rayons of Nesimi and Khazar. While broadband penetration is noted as quite Kangharli Rayon reports the highest share of high, there is yet scope for improvement in the respondents who are “very dissatisfied”’ with quality of service. Most respondents surveyed the quality of their mobile (25 percent) and reported having access to the Internet via broad- broadband connections (62 percent). band, despite the varying quality of connection. In Baku for instance, respondents reported the speed as not at optimal performance. In addi- tion, congestion of the network leads to poor service quality during peak hours, mostly in the evenings. While most of the rural-area respon- dents have fixed broadband access at home, some have to rely on mobile data because of the deficiency in infrastructure or, in some cases, financial constraint. The dissatisfaction reflected with speed is more common among those who access the Internet by fixed broadband com- pared to those using mobile Internet. The for- mer group reports that the Wi-Fi signal is not sufficiently strong and they yearn for more reli- ability in village broadband infrastructure. 24 Figure 11: Satisfaction with Quality of Mobile and Broadband Connections Source: World Bank Figure 12: Satisfaction with Connection Quality by Rayon Source: World Bank 25 5.1.7 Service Preference (a) Mobile Connection Preference for mobile connection in Azerbai- income, compared to those on a lower income, jan varies across rayons and income levels, with who complained about the high cost for connec- speed (43 percent) and reliability (30 percent) tion being their main reason for dissatisfaction. the most vital for those respondents surveyed, The above findings highlight the need for Azer- despite the high dissatisfaction with its exces- baijan to ensure that mobile service offers be- sive cost (31 percent). Conversely, 30 percent of come more personalized and region specific in respondents stated they had no complaints re- meeting the needs of its users. garding their mobile connection. This feedback reflects the critical need to tailor the cost and reliability of mobile connection service based on the area so as to level the playing field. Of partic- ular note were those respondents with a higher 26 Figure 13: Top Five Reasons for Favoring Figure 14: Top Five Reasons for Disfavoring Mobile Mobile Connection (overall sample) Connection (overall sample) Source: World Bank Source: World Bank (b) Broadband Connection While speed, reliability, and affordability are Figure 15: Top Five Reasons for Favoring the key factors for broadband satisfaction, Broadband Connection the opposite is primarily driven by its slow speed and high cost. Despite varying levels of preference across rayons, speed, reliability, and affordability were cited by survey respondents as their main reason for potentially preferring broadband connection. Some rayons prioritized speed, while others either cited the ease with which to connect or were completely satisfied with the system. In this case, income levels did not significantly influence respondent prefer- ences, although those at a higher income level were more likely to afford connection. Dissatis- faction with broadband arises more as a result of slow speeds, followed by high cost and un- reliability. A significant portion of respondents in various regions nevertheless reported their Source: World Bank complete satisfaction, but highlighted the ex- isting regional disparities in quality of service. 27 Ultimately, 30 percent or more of respondents Figure 16: Top Five Reasons for Disfavoring across all income levels were consistently satis- Broadband Connection fied with their broadband connection. (c) Reasons for not Favoring Broadband Con- nection The most cited reason by surveyed respondents for not preferring a broadband at home is that there was no need for the Internet (32 percent), followed by its cost (22 percent). More than 91 percent of those respondents with no need for broadband, instead, access the In- ternet via mobile connection. Other reasons put forth for not favoring broadband were the need for more infrastructure (18 percent) and the fact Source: World Bank that quality was subpar (14 percent). A disag- gregation by rayon indicated that the principle reason among them all for not favoring fixed broadband connection is, again, the need for more infrastructure. In Hajigabul Rayon, howev- er, there is little demand for broadband Internet (67 percent) while in Oghuz Rayon, the cost is excessive (67 percent) and in Kangharli Rayon, the quality is low (50 percent). Close to 17 per- Figure 17: Top Five Reasons Households Do Not Connect to Broadband cent of respondents in the rayon of Hajigabul reported one of the reasons for the low demand for broadband is that its women are discour- aged from using the Internet. A categorization of opinions based on individual income shows the principle issues are not only the lack of Inter- net infrastructure but also the need for quality service. Among students, however, 40 percent stated that there was little need for broadband Internet, given their use of mobile connection. Source: World Bank 28 sonal information. Some respondents are aware 5.2 Digital Literacy of misleading online information or inappropri- ate content. They expressed a mix of fascination and apprehension about AI. Despite recognizing AI’s potential for information retrieval and auto- The general attitude of respondents toward mation, they nevertheless are concerned about the use of smart devices and the Internet is job displacement and the potential risk of AI positive, in recognition of the latter’s signifi- replacing humans in various tasks. The fear ap- cant potential for online educational resources, pears stronger among older individuals. research materials, and courses. Respondents expressed keen interest in learning new digital 5.2.1 Internet Use skills (e.g., coding and design) as essential for future employment and personal growth. The The vast majority (92 percent) of respondents convenience and efficiency of digital services, use the Internet on a daily basis, with only a particularly for tasks such as online shopping, fraction reporting infrequent or no use. This banking, and accessing information are widely high usage rate is primarily facilitated by the acknowledged. Moreover, the time-saving ben- smartphone (98 percent), the predominant de- efits of these services and their potential to im- vice to access the Internet, followed by laptops prove one’s daily life are highly appreciated. Dig- at a distant second. Laptops (11 percent), desk- ital technology’s ability to connect with friends top computers (4 percent), and tablets (5 per- and family through social media platforms and cent) play a minor role in Internet access. Other messaging applications also facilitate staying than respondents in the rayons of Barda, Sharur, connected in the digital age, something that is and Aghdash, more than 90 percent of those highly valued. Platforms such as YouTube are ap- from the other six rayons report using the Inter- preciated for their entertainment value and as a net on a daily basis. The share of respondents source of educational content. The potential of who do not use the Internet is highest in Agh- digital technology for business growth and on- dash Rayon (7 percent). To access the Internet, line entrepreneurship is well recognized, espe- at least 98 percent of respondents from the 9 cially by women who work from home and earn rayons use smartphones, other than the rayon income. of Aghdash, where the figure stands at 93 per- cent. Respondents from Nesimi Rayon report Nevertheless, respondents in the survey also the highest number of laptop (desktop) (9 per- expressed their apprehension about the neg- cent) and tablets (14 percent) ownership. ative aspects of digital technology and Inter- net access. A major concern from the survey includes the health effects of excessive screen time, particularly on vision and sleep patterns. Respondents were aware of the risk of addic- tion to smartphones and social media, especially among younger individuals, as well as the like- lihood of distracting from school/work. In ur- ban areas, people are aware of the potential for hacking, data breaches, and online scams. Fur- thermore, concerns were raised about the secu- rity of financial transactions and breach of per- 29 Figure 18: Internet Use Frequency Device Used to Access the Internet Source: World Bank 5.2.2 Purpose for Using the Internet Among respondents, the Internet is used most ipate in social networks. The high Internet need for telephoning and making video calls (89 to download/install software or applications is percent), followed by instant messaging (86 observed in 37 percent of students (with zero percent) and participating in social networks income) and 48 percent of respondents who (75 percent). Other popular activities include are currently unemployed and seeking work. In reading online news, newspapers, and news terms of Internet banking, it is commonly used magazines (38 percent) and seeking health-re- among the respondents with incomes of more lated information (38 percent). In the rayons of than manat 250 per month. Nesimi and Khazar, it is common to make online purchases (56 percent and 54 percent, respec- tively). Internet banking is one of the top five activities in the rayons of Kangharli (57 percent) and Hajigabul (32 percent). Respondents from all income groups show a similar trend, with most using the Internet to telephone and make video calls as well as instant message and partic- 30 Figure 19: Top Five Internet Activities (overall) Internet for social connection, this purpose does not feature in the top three preferences in Bar- da Rayon. The share of respondents using it for information and news varies from 46 percent in Aghdash Rayon to 88 percent in Kangharli Ray- on. Those using the Internet for entertainment is highest in the rayons of Khazar and Aghdash (92 percent and 39 percent, respectively). Source: World Bank The most popular reason for using the Inter- Figure 20: Top Five Purposes for the Internet net among respondents is for entertainment (71 percent) purposes and social connection (71 percent), followed closely by the need for information and news (68 percent). Others included education (35 percent) and health in- formation (24 percent). Disaggregated by ray- on, information and news, entertainment, and social connection are the top three reasons for the Internet in most rayons, except for that of Barda. The share of respondents nevertheless varies across rayons. For instance, while 99 per- cent of respondents in Kangharli Rayon use the Source: World Bank 31 Figure 21: Top Three Purposes for the Internet, by Rayon Source: World Bank 5.2.3 Digital Government Digital government services in the context of Despite these challenges, there is definite in- rural Azerbaijan appear to be underutilized and terest in accessing online government services. poorly understood by the general population. This has been demonstrated by the inclinations Insight from the FGDs reveals that while some of participants to book appointments online, individuals use basic digital payment platforms use payment services, and seek agriculture and and educational portals, the broader spectrum healthcare resources. Knowledge of digital gov- of government e-services remains largely un- ernment services in rural areas, however, is sig- tapped. The lack of awareness and use of these nificantly low compared to urban areas, where can be attributed to several factors. Firstly, many awareness is sufficiently broad to include exis- respondents are neither aware of the specific tence of the Asan Imza mobile identity, SIMA for services available nor are they of the potential electronic transfers and payments, and the gov- benefits. Secondly, were individuals in fact aware ernment e-service portal. However, knowledge of them, they nevertheless may be deficient in and usage of these government services is not the necessary digital literacy skills to navigate omnipresent. and use them effectively. This rationale, in par- ticular, can be applied in the case of the elderly population who consider learning new skills to be challenging. Finally, while the smartphone is common, reliable Internet access remains a chal- lenge in the areas, thus preventing a wider use of online services. 32 Figure 22: Digital Government e-Service Portal Registrations e-Gov Portal my.Gov Portal Source: World Bank Registration on the e-gov.az and my.gov.az highest in the urban areas of Nesimi and Kha- portals is relatively low among respondents, zar rayons, where only 7 percent to 8 percent at 13 percent and 12 percent, respectively. The reported being unaware of digital government portion of those unaware of these is quite high, services.14 Disaggregation by individual income at 36% for both. A disaggregation by rayon re- shows that usage is much higher in households sults in Nesimi with the highest registration for with a higher income, providing the assump- the e-gov.az portal (41 percent) and my.gov. tion that this is driven by a higher concentra- az portal (39 percent), while Barda has the low- tion of these urban area households in the est, at 2 percent for the e-gov.az portal and 3 sample. percent for the my.gov.az portal. Survey results suggest a low awareness of these platforms in Gakh Rayon, with the share of people unaware of the platforms reaching 60 percent for the e-gov.az portal (60 percent) and 62 percent for that of my.gov.az. As expected, awareness is 14 Those living in the cities are constantly exposed to various sources of information from billboards, advertisements, public events, and social interaction, thus increasing awareness. 33 Figure 23: Digital Government e-Service Portal Registrations, by Rayon e-Gov Portal my.Gov Portal Source: World Bank 34 The most popular reason to use government Figure 24: Top Four Reasons to Use Digital e-service applications is for education (43 per- Government e-Service Portal cent) and payment transfers (42 percent).15 The government payment portal, for instance, offers a convenient online method with which to pay for various services, including taxes, util- ities, fines, state duties, social services, educa- tion fees, and other government-related invoic- es with a mobile e-wallet of credit cards. Other popular reasons are for healthcare and social services, each of which is at 27 percent. Educa- tion and payment transfers are among the top four services of in all rayons, with the payment application most popular in Gakh Rayon (71 per- cent) as is the high use of the custom service ap- plication, at 69 percent among those surveyed. Across income levels, the access is somewhat consistent, with students the highest users for education purposes, at 56 percent. Access for Source: World Bank payment transfers ranks top in the highest in- come bracket (manat 1,000 or more per month) and lowest among those reporting zero income. 15 This represents the share of respondents who either use digital government service applications or are aware of others using them. 35 Overall, 37 percent of respondents rate Azer- more prevalent (17 percent) as it was for those baijan’s education e-service portal as useful, between the ages of 51 and 65 (19 percent). By followed by 25 percent for payments (25 per- rayon, the government education e- service cent). This highlights the strong demand for ac- is considered more important in all except for cessible and effective government online edu- that of Gakh (66 percent), where the payment cational resources and services. The importance e-service is the leading option. Grouped by em- of Internet access for education also was under- ployment status and income, social services are lined during one of the FGDs in Baku City, where more relevant to students and those currently participants noted that the COVID-19 pandemic unemployed. had propelled Azerbaijani schools toward online classes, for which several of the survey house- holds were not prepared. The perception that the education e-service is more advantageous does not alter when disaggregating respondents by age. For the age group of 14 to 30, access to social services was considered the second most useful. For those of 31 to 50, healthcare was Figure 25: Perception of Government e-Service Portal Usefulness Overall By Age Source: World Bank 36 5.2.4 Digital Security The vast majority of respondents (69 percent) works. Overall, security practices become more reported that they did not engage in regularly proliferent among high-income individuals, in- updating their digital security. The most com- dicating that they are at the forefront of digital mon type of security practice was that of cre- security aspects; in fact, the two-factor authen- ating strong passwords for Wi-Fi (43 percent), tication feature ranks among the top three secu- while 2 percent were unsure and 1 percent found rity practices within the manat 1,000 per month security practices irrelevant. The absence of se- income group. curity may allude to a lack of awareness or a per- ception of futility. By rayon, adoption of security A significant majority (37 percent) of individu- practices varies significantly, with some (i.e., Bar- als fail to critically evaluate online information, da, Aghdash, and Nesimi) doing more so than in with Gakh Rayon the highest in negligence (65 others (i.e., Sharur, Hajigabul, Oghuz, Kangharli). percent). This indicates their potential vulnera- Strong passwords for email and digital accounts bility to misinformation and digital threats. Only are applied by 20 percent of respondents, indi- a small proportion (11 percent) of those respon- cating at least some knowledge of the need to dents surveyed regularly and critically evaluate protect their online accounts. The low use of the information they access, while a smaller antivirus software (14 percent) may be due to group (7 percent) report frequently doing so. a cost factor or the complexity of the software. The share of respondents who fail to assess the Strong passwords for Wi-Fi are consistently ap- information obtained is lowest in the rayon of plied across all income and employment levels, Nesimi (10 percent), followed by that of Khaz- ranging from 21 percent to 60 percent, respec- tively. This suggests a widespread understand- ing of the significance of security on Wi-Fi net- Figure 26: Security Practices Frequency Type Source: World Bank 37 Figure 27: Security Practices by Rayon Source: World Bank ar (17 percent). Distribution in Sharur Rayon is Figure 28: Frequency of Critically Evaluating somewhat distorted, where most respondents Online Information never critically form an opinion of the online information they gather, despite it having the highest rate of respondents who always assess the information (21 percent). Higher income lev- els generally correlate with a greater frequency of critical evaluation, although even in the high- est income bracket (i.e., more than manat 1,000 per month), 22 percent report never really as- sessing the data they collect. Source: World Bank Figure 29: Frequency of Critically Evaluating Online Information by Rayon Source: World Bank 38 of the skills in demand. People in rural areas are 5.3 Training and most interest in learning how to seek online in- formation resources, especially in relation to Capacity Building health. Needs Figure 30: Digital Training Source: World Bank Most respondents (94 percent) have never at- tended a digital training program. There is a significant gap in digital skill training and a need for greater access and awareness of the pro- grams available. This is reflected by 61 percent of respondents, which suggests little variation by rayon from those already having had digital training. The share of respondents who have attended digital training programs is highest in Nesimi Rayon and lowest in Barda Rayon. How- ever, perception for the need varies significant- Past Participation in Digital Training ly depending on the rationale, at 33 percent in Nesimi Rayon and 87 percent in Kangharli Rayon. Participation is quite high in Sharur Rayon, with 79 percent of respondents expressing a desire to learn digital skills. Respondents in all but one employed income group—the highest—consider a need for training. Overall, seeking health-related resources (22 percent) is a skill that respondents would like Perceived Need for Future Training to achieve, although it reflects mainly those above the age of 30. The rate is high for those interested in being able to search for online in- formation (20 percent), reflecting a demand for basic digital literacy training, particularly in con- sideration of the many who are not comfortable installing device software and applications. The younger age group of between 14 and 30 are more focused on learning how to access person- al data and write code in program language. By age group, there is high demand to be able to purchase or sell online (ages 31 to 50) and per- form online banking transactions (ages 51 to 65). Significant difference exists by rayon in terms Top 5 Digital Skills in Highest Demand 39 Figure 31: Perceived Need for Future Digital Training Source: World Bank Figure 32: Online Skill Demands by Age Group Source: World Bank 40 Micro-size enterprises frequently access a mul- Residents in rural rayons seek practical and titude of digital services despite their limited personalized digital skill training specifically to knowledge of digital technology. Insight from improve their livelihoods. For instance, respon- KIIs with women-owned businesses reveals that dents in Barda Rayon are interested in e- com- the demand for digital skills for work is partic- merce and digital marketing to promote and sell ularly high in rural areas, especially (i) those to their local products (e.g., agricultural goods, cat- increase digital literacy from the basic (e.g., com- tle). In the rayon of Gakh, demand exists for basic puter usage, Internet navigation, software appli- computer skills, such as software, Internet navi- cations); (ii) e-commerce skills and online financial gation, and understanding online safety factors. management; (iii) digital marketing and business Younger individuals expressed a keen interest in development; and (iv) government e-service graphic design and coding, which would lead to support (e.g., programs and financial resources). a broadening of their employment opportuni- To address these, digital skill training is neces- ties and entrepreneurial ventures. In recognition sary across various types of business, particular- of the ever-increasing digitalization of financial ly in rural areas, to enable businesses to thrive in services, respondents in the rayons of Gakh and the digital economy. In addition, the agriculture Aghdash seek training in online banking, money sector will benefit from adopting smart farming transfers, and digital payment methods. methods and techniques, precision farming, dig- ital marketing, and e-commerce, with the ability The lack of the digital skills listed above cre- to access the Internet once they have developed ates significant challenges for residents in rural their technology skills. areas. Findings from the FGDs held in rural areas suggest that digital illiteracy can prevent access The preferred mode of training is face-to-face to many job opportunities within and outside for more than half (55 percent) of those re- the villages which, in turn, causes financial stress, spondents surveyed. Among those expressing particularly in terms of online banking and pay- this preference as well as for hybrid classes, 49 ment systems. There is recognition of the inabil- percent are willing to travel anywhere in the vil- ity to access online educational resources and lage for the training. Close to a quarter (25 per- participate in a growing digital economy. Some cent) of the sample would like to be able to learn FGD attendees cited communication barriers online. The demand for face-to-face classes var- as a consequence, making it difficult for them ies from 43 percent in Aghdash Rayon to 65 per- to stay connected with friends and family living cent in Hajigabul Rayon, while for online classes, elsewhere. Furthermore, Azerbaijan’s current it is highest in the latter (47 percent), closely school curriculum in rural areas fails to adequate- followed by Gakh Rayon (46 percent). Prefer- ly equip students with the necessary digital skills ence for online classes is highest among those for the modern workforce. The desire for practi- who are currently unemployed and are seeking it cal, hands-on learning experiences and more re- (35 percent)—perhaps due to their desire for re- sources in schools was a recurring issue brought mote work and flexible work schedules. Demand forward in FGDs, emphasizing the need for af- for face-to-face classes is relatively high among fordable training programs that will focus on the respondents earning between manat 750 and skills required in the community. manat 1,000 per month, possibly due to the ability to increase their income once they have achieved the necessary digital skills. 41 54 6. RECOMMENDATIONS 1.2. Targeted Digital Skills Programs for De- Challenge 1: mographic Groups: Based on a comprehensive digital Skills framework, develop tailored digital skills programs for different user groups, such as Findings from quantitative surveys and FGDs public service officials, women, youth, persons point toward the absence of digital skills among with disabilities, the elderly.16 Survey data refer- respondents and their apparent willingness to enced in this report indicates diverse digital in- acquire them. frastructure and skills needs across regions. The establishment of a digital skills framework and standards for each user group allows a varied set of stakeholders (public and private) to develop Recommendation 1: and deliver customizable upskilling and re-skill- ing programs while ensure they align towards common objectives. Programs can be prioritized Adoption of a national standard for digital lit- based on specific demographics and in-demand eracy and skill development with regional and skills, such as health information (for elderly demographic targets for delivery. and persons with disabilities), coding (for young people), and e-commerce (for farmers and oth- 1.1. Adoption of a national standard for digital er businesspeople). Lower income households literacy and skills development allowing for have also been identified to adopt fewer online targeted delivery: A national standard for dig- security measures and would therefore require ital literacy and skills development in Azerbaijan targeted attention to reduce their vulnerability. could be a crucial step towards fostering a digi- tally empowered society and workforce. Utiliz- 1.3. Blend the teaching approach: Online as well ing global good practices such as the EU’s Digital as offline training should be provided to accom- Competence Framework, adapted to Azerbai- modate a diverse set of learning preferences jan’s specific needs, would define core compe- and Internet access modes. Data gathered re- tencies for citizens to thrive in the digital age. flects a strong preference for face-to-face and It would help develop essential skills and com- online learning among particular groups who opt petencies such as information and data literacy, for flexibility. communication and collaboration, digital con- tent creation, safety, and problem-solving. Such 1.4. Apply plain language and cultural sensitivi- a framework tailored to Azerbaijan can enable ty: For digital services and materials to be more the government to identify specific user groups accessible, plain language and culturally familiar and related standards for digital competencies terms should be adopted so as to align with ID- for each user group. This may include identify- DA’s efforts to use simple language on public ing user groups based on demographics like age service platforms (e.g., my.gov.az portal). Sim- as well as along professional categories such as plification of digital service interfaces with the public servants, in turn allowing Azerbaijan to spoken Azerbaijani language will make services develop customized standard of competencies easier to navigate. for these various groups of digital users. 1.5. Appoint local digital literacy facilitators: Since survey data indicate that approximately The World Bank team is support IDDA develop an action plan towards establishing such a digital skills framework based on the EU’s Digital 16 Competence framework for two specific target groups – public servants and rural populations requiring basic digital literacy. 43 34 percent of respondents would prefer a trust- that are accessible will be helpful, with focus on ed member of the community to conduct the such practical applications as online banking, courses, local community members can be ap- e-commerce, digital marketing (e.g., for agricul- pointed as digital literacy facilitators. As well as ture products), job searches, telehealth, and on- an effective method, it also will significantly raise line learning platforms. Such events will be useful traction in the uptake of programs. Engagement in demonstrating how digital services are able to with local communities will assist in identifying improve one’s daily life and increase economic those individuals who are tech- savvy and are at opportunities. a level not only to be able to provide the neces- sary training of trainers, motivation, and mento- 2.3. Introduce mobile digital outreach: Intro- ring, but also who have the capacity to organize duction of mobile access via an Internet electric outreach campaigns. bus (e-Bus) with interactive screens will be help- ful when traveling to remote areas. Such mobile access offers.... on-site demonstrations and in- teractive learning, providing practical exposure Challenge 2: to digital services and addressing accessibility challenges. A significant share of respondents (36 percent) 2.4. Partner with local influencers: Partnering report never having heard of the digital gov- with local leaders and influencers, including gov- ernment service portal. This unfamiliarity with ernment officials, school principals, and leaders digital connectivity, services, and opportuni- of local nongovernment organizations will help in ties calls for Azerbaijan to invest in the citizen promoting digital learning. The training of mem- uptake of digital technology. bers in existing community advocacy programs will ultimately provide them with the capacity to become effective advocates for digital learning as well as build trust within their own communi- Recommendation 2: ties. 2.5. Integrate with community events: To Awareness campaigns and outreach-events. boost digital learning participation, it is worth promoting digital services at local and cultural 2.1. Organize awareness campaigns and out- festivals and events where there are booths fea- reach events: The Government of Azerbaijan turing interactive games, quizzes, and contests. should conduct educational campaigns to in- To meet Azerbaijan’s rural community needs, crease awareness of the benefits of digital ser- adapt a community-based approach that emu- vices, including those relating to public services. lates India’s Digigaon Foundation initiative that Establishing community trust by collaborating provides digital literacy in agriculture, finance, and partnering with respected local figures will and healthcare. significantly boost the credibility of the initia- tive. 2.6. Engage in advertising campaigns: Create engaging TV and social media campaigns to 2.2. Form community workshops and demon- showcase how digital services can simplify and strations: Workshops and seminars in venues improve one’s daily life. Real-life examples and such as schools, libraries, and cultural centers community success stories can be compelling. 44 3.2. Support private sector participation in ex- Challenge 3: panding broadband access through catalytic public financing. Rural areas tend to lag urban centers in terms of expansion of high-speed The dearth of affordable and reliable Internet broadband networks and adoption of modern services (mobile and broadband) and existing technologies due to high investment needs to infrastructure disparities pose challenges to cover sparsely populated areas and lower ex- digital expansion efforts in rural Azerbaijan pected returns on these investments, rendering these investments financially unviable. Public sector financing support models, such as State- Aid programs in the EU and Universal Service Recommendation 3: Funds, can fill viability gaps to develop a posi- tive business case for investment in expanding high-speed broadband networks (fiber optic Enable affordability and quality of service based) to rural areas. The World Bank’s techni- improvements of broadband services and cal assistance through the EU4Digital Phase II private sector participation to expand digital program will support MDDT identify potential access. Establish Innovation and Digital Com- viability gap financing models that can be sued munity Centers and promote greater use of to ensure universal access to high-speed broad- digital public services among individuals and band across Azerbaijan. businesses in rural areas. 3.3. Establish Innovation and Digital Commu- 3.1. Develop a pro-investment and pro-com- nity Centers. Develop Innovation and Digital petition enabling environment for broadband Community Centers in existing local infrastruc- services. Aligning the telecom sector’s legal and ture, such as schools or libraries to maximize im- regulatory framework with international good pact and accessibility. These centers will provide practices and standards for a broadband based free internet, digital tools, and a collaborative communications market allows the use of policy environment for discussing ideas and support- and regulatory tools to enable competition, af- ing business ventures and startups. Such centers fordability, and improved quality of broadband can also be hubs for the promotion of financial services. Prioritizing finalization and adoption products and government incentives for invest- of the new Electronic Communications Bill will ing in digital services. The centers will also host be a significant step in upgrading the sector’s training programs, conferences, and workshops, enabling environment, allowing the newly es- becoming central hubs for community education tablished sector regulatory body (ICT Agency) and professional development. to recommend regulatory actions to support investment and market competition.17 Issues 3.4. Establish Senior Digital Guidance Centers. such as ex-ante competition regulation, qual- Within Innovation and Digital Community Cen- ity of service rules and monitoring, as well as ters, create areas and/or specific time slots for cross-sectoral infrastructure sharing are critical steps to support improved access, affordability, and quality of service. 17 The World Bank team is supporting MDDT and ICTA, through the EU4Digital Phase II technical assistance program (2024-2026), with legal and regulatory support to finalize the new Electronic Communications Bill as well as a new law in infrastructure sharing, and develop regulatory frameworks to implement the draft bills once adopted. 45 senior citizen engagement similar to the Finnish SeniorSurf Networks offering hands-on train- Recommendation 4: ing, one-on-one assistance, and workshops on basic computer skills, internet safety, and online government services. This will bridge the digi- Strengthen and broaden computer science tal divide and promote social inclusion for older and STEAM (Science, Technology, Engineering, adults. Arts, and Mathematics) within the educational curricula at the local level. 3.5. Invest in expanded use of digital technol- ogy public service delivery. In addition to ef- 4.1. Integrate computer science and STEAM forts to raise public awareness and, therefore, within school curricula: Introduce comput- household use of online e-services, investments er science education in primary and secondary should be made in increasing the use of digital schools. The learning of foundational coding, technologies by rural public service providers computational thinking, and problem-solving such as schools, health centers, agricultural de- from an early age will prepare students for velopment services (i.e. climate smart, digital the digital economy. In tandem, implement a agriculture technologies), local government, STEAM-based digital program within the cur- community and household energy systems, ru- riculum for the interdisciplinary understanding ral water supply and irrigation, and others. Fur- of digital technologies. Collaborate with inter- thermore, using promotion actions (temporary) national education organizations for curriculum such as zero-rated mobile data for essential updates and ensure that standards and teaching public information websites and public service methods are on par with global ones. delivery applications can incentivize greater dig- ital adoption in rural areas. This can be comple- 4.2. Reform the education and training of mented with promotion activities such as those teachers: Strengthen the digital literacy of listed above under awareness building to drive teachers through specialized training, mento- sustained use over time. ring, and access to local resources. Provide on- going professional support (e.g., help desks and online forums) to ensure educators are continu- ally updated on new technologies and methods. 4.3. Expand vocational education and training Challenge 4: centers to include technical specializations: To meet the increasing demand for specialized technical skills across Azerbaijan, expand its vocational training centers by offering technol- Insufficient attention is being granted to dig- ogy-focused programs aligned with industry ital skills in the education sector and in the needs. Offer flexible learning options, certifica- technical and digital professions. tions, and career support services, as well part- ner with industry for curriculum development and job placement. 46 Annex Table A.1: Azerbaijan: Employment Status by Rayon (in percent) Hajigabul Kangharli Aghdash Overall Nesimi Khazar Oghuz Sharur Barda Gakh (in percent) Employed (formally/ 6 51 10 47 23 43 62 56 61 40 informally) Self-employed/ business 45 21 42 13 30 22 13 14 5 23 owner Unemployed, seeking work 8 5 6 3 11 12 2 6 11 8 Student 10 10 7 17 9 7 11 15 100 10 Retired 6 1 6 2 1 2 2 1 2 Unemployed, Not seeking 22 7 26 11 18 9 7 4 6 12 work Unpaid domestic work/care 1 3 6 6 2 4 6 3 function Has a disability 1 1 2 1 7 1 1 1 Table A.2: Employment Sector by Rayon Hajigabul Kangharli Aghdash Overall Nesimi Khazar Oghuz Sharur Barda Gakh (in percent) Agriculture, forestry, fishing 78 17 79 11 53 16 8 2 25 Mining, quarrying 2 1 1 2 1 Manufacturing 2 3 1 3 1 Electricity, gas, steam, air 2 4 3 7 6 3 conditioning Water supply; sewerage, 1 2 2 2 1 1 waste management Construction 4 6 6 4 4 13 10 18 8 Trade 2 12 7 6 2 11 13 3 6 Transportation, storage 1 2 2 3 1 7 3 2 Accommodation, food 3 1 1 2 1 service activity Information, communica- 5 4 2 1 4 2 2 tion Financial, banking, insur- 2 4 6 1 ance activity Professional, scientific, 1 1 0 technical Administrative/support 7 5 2 5 8 1 2 4 service activities Public administration, 2 4 7 11 10 2 5 defense Education, training 6 41 8 37 15 24 36 10 29 24 Human health, social work 2 4 2 2 4 7 12 7 9 6 Arts, entertainment, rec- 1 0 reation Other service activities 6 7 2 16 2 6 1 7 5 6 Other domestic govern- 3 5 1 4 4 6 3 ment or civil services 2 Table A.3: Distribution of Individual income, by Rayon Hajigabul Kangharli Aghdash Overall Nesimi Khazar Oghuz Sharur Barda Gakh Manat (in percent) Zero Income 35 22 44 35 38 28 21 18 23 29 0 – 250 30 16 23 6 28 8 6 4 5 14 250 – 500 25 41 27 34 24 42 30 24 28 32 500 – 750 2 16 4 11 7 12 19 17 19 12 750 – 1000 2 3 3 12 2 4 15 17 18 8 >1000 1 1 2 1 1 6 18 7 4 3 Figure A.1: Internet Access, by Respondent Income Level Source: World Bank Figure A.2: Top Five Devices Used by Respondent Income Level Source: World Bank 4 Figure A.3: Top Five Reasons to Dislike Broadband Connection, by Rayon Source: World Bank Figure A.4: Top Five Reasons to not Select Broadband Connection, by Rayon Source: World Bank 5 Figure A.5: Registration on Digital e-Government Services, by Respondent Income Level Source: World Bank Figure A.6: Most useful Purpose to Use Public Digital e-Services, by Respondent Income Level Source: World Bank 6 Figure A.7: Frequency of Critical Evaluation of Online Information, by Respondent Income Level Source: World Bank Figure A.8: Perceived Need for Online Training, by Respondent Income Level Source: World Bank 7 68