November, 2024 South Caucasus Institutional Development and Technology Integration for Increased Research and Quality Higher Education in Azerbaijan P500971 Education © 2024 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved. This work is a product of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. The boundaries, colors, denominations, links/footnotes and other information shown in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The citation of works authored by others does not mean the World Bank endorses the views expressed by those authors or the content of their works. Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution—Please cite the work as follows: “World Bank. (2024). Institutional Development and Technology Integration for Increased Research and Quality Higher Education in Azerbaijan. © World Bank.” Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Acknowledgment This analytical work was led by a team comprising Shiro Nakata (Senior Economist), Renata Freitas Lemos (Senior Economist), Ciro Avitabile (Senior Economist), and Anna Berdzenadze (Education Specialist) in collaboration with the Ministry of Science and Education (MoSE) of Azerbaijan. Aytaj Pashayeva (Education Consultant) led the analysis and report preparation in collaboration with the research teams of Azerbaijani academics. The following authors’ work has been integrated into this report. Aytaj Pashayeva, the Ontario Institute for Studies in Education (OISE), University of Toronto looked into the work of career centers as well as work-integrated learning programs at HEIs and Khayala Ismayilova, PhD, KTH Royal Institute of Technology studied incentive programs in HEIs for boosting research outcomes. Two teams of researchers, Jeyhun Hajiyev, the Strategy, Innovation, and Digitalization Department, the Ministry of Digital Development and Transport, with Mehpara Yusifli, the Russian and English Education Department, Western Caspian University, and Elvin Yusifli, the Caspian Innovation Center looked into the link between the labour market and higher education programs in Azerbaijan. Sevinj Iskandarova, Ph.D., Bridgewater College, with Kanan Yusif-zada, Ph.D., Azerbaijan State University of Economics, and Sevinj Mukhtarova, Ph.D., Azerbaijan Medical University, studied the impact of integrating AI into higher education curriculum in Azerbaijan. The team is grateful for insightful suggestions from the peer reviewers, Roberta Malee Bassett (Senior Education Specialist), Koen Martijn Geven (Senior Economist), and Diego Ambasz (Senior Education Specialist). The study was implemented under the overall guidance and supervision of Rolande Simone Pryce (Country Director), Steffi Stallmeister (Country Manager), and Rita Kullberg Almeida (Practice Manager). The team also thanks Ahmet Levent Yener (Practice Leader), Anna Olefir (Senior Education Specialist), Hala Bishara (Senior Program Assistant), Lela Ghongadze (Program Assistant), Sabina Guliyeva (Program Assistant), and Ekaterine Asatiani (Program Assistant) for their helpful advice and operational support. Special thanks to Sevinj Mammadova, PhD, Associate Program Director of Graduate School of Education and Human Development of George Washington University, for her continuous support for collaboration with the MoSE. The team is immensely thankful for the high-level guidance of the Minister of Science and Education of Azerbaijan, Mr. Emin Amrullayev, and the Advisor to the Minister, Mr. Nijat Mammadli. Table of Content EXECUTIVE SUMMARY 2 INTRODUCTION 3 Higher Education System of Azerbaijan 3 Higher Education Student Population 5 Governance of Higher Education and Research 6 Funding of Higher Education & Research 7 Quality Assurance & Educational Programs in Higher Education 8 ALIGNMENT OF HIGHER EDUCATION, SKILLS & THE LABOUR MARKET 10 Labour Market & Employment 10 Bridging Graduate Employability & Higher Education Programs 13 INSTITUTIONAL DEVELOPMENT FOR INCREASED RESEARCH & TECHNOLOGY INTEGRATION 15 Research Incentives in Higher Education 15 AI Integration & Faculty Development 18 RECOMMENDATIONS 21 CONCLUSION 27 REFERENCES 28 1 EXECUTIVE SUMMARY Azerbaijan has identified the strengthening of on AI fundamentals, ethical behavior, and leadership. competitive human capital as one of its five national It found that both groups shared concerns about priorities for socio-economic development, which plagiarism, insufficient guidance, and the need for emphasizes the need to enhance the contribution of further training, but the training session delivered as human capital to national wealth through education. part of the research significantly improved their It also stresses the importance of ensuring that confidence and knowledge. higher education institutions are equipped with the skills and international competitiveness required to A study by Yusifli et al. highlighted the importance meet the demands of the global economy. of aligning higher education curricula with the labor market to prepare students for successful careers. It Developing a competitive higher education system is recommended that curricula be regularly updated with quality research output and education programs to reflect industry requirements, incorporating that meet the demand of the labor market requires feedback from students, industry partners, and institutional development and state policies. For alumni. One approach is to integrate curriculum instance, Pashayeva's study on career centers and reviews into the university accreditation cycle, work-integrated learning in public universities typically conducted every five years. However, given highlighted that, with adequate support, these the rapid pace of technological advancements, centers can effectively prepare students for the labor shorter-term reviews are advisable to ensure timely market. Work-integrated learning programs serve as updates. valuable tools for bridging higher education and the work force. Engaging industry partners and alumni in the curriculum review process provides valuable insights Research by Ismayilova revealed that despite the into current industry trends and skill requirements. implementation of the research rewards Additionally, leveraging student feedback helps mechanisms, the quality of these publications is not ensure that curricula are tailored to meet the high. While the quantity of publications has expectations of the target audience. When updating increased, there is evidence to suggest that many of curricula, consideration should be given to fields these articles are being published in lower-impact requiring specialized infrastructure or access to journals. This trend may indicate that the financial recent software. Allocating additional funds for incentives are encouraging submissions regardless necessary resources can enhance the quality of of quality, potentially undermining the overall education and equip students with relevant practical standard of research output. This raises important skills. questions about whether university faculty are incentivized to produce fewer, higher-quality papers A proactive approach to curriculum review, involving or a larger volume of lower-quality work. stakeholders from both academia and industry, will help maintain curriculum relevance, enhance Integrating AI into university administration and student confidence in the labor market, and education can enhance competitiveness. A study by contribute to the overall employability and success Iskandarova et al. assessed faculty and of graduates. administrators' readiness before and after training 2 INTRODUCTION The World Bank Education Team in Azerbaijan, in collaboration with the Ministry of Science and Education, issued a call for policy research papers in 2024. The objectives were to gain insights into existing challenges from the perspective of the country’s higher education stakeholders and to promote evidence-based policy discussions in Azerbaijan aimed at improving educational quality and advancing research activities. Through competitive selections, four research teams and individual researchers were awarded a research grant to carry out a three-month study in different areas of higher education. This report was produced to analyze key challenges of today’s higher education in Azerbaijan and present policy recommendations, integrating the research results of these researchers. The names, designations, and research topics of these contributing researchers are acknowledged separately in the report. The report offers a concise overview of the higher education system in Azerbaijan, addressing key areas to provide a comprehensive understanding of the system's characteristics. These include institutions of higher education, student population, governance of higher education, and the funding of research. The report delves into the primary issues within the system, drawing on findings from research projects to assess the alignment of current higher education programs with the labor market, the integration of work-integrated learning into higher education institutions, and career support provided to students. Additionally, the report explores how incentive mechanisms impact research outputs and how the integration of AI can enhance the confidence of faculty and administrators in higher education. It concludes by offering recommendations for policymakers and institutions. It aims to provide policymakers, academics, and higher education leaders and professionals of the country with an overview of the system, its challenges, and insights into key topics such as technology integration, work-integrated learning, and research governance. Higher Education System of Azerbaijan Azerbaijan's higher education system is relatively compact, consisting of a diverse range of institutions with governance structures that are gradually gaining more autonomy. The system reflects its Soviet heritage while also integrating European policy changes through its involvement in the European Higher Education Area (EHEA) and the Bologna Process and embracing management practices from the North American higher education system. In 2005, Azerbaijan became a member of the EHEA and pledged to adhere to the Bologna Process, which aims to standardize higher education practices among member countries (Mammadova & Valiyev, 2020). This commitment involved adopting the European Standards and Guidelines (ESG) for Quality Assurance, establishing a three-tiered higher education 3 system, improving student exchange programs, and implementing the European Credit Transfer System (ECTS) (Jabbarzade, 2020). Azerbaijan's higher education system comprises 52 institutions, 40 of which are publicly funded and 11 privately owned. The Ministry of Science and Education oversees 20 public and 10 private institutions, while 13 public institutions fall under the purview of different public entities. Seven public institutions are specialized in military and public service training and are managed by various ministries and public service entities. The majority of higher education institutions, about 85%, are located in and around the capital city of Baku. Public universities, known for their larger scale and ability to accommodate more students, are highly regarded and seen as dependable for securing future job opportunities. This is partly due to the loss of trust of the public in private universities with their mushrooming during the first years of independence and their abrupt closure with the introduction of accreditation rules. Consequently, most students (around 87%) choose to attend public universities (SSC, 2023). The major universities in Azerbaijan, such as Baku State University (BSU), Azerbaijan State University of Economics (UNEC), Azerbaijan State Oil and Industrial University (ASOIU), Azerbaijan State Pedagogical University, and Azerbaijan Technical University, collectively accommodate most of the undergraduate student population (Isakhanli & Pashayeva, 2018; SSC, 2023). Azerbaijan's public higher education system displays significant institutional diversity. It features 9 comprehensive universities that offer a broad array of academic programs and 31 specialized higher education institutions (HEIs) focusing on specific areas of study. This diversification began with the rebranding of previous institutes as universities and the expansion of their academic focus (Isakhanli & Pashayeva, 2018). It was further reinforced in 2016 with the introduction of a new education law, which introduced the concept of a research university (Ministry of Justice, 2016). A research university is defined as an institution that integrates research and education by involving educators and learners in the research process, adding a new dimension to the hierarchical structure of Azerbaijani higher education. In addition, the higher education system began to grant more autonomy to HEIs in their financial and management decisions. This included the introduction of faculty research incentives, greater independence in financial allocations, and the establishment of governing boards. Between 2017 and 2024, most public universities in Azerbaijan gradually transitioned to public legal entity status, demonstrating their financial sustainability through transparent fiscal reporting, which facilitated this shift (report.az, 2024). 4 Higher Education Student Population During the 2022-2023 academic year, a total of 222,809 students were enrolled in bachelor's and master's degree programs in Azerbaijan. These programs were offered in Azerbaijani, Russian, and English, and students could choose between full-time (92%) or part-time (8%) studies. The instruction was delivered by approximately 15,000 instructors, with around half of them holding either a Doctor of Science or Doctor of Philosophy degree (SSC, 2023). In the last two decades, there has been a significant surge in higher education participation; however, the system has been criticized for falling behind in terms of enrolment numbers. In 2005, a total of 31,983 students were admitted to HEIs at the bachelor's and master's levels. This number doubled to 62,314 by 2022 (Figure 1, page 5) (SSC, 2023). There was also a notable increase in interest in pursuing master's degrees. In 2005, master's degree students accounted for 10% of the total student population, a figure that rose to 19% by 2022. This trend can be attributed to the state order program including tuition support for master's degree students from 2010, as well as the growing societal value placed on postgraduate studies. In 2020, the state order program was further expanded to provide financial aid for doctoral degree students, contributing to a similar rapid increase in the number of students at the doctoral level. This initiative aims to improve access to higher education and assist students in obtaining advanced degrees. Despite the increase, in comparison to other countries with similar historical backgrounds, population sizes, and economies, Azerbaijan’s tertiary education enrolment rates are lower. For instance, Georgia's enrolment rate is twice as high as Azerbaijan's (UIS, 2023). Figure 1: Admission to bachelor’s and master’s degree Studies, 2005-2022 Source: SSC, 2023 5 Governance of Higher Education and Research The higher education system is regulated by MOSE, with major decisions requiring approval from the Cabinet of Ministers. Key regulations and policies are issued through presidential decrees, with the Law on Education 2009 serving as the primary regulatory framework. The Law on Higher Education has been under discussion since 2021, and as of 2023, over 300 recommendations were introduced for further deliberation (MOSE, 2023). The objective of this law is to bring clarity to existing policies and incorporate new additions. The document outlines the core principles of state policy in higher education in Azerbaijan, including the organizational, legal, and economic bases of the sector, the rights and responsibilities of students and educators, key provisions regarding entrepreneurship and innovation activities, and other aspects related to higher education. It also establishes guidelines for international cooperation in the field. Its enactment will enhance understanding of the regulatory framework governing higher education and address emerging needs and challenges in the sector. As of summer 2024, the Law on Higher Education has not been passed. After gaining independence in 1991, Azerbaijan initiated reforms to enhance university research capacity by strengthening postgraduate education. The First Education Law of 2003 sought to integrate research and teaching within higher education, gradually increasing research activities at universities while maintaining the Azerbaijan National Academy of Sciences (ANAS) as the central research authority. Reflecting the country’s Soviet legacy, universities focused primarily on teaching, with ANAS being responsible for organizing and conducting research until 2022 (Ministry of Justice, 2003). A significant shift occurred in July 2022 when a presidential order transferred 30 research institutes from ANAS to the Ministry of Science and Education (MOSE), with three museums placed under the Ministry of Culture. Prior to this reorganization, ANAS was the dominant force in Azerbaijan's research landscape, employing over 10,000 individuals, including more than 4,500 researchers, and receiving two-thirds of the national funding allocated for scientific research. Before these changes, MOSE primarily focused on general and higher education, with research activities concentrated under ANAS (Isakhanli & Pashayeva, 2018). The governance of science in Azerbaijan now includes a variety of institutions and mechanisms. In 2023, the Science and Higher Education Agency was established under MOSE to address issues and policies related to higher education and science specifically (APA, 2024). MOSE plays a more central role in formulating and implementing policies related to scientific research and development, overseeing fund allocation, fostering collaboration between research institutions and universities, and setting guidelines for evaluating and crediting scientific institutions. Although its role has shifted, ANAS remains a crucial organization that promotes scientific advancements and provides expert advice to the government. 6 Azerbaijan’s Law on Science of 2016 establishes the foundational principles of state policy regarding the organization, management, and development of scientific research activities. The Law outlines the goals, rights, and responsibilities of those engaged in scientific work and the mechanisms for financing these activities. It emphasizes the importance of integrating science and education with the economy and introduces the concept of a research university, which refers to HEIs or scientific education centers that effectively combine advanced scientific research with high-quality educational processes (Ministry of Justice, 2016). The Law defines key principles aimed at stimulating scientific activities in Azerbaijan, including the freedom of scientific creativity, the protection of scientific ethics, the integration of science within society, and the promotion of healthy competition. These principles are intended to enhance the quality of research and align Azerbaijan’s scientific endeavours with international standards. To support this, the state is tasked with creating conducive research environments and providing incentives for the training of highly qualified scientific personnel. For example, the Law provides for long-term loans and grants for doctoral students, as well as financial rewards for published research in indexed journals and articles with high international citations. Additionally, the Law ensures social security and financial incentives for researchers, including paid sabbaticals, salary supplements, and other benefits, to promote the well-being of those engaged in scientific work. It also mandates that researchers adhere to ethical standards, avoid plagiarism, and continuously improve their scientific knowledge and skills (Ministry of Justice, 2016). Funding for Higher Education & Research In Azerbaijan, research activities are primarily conducted by the public sector. In 2022, there were a total of 131 organizations engaged in scientific research, with 65% being scientific research organizations, 30% HEIs and 5% private sector organizations (Figure 2, Page 8) (SSC, 2023). Over time, the overall number of organizations involved in research has been decreasing, particularly among private research institutes. Table 1: Research funding as % of GDP and % of Public Expenditure Year 2005 2010 2015 2020 2021 2022 Amount 28,800,000 92,800,000 113,200,000 143,600,000 151,800,000 167,800,000 % of GDP 0.23% 0.22% 0.21% 0.20% 0.16% 0.13% % of Public Expenditure 1.35% 0.79% 0.64% 0.54% 0.55% 0.52% Source: SSC, 2023 Research in Azerbaijan continues to face chronic underfunding. While there has been a 139 million manat increase in research funding since 2005, its proportion of Gross Domestic Product (GDP) and public expenditure has declined (Table 1, Page 7) (SSC, 2023). Although HEIs do engage in research, only a few possess the capacity to conduct high-quality work. A 7 major challenge for HEIs is the limited funding available for research. Despite some growth since 2000, HEIs still receive just about 10% of the national annual research and development budget (World Bank, 2018). Thus, around 70% of these institutional budgets are allocated to salaries, leaving little for research and development. Figure 2: Organizations Involved in Scientific Research (2005-2022) Source: SSC, 2023 Quality Assurance & Educational Programs in Higher Education In Azerbaijan, an educational institution must be legally registered as a separate legal entity, hold a license from the relevant authority, and be accredited by the appropriate national body to be officially recognized and guaranteed by law (Ilyasov, et al., 2023). Thus, the quality assurance system is supported by various legal documents, including presidential decrees and laws that outline the standards and procedures for accreditation and quality assessment. These regulations are designed to align local practices with European and international standards, ensuring that Azerbaijani qualifications are recognized and valued internationally. After joining the Bologna Process in 2005, Azerbaijan started to integrate into the European Higher Education system, adopt a credit system, and establish a modern accreditation system. Quality assurance for EHEA countries in higher education is guided by the Standards and Guidelines for Quality Assurance in the European Higher Education Area (ESG), emphasizing institutional responsibility and stakeholder involvement. Local regulations require universities to develop quality policies, action plans, and annual performance reports 8 to meet these standards. However, the state's approval of education programs and curricula limits the implementation of these standards by Azerbaijani institutions. The higher education system in Azerbaijan is regulated in a way that limits the autonomy of universities to independently introduce or terminate academic programs. Any new academic programs must be submitted to MOSE for approval. As a result, admission processes are limited to programs that have received prior approval from the relevant authorities. The ongoing monitoring and periodic review of higher education programs in Azerbaijan involve adhering to the National Qualifications Framework, which mandates an internal quality assurance system and regular updates to assessment methods and teaching practices. Additionally, local institutions must undergo cyclical external quality assurance processes, such as accreditation, as regulated by the Agency of Quality Assurance in Education (AQAE) and aligned with international standards for qualification recognition. Additionally, the termination of academic programs can only take place following an accreditation review, typically based on recommendations from AQAE. To enhance the quality assurance system, it is recommended that the state grant greater autonomy to higher education institutions, develop guidelines for knowledge management, and improve legal regulations to support periodic internal monitoring and accountability. While universities in Azerbaijan have the authority to determine the language of instruction, the State Standard and Program of Higher Education (Ministry of Justice, 2010) specifies Azerbaijani as the official language of instruction in higher education. Nevertheless, universities have the flexibility to offer programs in foreign languages, depending on their institutional capacities (Suleymanov, 2020). As a result, universities in Azerbaijan currently offer programs primarily in Azerbaijani, Russian, English, and French. For instance, the French-Azerbaijani University under the Azerbaijan State Oil and Industry University is a testament to this linguistic diversity, offering instruction in both French and Azerbaijani languages, reflecting the evolving language policies within Azerbaijani higher education. In summary, while Azerbaijan’s quality assurance system is aligned with many aspects of the Bologna Process, particularly regarding standards and external evaluations, ongoing efforts are needed to fully harmonize with all Bologna criteria, particularly in areas such as institutional autonomy and internal monitoring practices (Ilyasov et al, 2023). 9 ALIGNMENT OF HIGHER EDUCATION, SKILLS & THE LABOUR MARKET Labour Market & Employment Graduate unemployment is a pressing issue in Azerbaijan. In 2019, according to the State Statistical Committee (SSC), half of the unemployed individuals had completed post- secondary education, with 22% holding university degrees (14% men and 8% women). Male and female graduates face different starting points in their careers due to the requirement that men complete a year of mandatory military service before entering the workforce. Data from the World Bank and the International Labour Organization (2024) indicate that youth unemployment in Azerbaijan spiked during the COVID-19 pandemic, rising from 11.4% to 15.1%, but has since gradually decreased to 13.6%. Available studies signal challenges that persist within workforce development. Some of these challenges are due to the mismatch between the technical skills needed in the labour market and the skills supplied by the universities. According to Valiyev (2020), factors such as an oversupply of graduates in specific fields like health, education, and humanities contribute to increased unemployment rates. Simultaneously, there is a shortage of financial managers and agriculture experts, outlining a pressing issue in aligning education with industry needs. The current obstacle faced by higher education in Azerbaijan is the mismatch between university training and the skills demanded by the labour market (Valiyev, 2020). Moreover, challenges also arise from the level of graduates' employability and the soft skills necessary for successful career development. In a 2020 study by Amirova and Valiyev, 24 transferable soft skills and competencies crucial for enhancing graduate employability were compiled and examined. The study, which involved over 2,500 students from six prominent universities in Azerbaijan, revealed a significant gap between the skills taught at universities and those sought by employers in the job market. As a result, the lack of these essential skills emerged as a major barrier to students' employment prospects. Through employer and graduate rankings, the study identified a core set of the top five competencies, including proficiency in a second language (primarily English), self-confidence, computer skills, interpersonal skills, and creativity, that hold particular importance for Azerbaijani employers and graduates. There has been a growing interest in master’s degree programs , as highlighted in Figure 1 on page 5. This is because the field and level of study can significantly impact employment opportunities after graduation. According to a 2020 study conducted by Mammadova and Valiyev, which surveyed 2,400 students, 55% of respondents believed that while it is possible to start a career without a master’s degree, it would result in significantly restricted job opportunities. In contrast, 34% of students had a more positive outlook, while 11% were undecided. 10 Technical fields, along with educational, economics, and management programs, are the most sought-after areas of study in higher education at the bachelor’s level (Figure 3, p. 10) (SSC, 2023). Over 20% of students enroll in pedagogical or educational programs, which also tend to have the lowest tuition fees. At the master's level, technology and economics and management programs are particularly popular, drawing in 63% of all students admitted to these advanced degrees (SSC, 2023). Figure 3: Distribution of Students in Different Educational Programs, 2022 Source: SSC, 2023 According to Amirova and Valiyev (2020), there is currently a scarcity of graduates who are adequately qualified as financial managers and agricultural experts. As an illustration, many graduates from higher education institutions specializing in education, which only account for 8.6% of employment and offer relatively low salaries, need help finding suitable employment opportunities. Moreover, this group of individuals is commonly perceived to possess insufficient vocational skills, which could lead to unemployment. Students feel differently regarding future employment opportunities. Sadirkhanov's (2009) research utilized a combination of student surveys, focus-group discussions, and in-depth interviews with educators and policy practitioners to investigate the relationship between the higher education system and labour market demands in Azerbaijan. The findings revealed that students attending private universities tend to be significantly more optimistic regarding employment opportunities than their public university counterparts. There are discrepancies in the views of training institutions and employers regarding the competence of graduates across various economic sectors. The most recent research conducted by the Asian Development Bank (ADB) in 2023 revealed that while 83% of surveyed training institutions felt that their graduates were sufficiently equipped for entry- 11 level roles, fewer than 25% of employers in these industries agreed. Employers in Azerbaijan particularly highlighted concerns about the lack of both general skills, such as soft skills and creativity, and job-specific skills among graduates (ADB, 2023). A survey conducted by the Central Career Branch of the Public Employment Agency, operating under the MLSPP in 2024, gathered insights from 138 employers across 22 industry sectors (MLSPP, 2024). This study aimed to delve into the expectations and requirements of the labour market. Findings from human resources specialists revealed that the challenges indicated could be tackled through additional training and education. For instance, highlighted significant challenges faced by employers during the hiring included deficiencies in presentation skills, communication skills, familiarity with job vacancies, knowledge about the company, and professionalism in conduct and attitude. Figure 4: Challenges encountered by employers in the hiring process Source: Adopted from Yusifli et al., 2024 Employers face significant challenges regarding the soft skills of employees. The study shows that a notable 58% of employers pointed to deficiencies in presentation skills, while half identified a lack of effective communication skills. Additionally, many candidates appeared to be unprepared for their job applications, failing to research the company or position beforehand. Employers also raised concerns about professionalism, with issues such as employees being late to work frequently mentioned as problematic. Employers preferred candidates with higher education degrees, particularly master's degrees, for managerial positions. Furthermore, opinions regarding the relevance of the study field to advertised positions varied among HR specialists. While approximately 50% emphasized the importance of a strong match between the candidate's field of study and the job requirements, 36% considered it somewhat important, with about 15% indicating it was of little or no importance. These insights underscore employers' multifaceted considerations when evaluating potential candidates and emphasize the significance of educational qualifications and alignment with job requirements. 12 Bridging Graduate Employability & Higher Education Programs Strengthening competitive human capital is one of the five national priorities in Azerbaijan’s socio-economic development plan, as outlined in the Presidential Order on "Azerbaijan 2030: National Priorities for Socio-Economic Development" (President.az, 2021). The order emphasizes the need to enhance the role of human capital in the nation's wealth through education, ensuring that higher education institutions develop highly professional skills and achieve international competitiveness. Furthermore, the socio-economic development strategy for 2021–2026 highlights the importance of advancing higher education in relation to sustainable employment. Several State-level policies enforce the bridging of higher education programs with the labour market. In February 2020, a Presidential decree titled "Approval of the Action Plan for Implementing the Employment Strategy for 2020-2025" directed MOSE and the Ministry of Labour and Social Protection of Population (MLSPP) to support the establishment of career centers and the provision of career counseling services within various educational institutions. The primary aim was to guide the professional orientation of youth, with a specific goal of creating 20 new career centers and monitoring their annual usage (Ministry of Justice, 2020). Recent policies have further HEIs to prioritize work-integrated learning (WIL) and career centers. In response to the COVID-19 pandemic, the Cabinet of Ministers in 2021 revised the final graduation requirements, eliminating traditional examinations and diploma defenses for undergraduate and master's degrees. Instead, students who met the required GPA and completed mandatory work placements were eligible for their diplomas, highlighting the increased importance of practical experience. Additionally, in December 2023, new regulations titled "Rules for Internship for Students of Higher and Secondary Educational Institutions" were approved, offering HEIs and students more flexibility in organizing mandatory internships. These changes, effective from September 2024, categorize work placements based on the level of education and allow adjustments in the duration and mode of these placements to better suit students' needs (Ministry of Justice, 2023). A study by Yusifli et al. (2024) investigated the alignment of higher education programs in Azerbaijan with the evolving demands of the market and the future landscape of work, in topics such as digitalization and innovation, sustainable development, and others. The research entailed a survey with 1,614 students and 26 employers which highlighted the intricate connections between graduate employability, company performance, job opportunities, employability skills, and curriculum design and delivery. Authors (2024) suggest that to more effectively address the needs of its evolving labor market, Azerbaijan has been focusing on enhancing its higher education system and aligning it with global standards. 13 A study by Pashayeva (2024) explored work-integrated learning (WIL) policies and programs in higher education, as well as career services centres (CSC). The study involved website analysis of career centers, interviews with the university career centre administrators, surveys and focus group discussions with the students. The research revealed that all sampled 31 institutions had established career centers with varying focus areas and organizational structures (Figure 5, page 14). However, only one-third of these institutions met most of the evaluation criteria, scoring between 80% to 100%. Most career centers were established within the past 24 years, with a significant concentration established between 2018 and 2024. Additionally, career centers have increasingly assumed responsibility for alumni relations, reflecting a recent initiative supported by the Public Employment Agency under the Ministry of Labour and Social Protection of Population and MOSE. Figure 5: Career Centers and their Establishment Years Source: Pashayeva, 2024 Interviews conducted with heads and administrators of career centers in 14 higher education institutions (private n=4 and public n=10) provided insights into the services offered. While some universities had well-established services, others were in the process of development. Challenges such as understaffing and underfunding hindered career centers' ability to engage effectively with students. Responses from four student focus group discussions varied based on personal choice of study area, parental influence, or centralized admissions. Students expressed a desire for more practical knowledge aligned with their areas of study. Mandatory one-month work placements were deemed too short, with students advocating for placements that offer substantial learning opportunities. Additionally, students 14 emphasized the importance of acquiring soft skills (e.g., communication, conflict management) and technical skills (e.g., computer software proficiency, language proficiency) relevant to their specialization. The survey findings offered an additional understanding of student viewpoints and encounters. A correlation emerged between students' duration of attendance at their HEIs and their familiarity with the institution's career centers. Nonetheless, overall, there was a notable lack of awareness regarding the existence of these career centers among students. Among those who availed themselves of career services, the most utilized offerings from career centers included participation in career fairs, seminars, and training sessions. INSTITUTIONAL DEVELOPMENT FOR INCREASED RESEARCH & TECHNOLOGY INTEGRATION Research Incentives in Higher Education The universities in Azerbaijan have been encouraged to enhance their research activities; however, an analysis of research performance indicates that HEIs still have limited research capacity and low research productivity. In Azerbaijan, the concept of a research university is relatively new, even though research is considered one of the main missions of the university (Abbasov & Jafarli, 2022). A study on the motivation of faculty in research and teaching found that Azerbaijani university teachers have less confidence in their research tasks compared to their teaching responsibilities. The current reward structures were found to be discouraging, prompting universities to reevaluate their incentive systems to ensure they align with the evolving landscape of higher education and meet the needs of university faculty (Ismayilova & Klassen, 2019). Despite the rapid increase in student numbers (Figure 1, page 5), a similar trend was not observed among the teaching staff (Figure 6, page 15). In the academic year of 2022-2023, 15,101 faculty members taught at HEIs in Azerbaijan. The lack of proportionate increase in university staffing can be explained by the increased use of adjunct faculty worldwide, including in Azerbaijan. The reduction in full-time faculty impacts the availability of faculty for research activities. Adjunct faculty, who primarily focus on teaching, may limit the institution’s research development if they make up a large portion of the teaching staff. However, adjuncts can also maintain effective teaching productivity, which could allow full- time faculty more time to dedicate to research endeavors (Fairweather, 2002). 15 Figure 6: Teaching Staff in HEIs in Azerbaijan Source: SSC, 2024 The number of publications from Azerbaijan has increased, but the H Index remains low, pointing to challenges in the quality and impact of research. According to the SCImago Journal and Country Ranking for 2002, which is derived from Scopus data, when compared to neighbouring Georgia, which has slightly fewer publications, Georgia’s higher H Index suggests better quality research output. Similarly, in comparison to Bulgaria, a country with a similar GDP per capita, both Azerbaijan and Georgia lag behind, with Bulgaria having a higher H Index and a greater number of publications, indicating a gap in research quality and impact (Table 2, Page 16). Table 2: Country ranks based on published documents and H Index, 2023 Citations Citable Self- per GDP per Country Documents Docs Citations citations Document H Index capita Bulgaria 7,936 7,490 4,762 1,091 0.60 347 $7,935 Azerbaijan 2,567 2,438 1,781 393 0.69 153 $7,646 Georgia 2,508 2,144 2,655 369 1.06 248 $6,484 Source: Scimago Journal & Country Rank, 2023 There are concerns about the effectiveness of research incentives currently implemented in Azerbaijani HEIs. A study by Ismayilova (2024) explored research incentive policies and 16 practices at eight HEIs through semi-structured interviews with senior university administrators and gauged their perception of these policies’ effectiveness. The study revealed that there is a financial reward policy for international journal publications in all sampled universities. This policy offers a one-time payment when a faculty publishes a journal article or a conference paper in Web of Science and Scopus indexed journals. The study found that financial research incentives and reward policies have been widely implemented to boost research productivity in Azerbaijani universities. These incentives are established through various provisions in the country’s Law on Science (201 6), aimed at stimulating and enhancing research efforts. The incentive programs primarily recognize scientific articles published in journals indexed in Web of Science, Scopus, and similar databases. Consequently, as reported by many senior university administrators, the number of publications has increased since the introduction and expansion of these financial incentives. The author (2024) expresses concern that despite the rise in the quantity of publications, the quality of research articles produced in the universities studied has been negatively impacted by these financial reward schemes. The increase in publication numbers is not inherently negative, but the rapid growth in journal output is troubling because more research is appearing in lower-impact journals. It seems that monetary incentives may encourage the submission of research articles without sufficient regard for their quality. An important consideration is whether university faculty might prefer to publish fewer high- quality papers or lower-quality ones. This situation raises concerns about the effectiveness of research incentives currently implemented in Azerbaijani HEIs. The study indicates that these incentives alone do not sufficiently foster a strong research culture within academic departments. One potential explanation is the Soviet legacy, where research was not a central mission of universities. Thus, while incentives can boost research productivity, their effectiveness seems to depend on an institutional culture that actively supports research and capacity-building. Moreover, financial incentives may impact different groups of university faculty in varying ways. For instance, these incentives often have little influence on those who are already actively involved in research. The study also found that many faculty members who lack the necessary research skills do not fully utilize these incentives. Factors such as language barriers and the lower acceptance rates of higher-level journals make publishing in international journals more challenging and time-consuming than in domestic ones. As a result, these faculty members often prefer to take on more teaching hours to increase their income rather than engage in research. 17 AI Integration & Faculty Development The integration of Information and Communication Technology (ICT) into education in Azerbaijan commenced in the early 2000s through a state program on ICT in education , supported by the World Bank. This effort was broadened with the introduction of the State Program on Informatization of the Education System for 2008-2012, which extended to HEIs. The program aimed to embed ICT in teacher training, teaching, and learning, and to advance the computerization of HEIs (Ahmadov, 2011). Additionally, the Socio-Economic Development Strategy of the Republic of Azerbaijan for 2022-2026, approved by the President, highlights the development of innovative and digital skills in higher education as a major priority (Ministry of Justice, 2022). The adoption of technology by HEIs has led to the implementation of e-libraries and learning management systems, and the extensive use of video conferencing and online learning tools during the COVID-19 pandemic (Aliyev & Aliyeva, 2024). The rapid adoption of Generative Artificial Intelligence (GenAI) globally since 2022 has led to its swift integration into higher education, with students embracing the technology more quickly than faculty members (Coffey, 2024). This trend has also been observed within the Azerbaijani higher education system. Azerbaijan's position as 74th out of 181 countries in the 2022 AI Readiness Index, as reported by Oxford Insights, reflects the country's preparedness to adopt AI across various sectors and compete on a global scale (Rogerson et al., 2022). While neighbouring countries like Iran and Georgia rank lower, Azerbaijan is poised to lead AI integration in the region. According to Iskandarova et al. (2024), countries such as Türkiye, Russia, and the United Arab Emirates offer valuable examples for Azerbaijan, having already embedded AI into their academic curricula and developed robust AI education policies. These advancements highlight the importance of Azerbaijan's ongoing efforts to incorporate AI, emphasizing the potential economic, industrial, and societal benefits that AI can offer. Universities need to develop sound guiding frameworks and institutional capacity to integrate AI tools to harness their potential. The study conducted by Iskandarova et al. (2024) examined the obstacles and difficulties faced by educators and administrative leaders and looked into effective strategies for successfully incorporating AI tools into the curriculum to improve student learning experiences. The study included 97 undergraduate and graduate faculty members along with 11 administrative leaders from educational institutions in Azerbaijan from seven public and private universities, where they underwent AI training. Their knowledge of AI and leadership confidence were evaluated through pre- and post-tests, with the training provided focusing on three main areas such as foundational AI knowledge, understanding of ethical AI behavior, and confidence in AI leadership. The findings showed noticeable improvements in participants' knowledge and confidence levels after the training, highlighting the importance of offering comprehensive training to educators to boost their AI literacy and teaching skills. 18 Figure 7: Administrative Leaders and Educators’ AI Tools Familiarity Source: Iskandarova et al., 2024 The study revealed that although most administrators were aware of AI and recognized the need for more in-depth knowledge about it, only 18% actively used AI tools in their work. The usage was even lower among those in the education sector, with just 7% employing AI tools, while the majority still required further knowledge (Figure 7, page 19) (Iskandarova et al., 2024). University administration identified several challenges in integrating AI into teaching and learning, including the need for adequate training and professional development on AI integration. They also noted a lack of clear guidance from higher education institutions on how to incorporate AI effectively. Additional concerns included issues related to plagiarism, data privacy, and the availability of AI tools in the local language. Educators shared similar concerns, emphasizing the need for established guidelines and rules, as well as issues of data privacy and plagiarism. Both groups expressed concerns about AI potentially impacting student creativity. Overall, there was a strong consensus on the need for enhanced professional development and training in AI integration (Figure 8, page 20) (Iskandarova et al., 2024). 19 Figure 8: Main challenges faced by Administrative Leaders and Educators Source: Iskandarova, et al., 2024 As a result, the analysis of pre-and post-test data demonstrated the training program's effectiveness in improving administrative leaders' and educators' skills in AI foundation, ethical knowledge, and leadership confidence, with notable enhancements in confidence and consistency in performance. The program has successfully prepared participants to address the challenges of AI integration in education, reinforcing the importance of well- structured training for effective AI implementation. Additionally, the follow-up session where participants shared best practices and real-world examples facilitated further learning and collaboration, emphasizing the value of a system-thinking approach in integrating AI into curricula. 20 RECOMMENDATIONS 1. Building alignment between labour market and higher education for increased quality The studies by Pashayeva (2024) and Yusifli et al. (2024) identified several discrepancies between higher education programs and the job market. According to Yusifli et al. (2024), achieving Labour Market Alignment (LMA) is crucial for aligning the expectations and goals of all stakeholders involved. It is the responsibility of HEIs to equip graduates with the necessary skills and attributes to thrive in their careers. This includes fostering independence, self-motivation, and the ability to develop effective professional strategies. Providing resources, guidance, and materials to enhance employability can help graduates assess their capabilities and enhance their readiness to transition into the job market. To address these challenges, it is essential for policymakers and educators to collaborate on interventions that prepare graduates for their careers and equip them with the essential skills to make well-informed decisions (Yusifli et al., 2024). Close collaboration with industry helps to incorporate industry needs into the curriculum and provides students with valuable work-integrated learning opportunities. Industry professionals can offer valuable insights into curriculum development through the establishment of industry advisory boards, ensuring that universities are teaching the skills and knowledge that are in high demand. By maintaining continuous communication and active involvement with industry partners, students can gain exposure to real-world scenarios and practices. The creation of industry advisory boards further enhances this collaboration and ensures that academic programs align with industry requirements. Career centers can work alongside these advisory boards. Labor market alignment can be accomplished through forecasting workforce skills, utilizing Labor Market Information Systems (LMIS), involving employers in curriculum development, and offering career development services that promote lifelong learning and upskilling (IHEP, 2024). For instance, the OECD’s Skills for Jobs indicators play a significant role in achieving labor market alignment by providing comprehensive data on skills imbalances. These indicators help governments, education institutions, and businesses identify both shortages and surpluses of skills in the labor market, thus informing policy decisions and workforce training programs (OECD, 2017). Priority actions: Establish advisory boards at HEIs to achieve LMA and integrate employer insights into educational planning, utilize labour market research to determine skills gap to ensure alignment with the workforce demands 2. Program reviews to ensure relevant and quality education Balancing practical knowledge with theoretical understanding is essential for adequately preparing students to meet labour market demands. To accomplish this, programs must be regularly updated to reflect industry needs, incorporating feedback from students, industry partners, and alumni. One strategy to ensure ongoing relevance is to integrate curriculum reviews into the university's accreditation cycle, typically every five years. Given the rapid 21 pace of technological advancements and changing industry requirements, conducting shorter-term reviews for timely updates is also beneficial. Involving industry partners and alumni in the review process provides valuable insights into current trends and necessary skills, while leveraging student feedback helps tailor curricula to meet the needs and expectations of the target audience. A review conducted by the OECD in collaboration with the Lumina Foundation during 2018- 2019 examined how the higher education systems in four U.S. states —Ohio, Texas, Virginia, and Washington—address the needs of their respective labor markets. The findings indicated that in Ohio, it is mandatory to evaluate workforce relevance criteria when approving academic programs. This evaluation can include local, state, and national labour market research, demographic analyses, and evidence of partnerships with businesses and industries, such as secured internships and co-op opportunities, as well as contributions from adjunct faculty or mentors for students (OECD, 2020). Priority actions: Implement a systematic curriculum review process integrated into the university's accreditation cycle, incorporating feedback from students, industry partners, and alumni to ensure alignment with labor market demands and facilitate timely updates in response to technological advancements and changing industry requirements. 3. Launching National Graduate Survey for informed policy making To effectively plan their work, both HEIs and career centers under them will need reliable labor market information and statistics on the graduates’ performance in the labor market. Thus, initiating a National Graduate Survey is crucial for assessing the quality and relevance of higher education and evaluating employment outcomes. Currently, the collection of graduate employment data depends on individual university surveys or phone calls, which have been ineffective due to low response rates. Another approach involves gathering data from employment agencies using students' personal identification numbers from their ID cards. However, concerns about universities collecting and managing these identification numbers emphasize the importance of adopting a national strategy. Implementing a national graduate survey would yield important data on graduates' earnings, the alignment of their skills with their field of study, the relevance of their subject, and their career pathways, including the proportion of students pursuing further education versus entering the workforce. Several countries in the world have been implementing survey of university graduates, for instance, The Graduate Outcomes Survey (GOS) in the UK and Australia, the National Graduates Survey (NGS) in Canada, Kooperationsprojekt Absolventenstudien (KOAB) in Germany and the National Survey of College Graduates (NSCG) in the USA. Countries that hold this survey with even less population is Finland, New Zealand, Singapore and Hungary (Usher & Marcucci, 2011). Although these surveys are carried out within differing time periods after students’ graduation and by different government and non-government agencies, they all intend to provide reliable insights into graduates’ career outcomes. 22 Priority actions: Initiate a National Graduate Survey to gather reliable labor market information and statistics on graduates’ performance, ensuring a comprehensive assessment of the quality and relevance of higher education and evaluating employment outcomes. 4. Strengthening career centers and integrating career training into university curricula Research conducted by Pashayeva (2024) identified several challenges related to the infrastructure, staffing, and resources needed for career centers to function effectively. To address these challenges, universities should establish dedicated spaces and infrastructure for career services, ensuring that sufficient staffing is available to support personalized counseling sessions, training workshops, and career development activities. The author (2024) also recommends appointing dedicated career counselors in each academic department to provide industry-specific guidance to students. The country may also need to invest in training professional career development practitioners and counselors to address the shortage of specialists who can work in career centers and support students. Additionally, career development should be fully integrated into the university curricula by offering credit-bearing courses on career planning and job readiness. These courses, which may include career training webinars, workshops, and work placements, should be available earlier in students' academic journeys, ideally before the fourth year, to enhance career exploration and readiness for the workforce. Building on successful practices, these courses can ensure that students receive ongoing career support, promoting informed decision- making and professional success. Moreover, funding should be allocated to support market research efforts, create career-building projects, and establish electronic resource databases to improve access to labor market information and enhance student career prospects. Career development learning significantly enhances the employability of higher education graduates, especially when it is embedded within the curriculum rather than treated as a supplementary or limited component (Bridgstock, et al., 2019). The Australian Blueprint for Career Development, a framework designed to guide the creation and evaluation of career development programs for individuals at all stages of life, is also applied in vocational training and higher education (Wright, 2008). It emphasizes the development of career management competencies, which include the knowledge, skills, and attitudes needed to make informed career decisions, and is mainly utilized by professional career development practitioners (Usher & Marcucci, 2011). Priority actions: Secure adequate funding, staffing, and resources for career centers; integrate credit-bearing career development courses into university curricula earlier in the academic journey to support workforce readiness. 5. Leveraging alumni networks to enhance career support Pashayeva (2024) also found out that most career centers are also responsible for alumni relations, primarily focusing on building alumni databases. Career centers can expand the scope of work by implementing mentorship programs that connect current students with alumni can significantly enhance the support system available to students while fostering alumni engagement and facilitating networking opportunities. By establishing structured 23 mentorship initiatives, universities can create avenues for ongoing guidance and support beyond the traditional academic setting. These programs should be designed to match students with alumni who possess relevant experience and expertise in their fields of interest. Providing mentors with training and resources and establishing clear guidelines for mentor-mentee interactions are essential to ensuring the effectiveness and sustainability of such programs. Integrating mentorship opportunities into the university's overall career development framework can also help students build valuable relationships, gain insights into their chosen fields, and navigate the complexities of transitioning into the workforce. Alumni can play four valuable roles. They can mentor students to help them succeed and stay committed, share career insights, motivation, and connections, offer client-based projects and hands-on learning experiences, and work as staff to enhance the connection between academic programs and job opportunities (Fisher & Price, 2021). A study conducted by Landoni et al. (2021) examined 58 alumni organizations across 55 higher education institutions in Italy. The research found that these organizations play a pivotal role in helping members connect with their peers, providing access to valuable professional networks that facilitate career opportunities. Additionally, these alumni networks serve as platforms for role modeling, where successful graduates can inspire and guide others in their career development. Priority actions: Establish structured mentorship programs within career centers to leverage alumni networks and foster student-alumni connections for career development. 6. Integrating incentives that improve the quality of publications The study by Ismayilova (2024) revealed that teaching workload, research culture and human capacity hinder the success of current research incentives used in HEIs in Azerbaijan. The author (2024) recommends improving the impact and quality of publications, and universities by increasing the amount of financial reward for papers published in Q1 and Q2 level journals and decrease or stop payment for papers published in Q3 and Q4 journals. The addition of quality-based financial incentives would redirect the university faculty away from the quantity of publications to focus on quality, which may lead to improvement not only in quantity but also in the quality of research and publications. Integrating research internationalization into current incentive schemes could greatly benefit young Azerbaijani university faculty by enhancing their research skills and output. Providing opportunities for networking and collaboration with international scholars, along with annual support for attending international conferences, would be pivotal. Moreover, linking monetary support for conference travel to active participation in university research groups could help foster a long-term culture of collaborative research. International research publications and their citations are frequently used as major benchmarks in global university rankings and serve as indicators of an institution's level of international engagement. In many higher education systems, such as those in Finland, the 24 Netherlands, Austria, and People's Republic of China, these publications also play a critical role in determining funding. For example, in People's Republic of China, financial incentives for international publications first appeared in the natural sciences in the late 1980s, with rewards provided to academics who published in Science Citation Index (SCI) journals. These incentives are often scaled based on the journal's citation ranking (Qin and Zhang, 2008). Priority actions: Enhance the research landscape in Azerbaijani HEIs by implementing quality-based financial incentives that prioritize publications in Q1 and Q2 journals, while reducing or eliminating rewards for those in Q3 and Q4 journals. 7. Strategic communication and professional development for sustainable results for research Designing incentive structures requires careful consideration to avoid sending the wrong message to faculty members (Bak & Kim, 2019). University administrators need to communicate clearly with faculty to ensure that research incentives are seen as supportive and encouraging rather than as control measures. If incentives are perceived as a form of control imposed by management, they are unlikely to positively impact research output. Research incentives should be tailored to motivate both productive and less productive researchers, considering their skill levels and motivation. For instance, incentives could be structured differently based on the research needs and capabilities of faculty members. Productive researchers might benefit more from non-financial incentives like research awards, which cater to their intrinsic motivations and existing resources. Conversely, financial incentives might be more effective for less-active researchers, helping to boost their research capabilities. Financial rewards alone may not lead to sustained improvements in high-quality publications. In addition to research incentives, universities should implement systematic programs that focus on building the research skills of faculty members. For example, monetary rewards could be offered for completing courses on quantitative and qualitative research methods or academic writing. These professional development activities are essential for equipping researchers with the knowledge and skills necessary for producing high-quality research. Polish universities offer a useful example on the importance of carefully designed research incentives, as they have implemented systems that initially focused on financial rewards for publishing in high-impact journals. However, these incentives were often viewed as top- down control mechanisms rather than support for academics (Kulczycki et al, 2021), aligning with challenges discussed by Bak & Kim (2019). To address this, Polish institutions adjusted their approaches by incorporating both financial and non-financial rewards, such as research grants, international collaboration opportunities, and awards. This has helped cater to productive researchers' intrinsic motivations, while less-active researchers have benefitted 25 from professional development opportunities, such as workshops on academic writing and research methods. Initiatives like the Polish National Agency for Academic Exchange (NAWA) also provide funding for skill-building programs, ensuring that financial rewards are complemented by efforts to enhance research capabilities. This balanced strategy aims to foster sustained improvements in research output and quality (Marklund et al., 2017). Priority actions: Design tailored incentive structures that promote research output by clearly communicating their supportive nature, while also implementing systematic professional development programs to enhance faculty research skills. 8. Investing in faculty professional development and integrating AI into education A study by Iskandarova et al. (2024) revealed that sharing best practices at both the administrative and educator levels can significantly improve the integration of AI tools into the curriculum. In addition, the study emphasized the importance of ethical guidelines to address AI’s broader implications, such as bias, privacy, and accountability, which should be considered at a national level to create a comprehensive framework for ethical decision- making. Professional development is essential for ensuring educators remain updated on AI technologies, trends, and best practices. Continuous learning through workshops, seminars, and training programs will help educators enhance their AI knowledge and skills. Alongside this, curriculum enhancement is crucial. Educators should incorporate AI-related topics, projects, and real-world applications to develop students' competencies, while ethical education must also be prioritized to foster critical thinking and responsible decision- making. Most importantly, stakeholders play a key role in supporting AI integration. By collaborating closely with educators, they can ensure AI education aligns with industry needs. Advocating for policies that promote AI integration in educational systems and providing resources for AI training programs will help shape the future of AI education and prepare students for the demands of a technology-driven world. According to Kolomitro and Schultz (2024), to effectively integrate AI into faculty development, the first step is to identify faculty needs in relation to AI across their various roles, followed by aligning these needs with the necessary competencies, such as understanding AI’s ethical use and its application in research. The development of an AI-focused curriculum should accommodate diverse faculty expertise, include ongoing assessment for growth, and provide resources such as coaching, while ensuring a stable, well-structured framework for long- term success. 26 Therefore, many universities offer training programs and support resources for faculty, researchers, and students to utilize AI effectively in teaching and learning. For example, the University of Toronto in Canada provides customizable AI and machine learning training for participants at all experience levels, including annual week-long bootcamps for faculty, organized in partnership with the Data Sciences Institute. The bootcamp curriculum is updated each year to include the latest advancements in the field (Carte Research, n.d.). Priority actions: Facilitate the sharing of best practices, support professional development through workshops and training programs, integrate AI-related topics and ethical education into curricula, and foster collaboration between educators and stakeholders to align AI education with industry needs. CONCLUSION In conclusion, the integration of AI into higher education, the enhancement of faculty research incentives, and the alignment of academic programs with labour market demands are all crucial for the future competitiveness of Azerbaijan's higher education system. AI integration, while still in its early stages, shows promise in transforming teaching, learning, and administrative processes. However, it requires a thoughtful approach that includes professional development, clear guidelines, and ethical considerations. By providing comprehensive training and fostering collaboration among educators, the potential of AI can be fully realized, empowering both faculty and students to navigate the complexities of modern technology. Similarly, research incentives must be carefully designed to motivate all levels of faculty, from the most productive researchers to those still developing their skills. Tailored incentive structures, combined with ongoing professional development opportunities, can drive higher research output and quality. At the same time, bridging the gap between higher education and the labour market is essential for ensuring that graduates are well-prepared for the demands of the workforce. This requires continuous curriculum updates, the integration of career development into academic programs, and close collaboration with industry stakeholders. By addressing these areas, Azerbaijan can create a more robust, adaptable, and forward-looking higher education system that meets the needs of both students and the broader economy. To develop effective policies in higher education, it is essential to conduct further research on student trajectories, starting from their final years of school, to identify factors influencing their success in the labor market. Establishing a comprehensive data system, where universities submit information annually, would enable MOSE to create a sustainable database for informed policymaking. Additionally, incorporating Labour Market Information (LMI) to monitor employment trends and identify demand-supply gaps is crucial for guiding institutions in their program planning, ensuring their offerings remain relevant and of high quality. 27 REFERENCES Abbasov, A., and Jafarli, A. (2022). Defining the research university in Azerbaijan: Imported global trends or rebranded Soviet Legacy? In (M. Chankseliani, I.Fedyukin, and I.Frumin eds.), Building research capacity at universities: insights from post-soviet Countries, pp. 179-200, Switzerland, Palgarve Macmillen. Ahmadov, I. (2011). Ali təhsilin İKT əsaslı innovativ inkişafı. [ICT-based innovative development of higher education] Azərbaycan Müallimi. https://www.muallim.edu.az/www.old/arxiv/2011/04/36.htm Aliyev, M., and Aliyeva, S. (2024). Revisiting digital transformation of Azerbaijan higher education in the new digital era. Yildiz Social Science Review, 10(1), 72–83. https://doi.org/10.51803/yssr.1441943 Aliyev, A., Ibrahimova,N., and Rzayeva, G. (2020) Information security: Legal regulations in Azerbaijan and abroad, Journal of information science, vol. 48, no. 6, pp. 811–824, 12 2020. [Online]. Available: https://doi.org/10.1177/0165551520981813 Amirova, G. and Valiyev, A. (2021). Do university graduate competences match post-socialist labour market demands:? Evidence from Azerbaijan. Journal of Teaching and Learning for Graduate Employability, 12(2), 332-347. https://ojs.deakin.edu.au/index.php/jtlge/article/view/1048 APA (2024) Elm və Təhsil Nazirliyinin yeni strukturu təsdiqlənib [The new structure of the Ministry of Science and Education has been approved] https://apa.az/resmi-xeber/elm-ve-tehsil-nazirliyinin- yeni-strukturu-tesdiqlenib-778159 Bak, H.-J., and Kim, D. H. (2023). New Public Management in the Era of Cutback: Research Performance with Declining Financial Incentives. Public Performance & Management Review, 46(2), 308-333 Bridgstock, R., Grant-Iramu, M., & McAlpine, A. (2019). Integrating career development learning into the curriculum: Collaboration with the careers service for employability. Journal of Teaching and Learning for Graduate Employability, 10(1), 56–72. https://doi.org/10.21153/jtlge2019vol10no1art785 CARTE Research. (n.d.). Centre for Analytics and Artificial Intelligence Engineering. Retrieved October 21, 2024, from https://carte.utoronto.ca/carte-research/ Coffey, L. (2024). A new digital divide: Student AI use surges, leaving faculty behind. Inside Higher Ed. Retrieved August 12, 2024, from https://www.insidehighered.com/news/tech- innovation/artificial-intelligence/2024/06/25/digital-divide-students-surge-ahead Fairweather, J. S. (2002). The Mythologies of Faculty Productivity: Implications for Institutional Policy and Decision Making. The Journal of Higher Education, 73(1), 26 –48. https://doi.org/10.1080/00221546.2002.11777129 Fisher, J. F., & Price, R. (2021). Alumni Networks Reimagined: Innovations Expanding Alumni Connections to Improve Postsecondary Pathways. In Clayton Christensen Institute for Disruptive Innovation. Clayton Christensen Institute for Disruptive Innovation. 28 Jabbarzade L. (2020). Bologna process in higher education system in post-Soviet Azerbaijan and Georgia: A comparative study. Azerbaijan Journal of Educational Studies. Vol. 691, Issue II, pp. 8–24 IHEP (2024). Postsecondary and Workforce Alignment (A ‘CPA’ Tactical Guidebook).” Accessed October 20, 2024. https://www.ihep.org/publication/workforce-alignment-a-tactical-guidebook/. Ilyasov, A., Imanova, S., Mushtagov, A., & Sadigova, Z. (2023). Modernization of quality assurance system in higher education of Azerbaijan. In Quality in Higher Education (Vol. 29, Issue 1, pp. 23 – 41). Informa UK Limited. https://doi.org/10.1080/13538322.2022.2100606 Isakhanli, H., and Pashayeva, A. (2018). Higher education transformation, institutional diversity and typology of higher education institutions in Azerbaijan. In J. Huisman, A. Smolentseva, & I. Froumin (Eds.), 25 years of transformations of higher education systems in post-Soviet Countries (pp. 97– 121). Palgrave Macmillan. Iskandarova, S., Yusif-zada, K., and Mukhtarova, S. (2024, forthcoming). Integrating AI Into Higher Education Curriculum in Developing Countries – A Case Study Ismayilova, K., and Klassen, R. M. (2019). Research and teaching self-efficacy of university faculty: Relations with job satisfaction. International Journal of Educational Research, 98, 55 –66. Ismayilova, K. (2024, forthcoming) University Administrators on Research Incentives in Azerbaijan: An Evaluation. Kolomitro, K., & Schultz, K. (2024, March 4). How faculty development can be supported in the age of AI. University Affairs. https://universityaffairs.ca/opinion/in-my-opinion/how-faculty-development- can-be-supported-in-the-age-of-ai/ Kulczycki, E., Rozkosz, E. A., Szadkowski, K., Ciereszko, K., Hołowiecki, M., & Krawczyk, F. (2021). Local use of metrics for the research assessment of academics: the case of Poland. Journal of Higher Education Policy and Management, 43(4), 435–453. https://doi.org/10.1080/1360080X.2020.1846243 Landoni, M., Bolzani, D. and Baroncelli, A. (2021), "The Role of Alumni Clubs in the Universities’ Entrepreneurial Networks: An Inquiry in Italian Universities", Jones, P., Apostolopoulos, N., Kakouris, A., Moon, C., Ratten, V. and Walmsley, A. (Ed.) Universities and Entrepreneurship: Meeting the Educational and Social Challenges (Contemporary Issues in Entrepreneurship Research, Vol. 11), Emerald Publishing Limited, Leeds, pp. 49-63. https://doi.org/10.1108/S2040-724620210000011004 Marklund, G., Naczinsky, C., Ziarko, W., Winckler, G., Puukka, J., File, J. M., Holm-Nielsen, L. B., & Melin, G. (2017). Peer Review: Poland’s Higher Education and Science System: Horizon 2020 Policy Support Facility. European Commission. https://doi.org/10.2777/193011 Mason, G., Williams, G., and Cranmer, S. (2009). Employability skills initiatives in higher education: what effects do they have on graduate labour market outcomes? Education Economics, 17(1), 1-30. 29 Mammadova, L., and Valiyev, A. (2020). Azerbaijan and European Higher Education Area: Students’ Involvement in Bologna Reforms. Research in Educational Administration & Leadership, 5(4), 1083 https://doi.org/10.30828/real/2020.4.4 Ministry of Justice (2003) “Təhsil haqqında Azərbaycan Respublikasının Qanunu” [Education Law of Azerbaijan] Retrieved August 12, 2024, from https://e-qanun.az/framework/18343 Ministry of Justice (2010, April 23) “Ali t əhsil pilləsinin dövlət standartı və proqramı”nın təsdiq edilməsi haqqında Azərbaycan Respublikasi Nazirlər Kabinetinin Qərari [Decision of the Cabinet of Ministers of the Republic of Azerbaijan on approval of the state standard and program of higher education] Retrieved August 12, 2024, from https://e-qanun.az/framework/19531 Ministry of Justice (2016, June 14) “Elm haqqında Azərbaycan Respublikasının Qanunu” [Science Law of the Republic of Azerbaijan] Retrieved August 12, 2024, from https://e-qanun.az/framework/33488 Ministry of Justice (2020, June 14) “Məşğulluq Strategiyasının həyata keçirilməsinə dair 2020–2025- ci illər üçün Tədbirlər Planı”nın təsdiq edilməsi haqqında” [On the approval of the "Action Plan for the implementation of the Employment Strategy for 2020-2025"] Retrieved August 12, 2024, from https://e-qanun.az/framework/44423 Ministry of Justice (2022) 3378—“Azərbaycan Respublikasının 2022–2026-cı illərdə sosial-iqtisadi inkişaf Strategiyası”nın təsdiq edilməsi haqqında [On the approval of the "Socio -economic Development Strategy of the Republic of Azerbaijan in 2022-2026"] Retrieved August 12, 2024, from https://e-qanun.az/framework/50013 Ministry of Justice (2023) Regulation on the internship of a higher and secondary specialized educational institution by specialty" Retrieved August 12, 2024, from: https://e- qanun.az/framework/56005 OECD (2017), Getting Skills Right: Skills for Jobs Indicators, Getting Skills Right, OECD Publishing, Paris, https://doi.org/10.1787/9789264277878-en. OECD (2020), Labour Market Relevance and Outcomes of Higher Education in Four US States: Ohio, Texas, Virginia and Washington, Higher Education, OECD Publishing, Paris, https://doi.org/10.1787/38361454-en. Pashayeva, A. (2024, forthcoming) Preparing for Future Labour Market: Work-Integrated Learning and Student Career Services in Higher Education System in Azerbaijan Report.az (September 10, 2024) Azərbaycanda doqquz ali təhsil müəssisəsi publik hüquqi şəxsə çevrilərək yenidən təşkil olunacaq [Nine higher education institutions in Azerbaijan will be reorganized by becoming public legal entities] Retrieved from: https://report.az/daxili- siyaset/azerbaycan-memarliq-ve-insaat-universitetine-publik-huquqi-sexs-statusu-verilib/ Rogerson, A., Hankins, E., Nettel, P. F., and Rahim , S. (2022, December 12). Government AI Readiness Index 2022. Oxford Insights. https://www.oxfordinsights.com/government-ai-readiness-index-2022 30 Suleymanov, T. (2020). Transformation of Higher Education in Azerbaijan: Reforms, Policies and Current Trends. The Journal of Economic Sciences: Theory and Practice, 77(2), 40-60. Usher, A., & Marcucci, P. (2011). Survey of graduate tracking systems around the world. Management of Sustainable Development. Qin, H., and Zhang, R. (2008). “Reflections on SSCI and Academic Evaluation of Humanities and Social Sciences in Higher Education Institutions.” [In Chinese.] Journal of Higher Education 3: 6–12. Quan, W., Chen, B., & Shu, F. (2017). Publish or impoverish: An investigation of the monetary reward system of science in China (1999-2016). Aslib Journal of Information Management, 69(5), 486–502. https://doi.org/10.1108/AJIM-01-2017-0014 Valiyev, A. (2020). Attaining SDG 8 in Azerbaijan: The challenges of economic transformation and job creation. International Labour Organization. https://www.ilo.org/ wcmsp5/groups/public/–ed_emp/documents/publication/wcms_749432.pdf Wright, M. (2008). Australian blueprint for career development. VOCAL: The Australian Journal of Vocational Education and Training in School, 7, 70–75. https://search.informit.org/doi/10.3316/informit.884873525609288 Yusifli, M., Hajiyev, J., and Yusifli, E. (2024, forthcoming) Harmonizing Azerbaijani Higher Education: Nurturing Skillsets for Dynamic Markets and Tomorrow’s Workforce. 31