The Republic of Azerbaijan Ministry of Economy and Industry BAKU INTERNATIONAL INDUSTRY CONFERENCE CONFERENCE REPORT Industrialization in the 21st century: Trends, approaches and best practices in industrial policy www.bakuconference.com Industrialization in the 21st century: Trends, approaches and best practices in industrial policy Baku International Industry Conference CONFERENCE REPORT Organized by United Nations Industrial Development Organization (UNIDO) and the German Federal Enterprise for International Cooperation (GIZ) and Supported by the Government of Azerbaijan Copyright © 2015 United Nations Industrial Development Organization The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. 26-27 November 2014 Designations such as “developed”, “industrialized” and “developing” are intended for statistical convenience and do not necessarily express a judgment about the state reached by a particular country or area in the develop- Baku, Azerbaijan ment process. Conference Venue: “Four Seasons Hotel Baku” The mention of firm names or commercial products does not imply endorsement by UNIDO. This report is based on discussions recorded during the Forum’s sessions and has not yet been verified by participants. Material in this publication may be freely quoted or reprinted, but acknowledgement is requested, together with a copy of the publication containing the quotation or reprint. Industrialization in the 21st century: Trends, approaches and best practices in industrial policy Baku International Industry Conference CONFERENCE REPORT Organized by United Nations Industrial Development Organization (UNIDO) and the German Federal Enterprise for International Cooperation (GIZ) and Supported by the Government of Azerbaijan 26-27 November 2014 Baku, Azerbaijan Conference Venue: “Four Seasons Hotel Baku” Greetings to the conference participants Ilham Aliyev, President of the Republic of LI Yong, Director General, UNIDO Azerbaijan [This video message was introduced by Mr. Mohamed- [Read by Mr. Shahin Mustafayev, Minister of Economy Lamine Dhaoui, Director, Business Investment and and Industry, Republic of Azerbaijan] Technology Services Branch, UNIDO] Dear conference participants, It is a great pleasure for me to join you for the opening I welcome and congratulate you on the opening of of this important event. the international conference on Industrialization in Allow me to warmly thank the Minister of the 21st century: Trends, approaches, and best prac- Economy and Industry, Mr. Shahin Mustafayev, for tices in industrial policy. giving me this opportunity. At present, industrial policy should be directed I am confident that the Baku International toward applying high-technology standards in accord- Industry Conference will serve as an important plat- ance with competitiveness, efficiency, and environ- form to help steer the global debate on industrializa- mental security; should be connected with scientific tion trends in the 21st century. research; should respond to modern challenges; and It will also highlight modern approaches and should be based on new approaches. policy instruments to foster inclusive and sustain- It is not a coincidence that the conference is taking able industrial development, formulate new strategies, place in Azerbaijan, a country with a great industrial develop common action, and build new partnerships. tradition. In our rapidly modernizing country, the These topics are highly relevant and timely in development of industry is of particular importance, view of the ongoing global discussions on Sustainable as demonstrated by the proclamation of 2014 as “The Development Goals. As you may know, the proposed Year of Industry” in Azerbaijan. Goal 9 addresses the issues of building resilient infra- The reforms carried out in Azerbaijan are in structure, promoting inclusive and sustainable indus- accordance with the requirements of our time. The trialization, and fostering innovation. successful implementation of government pro- As a specialized agency of the United Nations sys- grammes, large-scale infrastructure projects, con- tem, UNIDO is dedicated to promoting inclusive and tinuous improvement of the business and investment sustainable industrial development. It helps its mem- climate, government support of private-sector devel- ber states implement targeted policies, best practices, opment and, above all, national political and macro- innovative solutions, and strategic interventions. economic stability are creating opportunities to form I welcome the decision of the President of strong industries in the country. Azerbaijan to declare 2014 “The Year of Industry.” At present, economic diversification is a priority, We all know that industry drives innovation and and fulfilling this duty requires industrial develop- helps create new technological knowledge. Vital for ment based on the application of best practices. job creation, sustainable livelihoods, and equitable In this regard, I believe that the conference will growth, it is key to eradicating poverty. support the efficient exchange of views in the field of A modern industry is also about environmen- industrial policy and help establish new cooperative tally sustainable technologies that help reduce con- relations. sumption of non-renewable resources and minimize Ilham Aliyev greenhouse-gas emissions. Such technologies stimu- President of the Republic of Azerbaijan late innovation, technological change, and industrial diversification. iv During this conference, we foresee the signing of that ensure that the benefits reach the entire popula- a Framework Programme of Cooperation between tion and contribute to sustainable development, in UNIDO and the Government of Azerbaijan for both rural and urban areas. GREETIN 2014–2018. At the same time, competitiveness should be at This document will contribute to the inclusive the heart of the thinking about sustainability because G S TO THE CONFERENCE PARTICIPANTS CONFERENCE THE TO S and sustainable development of the economy of competitive economies tend to be more innovative, Azerbaijan. It will also support the strategic develop- more resilient, and better able to respond to external ment priorities of the “Vision 2020.” shocks and thus maintain high levels of prosperity. I am confident that this conference will help Membership in the World Trade Organization outline solutions and actions and expand partner- (WTO) is contributing to these objectives, and it ships to further promote and advance strategies and would also be beneficial for Azerbaijan and other international cooperation in the field of sustainable countries to join the WTO. industrialization. Attaining higher levels of sustainability require I thank you for your kind attention and wish you that governments, businesses, the private sector, and all a productive and successful conference. civil society work together to address the emerging challenges and join hands in formulating and imple- Antonius Broek, United Nations Resident menting longer-term industrial strategies, as they aim Coordinator, Azerbaijan to do in Azerbaijan. It is a great pleasure to be with you here today, repre- Progress on these challenges requires intensifying senting the United Nations system in Azerbaijan at this multi-stakeholder and inter-sectoral collaboration— important international conference, which is convened for example, on environmental regulation, where a by the government, in partnership with UNIDO and balance with productivity needs to be ensured; and GIZ, to mark “The Year of Industry” in Azerbaijan. on social inclusion, equal roles, and opportunities for Azerbaijan has made significant progress in lifting men and women, youth, and persons with disabilities, its socio-economic development to higher levels over which can be achieved only if businesses contribute to the past decade. Its economic growth has been accom- human-capital development. panied by improvements in the institutional and The mounting social and environmental pres- regulatory environments and gradually increased par- sures observed in rapidly growing, developing, and ticipation and roles in the regional and international emerging economies suggest that these dimensions economic arena. are strongly interlinked and therefore should both be Now, the country is pursuing an ambitious goal addressed at the same time and be a part of the sus- to evolve from a middle-income country into a high- tainable economic development process. income nation with a diversified and knowledge-based New knowledge and experiences are making it economy by 2020. possible to pursue economic growth, environmental In fact, there is not a single country in the world sustainability, and social equity simultaneously. that has reached a high stage of economic and social Making the most of this momentum, while put- development without having developed an advanced ting in place measures to mitigate risk and prevent loss industrial sector, with important roles for the pri- of gains when a natural or human-induced disaster vate sector, small and medium-sized enterprises, and strikes—in other words, enhancing resilience—will healthy competition. be a major priority of global development in com- Without doubt, enhancing competitiveness ing decades. And it will thus be