The acceleration of technological transformation in the global economy, the expanding scope of artificial intelligence applications, and the emergence of new business models are further increasing the role of human capital in economic development. Under these circumstances, countries’ competitive advantages are determined not only by financial and natural resources, but also by the knowledge and skills of the workforce, innovation potential, and ability to adapt to new technologies.

In a statement to AZERTAC, Latif Zeynalli, Head of the State Programs Division at the Center for Analysis of Economic Reforms and Communication (CAERC), said that the 2nd Azerbaijan International Investment Forum, held in Baku, also serves as an important platform for discussing Azerbaijan’s objectives in economic diversification, technological transformation, and expanding investment in high-value-added sectors with international investors.

President Ilham Aliyev noted in his address to the Forum participants that since 2020, real GDP growth in the non-oil sector has averaged 5 percent annually, while the non-oil industry has increased 1.5 times and non-oil exports have nearly doubled. As a result, the share of the non-oil sector in GDP reached 72 percent in 2025. As the head of state emphasized, the signing of investment agreements worth more than US$10 billion at the 1st Azerbaijan International Investment Forum, with more than US$7 billion of this amount accounted for by the non-oil sector, demonstrated growing investor interest in Azerbaijan. The expansion of the geographical representation and international participation at the 2nd Forum, in turn, indicates that this interest is continuing. The President’s address emphasized the contribution of foreign investment to the development of the non-oil sector and Azerbaijan’s integration into global value chains, while noting the particular importance attached to projects that bring advanced technologies, increase productivity, and create skilled jobs. This approach highlights the importance of developing human capital in parallel with attracting investment and technologies, as well as building the capacity to absorb, apply, and transform them into economic value. It is precisely in this context that the topic “Investing in Human Capital and Future Skills” included in the Forum’s program is of particular interest.

Latif Zeynalli noted that diversifying the economy through high-value-added and technology-oriented sectors is also changing the requirements for human capital. In the modern economy, investment in human capital is no longer limited to formal education and vocational training. Digital skills, innovative thinking, leadership, adaptability, and lifelong learning are among the key components of human capital under the new economic conditions. According to him, strengthening the link between investment, technology, and human capital is of great importance for the sustainability of economic diversification. The expanding application of advanced technologies increases demand for a workforce with new skills, while the labor market’s adaptation to this demand supports productivity and the expansion of high-value-added activities. In this regard, human capital development serves as one of the key factors linking investment policy with economic diversification. It is precisely in this context that human capital development has been identified as one of the main areas of strategic policy in Azerbaijan. “Modern Innovation Space and Competitive Human Capital” is identified as one of the five national priorities in “Azerbaijan 2030: National Priorities for Socio-Economic Development.” The document envisages education aligned with the requirements of the 21st century, the development of digital competencies, workforce training in line with labor market requirements, and lifelong learning as important elements of human capital development.

One of the key issues at the next stage is to establish a more flexible link between the education system and the labor market. Against the backdrop of technological change, updating education and vocational training programs in line with labor market requirements, as well as promoting continuous skills development, can support the structural transformation of the economy. This direction is also reflected in the Action Plan for the implementation of the Employment Strategy for 2026–2030. The document envisages developing workforce skills, providing vocational training aligned with the “green economy,” and expanding dual education. At the same time, organizing training in data analytics, programming, cybersecurity, and renewable energy technologies reflects practical steps toward developing future skills. According to the State Employment Agency, 10,851 people have been involved in vocational training during the period elapsed in 2026, while an additional 6,650 people are planned to join these programs by the end of the year. On the other hand, strengthening state-university-business cooperation is of particular importance in human capital development. Aligning the knowledge and skills developed at universities with the real needs of the business sector, increasing companies’ participation in education and vocational training, and expanding internship and work-based learning opportunities can contribute to reducing skills mismatches in the labor market and increasing graduates’ employment opportunities.

The Head of the CAERC Division emphasized that, in the long term, one of the key competitive advantages of countries is human capital capable of adapting to changing technologies, generating new knowledge, and transforming that knowledge into economic value. Therefore, investment in human capital is not only a matter of social development, but also one of the key conditions for productivity, innovation, and economic diversification.

Thus, against the backdrop of digital transformation and the green transition, expanding investment in human capital and future skills can contribute to strengthening Azerbaijan’s long-term competitiveness, as well as expanding high-value-added activities and skilled employment.