ANALYSIS AND IMPROVEMENT OF THE SCIENCE FUNDING MODEL IN AZERBAIJAN

Abstract

This article examines the science funding model in the Republic of Azerbaijan, with a particular emphasis on the economic nature, institutional features, and current challenges of institutional (base) funding. The study demonstrates that the financing of scientific institutions in the country is largely dependent on the state budget, while the majority of allocated funds are directed toward salaries and administrative expenditures. This fiscal structure significantly limits the modernization of research infrastructure, the development of experimental studies, and the implementation of innovative initiatives.
The research employs comparative analysis and statistical methods to evaluate Azerbaijan's science funding system in comparison with international practices. The experiences of countries with developed innovation systems, including the United States, EU member states, and South Korea, indicate that the effective development of scientific activity requires a balanced combination of institutional funding and competitive project- and grant-based mechanisms.
The findings suggesting that improving the efficiency of research in Azerbaijan requires a gradual transition toward a mixed funding model. Such a model preserves the stabilizing role of institutional funding while strengthening the performance orientation and competitiveness of scientific research through project-based and grant funding instruments. The article also proposes several policy recommendations aimed at improving financing mechanisms, including the introduction of performance-based approaches, strengthening university–industry cooperation, expanding research commercialization, and diversifying financial sources. These measures are essential for enhancing the sustainability and competitiveness of Azerbaijan’s national innovation system.