Ali Abbasov: "For the development of the IT sector we should introduce a 'public-private-academic partnership' model"22.06.2022 /
Former Minister of Communications and Information Technology, General Director of the Institute of Control Systems (ICS) of ANAS, Academician Ali Abbasov gave an interview to Report.az.
First of all, I would like to ask you about your work at the Institute of Control Systems (ICS) of ANAS, which you currently head. What does the Institute do now?
Next year we plan to celebrate the 70th anniversary of our institute. The Academy of Sciences of Azerbaijan (ASA) was founded in 1945, and the history of our institute began in 1953 with the establishment of the Laboratory of Electromodeling under the Petroleum Survey of the ASA. In 2014, the institution was renamed the Institute of Control Systems.
Since its foundation, the institute has been engaged in research in the field of electronic computing devices, technological process control systems, theoretical control problems and implementation of many projects of international importance. The list of projects includes automation of production processes in the oil and gas industry, republican automated control systems, participation in the building of the Internet in Azerbaijan, military systems of various purposes and many others.
Currently, the basis of research and applied works in the institute is the control of complex objects, signal processing, research and automation of decision-making processes in cybernetic systems, development and practical application of artificial intelligence methods, optimization problems and applications, etc. Research is aimed at creating solutions that can meet the requirements of the challenges of the 4th industrial revolution.
Our scientists are focused on all the most important initiatives, from artificial intelligence, nanotechnology, quantum computers, biological synthesis, 3D, 4D, 5D, and even 6D printing technologies to 5G communications technologies. But naturally, it is the artificial intelligence issues that are of most interest at the moment, because they are aimed not only at solving scientific, technical problems, but also at changing the fundamental mindset of society.
At the end of last month, Azerbaijan hosted the TEKNOFEST Azerbaijan Aerospace and Technology Festival, and we saw you among the participants. What new products did you present at the festival?
Our institute was one of the 6 institutes of the National Academy of Sciences represented at the festival, and we presented two exhibits. One of them was the "unmanned aerial vehicle control system" and the onboard (flight) computer that implements this system. Our institute created an onboard computer for controlling aerial vehicles. It is a proprietary product of the ICS. We also have a special design bureau, which mainly conducts experimental design work based on the results of conducted scientific research. I must specially note that the created flight computer was presented as an exhibition item on the observation unmanned aerial vehicle "Şahin" ("Falcon") developed in the High Technology Park of ANAS.
The second exhibit was a system of processing the Azerbaijani language using artificial intelligence. Nowadays the processing of natural languages is one of the main fields of artificial intelligence. But the Azerbaijani language is not very widespread in the world. About 50 million people in the world speak the language, and it is the official language for about 10 million of them.
The Azerbaijani language belongs to the group of languages with low linguistic information resources. For this reason, the world's leading research centers do not invest much in the creation of artificial intelligence in these languages. So this kind of research for the Azerbaijani language can only be in the interests of the Azerbaijani state.
We have been working in this area for 20 years, and as a result, the computer now understands the Azerbaijani language and answers the questions asked. At the festival, we showed a robot operator built on its basis. We think it is a very important achievement. The system was developed jointly with Robotronics, an Azerbaijani startup company.
What does it take to promote these projects?
They must first be approved and accepted by whomever we present them to. We are currently working closely with ASAN Service, the State Customs Committee, and the Ministry of Digital Development and Transportation.
A system that answers these questions today instead of me will replace me tomorrow. Unfortunately, we have limited linguistic information resources. Currently, the system we created works with 300 million sentences and 3 billion combinations of words. But for the English language, the number is 3 trillion. Our scientists are working on a new system. Thus, we are currently translating foreign language resources into our own language using the system and running the learning process in our own neural network.
We estimate that by 2030 about 60-70% of our compatriots will be using the work of this type of operator.
We did an experiment once. The artificial intelligence prepared a 2-page speech for me. The result was very successful. It can even write poetry. But we want the artificial intelligence to read our writers and write an Azerbaijani novel.
What is the investment cost of the project?
It is hard to calculate the amount of investment, because the main investment is human capital, knowledge. Currently, our project is being commercialized. The initial cost of a lifetime license is about 50,000 AZN. Very cheap, so to speak.
But if it were in foreign companies, it would cost more and it would increase our dependence on those companies. This is their practice. They sell new things at a very high cost, and give the old ones away for nothing. This also hinders development.
You have been in charge of Azerbaijan's communications sector for a long time. What is the difference between the challenges of the past and the present?
The challenges change over time. Where once gaining access to the Internet or creating a computer network was considered a great achievement for us, now the main challenges are the realities created by artificial intelligence.
Where once we sought the development of information technology, landlines, cell phones, the Internet, and digital television, today, as a result of the rapid development of the country itself, these things are already a reality. Now we must be able to maintain the pace of our development within the requirements of the fourth industrial revolution. The development in Azerbaijan today is quite good in this regard. Today our country is placed between developing countries and developed countries in terms of pace of development, and this is a great achievement.
Today, as a result of wide application of digital technologies human activity is fully virtualized and, for instance, cybercrime has become a problem in itself. It is estimated that in 2025, the damage to the global economy caused by cybercrime will be $6 trillion. If the dynamics of cyber attacks continue, I can't imagine how much damage the global economy will suffer.
We usually think of cybercrime as the theft or theft of information or funds, including access to some sites or databases. But now it is going to the point where artificial intelligence or robots will make decisions without our knowledge. And that means that some major conflicts and even wars will be managed not by humans, but by automatons, robots with artificial intelligence. If there are cyberattacks on automatic control and decision-making, we as humans will just have to wait helplessly for the consequences.
Perhaps one day there will come a time when global wars will be started not by humans, but by machines created by humans. Today humans can control a cybernetic or automated system they have created and make any decisions related to it. The worst thing is that it is going to be machines, robots, who will make decisions in these systems too. In this regard, I think all scientists of the world should be cautious about the development of science.
Speaking of science, please tell me something. Most people perceive you more as a teacher than a government official. And when I was arranging the interview with you, you said that you work at a university. Where and what do you teach?
I am currently visiting head of the Department of Digital Economy and Applied Informatics at the Azerbaijan State University of Economics (UNEC). I also came to the post of Minister from science and education. Let me explain why I never gave up teaching.
We are now exploring what is needed for innovative development. Generally, there is now a model of development which we call Public Private Partnership (PPP). In our opinion, innovative development now needs an "academic" component as well, i.e. the PPAP model.
And TEKNOFEST Azerbaijan was also important not only in terms of "public-private-academic partnership", but also in terms of cooperation between generations, i.e. between the young generation and the older generation. It is the PPAP model that helps a lot in building ties with universities. For example, last year alone, more than 150 university students did internships at theICS as part of their collaboration with private companies, and they are already getting closer to real work.
As you said, most people know me as a teacher. What is a teacher's main job? Teaching students. If a teacher can't give a student the knowledge he or she needs, if the student doesn't go further than the teacher, then that's a bad teacher. That's why we pay special attention to our ties with universities.
How many of your students now, as you said yourself, have gone further than you and hold high offices? By the way, it turns out that the Minister of Digital Development and Transport of Azerbaijan, Rashad Nabiyev, was also your student.
As for Rashad Nabiyev, I must say that his appointment as Minister is a very good and timely decision made by Mr. President. We saw his successes at Azercosmos and, before that, as head of the Finance and Analysis Department of the Ministry of Communications and High Technologies. He is a young man with Azerbaijani and US education, and he got off to a very good start. He should keep it up. Currently, the concept of digital transformation developed by the Ministry of Digital Development and Transport is an important roadmap for future development. In this regard, I appreciate the ministry's close cooperation with the Center for Analysis and Coordination of the 4th Industrial Revolution.
In total, about 300 young people have been sent abroad by the Ministry for training in IT and related fields. When we meet abroad, they come up, introduce themselves, and we are very happy to see their successes.
You know, the Ministry of Education had a special program. Now the next stage is coming. This is about the education of young people abroad. Mr. President attaches special importance to the education of young people, to improving their knowledge and skills. The relevant state programs confirm this.
We also did our best to provide technical support to these processes. When I was Rector of the Azerbaijan State Economic University and when I was Minister, we were sometimes told: "Look, you send young people to study abroad. They will go and study and stay there."
But we did not agree with that. Because we believed that even if some of them stayed abroad, this would mean the formation of an intellectual diaspora of Azerbaijan. The education of every Azerbaijani should be seen only in a positive light, no matter where they study.
Many of these students are now working in various positions and pursuing careers in academia.
What do you think of the role of our young people in science in general? They prefer to work in the private sector these days. Does your institute have any problems with working with young people?
You raised a very important point. Today, recently, the level of development of science, its future has been of interest to our state, society and young people. In the Academy this issue is also a priority. On the example of our institute, we believe that the answer to this question is different for fundamental and applied sciences. Keep in mind that fundamental science accounts for about 20-25% of the total scientific corpus, while fundamental research is theoretical in nature and is a long-term applied process. But the most important indicator of applied science is the application of its results to practice, and young people are more interested in this area. In the world this process is based on the model of a "sacred triangle" - "university (academic potential)-state-industry" and stands on 3 pillars: human (knowledge) capital-favorable environment-financial resources. Today in Azerbaijan sufficient knowledge capital is being formed in the Academy and universities. In special economic zones, technoparks created by the state and so on the favorable environment is created (exemption from taxes and customs duties, jobs, provision of appropriate infrastructure, etc.). But the third pillar - access to financial resources - is insufficient compared with developed countries.
In developed countries, the sources of the main financial resources of startups, "unicorns" (startups worth more than $1 billion) are either large private companies, large corporations, government subsidies, bank loans, or funds from the stock markets, that is, funds held in venture capital funds. When these three pillars are in place, the company is unstoppable. Anyone building a new business must have access to venture capital.
Today there are only about 1000 unicorn companies in the world, of which 70% are in the United States. That's because there is a brain flow because of the conditions created in the US. Also, the US has a strong financial system. In that country you can take out a loan at 0.1%, there is access to venture capital funds. Mostly such risk money is spent by companies like Microsoft, Amazon, and Apple. Amazon invested $43 billion in science in 2021, and Huawei invested $23 billion. Amazon's investment in science is more than all the CIS countries put together today.
Now our institute works together on the basis of cooperation agreements with some private companies and enjoys the benefits of the High Technology Park of ANAS.
How many science-intensive projects can government contracts help fund?
As I have already said, our institute has a special design bureau, which is a self-financing organization. It often receives contracts from the State Oil Company of the Azerbaijan Republic (SOCAR). Their work is also conducted on a scientific basis. One of the works of the Special Design Bureau is a completely national control system similar to foreign SCADA systems used in Azerenerji and other large organizations. We will introduce it to the public soon.
Speaking of SOCAR, I would like to say that the company gives grants to scientists every year. It knows that the results obtained from these grants indirectly serve the development of the company. If two out of ten grant projects yield successful results, it is a great achievement. We also work actively with the Science Development Fund on grant issues. In particular, we implement a number of projects in the development of Karabakh.
Speaking of grants, when you were Minister, there was also the State Fund for the Development of Information Technology, which allocated grants for various projects. Were there any successful results from the projects that received its support?
This fund continued its activities five years after I was relieved of my ministerial duties. But that does not mean that I have to step aside. No. Then the question arises: what was our expected result? In fact, the work of the fund was organized very properly. It was "venture capital," that is, risk capital, and in that respect, the money spent was at risk. The State IT Development Fund was allocated 10 million manats in 2013-2015. The fund mainly allocated grants and soft loans to startup companies for innovative development. Grants accounted for about 15% of the total amount, and the rest was spent on loans, on preferential terms, at 3-5% per annum. For that time, these were very favorable conditions, interest rates. The loans provided by the fund were repaid on time, and several new companies benefited from it. In our time, the fund was audited, no serious flaws were found.
It is possible that some of those startups that have good indicators today once received grants and soft loans from us.
And why did the Kura computer plant in Mingachevir and the High-Tech Park under the ministry fail and then close?
At the Mingachevir computer plant, we started the production of "Kura" brand computers for the first time in Azerbaijan. The plant was quite active and successful in the Azerbaijani market. Equipping secondary schools with computers was carried out by the "Kura" plant within the framework of the state program. Another product for the visually impaired was "Dilmanc" microcomputers, which work with sound, etc. The plant recovered its investment around the same time period.
If the plant had not stopped producing computers then, there might still be normal production now. We could have even produced high-speed specialized computers.
And the Pirallakhi High Technology Park under the Ministry was just established then and is still in operation now. I am not aware of the current situation with the park.
In 2017, you took over the management of the HT Park at ANAS. But the situation of its residents is not perfect either.
In 2017, I was appointed advisor to ANAS, and then in 2020, I was appointed General Director of the High Technology Park of ANAS. I only worked there for five months. You would probably agree with me that 5 months is too short a time for doing something serious at a technology park.
You know, we are always prone to criticism. But I would say that in Azerbaijan the situation with technology parks is not so bad. I understand your point. It is true that we do not have a technologically powerful and globally competitive ICT product that we can bring to the world market.
But our neighbors do…
I would not say that. Free zones and technology parks appeared in Georgia somewhat earlier than in our country. In Armenia they want to create a veneer of that, and the reason for that is the Armenian diaspora. But I will say it again, we are ahead of our neighbors. International ICT statistics confirm this.
If we are comparing ourselves with our neighbors, let me briefly say what I think. In the area of ICT services provided to the population, Azerbaijan ranks 1-2 among the CIS countries. As for our regional neighbors, compared to the Middle East we are, I would say, among the leaders. If we talk about our place in the high-tech markets, then this region has always lagged behind. This is why, as we have already said, in order to develop this area, we have to choose the best options for the use of financial resources when implementing the "public-private-academic partnership" model.
There is such a tradition in the West that the new team is in constant contact with the person who has been relieved of his duties and uses his experience at least as an expert. What was it like after you left the office?
They probably think, "Well, we've seen everything you could do. Now we'll do it ourselves." There's a perception in our society that if someone is out of office, you have to stay away from them. Institutions sometimes think that way, too. But you can take an interest in the opinions of those who used to hold office, as well as older people, use them as consultants. You can listen to their advice. In the end, the person in charge makes the final decision.
But I was treated well. After my resignation in 2017, I came to the ANAS as an advisor and, as you can see, now I continue to work at the Institute of Control Systems.
One of the issues that caused most dissatisfaction when you were minister and in subsequent periods was the activity of Internet providers. In particular, the state provider's monopoly on the market caused discontent. In your opinion, is there really a monopoly of Aztelecom?
Speaking of monopoly, we must admit that in market economies there has always been monopoly everywhere. Today the 500 most powerful companies in the United States (Fortune 500) account for 75% of GDP. This is seen as a natural monopoly. The situation in the Internet provider market in Azerbaijan has not been bad. Since 2015, there have been about 40 ISPs. No license for this activity was required, and it is not required now. But it is true that there was only one company providing wholesale (backbone) Internet services - Delta Telecom, and later a second company - Aztelecom - entered the market, and a competitive environment emerged.
However, Aztelecom is a state-owned company and communications is perceived as one of the attributes of the strategic and national security of the country, therefore, this company was not privatized in the first period of our independence, like, for example, the power engineering facilities. That is, Aztelecom's monopoly is a state monopoly. However, as the market economy in the country developed deeper, the process of privatization started to be implemented as well. Subsequently, the development of the cellular sector has shown that communications in the private sector can be more efficient and reliable. I believe that gradually the state-owned communications operators will also be privatized, including Aztelecom.
"Aztelecom" is indeed controlled by the government structure responsible for market regulation and has certain privileges in providing communications services compared to other players in the market.
In our time, we were not able to solve this problem. I believe that the current leadership of the Ministry will soon solve it and create, in general, a truly fair competitive environment in the telecommunications and information technology market.
Back then, Mr. President instructed us to create an environment that would ensure normal competition in the ICT market. For this purpose, it was necessary to privatize the sector.
You know, it is also necessary to take into account the fact that as a result of privatization of large state enterprises, including Aztelecom, numerous job cuts were to be expected. You have to be very careful about this. We know that the number one priority of the policy of our state, of the President personally, is to secure the rights and social protection of citizens. Please understand that we also had to be very careful because of this.
In the case of Aztelecom this issue is still open.
I also want to point out that as soon as Aztelecom's privatization would be announced, foreign companies would also be interested. But we wanted Aztelecom to be privatized mainly by local businesses, and at that time there was no local investor capable of acquiring a state-owned operator. If privatization had taken place, Aztelecom would have been bought by foreigners, while it is considered reasonable to give preference to privatization by local investors because communications is a strategic area. As you can see, the main obstacle for us was the lack of local investors with investment opportunities.
Some local companies wanted to buy Aztelecom. But they were going to take out bank loans to invest. Sometimes the company either could not get a preferential bank loan or could not use it properly.
What was the investment value of Aztelecom? Around $1 billion?
At the time, the operator had an annual turnover of about $130 million. Its market value was estimated at about $500 million. There were no buyers for this company at that price at that time. The local company would have received large discounts on the purchase, including the option to pay off the price over a period of nearly 20 years.
This has been a very extensive interview. But maybe you would like to add something else?
No, this interview really turned out to be very extensive; I feel as if you took me back in time. I think we have discussed important, serious issues. Thank you and the entire report.az team.