Azerbaijan aims to boost its economy by encouraging more entrepreneurship and innovation. However, the country faces challenges like lack of competition, high interest rates, and limited access to risk capital. This hinders the growth of businesses, especially small ones. The government can help by creating better conditions for entrepreneurship and designing financial policies that support innovation. The study found that high-growth entrepreneurship is low in Azerbaijan, and firms are not very innovative. To diversify the economy and create more jobs, it is crucial to address these obstacles and promote a more competitive business environment.