Armenia as a Technology Hub?

Armenia—with its highly educated population, an entrepreneurial spirit, a legacy of research and development during Soviet times, and high growth digital sector—can become a technology hub or “Silicon Mountain” in the region.

According to the Enterprise Incubator Foundation, in 2012, Armenia exported $120 million worth of IT software and services, mostly to the U.S., Canada, and the European Union. There were about 360 IT companies in Armenia, with an average annual growth of 23 percent. Revenues accounted for 3.3 percent of its national GDP, with the industry contributing 8 percent of total exports. About 1 in 10 of the companies had a turnover of more than $1 million.

Armenia used to be a hub for the Soviet Union’s scientific and research and development (R&D) activities, including industrial computing, electronics, and semiconductors. Since independence, the country’s focus has been towards software development, outsourcing, and IT services.

Although Armenia has around 90 percent coverage of 3G network nationally, only around 40 percent access the network.

Students experiment in robotics during a workshop at Tumo.
Students experiment in robotics during a workshop at Tumo.

That is why places like the Tumo Center are so important. Tumo is a new kind of after-school learning environment where thousands of teenage students are put in charge of their own learning, in a place where there is access to the internet and technology. The Center teaches skills necessary to succeed in the digital industry, for example in animation, video game design, web development, and digital video and audio.

Another organization helping prepare Armenia for digital future is Armtech, which promotes Armenia’s high technology economy and encourages investment; allows for the networking among high tech professional worldwide; and organizes a leading Armenia tech conference every year.

Then there have been the technology investments. In 2011, Microsoft Corporation established an Innovation Center in Yerevan, and in the same year India set up a joint Center for Excellence in Information Communication Technologies at Yerevan State University. In response, the Armenian government opened an information and high-tech office at the Plug and Play Center in Silicon Valley in December 2012.

The latest accomplishment came in December 2013, when Technology and Science Dynamics Inc./Armtab Technologies Company, an American-Armenian joint-venture, announced the first tablet and smartphone made in Armenia.

A country that has made the most of its small land mass while leveraging the intellectual capacity of its population has been Israel. The percentage of Israelis engaged in scientific and technological inquiry, and the amount spent on research and development in relation to gross domestic product, is the highest in the world.

A number of factors have contributed to this, including investing within the country to patent technologies and attracting foreign investment to build research and development centers. The Armenian government should consider these and other models to further enhance some its natural resources—its people.

Perhaps it could appoint an Advisory Board (including diasporans) to work alongside these existing organizations to set and implement Armenia’s digital plan, to not only develop the sector but identify new opportunities to leverage.

Armenians are no strangers to the digital sector, with Avie Tevanian, a former senior vice president and former chief software technology officer at Apple; Alexis Ohanian, co-founder the social news website Reddit; Vahé Torossian, corporate vice president of Microsoft’s Worldwide Small and Mid-market Solutions and Partners (SMS&P) organization; Katherine Safarian from Pixar, and an Oscar recipient; Zareh Nalbandian co‐founder and CEO of Animal Logic, one of the world’s leaders in digital animation; and many others.

The opportunities that are available are huge. For example, WhatsApp Messenger, a cross-platform mobile messaging app, was recently acquired by Facebook for $19 billion.

Armenia’s most valuable commodity is before us, we just need to open our eyes.

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Sassoon Grigorian

Sassoon Grigorian is a corporate affairs professional and has worked in leading global technology companies. Grigorian formerly worked in the New South Wales (NSW) state government as an adviser to a former NSW Premier. He serves on the Boards of the Asia Internet Coalition (AIC) and the National Center for Asia Pacific Economic Cooperation (NCAPEC), and is co-founder of the Australian Interactive Media Industry Association’s (AIMIA) Digital Policy Group.

4 Comments

  1. Tremendous articles ! Actions like these will be the seeds that will put us on the map. The technology sector is heaven sent to Armenians as Edward Keonjian predicted some 50 years ago when he began working in America. The opportunity must be expanded to diasporans that will bring valuable supply and demand chain benefits with leveraged goals and vision.

  2. Dear Sassoon,
    Reassuring article! Great to see how Armenian tech achievements are reflected here. We, at Gyumri IT Center, are proud to be part of the major breakthrough in developing IT further in Armenia, in the city of Gyumri. Opened in 2005, we have trained more than 200 young Gyumretsis, and supported the openings of a number of IT companies in this city. We will be thankful to read about GITC and Gyumri in your future articles – about Armenia 2d city, Gyumri as main future hub for IT industry in Armenia. 
    For more details you can go to our site: http://www.gitc.am.
    Thank you

  3. Yes, Amalya is correct – the city of Gyumri is the new IT engine for Armenia. We here at DigitalPomegranate.com have invested a great deal with fantastic results. The new Gyumri Tech Center is another huge plus for startups and foreign investments.

    We are so happy that we are opening another company focused on App development using LiveCode. iTechnology.am, Armenia’s leading tech magazine, which is based in Gyumri and recently dedicated an entire issue to LiveCode and Armenia: http://www.itechnology.am/livecode-issue-may-2014/

    –Todd

  4. A very positive and encouraging article. One of the most valuable assets RoA has is its youth and their intellectual capacity. How we keep them in Armenia is another complex issue.
    However, without throwing cold water on the idea, or discouraging the further development or nourishemnt of the efforts, US Armenian-American citizens have to be cautious.
    The concern is the following: The US Dept of Commerce, under ” US Export Administration” regulations, has Armenia blacklisted. The Blacklist includes ex USSR republics and a number of rogue countries. This basically prohibits any contact, dialogue or exchange by a US Citizen or US Company with an Armenian ounterpart, without going through a complicated process to get permission/exemption to do so.
    It is not an insermountable obstacle, but work need to be done to have the restrictions on Armenia eliminated. ANCA definetly can work on this.
    Vart Adjemian

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