Armenia is one of the leading Information Technology (IT) nations among its CIS and Middle East neighbours. ICT is among the fastest growing industries and benefits from a favourable environment, adequate infrastructure, competitive prices and a highly skilled labour force.
Software development and outsourcing is a major part of Armenia IT sector, with around two thirds of Armenian IT output exported to over 20 countries: USA and Canada firstly, Russia and CIS as second destination, and the EU. The monthly salary of an experienced software developer in Armenia is around EUR 700. The main activities are web design, mobile applications and specialised software.
The telecommunications sector in Armenia has already seen substantial foreign investment and acquisition. Some investment opportunities remain and are made possible by appropriate ICT infrastructure and regulations.
Strategic direction/ specific schemes and incentives
IT among the priority sectors for the Armenian government:
ICT Development Concept Paper and Action Plan adopted in 2001;
Priority Sector for the DCFTA (Deep and Comprehensive Free Trade Agreement) under discussion with the EU;
Armenia aims at becoming a regional ICT hub: strengthening of Armenia’s ICT infrastructure, creation of an “Armenia IT brand” in the global market and development of higher value-added projects;
A governmental project to exempt innovative companies from tax on profit (instead of 10%) under discussion.
Business opportunities in the IT and telecommunication sector go from R&D outsourcing to venture capital and foreign investment, for EU and Eastern countries, and mainly include:
Software development and outsourcing, chip design and testing, networking systems and communications;
Development of fibre to the home technologies: an open field, estimated investment for the opening of points of sale (around USD 10 million);
Establishment of a virtual network operator: up to 10 times cheaper than standard communication rates for the consumer. All prerequisite are met: availability of licenses, infrastructure and phone numbers.
Some success stories
Synopsys (USA), a company specialising in Electronic Design Automation (EDA) software for semiconductor design, established its presence in Armenia when it acquired Monterey Arset and Leda Design in 2004, after IT was declared a priority business sector for the country. Since then, Synopsys Armenia closed joint stock company (CJSC) has become an important Synopsys site, providing R&D and product support in EDA. The company employs several hundred qualified Armenian engineers and is engaged in a number of successful cooperation programmes with major Armenian universities such as the State Engineering University of Armenia (SEUA) and Yerevan State University (YSU).
WEB-ISI (France) is a French SME which was established in 2005 with a core team of 4 engineers, while a talented team of 17 engineers work in an Armenian joint-venture, e-Works LLC, specialising in Internet strategy and Web design.
D-link (Taiwan), a company with over 2,000 employees and 170 offices in 70 countries, announced in October 2011 its project to set up a lab in the Gyumri Technopark after having successfully implemented several programmes in Armenia. At the initial stage, the centre will have a 60-member staff.
The Enterprise Incubator Foundation (EIF), a technology business incubator established in 2002 within the framework of the World Bank’s “Enterprise Incubator” project, supported many successful projects such as the Regional Mobile Applications Laboratory for ECA, the Microsoft Innovation Center, the Science & Technology Entrepreneurship Program (STEP) in Armenia, the India-Armenia Center of Excellence in ICT, the Cisco Systems Network Academy, the SUN Microsystems Development and Testing Laboratory and the ArmTech Congress.
Useful links and contacts
Armenian ICT Industry Association (UITE)
Enterprise Incubator Foundation (EIF), and its guide of Armenian IT companies
Gyumri Information Technologies Center
Armenian Development Agency (ADA)
SME Development National Center of Armenia