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Armenia’s Emerging Tech Landscape: A New Generation of Innovators

In Armenia, the foundation for a robust technological future is being laid early in education, exemplified by young learners like nine-year-old Slavik. Within a typical three-storey school in Yerevan, Armenia’s capital, Slavik is unveiling his creation—a simple box equipped with three LED lights.

“He’s learned to control it and understands the programming involved. The code is entirely his own work,” remarks Maria, a 21-year-old technology coach guiding the students.

Nearby, 14-year-olds Eric and Narek display a smart greenhouse model capable of monitoring temperature and autonomously controlling fans via a mobile application. Other pupils enthusiastically present their inventions, which include games, robots, and various smart home projects. Meanwhile, eleven-year-old Arakel proudly holds up a cardboard structure of a house featuring a retractable clothesline, designed to make his mother’s chores easier by protecting clothes from rain.

These aspiring engineers participate in specialized engineering lab classes where they are introduced to programming, robotics, coding, and 3D modeling. Launched in 2014, this initiative, known as Armath—which translates as “root” in English—has now expanded to 650 labs in schools throughout Armenia.

The program, developed by the Union of Advanced Technology Enterprises (UATE), unites over 200 high-tech firms in the country. UATE’s chief executive, Sarkis Karapetyan, expresses the organization’s vision: “We aspire to see Armenia evolve into a tech powerhouse that offers significant value to both its citizens and the global community.”

Karapetyan notes that Armenia is home to approximately 4,000 tech companies. The Armath initiative is a hallmark of effective public-private partnership in Armenia. “We attract funding from the private sector, set up Armath labs in various schools, and provide equipment. The government contributes a budget of $2 million annually for coach salaries,” he explains. Currently, over 600 instructors lead classes for 17,000 active students.

“Our ambition is to inspire 5,000 talented youths to pursue engineering careers annually,” adds Karapetyan. Nestled in the South Caucasus, Armenia is a landlocked nation with a population of 2.7 million and has faced closed borders with Azerbaijan and Turkey due to ongoing territorial disputes.

Unlike its regional neighbors, Armenia lacks natural resources and direct sea access. Yet, it has maintained a historical legacy in mathematics and computer science since the Soviet era. In 1956, the Yerevan Scientific Research Institute of Mathematical Machines was established, leading to the creation of its first computers by 1960.

Leveraging this legacy, Armenia aims to transition into a technological focal point of the Caucasus, with notable success already in hand. A prime example is Picsart, an AI-driven photo and video editing platform founded in 2011; it has since achieved a valuation of $1.5 billion, with dual offices in Yerevan and Miami. Other thriving companies include Krisp, known for its audio processing software, and Service Titan, specializing in business software.

According to an annual report, Armenia ranks as the top destination in the Caucasus for launching startups, placing 57th globally, ahead of Georgia (70th) and Azerbaijan (80th). An integral element of Armenia’s tech evolution is its vast diaspora—approximately 75% of Armenians and those of Armenian descent reside outside the country. This global network offers essential connections, particularly within the US technology sector, where about 1.6 million individuals of Armenian ancestry are concentrated, especially in California.

Samvel Khachikyan, director of programs at SmartGate—a venture capital firm operating in both California and Armenia—points out the significant presence of Armenians in the leadership of major US companies. “If you examine the top 500 companies in the US, at least one or two will have Armenians on their boards or in high-level management positions,” he states.

SmartGate aids Armenian entrepreneurs in setting up operations in the US. Khachikyan illustrates the challenges faced by Armenian startups attempting to break into the US market, noting how SmartGate facilitates their integration through intensive networking opportunities in Silicon Valley and Los Angeles.

However, many Armenian startups, like Dr Yan—an app founded by entrepreneur Irina Ghazaryan that simplifies healthcare access for Armenians—initially test their products domestically. Ghazaryan identified a market gap caused by difficulties faced by patients in securing doctors’ appointments. Her application’s subscription model charges doctors for listings on the platform, and as the business flourishes with a monthly revenue growth of 25%, there are plans for wider expansion beyond Armenia.

In an unexpected turn of events following Russia’s invasion of Ukraine in 2022, Armenia’s tech sector benefitted from an influx of Russian IT professionals seeking refuge. Major companies, including US chipmaker Nvidia, relocated their operations to Armenia, further supporting local industry growth.

Vasily, a Russian IT consultant who moved to Armenia in 2023, acknowledges the country’s welcoming stance for Russians during this transitional period. He estimates that the Russian tech community in Armenia has grown to include between 5,000 and 8,000 individuals, significantly alleviating skill shortages in areas like data processing, cybersecurity, and financial technologies.

Nonetheless, Vasily cautions that Armenia has become somewhat expensive, and reducing the tax burden for IT firms is crucial for retaining them in the long term. Despite these challenges, overall optimism regarding Armenia’s technological advancement remains strong. Khachikyan anticipates a flourishing future for the sector, highlighting the successful launch of Service Titan on the New York Stock Exchange in December, with its current valuation exceeding $10 billion.

Source
www.bbc.com