Armenian IT Sector Grows Despite Economic Crisis


World Markets Research Centre
Global Insight
Nov 25 2009

The participants of an IT conference held in the Armenian capital,
Yerevan, yesterday concluded that the country’s IT sector has been
growing despite the economic crisis. The conference, organised by the
Competitive Armenian Private Sector Project (CAPS) and funded by the
United States Agency for International Development (USAID), highlighted
the factors that have contributed to the successful development of the
sector in Armenia, including better cooperation between the private
sector and the government, recent customs and tax reforms, the rapid
spread of advanced technologies in the country, and the creation of
educational institutions that generate highly skilled IT specialists.

Significance:Armenia has been hit hard by the global economic crisis,
with GDP dropping by 18%. Against this backdrop, the news of its
expanding IT sector is encouraging for the Armenian government and
foreign investors. Since the mid-1990s the Armenian government has
been taking consistent steps to develop the IT sector. The country’s
17-year blockade by neighbouring Turkey and Azerbaijan due to political
tensions has played a positive role in IT development. The government
has funnelled resources into the IT sector since it is an opportunity
to utilise the highly skilled intellectual pool found amongst the
Armenian population, without having to rely on blockade-impacted
transportation. So far IT remains one of the most attractive areas
for foreign investors in Armenia: there are over 210 IT companies in
the country, 58 of which are foreign owned. These companies export
$70US million in products annually to 20 countries.

The latest entry into the Armenian IT market was the global
communication company Orange. Indeed, even the Russian president
Dmitry Medvedev recently stated that Armenia’s success in the quick and
effective introduction of information and communication technologies,
including universal wireless internet coverage, is a model that Russia
is eager to replicate.

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