This year’s congress was well attended.
That’s Alec Baghdasaryan of IIG Services, Armenian Education Foundation
member and GITC supporter, in the front right.

I had the good fortune to attend Armtech Congress 2012 on December 10 at Stanford University in Palo Alto, California. The conference is an annual discussion about the health of the Armenian IT industry. Here are some of the more salient points, noted in the order presented:

  • Last year Armenia had 7% GDP growth with 2% inflation. The general economy fared well through and since the global crisis of 2008.
  • According to World Bank reports, Armenia now ranks as the 32nd easiest country for foreign business investment. That doesn’t sound like much, except it’s a rise of about eight points from last year, just behind The Netherlands.
  • Within the Commonwealth of Independent States, Armenia is number one in per-capita patents issued. We are quite creative!
  • The Armenian National Engineering Laboratory has been launched, and will offer four floors of R&D facilities to engineering students.
  • Pension reforms starting in 2014 will mandate 5% employer, 5% employee contributions to a 401K-style self-directed retirement account. This will result in about 1B USD of savings by 2024.
  • Also starting in 2014, businesses will be able to use electronic invoicing and tax filing. This is a big change from the paper invoicing system I saw mandated as late as 2009.
  • About 26M USD of venture capital will be available to Armenian entrepreneurs from new sources. This is in addition to the 24M USD the World Bank has already invested to date.
  • Armenia’s wireless broadband infrastructure is faster and more competitive than that of India’s, thanks to licensing of three carriers (Beeline, Orange, VivaCell) as well as a minimum 3G network speed.

Was this year’s Congress just another mutual admiration society? No, thanks to an intellectually honest panel session hosted by Raffi Kassarjian of Congress Bank. Raffi brought together a panel of on-the-ground realists (as opposed to feel-good cheerleaders) to discuss the future of “hye”-tech. It’s this kind of forthright discussion that made the entire Congress worth attending.

Richard Bezjian, a serial entrepreneur in the best sense of the term, said future Armenian start-ups will face a number of challenges on multiple fronts. The era of cheap labor outsourcing is over. First-world countries are facing extreme resistance to sending work outside their borders. “Low handing fruit” is now gone. And to attract more direct foreign investment, Armenia must provide a market by consuming on a much larger scale the goods and services it produces. Thus Armenia will need to do more to grow in the future than perform contract work as we have in the past.

Dr. John Kibarian, CEO of PDF Solutions (having nothing to do with Adobe or its Portable Document Format), was invited to discuss why his company was not doing business in Armenia. He said these factors include the difficulty finding Diaspora employees willing to work for extended periods in-country, the lack of local Armenian project management talent, and an ecosystem that is not competitive with other countries.

But not all is doom and gloom. Bezjian also presented the basis for being optimistic about Armenia’s IT future: countries are including Armenia in forming alliances among themselves, Armenia knows and can present a highly skilled labor force, and growth in new deployment technologies such as cloud services can cross the geo-political obstacles that have previously kept Armenia out of some markets.

Now it’s your turn: What do you think about Armenia’s IT future? Positive or Negative? And more importantly, why? Tell us in the comments!