Children at a 3D printing station during the Digitec Expo (Photo: Armath)

Digitec Expo Aims to Expand IT Breadth

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YEREVAN – The Armenian capital hosted the Digitec information technology expo over the weekend. The event, which was held on the weekend of October 29 through 31 at the Hamalir, brought together some of the biggest names in the local tech scene, some of Armenia’s most successful indigenous tech startups and thousands of curious tech enthusiasts around the theme of tech-fostered inclusion in the post-Covid World.

The Digitec technology expo, which has been held in October every year since 2005 – with the exception of 2020 due to the ongoing COVID-19 pandemic and Second Artsakh War – remains the largest annual tech exhibition and conference in the Caucasus designed to, according to organizers, “showcase the achievements and potential of the rapidly-growing tech industry in Armenia.”

Students demonstrate a new, realistic combat simulation system they designed for the Armenian Military at the Digitec Expo (photo: Raffi Elliott)

The event is hosted by the Union of Advanced Technology Enterprises (UATE) a sort of lobbying group which supports the country’s burgeoning tech community and also advises the government on pro-IT sector reforms. This yearly event also enjoys the support of the Armenian Ministry of High Technology. Armenia has long made Information Technology a key aspect of its economic development strategy.

Borne out of a cluster of cutting-edge technology research and development institutes which found their home in the Soviet Yerevan of the 1970s and 1980s, and bolstered by the establishment of subsidiaries of many well-respected Silicon Valley firms, the Armenian tech scene has the distinction of being one of few sectors which continued to see robust growth throughout Armenia’s post-independence era in spite of the economic disruptions felt as a result of the country’s transition from a planned to market economy – growth which remains unabated today. Armenian tech even saw a remarkable 2.8 percent expansion in 2020 as the Coronavirus pandemic threw the rest of the world into recession. Currently some 800 active tech companies in the country employ almost 16,000 workers, many in competitively-compensated programming or computer engineering positions.

Over the course of the past 20 years, the industry also matured from a mostly outsourcing-based model into a better-healed indigenous technology startup ecosystem. At least two such Armenian startups have already reached the coveted status of Unicorn, meaning they hold valuations worth more than $1 billion. These companies, ServiceTitan and Picsart, both maintain offices in the United States, but virtually all technology and product development is located in Yerevan. Experts predict another 4 startups have the potential to reach this important benchmark within the next two years.

Armen Kherlopian, PhD, a strategy, innovation, and business leader whose experience portfolio includes Global Fortune 100 Companies as well as government organizations such as the FDA and NASA believes that startups provide Armenia with a strategic economic development boost. “The success of startups in Armenia will have a compounding effect in generating economic growth at the necessary speed to catch up to those of our resource-rich neighbors,” Kherlopian tells the Mirror-Spectator. In his view, each Armenia-based tech unicorn which successfully exists – either with an IPO or acquisition – instantly creates 50 new millionaires in the country.

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Aside from the benefits of the trickle-down effect that this wealth would bring to the local economy, this new breed of millionaires would be different. “These people are from the startup scene, they understand the high-risk – high reward nature of the business,” Kherlopian explains, “their strategic investments would target the next generation of fast-growth startups in the country, startups which command valuation multiples.”

Kherlopian has partnered with another big name in the Armenian tech scene, Emma Arakelyan, to form the angel investing consortium BAJ Accelerator. BAJ has partnered with Cornell University and the Technion-Israel Institute of Technology with the mission of creating an angel investing culture in Armenia. Inspired by the snowballing effect that Skype had on kickstarting Estonia’s digital revolution, BAJ even took on one of Skype’s co-founders.

BAJ is part of a larger syndicate of angel investors currently sustaining the Armenian startup ecosystem. Others include the Business Angels Network of Armenia (BANA), AICA and FAST. Several of their venture-funded startups were among the exhibitors at the Digitec Expo this weekend.

Also featured at the Digitec Expo was one of UATE’s flagship projects at the moment, the Armath Engineering laboratory network. The idea is for an Armath lab to be installed in every high school across the country – and particularly in regions near the borders – to teach STEM to students at a young age. Since last year’s war, a particular emphasis has been placed on the development of Unmanned Aerial Vehicle (UAV) technology.

“We need to collectively develop an action plan to turn the challenges [of Covid and regional pressure] into new opportunities for Armenian tech to play its role in making our world a better place”, said Raffi Kassarjian, executive director at UATE. In his keynote address during the Digitec Summit, Kassarjian also laid out the current challenges that the Armenian tech industry faces in sustaining its growth, as well as the opportunities that lay ahead in a world forever-changed by COVID-19.

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