Jean Mamikonyan

Armenian IT Is a Means to Leave Armenia, Not to Stay

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By Avo Piroyan

Special to the Mirror-Spectator

YEREVAN — Among the few positives for Armenia has been the buoyant IT sector which has grown rapidly over the last 5-7 years and is now roughly 5 percent of annual GDP, about $630 million. It has expanded from virtually nothing into one of the only sectors in the country still growing. Many have pointed to this success as exemplary of what is possible in Armenia.

While the above is certainly true, those in the IT industry are less glowing in their assessment.

A dampener on the above positivity is that despite there being 800-900 IT start ups a year in Armenia, the number of international copyright IPs (intellectual property – a unique discovery/product that is patented) produced in Armenia can be counted on one hand. By contrast, China produces roughly 300,000 per year.

Among the many problems has been the inability to keep specialists. Jean Mamikonyan is one such specialist. Born in Yerevan, he studied engineering before getting into the IT sector in the early 2000s.

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Mamikonyan said, “The demand side is not that big. International companies don’t really use Armenia for outsourcing. As for the local ones, financial and telecommunication companies pay for IT but the rest either don’t have the money or don’t value it which means no investment which means not that many IT jobs.

“Top technological innovation for an average business is to have a Facebook page or website.”

Mamikonyan now works in Germany. His career path is not an unusual one. A person hones their skills in Armenia, becomes a respected specialist and takes a job abroad where the average pay is at least double that of the high end income for IT specialists in Armenia.

Aside from the monetary difference, the security and geopolitical situation is a concern as well as the long term lack of opportunities for themselves and their children.

“The main capital is people but it’s limited, and geopolitical situation doesn’t help to keep people from leaving,” Mamikonyan added.

Systemic problems

The reasons why the number of people in IT is limited run beyond emigration.

Armen Orujyan, CEO of FAST (Foundation for Armenian Science and Technology), said, “Among the main problems facing the Armenian IT sector is the education system, from schools to universities.

IT and especially high tech requires a person to have an in depth knowledge based in mathematics and the sciences.”

Following the collapse of the Soviet Union, Armenia inherited a very strong, if not at times brutally harsh, education system. Children of migrants found that their one year of mathematics from 1980s and 1990s Armenian schools was enough to last several years in western countries.

“That education system has gone,” Orujyan said, adding, “the base curriculum hasn’t kept up with modern changes and discoveries, and the teaching specialists have left.”

When asked what was the reason, besides the broader infrastructure, the answer was short and obvious, ‘money’.

“How do you expect a teacher to live on $100 per month? People take another job, whatever it is just to make ends meet. This has to change before you can expect education to improve,” Orujyan said. Indeed, teachers in Armenia get paid between $100-200 per month depending on the number of hours they work and years of experience.

What Can Be Done

The problems are not unsolvable. However, they do require an assertive approach. Comparing Armenia to the Silicon Valley in California, Orujyan said, “they already have the ecosystem in place with a lot of VCs (venture capitalists) that are also locally based.

On top of this, you have globally renowned Stanford University, and if that is not enough, you have California State University at San Jose, which feeds more students to the Silicon Valley than any other institution.”

In order to compete, Armenia will need to offer something that the others cannot or do not; things around flexible labor laws and taxes which could make Armenia an attractive base for international companies.

“With the right approach and active outreach, it is certainly doable. The problems and the solutions are clear,” Orujyan said.

For now, however, there is no concerted and organized effort to take Armenia’s IT sector from being a training ground and feeder of specialists to other countries to the next step.

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