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New Strategic National ICT Vision in Armenia is required UITE, May 2008 ICT Industry Overview Before 1991 Armenia was regarded as a Silicon Valley of the former Soviet Union. The main industry sectors were: Mechanical engineering Electronics Chemical industry Energy industry

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slide2

ICT Industry Overview

Before 1991Armenia was regarded as a Silicon Valley of the former Soviet Union.

The main industry sectors were:

  • Mechanical engineering
  • Electronics
  • Chemical industry
  • Energy industry
  • Armenian industry inherited:
  • High quality technical workforce (according to the Brainbench Global Skills IQ Report for 2006, Armenia was ranked second in the world, after USA, in the number of IT certifications received per capita)
  • Physical infrastructure (airways, roads, railways and telecom)
  • Generally adequate manufacturing facilities coupled with scientific and design institutions
slide3

ICT Industry Overview

Today ICT industry is one of the most dynamic and promising sectors of the economy

2006

  • The share of the sector in Armenia's $5 billion

nominal GDP - 1.3%

  • 160 ICT companies (50 foreign)
  • About $84 mln in total revenue ($10 mln in 1998)
slide4

ICT Industry Overview

2008

About 200 Companies with 6000 employees, of which 72% are technical specialists

  • Multimedia design
  • Industrial automation
  • Web design and development
  • Educational software
  • Management information systems
  • Computer aided design
  • Systems integration

Major specializations include:

  • Embedded systems
  • Semiconductor design
  • Custom software development
  • Financial applications
  • Security and encryption
  • Software development and outsourcing
slide5

ICT Industry Overview

Geographical Distribution

2003

2006

  • At the peak in 2004, annual number of start-up ICT firms reached 25-30 (26% growth per year)
  • In 2007 the total number of ICT companies established with foreign investment reached 60 (30% from the industry total)
  • Share of local companies’ revenues in the industry’s total amounts to 40-45% ($37 million)
  • Average revenue per company for locals - 80% ( 8% for branches)
slide6

RA Government ICT industry Development Strategy

  • Armenian Networked Readiness Index (NRI) 2007–2008 is 106 compared to that of Azerbaijan (67), Russia (72), Georgia (91), Moldova (96), Turkey (55), Colombia (69), Kenya (92) and Nigeria (94) *
slide7

RA Government ICT industry Development Strategy

ICT Industry Development Strategy of the Armenian Ministry of Economy (2001)

“the current situation inICT industry in Armenia may be characterized as an aggregate of mainly partial achievements, the results of which in terms of the global market can not be considered as significant”*

  • No ICT-specific tax policy that would encourage the rapid growth of the sector
  • Tax and Custom administration mechanisms in places are underdeveloped
  • No tax benefits for Educational and R&D investments
  • No fiscal and export incentives in forms of reduced tax rates, tax subsidies, waivers and exemptions to SME
  • Enterprise Incubator Foundation - the only agency engaged in the development and incubation of ICT SMEs in Armenia
  • One private techno-park - VIASPHERE
slide8

RA Government ICT industry Development Strategy

New ICT sector development concept paper (2007)

Key milestones:

Short-term (1-3 years):

Build world class ICT infrastructure to support Armenian ICT industry and information society development

Mid-term (3-5 years):

Strengthen Armenia’s ICT infrastructure and ensure the presence and penetration of “Armenia ICT brand” in the global market

Long-term (5-10 years):

Achieve full “Armenia ICT brand” penetration in global markets and particularly in targeted high-growth market segments. Contribute to the growth of ICT, increase in sector revenues and development of knowledge-based economy through ICT infrastructure and Information Society development.

slide9

RA Government ICT industry Development Strategy

Information society and IT Industry growth target indicators:

slide10

IT D E V E L O P M E N T

ACTION PLAN

2008-2018

 Design, develop and build world class ICT infrastructure serving major regions, cities, government & private industry

2008-2018

Develop & launch targeted programs aimed at increasing Armenia IT graduates and workforce.

2008-2013

Equip and operate national Tele-Centers serving citizens in key Armenian regions & towns.

2008-2011

Build Armenian Techno-Park supported by world class ICT, municipal infrastructure and services

2008-2011

Select, develop and rollout

E-Government pilot projects

(Rollout 3 pilot projects in 3 years)

slide11

IT D E V E L O P M E N T

ACTION PLAN

2008-2013

Establish Armenian Software Engineering Competence Center to certify & train Armenian software developers to ensure compliance with global Capability Maturity Model Integrated (CMMI) standards

2008-2018

Develop , design & rollout world class strategic marketing & promotional campaign to position “Armenia brand” in targeted high growth IT markets.

2008-2015

Replicate EIF business incubator model and establish university-based technology transfer centers (TTC) to stimulate IT innovation & product development

2008-2018

Establish Armenian IT Enterprise Development Fund to promote private IT companies; attract foreign direct investment & venture capital to develop and commercialize IT innovation & product development

slide12

THE UNION OF INFORMATION

TECHNOLOGY ENTERPRISES

slide13

The Union of Information Technology Enterprises

Main Strategic Directions:

Education and workforce development

(strategic goal: the number of qualified ICT specialists is 10000)

Legal framework/collaboration with state bodies

(strategic goal: ICT is a priority industry in Armenia in practice)

Development of ICT/High Tech sphere/Formation of Information Society

(strategic goal: higher level of use of ICT in other businesses)

Development and enhancement of the association

(strategic goal: UITE is an influential and powerful institutional organization serving the interests of its member enterprises)

slide14

The Union of Information Technology Enterprises

  • 2007 in brief
  • Participation in CeBIT (2000-2007)
  • Intellectual Property Rights Protection Campaign
  • Custom legislation improvement project
  • Development of ICT/High Tech Portal (www.uite.org)
  • DigiTec Expo - 2007 ICT/High Tech exhibition (50 companies, about 8000 visitors)
  • ICT Leaders Meetings
  • UITE became the official counterpart of the CBI, the Netherlands’ Centre for the Promotion of Imports from developing countries for assisting local ICT companies’ outsourcing.
  • Participation in new Armenian ICT development concept drafting
slide15

The Union of Information Technology Enterprises

  • 2008 Action Plan
  • Education and workforce development
    • UITE participation in Stockholm Challenge-2008 award ceremony
    • Training center formation within UITE
  • Legal framework/collaboration with state bodies
    • Drafting the package on tax & custom legislation improvements
    • Media campaign
  • Development of the sphere of ICT/High Tech
    • UITE members participation in CeBIT 2008
    • Armenian High Tech Virtual Community Portal (www.uite.org)
    • Assisting Government in Techno City establishment in Gyumri
    • Organizing Armenian delegation participation in World Congress
    • on Information Technology 2008 in Malaysia
    • Organizing DigiTec - 2008
    • Organizing Robotics Contest
  • Development and enhancement of the association
    • Organizing the series of ICT Leaders Meetings
slide16

The Union of Information Technology Enterprises

The main problems that hinder Armenian ICT industry development:

The lack of authorized state body responsible for Information Society development

Limited financing for ICT sector

Insufficient interaction among the entire scope of the sector’s infrastructure, including the National Academy of Science, industry, state ministries and the private sector

Low level of government investments in R&D

Excessive Custom and Tax administration (applications of “estimated prices” custom clearance method for ICT goods for importing and VAT levy at the border for importing)

The lack of tax benefits for educational investments

The lack of qualified ICT specialists

AMD appreciation (in recent years the AMD has appreciated on average by 20%)

slide17

THANK YOU

Meri Duryan

UITE

email: mduryan@uite.org

url: www.uite.org