Embed Size (px)
Citation preview
• Mechanical engineering
• Electronics
ICT Industry Overview
Before 1991 Armenia was regarded as a Silicon Valley of the former Soviet Union.
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
The main industry sectors were:
• Chemical industry
• Energy industry
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)
ICT Industry Overview
Today ICT industry is one of the most dynamic and promising sectors of the economy
• Embedded systems
• Semiconductor design
• Custom software development
• Financial applications
• Security and encryption
• Software development and outsourcing
ICT Industry Overview
• Multimedia design
• Industrial automation
• Web design and development
• Educational software
• Management information systems
• Computer aided design
• Systems integration
Major specializations include:
2008 About 200 Companies with 6000 employees, of
which 72% are technical specialists
ICT Industry OverviewGeographical Distribution
• 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)
2006 2003
RA Government ICT industry Development StrategyArmenian 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) *
Variables Armenia Azerbaijan Georgia Russia Turkey
Total tax rate 5,44 5,14 5,3 4,41 4,85
Government prioritization of ICT 4,07 5,05 4,11 4,2 4,46Government success in ICT promotion 3,4 4,74 3,59 3,5 4,08
E-government readiness index 3,32 3,64 3,63 4,01 3,8
ICT use and government efficiency 3,02 4,4 3,65 3,65 4,6
University-industry research collaboration 2,49 3,18 2,27 3,17 3,32
Spending on R&D 2,63 3,41 2,51 3,42 3,24
* Global Information Technology Report 2007-2008, World Economic Forum
ICT Industry Development Strategy of the Armenian Ministry of Economy (2001)
• 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
RA Government ICT industry Development Strategy
“the current situation in ICT 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”*
* IT Development Concept Paper, the Ministry of Economy of Armenia, 2007
New ICT sector development concept paper (2007)
RA Government ICT industry Development Strategy
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.
RA Government ICT industry Development Strategy
Information society and IT Industry growth target indicators:
Key Data 2006 2018Home computer penetration 5% 50-70%Educational computer penetration 10% 80-90%Public sector computer penetration 10% 100%Consumption of local IT products in the internal market – GDP
0.5% 2-4%
Share of e-services provided by RA state entities against the total
<1% 80%
Number of IT companies From which those with foreign capital committed
16050
1000200
Workforce 5000 20000Industry revenues 84 million (USD) 1 billion (USD)
IT R&D companies <10 100-200Large technology cities Techno-Parks & incubators
02
1>10
2008-2018 Design, develop and build
world class ICT infrastructure serving major regions, cities,
government & private industry
2008-2011Select, develop and rollout
E-Government pilot projects (Rollout 3 pilot projects in 3 years)
2008-2018Develop & launch targeted programs aimed at increasing
Armenia IT graduates and workforce.
2008-2011Build Armenian Techno-Park supported by world class ICT, municipal infrastructure and
services
IT D E V E L O P M E N T ACTION PLAN
2008-2013Equip and operate
national Tele-Centers serving citizens in key Armenian regions &
towns.
2008-2013Establish Armenian Software
Engineering Competence Center to certify & train Armenian software
developers to ensure compliance with global Capability Maturity Model
Integrated (CMMI) standards
2008-2018Establish Armenian IT Enterprise
Development Fund to promote private IT companies; attract foreign direct
investment & venture capital to develop and commercialize IT
innovation & product development
2008-2018Develop , design & rollout world
class strategic marketing & promotional campaign to position
“Armenia brand” in targeted high growth IT markets.
2008-2015Replicate EIF business
incubator model and establish university-based technology
transfer centers (TTC) to stimulate IT innovation &
product development
IT D E V E L O P M E N T ACTION PLAN
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)
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
The Union of Information Technology Enterprises
2008 Action PlanEducation 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
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 developmentLimited 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&DExcessive 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 investmentsThe lack of qualified ICT specialistsAMD appreciation (in recent years the AMD has appreciated on average by 20%)
