1. Armenian ICT Industry overview and the role of the Union of Information Technology Enterprises in promotion of ICT/High Tech Development in Armenia

2. The main industry sectors were: Armenian industry inherited:
ICT Industry Overview
Before 1991 Armenia was regarded as a Silicon Valley of the former Soviet Union.
The main industry sectors were:
Chemical industry
Energy industry
Light Industry
Mechanical engineering
Electronics
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

3. ICT Industry Overview
Today ICT industry is one of the most dynamic and promising sectors of the economy
2008
The share of the sector in Armenia's $9.2 billion
nominal GDP - 1.2%
175 ICT companies (56 foreign)
About $111 mln in total revenue ($10 mln in 1998)

4. Major specializations include:
ICT Industry Overview
Major specializations include:
Embedded systems
Semiconductor design
Multimedia design
Industrial automation
Web design and development
Custom software development
Financial applications
Security and encryption
Software development and outsourcing
Educational software
Management information systems
Computer aided design
Systems integration

5. ICT Industry Overview Geographical Distribution
Share of local companies’ revenues in the industry’s total amounts to 38% ($42 million)
Average revenue per company for locals - 30% ( 3% - branches)
At the peak in 2004, annual number of start-up ICT firms reached (26% growth per year)
In 2008 total number of ICT companies established with foreign investment reached 56 (32% from the industry total)

6. RA Government ICT industry Development Strategy
Armenian Networked Readiness Index (NRI) 2008–2009 – 114 Azerbaijan (60), Russia (74), Georgia (88), Moldova (99), Turkey (61), Colombia (64), Kenya (97) and Nigeria (90)
Variables
Armenia
Azerbaijan
Georgia
Total tax rate (hard data) 52 64 57
Government success in ICT promotion
119 20 89
Mobile telephone subscribers (hard data)
126 88 98
E-government readiness index (hard data) 91 81 82
ICT use and government efficiency
127 34 76
Internet users (hard data)
105 85 96
Company spending on R&D 67
121

7. RA Government ICT industry Development Strategy
New ICT sector development concept (2008)
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.

8. RA Government ICT industry Development Strategy
Information society and IT Industry growth target indicators:
Key Data
2006
2018
Home computer penetration 5%
50-70%
Educational computer penetration
10%
80-90%
Public sector computer penetration
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
160 50
1000
200
Workforce
5000
20000
Industry revenues
84 million (USD)
1 billion (USD)
IT R&D companies
<10
Large technology cities
Techno-Parks & incubators 2 1
>10

9. IT D E V E L O P M E N T ACTION PLAN
 Design, develop and build world class ICT infrastructure serving major regions, cities, government & private industry
Develop & launch targeted programs aimed at increasing Armenia IT graduates and workforce.
Equip and operate national Tele-Centers serving citizens in key Armenian regions & towns.
Build Armenian Techno-Park supported by world class ICT, municipal infrastructure and services
Select, develop and rollout
E-Government pilot projects
(Rollout (3) pilot projects in 3 years)

10. IT D E V E L O P M E N T ACTION PLAN
Establish Armenian Software Engineering Competence Center to certify & train Armenian software developers to ensure compliance with global Capability Maturity Model Integrated standards
Develop , design & rollout world class strategic marketing & promotional campaign to position “Armenia brand” in targeted high growth IT markets.
Replicate EIF business incubator model and establish university-based technology transfer centers (TTC) to stimulate IT innovation & product development
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

11. THE UNION OF INFORMATION
TECHNOLOGY ENTERPRISES

12. The Union of Information Technology Enterprises
Main Strategic Directions (2010):
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)

13. The Union of Information Technology Enterprises
UITE in brief
Participation in CeBIT ( )
Intellectual Property Rights Protection Campaign
Custom legislation improvement project
Tax legislation improvement project
Membership Development Initiative
Development of ICT/High Tech Portal (
DigiTec Expo ICT/High Tech exhibition (
ICT Industry Leaders and Stakeholders Meetings
UITE is the official counterpart of CBI, the Netherlands’ Centre for the Promotion of Imports from developing countries
Active participation in the development of state concepts, relating to ICT/High Tech field and Business Environment Legislation.
ICT/High Tech Educational Consortium

14. The Union of Information Technology Enterprises
2009 Action Plan
Education and workforce development
ICT/High Tech Consortium Establishment
Develop and provide special leadership development, effective financial management, startup business essentials and promotion modules trainings to beneficiaries
Promotion of startup business support programs in the regions of Armenia
(Armenia)
Legal framework/collaboration with state bodies
Promotion of tax & custom legislation improvements
Media campaign

15. Development of ICT/High Tech Industry/ Promoting Regional Cooperation
Develop Armenian High Tech Virtual Community Portal
Assist Government in Techno City establishment in Gyumri
Organize DigiTec 2009 / DigiTec Business Forum
Organize Armenian Open Robotics Contests(robotics.digitec.am)
Promote regional cooperation initiatives of UITE member companies
Develop and organize regional study tours for the representatives of leading Armenian ICT/High Tech companies and vice versa
Co-organize Armtech 2009 Congress
Organizing the series of ICT Leaders Meetings

16. 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 Science, education, telecommunication, 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

17. THANK YOU