Meri Duryan by 39Y4e4

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									                   ICT Industry Overview
    Before 1991 Armenia was regarded as a Silicon Valley of
                  the former Soviet Union.
                The main industry sectors were:

     • Mechanical engineering         • Chemical industry
     • Electronics                    • 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
             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)
                   ICT Industry Overview
                           2008
          About 200 Companies with 6000 employees, of
              which 72% are technical specialists


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




          2006                                            2003
• 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)
     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) *
            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    4,46
Government 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
  RA Government ICT industry Development Strategy
             ICT Industry Development Strategy of the Armenian
                        Ministry of Economy (2001)
 “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”*

   • 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
* IT Development Concept Paper, the Ministry of Economy of Armenia, 2007
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.
  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             10%             100%
Consumption of local IT products in the       0.5%              2-4%
internal market – GDP
Share of e-services provided by RA state       <1%              80%
entities against the total
Number of IT companies                          160             1000
From which those with foreign capital            50              200
committed
Workforce                                      5000            20000
Industry revenues                        84 million (USD) 1 billion (USD)
IT R&D companies                                <10           100-200
Large technology cities                           0               1
Techno-Parks & incubators                         2              >10
                       IT D E V E L O P M E N T
                           ACTION PLAN

       2008-2018
Design, develop and build
    world class ICT               2008-2018
 infrastructure serving       Develop & launch
                                                           2008-2013
  major regions, cities,  targeted programs aimed
                                                       Equip and operate
 government & private     at increasing Armenia IT
                                                     national Tele-Centers
        industry                graduates and
                                                     serving citizens in key
                                  workforce.
                                                      Armenian regions &
                                                             towns.

            2008-2011                             2008-2011
   Build Armenian Techno-Park            Select, develop and rollout
   supported by world class ICT,       E-Government pilot projects
    municipal infrastructure and     (Rollout 3 pilot projects in 3 years)
              services
                      IT D E V E L O P M E N T
                          ACTION PLAN

              2008-2013
   Establish Armenian Software                     2008-2018
 Engineering Competence Center to      Develop , design & rollout world
 certify & train Armenian software        class strategic marketing &
developers to ensure compliance with   promotional campaign to position
 global Capability Maturity Model        “Armenia brand” in targeted
   Integrated (CMMI) standards              high growth IT markets.


            2008-2015                            2008-2018
      Replicate EIF business         Establish Armenian IT Enterprise
  incubator model and establish    Development Fund to promote private
   university-based technology      IT companies; attract foreign direct
    transfer centers (TTC) to         investment & venture capital to
    stimulate IT innovation &          develop and commercialize IT
       product development          innovation & product development
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 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
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%)
      Meri Duryan
         UITE
email: mduryan@uite.org
   url: www.uite.org

								
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