Surrounded by the dangers of the world, Armenia created the first technological scene | Technology

Yerevan, Armenia – The rugged mountains of the southern Caucasus are not an obvious place for a successful technology startup scene.

Located 7,000 miles from Silicon Valley, isolated Armenia has been buffeted by the country’s political winds from all directions.

To the north and south, respectively, lie Russia and Iran, the two most authoritarian countries in the world.

To the east and west, it faces Turkey and Azerbaijan, enemies whose relations with Yerevan, respectively, are marked by tensions over the Armenian genocide of 1915-1916 and armed conflict in the disputed Nagorno-Karabakh region.

Home to less than 3 million people, the former Soviet Union has an economy larger than poverty-stricken Haiti.

None of this has dampened the great ambitions of Armenia for its first stage of technology, making the waves reach a level that opposes the country’s shrinking and difficult conditions.

The number of IT-focused companies in Armenia has more than doubled in the past year, while the number of employees in the sector has increased by 30 percent, according to the Armenian government.

Armenia-based startups such as Piscart, the creator of the popular photo and video editing app, meanwhile, have found success in Silicon Valley, where founders have used it to support offices and work from home.

Investment flows have gone the other way, too, with major players such as Nvidia and Adobe in recent years announcing plans to set up jobs in the country.

The Armenian government has been keen to use the scene’s links overseas to raise its profile on the international stage.

‘Invest in Armenia’

Last month, Yerevan hosted the annual World Congress on Innovation & Technology (WCIT), an international forum to discuss emerging technologies, for the second time in five years.

Speakers who attended the event included Moderna founder Noubar Afeyan and Nvidia CEO Rev. Lebaredian.

The idea of ​​an Armenian technology company bringing a product to market was once considered “very different,” Mikayel Vardanyan, chief product officer at Picsart, told Al Jazeera on the sidelines of WCIT 2024.

But these days, there are “many, many companies doing it and every year this amount is increasing because they are looking at each other,” said Vardanyan, who in 2021 became the first Armenian unicorn with a value exceeding $1bn.

“They look at a few that have succeeded, including ours, and think, ‘Okay, we can do it, we can do it in Armenia, and invest in Armenia.'”

Tech founders in Armenia readily admit that Silicon Valley remains the place to be for fundraising and networking opportunities.

But they say, increasingly, the opportunity is also emerging at home.

Davit Baghdasaryan, CEO and founder of noise-cancelling software Krisp, said many Armenian entrepreneurs have plans that separate operations between their home country and Silicon Valley.

“Armenia has been growing and people from the US, they see that there are interesting entrepreneurs and innovators from Armenia. They are very motivated, not only to give back, but to come,” said Baghdasaryan, who moved home in 2017 after ten years in US, he told Al Jazeera.

Baghdasaryan said the increasing number of success stories has encouraged others to bet on the country.

“You want to be a part of it because your heart and your mind is still – a part of it – in Armenia,” he said.

“So that makes me very happy to watch. Because I lived there for 10 years, I came back. I know both worlds very well.”

The Armenian government says it is committed to doing everything it can to make business easier, including simplifying the company registration process to the point that it can be completed in just 15 minutes.

Last month, the Ministry of High-Tech Industries introduced a law, called the New High-Tech Support Law, to lower personal income tax rates and business tax rates for technology startups during their growth years.

The government has also allocated 1.940 billion Armenian dram ($5m) to fund the construction of “Engineering City”, a private public project that aims to include services such as the acceleration of the engineering business, an advanced research center, and supercomputing and cybersecurity. resources.

“Armenia’s long-term vision is to become a global technology hub known for innovation, quality, and excellence, where we build and build new industries and sectors,” Armenia’s Minister of High Technology Industry Mkhitar Hayrapetyan told Al Jazeera.

“We want to build a vibrant tech ecosystem that attracts top talent and foreign investment.”

‘Culture of fitness’

On paper at least, the government’s efforts seem to be bearing fruit.

Armenia’s economy, which is roughly the size of Peru’s on a per capita basis, has grown rapidly since the end of the COVID-19 pandemic.

Gross domestic product (GDP) is expected to grow by about 6 percent in 2024, after growing by 8.7 percent and 12.6 percent, respectively, last year and in 2022.

Hayrapetyan said his government is focusing on the potential of AI.

“AI is not just a buzzword now but it is also a catalyst for the transformation of public administration and the delivery of quality public services; it is important to increase your productivity by restructuring our operations,” he said.

“According to many independent international reports, our highly educated and tech-savvy population gives Armenia a unique opportunity to become a global leader in AI and machine learning. To fully utilize this potential, we recognize that investing in people is critical. “

Picsart’s Vardanyan said some of the government’s efforts have been more successful than others.

In some cases, it worked. In some cases, it still needed to move quickly to be able to compete with other countries,” he said.

But since Armenia may always struggle to compete with larger countries that can offer more incentives, consistency and a long-term vision will be important to the region’s success, he said.

“So it’s very important to keep it going,” he said. “So it’s not about doing it once and then having to forget about it for 10 years, it’s not going to work.”

However, when it comes to Armenian retail, Vardanyan pointed to a factor beyond the government’s control: a “culture of resilience” that was created due to hardship, including a lack of energy and basic goods after the breakup of the Soviet Union. Union.

“There was no electricity, no water, but you were thinking what to do even if the situation is like this when in other countries it is considered as the end of the world,” he said.

“But we, looking for electricity, let’s find it. What can we do this way? No internet connection? Okay, let’s think about it.”

Travel to Armenia and accommodation was paid for by the Union of Advanced Technology Enterprises.