How to develop IT in Armenia՛s regions and why is it so important? Gyumri hosted Silicon Mountains Shirak forum

Did you know that about 80% of Armenia's tech talent is concentrated in Yerevan, while most of the regions' potential is wasted? What problems can uneven tech development in the capital and the regions cause? Why is regional development so important for both the country and business? What can be done to decentralize Armenia's IT industry?

All these issues are the subject of this year’s Silicon Mountains Shirak technology summit. It was decided to discuss the problems of the regions in a regional city: for the first time in the 5-year history of the summits, the event is being held in Gyumri, the largest city in the Shirak region, where 20 speakers and more than 200 guests had come to listen to them.

Gyumri is considered one of the most technologically advanced cities in Armenia: many IT companies open branches in Gyumri, moreover, there are local startups here. According to UEICT President Armen Baldryan, Gyumri can become an excellent example demonstrating how regional cities can and should be developed.

As UEICT Director Eduard Musaelyan noted in an interview with NEWS.am Tech, the Silicon Mountains forum and the discussions within it right now, of course, will not change anything in the country and will not solve any problems: but both the youth and representatives of companies and startups will go home with new ideas, perhaps with a slightly changed way of thinking, which in the long term will lead to changes both in the regions and in the country.

The event was held by UEICT with the support of the Ministry of High-Tech Industry of Armenia. The Platinum Partner of the forum is Unicomp, the Fintech Partner is EasyPay, the Tech Partner is Ucom, the Silver Partners are Synopsys and Ovio. The Regional Partners of the event are EIF and GTC, and the Media Partner is NEWS.am Tech.

The event also included an expo with the participation of companies from both the regions and Yerevan, presenting their products and smart solutions.

Three panel discussions and two important presentations

Every year, the most relevant topics, one way or another related to the digitalization of the economy and the development of the country, are chosen for discussion at the Silicon Mountains summits. This year, as Armen Baldryan said, the event is dedicated to the technological development of the regions of Armenia.

The panel discussions focused on three main topics.

Human capital in regions 

Human resources are the greatest capital of any successful company: business works thanks to people. All participants of the panel discussion Human Capital in the Regions agreed with this idea, discussing the crucial role of talents not only in business development, but also in stimulating economic development and sustainable growth.

How to attract and retain the best talent in the regions? What educational programs are available in the regions and how effective are they? What can be done to improve their effectiveness? What is needed to maximize human potential in the regions? What role should the state, private companies and organizations like UEICT play in all this?

Synopsys Armenia Director Hovik Musaelyan, Synergy International Systems Founder and CEO Ashot Hovhannisyan, RA Deputy Minister of High-Tech Industry Ruben Simonyan, EPAM Armenia Director Benjamin Gyurjyan, and UEICT President Armen Baldryan shared their ideas and vision during the discussion. BSC Founder Samvel Gevorgyan moderated the discussion.

Investments in regions

Why is it so important to attract investments to the regions of Armenia, open branches of companies there, create new jobs? What kind of investments will be most effective? What are they doing in other countries and what could we learn from them? What else is needed to unlock the full potential of regional investments?

All these and many other issues were discussed by the head of the CIPE office in Armenia Louisa Ayvazyan, the coordinator of digital programs of the EBRD Armine Arakelyan, the CEO of TUMO Marie Lou Papazian, the Marketing Director of EasyPay Tigran Parseghyan and the head of the  USAID Economic Foundations for a Resilient Armenia Activity Artak Ghazaryan. The moderator of the discussion was the Director Enterprise Incubator Foundation Bagrat Yengibaryan.

Startups in regions

During the third panel discussion, industry leaders, entrepreneurs and investors, including Barinfors Founder and CEO, Head of UEICT Shirak Regional Center Gurgen Gharibyan, Tesvan CEO and Co-Founder, Head of UEICT Gegharkunik Regional Center David Grigoryan, General Manager - ACBA Federation Harutyun Poghossian, Digital Pomegranate CEO and Co-Founder Gayane Arakelyan and GIZ Project Advisor Mariam Babayan, discussed the unique opportunities, challenges and emerging trends shaping the startup ecosystem in Armenia’s regions.

Breakthrough innovations, regulatory frameworks, funding mechanisms – this discussion, moderated by ViralMango Founder and CEO Rem Darbinyan, contained a lot of valuable information not only for aspiring entrepreneurs, but even for seasoned professionals.

Eduard Musaelyan, the director of UEICT, told NEWS.am Tech that his organization has members from the regions of Armenia, so the topics for discussion were not chosen randomly: they are all based on the problems that these people regularly face while working in the regions.

In addition to panel discussions, forum guests also had the opportunity to listen to two unique speeches. Ucom CEO Ralph Yirikian spoke about how the creation of infrastructure and the spread of communications technologies in the regions creates conditions for the work and development of other companies. After all, it is impossible to develop the IT sector without communications, and it is unlikely that anyone would want to argue with this.

Onex CEO and co-founder Samvel Martirosyan, in turn, spoke about how the company, which received a tiny investment of $200, turned into a transnational company.

Eduard Musaelyan is confident that both examples will certainly inspire the forum’s guests to new achievements.

Not Yerevan alone

Why is it bad to concentrate companies, investments and human potential in the capital? Why is it necessary to take serious measures to develop the regions of Armenia?

As Eduard Musaelyan noted, this problem is relevant all over the world today, not only in Armenia. And everywhere it has a negative impact on both business development and the development of the country as a whole. Firstly, according to him, the concentration of everything in Yerevan is a negative phenomenon in terms of business diversification. Secondly, the population of Armenia is only about 3 million, and human resources are more than limited. At the same time, it turns out that business, working only in the capital, uses only a small part of the available resources, ignoring the capabilities of the regions.

Moreover, regions can provide businesses with many other opportunities that are not related to human resources, and ignoring regions leaves all these opportunities unclaimed.

Concentrating technological progress exclusively in the capital of a small country like Armenia can lead to serious problems for the country as well. These include significant economic disparities between the capital and other regions (meaning that the full range of resources and talents available throughout the country will not be used), unequal access to employment opportunities, income, education and health care, and worsening poverty and underdevelopment in rural areas. All this, of course, will lead to a brain drain: people who could contribute to local development will start moving to the capital, which will further accelerate the degradation of the regions.

Overcrowding in large cities is another serious problem, as it, in turn, leads to increased pressure on housing (and, of course, higher prices for houses and apartments), transport and public services. More traffic jams, worsening environmental conditions, overloaded public services… All this will worsen the quality of life in the capital itself.

According to Eduard Musaelyan, to avoid all this and to enable the country to develop regularly, it is necessary to create conditions for the technological development of the regions. If there are more IT companies in regional cities, each of the jobs they create will lead to the creation of 3-6 additional ones in the service sector: there will be more visitors in stores and catering establishments, new establishments with new jobs will open, there will be much more work for various craftsmen, and life in the city will sparkle with new colors.

“Imagine if hundreds and thousands of IT companies appear in our regions, how many new jobs will appear, how quickly cities will begin to develop and how the quality of life will change in them,” he noted.

Symbiosis of public and private sectors

Armen Baldryan, president of UEICT, is confident that for the successful technological development of the regions of Armenia and for the creation of the infrastructure necessary for this development, cooperation and interaction between the public and private sectors are needed.

"The private sector is guided, first of all, by business interests, and the state must also proceed from the interests of citizens. The interaction of these two parties, their symbiosis can help create ideal conditions and infrastructure for the development of our regions," Baldryan noted.

As Deputy Minister of High-Tech Industry Ruben Simonyan noted in turn, events like the Silicon Mountains forum are important, first of all, precisely because they create a platform where representatives of the public sector and business can meet, discuss various issues, exchange experiences and opinions, summarize the work done and decide what to do next.

"At such events, we can receive feedback from the technology sector, learn about the problems that concern them," the deputy minister noted in an interview with NEWS.am Tech. "Naturally, we work with representatives of this sector all the time, but during such events, problems are revealed that might not have surfaced under other conditions. Of course, during such events, we also see positive changes in the field."

According to Simonyan, the very fact of holding the Silicon Mountains forum in a regional city can already contribute to the development of the regions. Gyumri, chosen to host the event, is considered one of the most technologically advanced cities in Armenia today. The IT sector is also developed in regional cities such as Vanadzor, Ijevan, Sisian and Kapan. However, as the Deputy Minister noted, it is necessary to continue developing the regions, conduct educational programs, create infrastructure and ecosystems so that young people who have received an education in the IT field are not forced to look for work in the capital and could apply their knowledge in their cities.