How Armenia is trying to build a Silicon Valley in the Caucasus

In Armenia tech training begins early.

In a typical three-storey state college within the suburbs of Yerevan, the Armenian capital, nine-year outdated Slavik is demonstrating his invention – a field with three LED lights.

“He has realized easy methods to management it, and the programming language. You’ll be able to see the code is written by him,” says Maria, the 21-year-old tech coach main the category.

Subsequent to them, 14-year-old Eric and Narek are displaying their good greenhouse mannequin that screens temperature and controls followers robotically by way of a cell app.

Different kids are enthusiastically showcasing their innovations: video games, robots, apps and good house initiatives.

Eleven-year-old Arakel is holding his cardboard mannequin of a home with a retractable clothesline.

“I’ve made my mom’s work simple, one a part of the gadget is about on the roof, and one other is a motor,” he says. “When it rains the road goes beneath the roof to maintain the garments dry.”

These younger inventors have been attending engineering lab courses the place they study programming, robotics, coding, 3D modelling and extra.

The programme began in 2014, and is known as Armath, which interprets into English as “root”. Immediately there are 650 Armath labs in colleges throughout Armenia.

The initiative was established by a enterprise organisation referred to as the Union of Superior Know-how Enterprises (UATE), which represents greater than 200 high-tech Armenian corporations.

“The imaginative and prescient is that we wish to see Armenia changing into a tech centre powerhouse that delivers utmost values to Armenia and to the world,” says Sarkis Karapetyan, the chief govt of UATE.

In his spacious, open-plan workplace in Yerevan he says that there are actually round 4,000 tech corporations in Armenia.

Armath is a part of the UATE’s training and workforce improvement programme. Mr Karapetyan says the programme is essentially the most profitable public-private partnership within the nation.

“We increase capital expenditure from the non-public sector, we go to the faculties and set up Armath labs, we donate the gear,” he says. “And the federal government, the training ministry offers us a finances of $2m (£1.5m) yearly to pay the salaries of the coaches.”

There are actually greater than 600 coaches, and 17,000 energetic college students.

“The purpose is to have 5,000 of essentially the most gifted youngsters determine to grow to be engineers yearly,” says Mr Karapetyan.

Armenia is a landlocked nation of two.7 million individuals, the smallest within the South Caucasus area, and its borders with neighbouring Azerbaijan and Turkey have been shut for many years as a consequence of unresolved territorial disputes.

Not like its neighbours, Armenia doesn’t have pure assets or entry to the ocean. However all through the Soviet period it had been a centre of arithmetic and laptop science.

In 1956 the Yerevan Scientific Analysis Institute of Mathematical Machines was established in Armenia and by 1960 it had developed two first technology computer systems.

Immediately, the nation is tapping into its legacy with the ambition to remodel itself into the tech powerhouse of the Caucasus.

And there was some success already. Picsart, a AI-powered picture and video enhancing web site and app, was launched in Armenia in 2011. Immediately the corporate of the identical title, which has twin headquarters in Yerevan and Miami, is valued at $1.5bn.

Krisp, which makes audio-processing software program, and Service Titan, which offers enterprise software program, are different Armenian success tales.

In the meantime, an annual report says that Armenia is the very best nation within the Caucuses area wherein to launch an organization, placing it in 57th place globally. This compares with Georgia in seventieth place, and Azerbaijan in eightieth.

A crucial think about boosting Armenia’s tech improvement is the nation’s international diaspora – some 75% of the world’s estimated Armenians, and other people of Armenian descent, dwell elsewhere.

This worldwide group offers necessary connections, particularly within the US tech business. Within the US there are as many as 1.6 million individuals of Armenian ancestry, centred on California.

Samvel Khachikyan, is director of packages at SmartGate, a enterprise capital agency based mostly in each California and Armenia that focuses on tech investments.

He says that in case you take a look at the highest 500 corporations within the US, “for positive you will discover a minimum of one or two Armenians” within the boardroom or one administration degree beneath.

Mr Khachikyan explains how his firm helps Armenian entrepreneurs arrange operations within the US.

“Think about an Armenian start-up, two younger individuals deciding to go to the US to attempt to function there, they haven’t any connections, no information concerning the tradition the way it works.

“It is gonna be arduous, very arduous. We’re serving to them, it is just like the launch of the rocket, the primary couple of seconds is the toughest.”

SmartGate takes Armenian founders to Silicon Valley and Los Angeles for intensive networking with prime US corporations and buyers.

However many Armenian start-ups first take a look at their merchandise of their house market.

Irina Ghazaryan, is the founding father of an app referred to as Dr Yan that’s altering how Armenians entry healthcare by enabling them to extra simply guide appointments with docs.

Ms Ghazaryan was beforehand working in product and internet design when, helped by the actual fact she comes from a household of docs, she recognized a niche out there. “Sufferers could not discover the fitting docs, and docs have been affected by limitless calls.”

The app operates on a subscription mannequin, with docs paying to be listed on the platform, and there are plans to increase.

“We’re rising a minimum of 25% income month by month,” provides Ms Ghazaryan. “We’re virtually break-even in Armenia and that provides us power to start out increasing to different markets, like Uzbekistan.”

Armenia’s tech ecosystem acquired an sudden increase in 2022 following Russia’s invasion of Ukraine. Hundreds of Russian IT specialists left their nation, and lots of selected to settle in Armenia.

In the meantime, US chipmaking large Nvidia moved its Russian workplace to Armenia.

Vasily is a Russian IT advisor who relocated to Armenia in 2023. “Armenia was essentially the most pleasant to individuals from Russia so as to assist them transfer, adapt and so forth,” he says.

He estimates that that the Russian IT group in Armenia now totals 5,000 to eight,000 individuals. This inflow has mentioned to have crammed essential ability gaps in Armenia’s tech sector, in areas similar to knowledge processing, cybersecurity, and monetary applied sciences.

But Vasily says that Armenia could be costly and the nation wants to scale back the tax burden on IT companies if it needs them to remain within the nation.

Nonetheless, total optimism stays excessive about Armenia’s tech future. Samvel Khachikyan expects the sector to growth. He factors to Service Titan, which floated on the New York Inventory Trade final December, and is now value greater than $10bn.