Silicon Valley Armenia: Armenian Tech Sector Growing Despite Recession

By MassisPost

YEREVAN — Armenia’s technology sector continued to grow rapidly last year despite a recession primarily caused by the coronavirus pandemic, Minister of High-Tech Industry Hakob Arshakyan said on Tuesday.

“The combined turnover of [tech] companies rose by 20.6 percent to about 198 billion drams ($380 million),” Arshakyan told a news conference.

“Please note that this includes only high-tech industry companies and doesn’t include telecom operators,” he said.

The total number of such firms reached 1,228 in 2020, Arshakyan went on. The number of their officially registered employees jumped by 22 percent to 18,747, he said.

Many of them work for local subsidiaries of U.S. tech giants like Synopsys, National Instruments, Mentor Graphics and VMware. A growing number of other information technology (IT) engineers are employed by Armenian startups and other homegrown firms.

In Arshakyan’s words, 192 new IT firms qualified last year for tax breaks that were first introduced by Armenia’s former government in 2015. Local startups also attracted $50 million in mostly foreign investments, added the minister.

The official figures cited by him contrast sharply with the country’s overall macroeconomic performance. The Armenian economy contracted by an estimated 8 percent in 2020 mainly because of the COVID-19 pandemic. The six-week war in Nagorno-Karabakh, which broke out in late September, also contributed to the significant decline in economic activity.

The Armenian tech industry dominated by software companies appears to be the only sector of the domestic economy practically unaffected by the recession. It has been growing at double-digit annual rates for more than a decade.