Prime Minister Tirgan Sargsyan addresses last year's ArmTech conference

BY ROSTOM SARKISSIAN

On December 10 and 11 the 5th Annual ArmTech Congress will take place at Stanford University.

The last ArmTech Congress that took place in the U.S. was in 2009 (alternating between Yerevan and Silicon Valley since 2007).  I attended the Congress (Armenian Technology Congress) in San Jose on behalf of Asbarez Armenian Daily.  As a preview for the upcoming event, below are my observations from the 2009 Congress.

In 2009, over 250 high tech executives, industry professionals, Armenian government officials, and interested participants attended the Congress.  The ambitious 3 day conference addressed critical high-tech industry topics by featuring 4 plenary session and 24 parallel track sessions in areas ranging from telecommunications and internet to microelectronic design and testing to green technologies to professional networking.  It was well organized and the topic areas ranged from the basics of education reform to detailed pitches for investor funding on specific project.

ArmTech was envisioned as being more than a yearly conference.  Its purpose was to become a platform for the development of the high tech industry in Armenia.  It has been developed to be a networking space, an ideas lab and a showcase of Armenia’s high tech industry to the world.

“The goal of ArmTech is to showcase Armenia’s high tech capability and to energize and connect high tech diaspora communities all over the world” said Tony Moroyan, co-chair of the 2009 ArmTech Congress and Chairman of Viasphere Technopark.   “We accomplished our goal, and the conference was exceedingly successful from the reviews of participants.”

According to one participant, Dr. Greg Nemet of Spectralus, a developer of crystal and laser technology for consumer electronics market, “when we first signed up for ArmTech, we weren’t sure what to expect so we were just looking forward to hearing the presentations and to getting some information about high tech in Armenia.”  He added, “ArmTech has been successful for us because we made two important contacts and had really useful conversations with them.  Those two contacts alone were worth the event for us”.

In 2009, the high tech industry was beginning to have an impact on Armenia’s economy, with high tech contribution to the GDP increasing by 15-20% per year based on government statistics.  The high tech industry was equal in size to the mining industry in terms of sales and employment, according to the Prime Minister’s office.  At that time, high tech employed nearly 5,000 Armenians in 200 companies.

According to Rich Goldman, co-chair of the 2009 ArmTech Congress and CEO of Synopsys Armenia, “Armenia’s inherent advantages have not changed.  That core starts with the extreme brain power in Armenia”.  Goldman noted other comparative advantages Armenia has: soviet legacy as a center of Semiconductor development; electrical engineering capacity; and continuing rise in English fluency.  “electrical engineering is the high value space where Armenia has a proven advantage”

It was no surprise then that a mini cluster begun to form around the semiconductor industry in Armenia.  This growth was led by Synopsys, one of the largest Electronic Design Automation (EDA) companies in the world, and Virage Logic (which Synopsys eventually bought).  In 2009, both were respected Silicon Valley companies and early entrants into Armenia’s high tech field.

These two Silicon Valley based firms were drawn to Armenia because of the existing potential of Armenian scientists in this area.  Both companies have been successful in Armenia and have been at the forefront of attracting other high tech companies.

While Armenia is quickly establishing itself in the Semiconductor field, do not expect to see “made in Armenia” micro chips in your computer any time soon.  “Setting up a Semiconductor manufacturing operation in Armenia is not feasible due to the high start up costs and the limited transportation options out of Armenia” said Yervant Zorian, Chief Architect at Synopsys Corp.  He added, “…but, Armenia can play an important role as a center of research and development in this field.”

Starting a business in Armenia
For Diasporan high tech firms looking to start a business in Armenia, up until this ArmTech Congress, there was no high tech trade office in the US or Armenia where they could get all the essential information about setting up and operating in Armenia.  This year, during the Congress, the government of Armenia will introduce an IT sales representative office in the Silicon Valley.

While that office becomes operational, you can also contact Enterprise Incubator Foundation (www.eif.am), created by the Armenian government and the World Bank, to assist the local IT sector with business, training, legal and facility services.  According to its Director, Bagrat Yenigbarian, the EIF can serve as a starting point for Diasporan firms.

The Viasphere Technopark (www.viasphere.com) in Yerevan is another high tech resource that companies can contact, but note that the privately funded technopark is not set up to be a “trade office” for business entry into Armenia.  Their primary goal is to incubate local businesses and house subsidiaries of established businesses.

Challenges ahead
While high tech is a very promising industry for Armenia, we should also be aware of the challenges that this sector faces.  The challenges will include the high cost of internet access; the need for increased computer literacy; the real commitment of the Armenian government to invest in primary and higher education (including necessary equipment); the need for more training programs; Armenian scientists and business people understanding how to work with American and European technology consumers; and the fierce competition for investment dollars that will begin once Georgia and Azerbaijan start ramping up their high tech efforts.

One of the great challenges Armenia faces in developing its economy will be dealing with corruption, which up to this point has left the high tech industry alone.  If the high tech industry fortifies its position as a leading field in the economy, will the Oligarchs demand a piece of their Pi?  High tech, unlike mining, is not an immobile industry.  With enough disincentives, businesses can easily move to more welcoming locales.  Hopefully, the nicknamed robber barons understand that they should not mess with the nerds that will potentially fuel Armenia’s growth during the 21st Century.

Looking forward
This is a very promising field for Armenia.  While the development of the high tech industry is a newer focus for Armenia’s government, science has always been something that Armenians have been good at.  From Hambatsumian to Migoyan to the Cosmic Ray Division to the Metsamor Nuclear Power Plant to being a center of semiconductor research during the soviet to being a finalist for the SESAME Synchrotron project, Armenia has always thrived in the scientific field.

The foundation for high tech is developing in Yerevan and is now being actively developed in Gyumri.  The “computers for all” program has lowered the cost of computer ownership and has slowly increased computer literacy in Armenia.  The TUMO Center for Creative Technologies (www.tumo.org) has added a new layer of high tech potential: creative technologies.  As this is happening, the newly arriving companies in Armenia are developing their own curriculums with Armenia’s higher education institutions while the LUYS Foundation (www.luys.am) is actively funding the education of Armenians throughout the world that get into the best universities in the world (Cal Tech, MIT, Harvard, etc).

If you’re a scientist, engineer, patent attorney, venture capitalist, high tech executive, technophile or scientific visionary, then you should definitely go to the ArmTech ‘12 Congress at Stanford University from December 10-11.  Registration is free.  For more information, visit: www.armtechcongress.com.

Based on what I saw in 2009 and what I’ve read since then, there should be a lot of positive energy and forward looking projects that will be discussed and introduced at ArmTech 2012.