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IT IS TIME FOR ELABORATING A CONCEPT OF IT DEVELOPMENT IN ARMENIA
During the last few years, serious progress in the software and IT services sector has been observed in Armenia. Besides the local companies, a considerable number of subsidiaries of foreign companies are working in Armenia to make use of high-quality and cheap labor
force. However, the productivity and, therefore, development of labor productivity are not quite high (approximately a fouth of the US level). The difference in the productivity in the companies of both types is the result of shortcomings of the higher education and problems of state administration (tax policy, regulation of the sector). As regards local companies, additional, more serious prpoblem for them result from the lack of knowledge of the strategic
market and the access to the international market, the narrow local market, which causes a scale discount, trademarks, as well as the problem of property. Below is an interview given by Director of the "Information Technologies Fund" Organization Garegin Chaguszian to the ARMINFO News Agency.
- What factors account for this growth in Armenia?
- As to the absolute indicators of development of IT sphere, Armenia is among some thirty software producer-countries. However, the growth of quality indicators requires a single policy of the country, public and IT-companies, as majority of factors influencing the development of the sphere are based on their interaction. For example, one of these factors is provision of the
branch with qualified cadres, human capital, where the state should stimulate education, IT-companies should specify demand, and the public should display a conscious activity. The public activity has been observed recently, as this year applicants to the relevant faculties of higher educational establishments was as follows: 20 entrants to 1 place. The next factor is especially state, which should wage a stimulating taxation policy. All the taxation instruments in the IT-sphere in Armenia should be seriously analyzed. While, there is a task of internal cooperation, creation of a cluster, inside the industry. The given type of activity allows differentiating the specialization and solving more difficult, complex tasks, and receive larger orders. The IT-sphere and the operating companies are in the stage of establishment and at the initial stage of unification, and at a higher level of organization of technoparks and clusters.
- What, do you think, is the way of development of the IT sector is Armenia? And which section of the IT market is the most promising for Armenian companies - software, chip design, production of equipment?
- Armenia has not yet determined its specialization in the IT-sphere. Armenia's market may develop in the following two directions: the leading companies can choose one specialization or several companies will specialize in one direction each. This will depend on the concept of the sphere's development. For a policy to be elaborated for a particular sphere, its potential needs to be known. Even in conditions of the communication blockade imposed by `ArmenTel' and without a properly elaborated policy in the IT sphere we are showing unique results. And if a favorable policy is elaborated, all the optimistic forecasts can be surpassed.
-Yes, but the Premier-Headed Coucil for Promotion of IT Development has operating...
-In the sphere of IT in Armenia the key goal to be realized in the coming two years is formation of a strategy of development of the information society. He said that besides solving the tasks in the IT-sphere, it is necessary to solve the tasks in the society, as information technologies pierce through all the spheres of public life. If there is not democracy in the public life, even democratic management of the sphere of high technologies is impossible; if there is no dynamics in development of the public, no dynamic development of the IT-sphere is possible. As regards the IT Development Promotion Council attached to the Armenian Prime Minister, this structure has
an exclusively lobbying function, and no financial or any administrative levers. The executive power in Armenia has no bodies directly engaged in the management of the sphere. The council just rises problems in the sphere, but not solves them. Now is the time for the IT-sphere in Armenia to carry out a self-knowledge, self-study and self-assessment, it is the first stage of working out the policy in the sphere of high technologies. The country has not enough information in the high-tech sphere, as it does not make any surveys in the sphere. That is why the issue of the level of state regulation of the IT-sphere remains open like the issue of liberal
development of the sphere. It would be rather primitive saying that the market must be either liberal or state, as only mixed types are observed in practice with a different level of state regulation. Everything depends on the goals and tasks that have not been determined yet.
Ruben Grdzeljan, ARMINFO, 11 AUGUST 2003
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