Ararat mountain and city of Yerevan, Armenia.
Armenia has recently risen from relative obscurity to global prominence due to tensions with neighboring Azerbaijan. But there’s another reason to pay attention to this rugged and mountainous country: its rapidly evolving technology sector.
It has become a technological powerhouse with the presence of global players and a vibrant startup ecosystem. And while the country remains politically close to Russia and Iran to counterbalance its hostile neighbors to the west (Turkey) and east (Azerbaijan), its private sector remains firmly focused on the West, especially the United States with its nearly one million inhabitants. Armenian diaspora.
“We see ourselves as a networked nation,” said Rem Darbinyan, founder of a startup called Viral mango, which connects brands with influencers around the world. “We have generations of Armenians living abroad. »
Adobe CEO Shantanu Narayen speaking at the Silicon Mountains conference in Yerevan, Armenia.
In October, Adobe CEO Shantanu Narayen was in the vibrant capital Ereven to speak at the country’s congress Silicon Mountains Conference and open a new Adobe building. Across town, dozens of startups showcased their innovations at the annual show Digitec Show. This small landlocked country has already produced a unicorn (Picsart) and more are on the way.
With the snow-capped peak of distant Mount Ararat – the Armenian national symbol that looms across the Turkish border – visible on a clear day, Yerevan is full of sophisticated restaurants crowded with tables of young tech entrepreneurs drinking water. -living on apricots and eating trays of stuffed vine leaves. they discuss the latest innovations.
Various indices point to Armenia as the emerging technological power of the South Caucasus region, a legacy of its role as one of the main technological centers of the Soviet Union – the USSR’s first general-purpose computers there were developed in the early 1960s.
This history collapsed during the breakup of the Union and the subsequent war with Azerbaijan over Armenia’s national borders – a conflict that continues to reverberate today. But Armenia recovered and built on the success of its diaspora in the United States to become one of the region’s strongest economies.
People like Noubar Afeyan, co-founder of biotech powerhouse Moderna, Alexis Ohanian, co-founder of Reddit, and Avie Tevanian, former Apple CTO and creator of the macOS operating system, have all remained connected to the country.
After gaining independence in 1991, Armenia began to grow as a creator of software for Western companies, many of which were founded by Armenians. But little by little, it moved up the value chain to produce its own products.
This trend only accelerated with the outbreak of war between Russia and Ukraine, which pushed businesses from both countries to set up shop in Yerevan. The ensuing influx of capital caused the Armenian dram to rise against the dollar, hurting the competitiveness of the country’s outsourced industry. Meanwhile, a small venture capital industry banded together to fund technology development and today, startups can raise up to $1 million domestically before turning to venture capital firms abroad.
As a result, the country’s economy is booming – with an expected growth of 7 percent this year, according to the International Monetary Fund, making it the fastest growing economy in the region.
Many places around the world have developed tech hubs and startup ecosystems, but for Armenia, it’s a matter of survival.
“The future of Armenia’s economic development lies in high-margin scientific products,” the country’s Minister of High-Tech Industry Robert Khachatryan told Forbes. He explained that because the country is landlocked, logistics costs prevent it from exporting physical goods at competitive prices.
The technology industry is now the fastest growing sector in the country, growing more than 30% in 2023, surpassing resource extraction and agriculture as the main drivers of the economy. And this attracts foreign investment. In addition to Adobe, many of the world’s most powerful technology companies have set up shop there, including Microsoft, Google, IBM and Cisco.
Artificial intelligence is of course the hottest technology. Picsarta photo and video editing platform launched in 2011, has a team of data scientists building the company’s own core generative AI model. Krispa newer startup, uses artificial intelligence to change the accents of Filipino and Indian English speakers in real time to simple Midwestern American pronunciation – a product it markets to call centers serving North America.
DigiTec 2023 in Yerevan, Armenia attracted entrepreneurs and investors from around the world.
At the DigiTec Expo, dozens of startups showcased their AI products, from Viral Mango with a platform that connects influencers and brands, to Orders.co whose AI software, at the touch of a button, creates interactive menus for restaurants that want to integrate with food delivery services.
Armenia was late to the AI train, but it is quickly catching up. Even though the country’s university system was strong in mathematics, there were few machine learning professors available to guide students in 2016, when machine learning was already sweeping computer science departments in the West. Hrant Khachatrian, a young researcher, and four friends rented an apartment in the capital and grouped around a single GPU to start exploring on their own.
The community and number of GPUs grew into one of Armenia’s first AI labs: YerevaNN. By 2019 ErevaNN published papers at major AI conferences, including the Computer Vision and Pattern Recognition Conference (CVPR).
Universities have started to catch up by creating graduate programs in AI. Today, Khachatrian is working with Yerevan State University to integrate YerevaNN into a new AI lab created by the university, giving students a place to conduct research.
The AI research community in Armenia now numbers over 600 people. However, the lack of IT resources threatens its competitiveness. GPUs are hard to find and expensive when available.
This is where the private sector comes in. Venture capital and Western connections among the country’s entrepreneurs help startups create products despite material constraints.
“We now have venture capital funds in Armenia,” said Narek Vardanyan, CEO of Prelaunch.com, a validation platform that creators can use to assess market demand for their products before developing them. “Previously, Armenian companies had to go to Silicon Valley. For seed funding, we can raise $2-3 million with Armenian funds.”
The community also focuses on human capital development with private initiatives such as Armath (a contraction of Armenia and Math), sponsored by the Union of Advanced Technology Enterprises (UATE), which runs engineering laboratories throughout Armenia for students as young as 10 years old.
Middle school students present their projects in a laboratory in Armath. The program, whose name is a … [+]
At a village school in the countryside north of Yerevan, bright-eyed middle school students gather in a classroom to present their projects: one of them, a “smart home” the size of a shoebox, complete with DIY keypad lock, smoke detector and automated lighting. with sensors, LED lights and pieces of wire. Along a windowsill, a row of potted plants is fed by an automatic irrigation system built by the students. Students, meanwhile, work on monitors connected to Rasberry Pi handheld computers.
“At Armath, everything is open source and everything is done by project,” explains Arevik Hovhannisyan, a teacher. “The goal is for kids to understand the basics of engineering and maybe decide to become an engineer.”
Armath operates as a public-private partnership: companies sponsor the laboratories, which are then donated to schools where the local government funds their operation. So far, UATE has established more than 650 laboratories across Armenia and exported the model to several other countries.
In the far north of the country, sandwiched between steep mountain slopes, students from another program gather in the evenings for folk dances and to present their projects. This is Real School, another UATE initiative, a four-year professional program for high school students, giving them hands-on experience in creating technology solutions.
Back in the capital, children aged 12 to 18 can attend YOU … ME, an after-school bootcamp where they learn to program and create software. The interior looks more like a well-funded tech company than a school, with custom-designed workstations on wheels and a carpeted lecture hall-style meeting area. “We show them that they can create everything on their own,” said Zara Budaghyan, herself a TUMO graduate.
Sargis Karapetyan, technology entrepreneur and acting CEO of UATE, speaking at Digitec 2023.
Another initiative, AI generation, hopes to integrate machine learning teaching into high schools nationwide. Initially funded by Noubar Afeyan, co-founder of Moderna, AI Generation already has hundreds of students enrolled in high schools in 16 cities hoping to train researchers and engineers in artificial intelligence.
“We want to show the Armenian technology ecosystem on the global market map,” said Sargis Karapetyan, technology entrepreneur and acting CEO of UATE, adding that the country needs more external capital. “Another target are people looking to open branches in Armenia, expand and find good talent. »