ArmInfo. The market turnover of the IT sector of Armenia has exceeded $650 million, Deputy Economy Minister of Armenia Emil Tarasyan has told ArmInfo. He says that the annual average growth of the market makes up 17-20%. He stresses that 70% of the IT market of Armenia is export-oriented, with the remaining part being used on the domestic market.
As regards the structure of the IT market, the deputy minister notes that the major part of domestic orders concerns web programming. There are also orders for logistics software. The e-trade is not big due to the limited domestic market. However, the share of outsourcing in the IT sector remains quite high - up to 80% of the market. Due to the privileges provided by the Government both in terms of infrastructure and taxation, the numerous outsourcing freelancers working in Armenia started forming groups of startup companies united by a common result-oriented idea. This helped considerably regulate the given segment and partially bring it out of the shadow field. "This is a new trend on the market, which raises hopes for transition from outsourcing to projects of creation of own products," he says.
Tarasyan says that over 110 startup companies have been registered in the IT sector. Almost 100 of them already have the relevant license and enjoy the governmental privileges. "In addition to tax remissions, the Government has created a quite favorable investment environment for this sector. First of all, the matter concerns "Alliance" free economic zone and the opportunity to relive the companies of VAT for three years in case they import the necessary equipment," he says, noting that there are going to be some legislative changes related to provision of privileges to the startup companies. The Ministry has suggested lifting the temporary restrictions, according to which the closing month for submission of applications was November 2017 and the tax concession period was to last until 2020. "Guided by the positive statistics and having certain dynamics in development, we have offered the Government to lift the restrictions concerning the dates of submission of applications and we have also set a concession period of 5 years, which is enough for the so-called incubation period and introduction of innovative products in the market," Tarasyan says.
The deputy minister also notes that Granatus Ventures, the first venture capital firm in Armenia, which was founded 36 years ago and is still the only firm of its kind in Armenia, operates quite well. Its capital (6 mln USD) is equally divided among the Armenian Government and private investors. Granatus Ventures has already signed 8 contracts worth a total of 4 mln USD.
Tarasyan says that the Ministry of Economy is currently working at a new IT sector development strategy, because the previous document was adopted as early as in 2008. "At that time, our goal was to enhance the internet connectivity level, make internet more affordable and faster, create free economic zones and technoparks. Today our tasks are harder and global - to ensure progressive promotion of the market via providing state support to serious projects, which are capable of doing good to both the economy in general and the military industrial complex in particular. It is possible to do through tangible investments in further development of infrastructure, paying special attention to strategic directions. There should be a single platform that will bring together the customer, the product and the expert examination through the example of Defense Advanced Research Projects Agency (DARPA) or Small Business Innovation Research Program (SBIR). "We often speak of innovations in the defense sector, but the same innovations can be actively introduced in civilian practices, for instance, in the sector of services, industry and agriculture," he says.