Armenian Virtual Bridge: a gateway to Silicon Valley and beyond
Armenia is on a right track to achieving the 4th industrial revolution. This comes with the development of advanced information technologies and the recent launch of the “Armenian Virtual Bridge”. This project is worked out by the Armenian Ministry of High-Tech Industry to empower local start-ups to build direct communication with Silicon Valley and other parts of the world. The objective of rolling out of this initiative is to turn Armenia into a competitive and technologically advanced country at the world stage.
In recent years, Armenia has emerged as one of fastest growing economies in the former Soviet Union. Its economy grew by 7.6 per cent in 2019, the largest recorded growth since 2008, and an average 6.4 percent in 2017 and 2018. The country has a population of just three million people; however, it also has a spread out diaspora around the world that is highly sophisticated and contributes towards its development with technological know-how, innovations and market related skills. It already has mobile 4G service network covering nearly 90 percent of its territories. Also, the government is collaborating with mobile operators, both local companies, like Beeline, MTS Armenia- earlier known as VivaCell-MTS, and international giants, like Nokia, to roll-out nationwide 5G services in the coming years.
Forbes magazine considers Armenia as a possible new global high-tech hub. According to Forbes, this transformation is partly explained by its geographic location. While its neighbors, Azerbaijan and Georgia invest primarily in logistics projects (especially ports and pipelines), Armenia, a landlocked country, has made the choice of going high-tech way to better connect with the rest of the world.
The country is home to some of the latest successful tech start-ups, like PicsArt, a photo editing app that reached 130 million monthly active users in 2019, and Triada Studio, an animation, motion design and visual effects studio, which runs the popular Shadowmatic app used for creating photorealistic 3D shadow puzzle. The tech industry is well supported by the government through various incentives and tax benefits. Most of global digital giants, like Amazon, Facebook, Apple, Huawei are already operating in Armenia and are participating in government endeavors, like macro-economy and free economic zones. Moreover, Yerevan fosters to create a high-tech environment to retain its qualified workforce from leaving the country. This attractive environment for start-ups comes from the high quality educational in hard sciences offered by local academic institutions. Armenia derives this legacy from the former Soviet Union, under which it was producing a range of computer equipment, emphasizing on computer science education as a desired career option for youths and introducing more women to actively participate in this field. The Yerevan Computer Research and Development Institute, a world recognized research institution, stands tall with its contributions in shaping the country’s tech environment and tech culture as its stands today.
Despite recent advances, the Armenian government understands the weaknesses impeding the country to become a world leader in the high-tech sector. Armenian entrepreneurs (qualified and talented as they are) lack funds, social connections and management skills to operate in global markets/ foreign countries. The Pashinyan-led government feels the entrepreneurs in the country will gain market knowledge and experience if they are get integrated into the start-up ecosystem in the United States, particularly in the “Silicon Valley”. Keeping this in consideration, it has launched the “Armenian Virtual Bridge” with great fanfare. Under the program, a selected group of 45 entrepreneurs from Armenia will get an opportunity to visit the Silicon Valley this year (i.e., 2020) to present their products correctly and negotiate with prospective investors to fund their projects.
On 12 March 2020, Hakob Arshakyan, Minister of High Technology Industry, unveiled the main policies of the program at a meeting in Yerevan.
This ‘Highconnect’ platform will enable hundreds of Armenian entrepreneurs to present their projects to Silicon Valley investors in San José, where an Armenian centre will soon be opened. Some Armenian entrepreneurs will also get an opportunity to take training courses at Draper University to brush up their management skills.
In addition to the educational aspect, the “Armenian Virtual Bridge” will also work on financing IT companies in Armenia with several tools including the Armenia’s National Venture Fund. The fund’s capital will reach $ 100 million by 2027 and will help mainly Armenian start-ups to access the international market.
Another aspect of the “Armenian Virtual Bridge” regards the development of cooperation in the Gulf region. A representative office will soon be set in the UAE and/or Qatar for Armenian entrepreneurs to connect with Gulf states investors and increase visibility.
Because of its multi-dimensional aspects, the “Armenian Virtual Bridge” program is likely to draw interest from both Armenian and foreign companies and will confirm Armenia’s regional leadership in high-tech and digital technologies.
Does there exist scope for enhancing quality and output of the program?
Yes, of course, and especially under changing global circumstances when the US and Europe are facing tremendous economic slowdown. At this juncture, even the hawkish investors from Silicon Valley will desist to fund start-ups or their ideas, both conceptualized and operational, unless there is a solid business case to capture international markets. This may not be the case with 99 percent of the products/ services that Armenian start-ups have to offer for now.
Following are proposed nuances that will contribute towards strengthening the program.
> Add other major global tech destinations, like Singapore, Malta, Tel Aviv (Israel) and Bangalore (India), alongside Silicon Valley.
> Create this as a vibrant interconnected grid connecting different local and global parties along value chains. This mean desist from shaping the programme as a end-to-end path between two destinations.
> Look towards Asia, and especially Asian private players (investors, developers and
> Work towards normalizing political conflicts in its vicinity to make the South Caucasus region a more attractive destination for global giants to come in and freely operate.
Authors: Dr. Sebastien Goulard and Hriday Sarma. Both authors are coordinators with the Caucasus-Asia Center, website : www.caucasusaiacenter.org