IT Landscape in Armenia
Armenia cannot afford to stay out of the most important technological breakthrough of this decade. Armenia’s current geographic isolation, mainly due to the embargo of Armenia’s transportation routes by two if its neighbors (Turkey and Azerbaijan), as well its small population, highlight the urgency of creating the requisite infrastructure for the introduction of E-Commerce, which would become Armenian’s gateway to the gateway to the global economy. This access to the global markets will bring about invaluable benefits to Armenian’s economy by increasing employment, facilitating business growth, and increasing tax revenues through the use of electronic payments.
By adherence to a number of multilateral agreements and conventions, Armenia had made a commitment to implementing important legislative reforms, which will allow the development of Armenia’s economy and technology. However, parallel to the enactment of legislative, efforts should be made to correctly implement the laws, in order to foster the creation of an environment that welcomes international commerce.
Below are sectors that exist within Armenia and that lend themselves to potential expansion via E-Commerce and E-Business.
During the Soviet era, Armenia attracted as many as 2 million tourists each year. While this has dropped off considerably, tourism is considered by many to be one of the better future prospects for foreign investors and for expansion. The privatization of hotels is already underway with several investments having taken place since 1998. For 1999, leisure travel sold over the Internet in the U.S. alone amounted to US$ 7.8 billion, with forecasts showing this will grow by 700% by the year 2001. Current forecasts indicate that by the year 2004, approximately 12 percent of Leisure Travel in the U.S. will be booked over the Internet—one of the highest rates of E-tailing (i.e., selling of products over the Internet). This is not limited to the U.S., but is expanding in other countries and regions as well. Should Armenia pursue an active build out of its infrastructure and promote tourism, the Internet holds much promise for promoting the country to the Leisure Travel market—extending its reach at a minimal cost.
Another potential area for expanding the market via the Internet is for the Jewelry and diamonds/gems sector. This sector has received some foreign investments in 1998 with the formation of a joint venture known as Armengold. By nature of the value-added services and low weight (e.g., relative to having low shipping costs), these products hold potential promise for expanding the market reach via the Internet. The key here is to establish a market presence for Armenian Jewelry on the Internet—an effort that would need to be collective not only within the Jewelry sector, but also more appropriately within the context of a national “branding” effort that would include tourism, handicraft, etc. This would appear to hold significant potential for Small and Medium-sized Enterprises.
While perhaps not something of major size, Armenia, like many developing countries, does have a wonderful history of quality handicrafts. Here too the Internet can be leveraged to promote these items—again, best if accomplished within the context of a much broader national “branding” initiative.
Other options exist whereby members of the Armenian Diaspora can purchase local Armenian products over the Internet for delivery to local family member. Also, it appears there may be some potential for leveraging Business to Business E-Commerce in selected areas as an effort to expand exports of target commercial products.