IT Landscape in Armenia
During this year, there has been considerable attention by various groups on the potential for software development within Armenia. This too builds on the capacities developed when under the Former Soviet Union, but also has the advantage of requiring minimal investments, leverages the current human resources, and represents a rapidly expanding market throughout the world. This has included a report by the ITC.[1]
It is estimated that there are between 20-30 local software companies within Armenia that are owned and operated by Armenians. In addition, there are 10-12 U.S. firms, and 2-3 European firms, and at least one Russian firm that own and operate subsidiaries within Armenia. It is estimated that on average, these firms employ between 30-35 each. Using a number of 40, each with 30 employees for an average, the number would total 1,200. While perhaps soft, it has been estimated that in the Soviet era as many as 10,000 were employed in the high-tech sector (software and electronics).
A recently-completed study, Assessment of Rationale for the Establishment of the IT Park in Armenia[2] Information from a study conducted by UNIDO, puts the number of programmers in Armenia at about 250, with an additional 2,000 IT specialists. This in large built off of an earlier study conducted by the U.S. Foreign Commercial Service in Yerevan. Those firms included in this survey were relying extensively on the most current programming languages including Visual C, C++, Visual Basic, Java, SQL Server, Oracle, and Power Builder.
While estimates vary, a recent study on the potential of establishing a software and IT sector in Jordan places the world market for software and computing services at US$ 400 billion in 1998, with the sector reaching a projected US$ 620 billion by the year 2002.[3] As a result of this size and growth, there are currently, and projected well into the future, acute labor shortages for software development. The UNIDO Report, while reflecting different numbers, including data from the U.S. Department of Commerce, comes to the same conclusion—there is a current shortage and a projected shortage of IT professionals worldwide. Further, the UNIDO report puts forward the notion that Armenia is well positioned to leverage the strength of its prior position during the Former Soviet Union era and become more engaged in this high-growth sector.
Armenian Computer Programmers have already obtained high reputation and credibility in USA IT market. More then 60% of local software companies export their products, mainly to USA, Germany, France, Russia, Holland and Georgia.
The companies are also actively in receiving Software Projects from foreign-based companies. Thus, all Armenian based companies receive such projects. The projects mostly come from USA.
Strengths and Weakness of Software Sector in Armenia:
Ø High technical expertise of the IT professionals.
The very expansion of software sun-sector speaks itself about the professionalism of Armenian software developers.
Ø Cost competitive labor force.
For comparison, the remuneration of compute programmer with up to 5 years of experience in foreign software companies in Armenia companies $7,000-10,000 annually, while the US the similar software developer is paid from $40,000 to 60,000[4].
Report by Arcas group[5] where the salaries reported are taken at a minimal value, which is used to compensate the software developer without experience.
|
POSITION |
USA |
UK |
Greece |
India |
Armenia |
|
Project Leader |
79,000 |
57,000 |
36,000 |
35,000 |
4,800 |
|
Business Analyst/Consultant |
55,000 |
54,000 |
43,000 |
32,000 |
2,400 |
|
Systems Analyst |
70,000 |
49,000 |
23,000 |
21,000 |
2,400 |
|
Development Programmer |
60,000 |
42,000 |
20,000 |
12,000 |
2,400 |
|
Support Programmer |
54,000 |
36,000 |
23,000 |
12,000 |
2,400 |
|
Database Data Analysts |
73,000 |
32,000 |
36,000 |
26,000 |
2,400 |
|
Documentation Staff |
69,000 |
36,000 |
23,000 |
12,000 |
1,200 |
The authors of the report state that "table clearly shows competitive advantage of the Armenia IT companies in cost (the staff salaries make 80% cost of the IT company on product development)" and "taking on account high technical level and low cost of development of IT products, it can be stated that the Armenia IT companies provide the best quality/price ratio in the World"[6]
[1] Global Technology Markets-Country Export potential Profiles: Information technology-Armenia. International Trade Center. Geneva.200.P.24
[2] Assessment of Rationale for the Establishment of the IT Park in Armenia. UNIDO Geneva. January 2000.
[3] The Reach Initiative – Launching Jordan’s Software and IT Services Industry. August 1999.
[4] Information week research salary survey of 21, 398 in professionals, http://www.informationweek.com/731/salextra.htm
[5] “Information Technologies” report by Arcas Group, April 2000
[6] “Information Technologies” report by Arcas Group, April 2000