Information technology (IT) has become a major sector of the Armenian economy and will continue to grow strongly in the years to come, Prime Minister Tigran Sarkisian said on Wednesday.
Sarkisian revealed that IT firms now generate approximately 5 percent of Armenia’s Gross Domestic Product (GDP).
“So the IT sector is now on a par with our mining-metallurgical industry,” he said in a speech at Yerevan States University. “The number of people employed by the two sectors is roughly the same: about 5,000. But wages in the IT sector are much higher and so is the pace of their growth.”
“This is our priority,” he added. “We will do everything to increase the share of this sector.”
Successive Armenian governments have declared the sector’s development a top economic priority. But it was for years hampered by a legal monopoly on telecommunication services enjoyed by the ArmenTel national telephone operator. The monopoly was lifted five years ago.
Much of the sector’s development since then has been driven by a rapid spread of Internet access in the country. Tightening competition between local Internet providers has been improving the quality and lowering the cost of the service.
According to government data, the number of broadband Internet users rose by almost 36 percent to 235,000 in the first quarter of this year. Only some 70,000 Armenians had access to relatively high-speed Internet connection as of late 2009.
IT products accounted for an estimated 8.5 percent of Armenia’s exports last year, up from 3.6 percent reported in 2009. Much of the IT export is generated by Armenian subsidiaries of California-based software development companies.
Last December, the World Bank provided Armenia with a $24 million loan designed to foster enterprise innovation and the spread of IT. The bank said the loan will be used for improving Armenians’ access to affordable computers and high-speed Internet connection and helping local businesses to authenticate electronic transactions. The Armenian government will contribute $6 million of its own funds to the project.