ARMENIAN COMPANIES’ SHARE IN IT DECREASED BY 38%

news.am
Feb 9 2010
Armenia

Share of Armenian companies decreased by 38% in IT sphere. At the
same time, average revenue per company for locals increased by nearly
25% and only by 9% for the foreign branches, Enterprise Incubator
Foundation (EIF) report reads.

In 2009, the turnover of Armenian software and services sector reached
around $130m resulting in 27% CAGR in 1998-2009. This turnover figure
constitutes 1.1% of Armenia’s $11.9 bn nominal GDP in 2008. It is
close to the share of IT sector in GDP for such countries as India
(1.4%) and Germany (1.3%)

In 2006-2009, industry showed compound annual growth of 24%.

Industry’s contribution to the total exports rose from 3.6% in 2003
to 5.6% in 2009 proving the growing importance of the software sector
for Armenia’s landlocked economy focused on the expansion of export
oriented businesses.

33 largest companies (with turnover $1m and over) comprising 17% of
all IT firms generating 60% of all industry revenue. Today, there are
13 more companies with revenue ranging $1m and over compared to 2006.

Number of small firms with less than $100,000 in revenue also increased
by 4%, although these firms do not have any visible impact on the
industry. Rising operating costs and low effectiveness of small
companies make it highly difficult for companies with less than 10
employees to operate in the long term.