Celebrations on the streets of Yerevan after the declaration of independence (Sept. 21, 1991)

Author’s Note: Continuing on with the theme of education, the fourth installment focuses on the the need to build an economy based on education, research and innovation to tap into the global value chain as a sustainable path for the country’s future. This will require strong will, detailed planning, sacrifice and transparency and accountability, all in short supply in the current realities of the Armenian nation. We either sit idly by and become a Turkish vilayet, as dreamed by the current collaborator regime, or be a nation worthy of having our own country, one that meaningfully contributes to the world. 

Armenia is fortunate to have had a strong educational and scientific basis from the Soviet era. Unfortunately, much of this infrastructure has not been maintained, updated or upgraded. As a result, universities use outdated curricula, majors and concentrations, textbooks and faculty to train the next generation. Sprinkle in the existing corruption due to low salaries and anemic support, crony appointees who lack proper vision and/or world class expertise to plan and implement the future of higher education in the country, and you end up with the currently ranked institutions. 

What are we to do? This is no question that Armenia has traveled an arduous path since her independence, having survived an earthquake, a forced war to stand up for her kin, closed borders and the ensuing post-Soviet chaos and consolidation of wealth and resources.

During this period, Armenia has emerged as a regional hub for Information and Communication Technology (ICT), relying on its human capital and the strong educational traditions and academic and commercial institutions of the Soviet era. Notable intellectual and economic nodes of excellence, such as Engineering City, have been designed and implemented in Armenia to connect Armenia to global value chains (GVCs) in the engineering space. Developing the Armenian National Engineering Laboratory (ANEL) for all universities engaged in training engineers in Armenia was the first successful step to inspire both private and public sector policy makers.   

Building on the success of the Engineering City program and similar efforts and capitalizing on the Armenian human capital both within the country and throughout the Diaspora, we envision the implementation of an extended knowledge economy, encompassing research and development in mathematical, physical, environmental and life sciences, with special focus on interdisciplinary areas, as the growth areas of the future. The scientific core has existed in Armenia, and there is significant innovation potential. But the intermediate steps and the associated infrastructure to realize those innovations and connect them to the global value chain are missing.  

An approach based on developing science and innovation hubs with perpetual funding sources and faculty endowments to facilitate the infusion of world class talent will lead to innovation and productivity and will lay the foundation to train the workforce that Armenia needs to compete and participate in the Global Value Chains (GVC) of tomorrow. The future of high technology is uncertain, because it evolves by disruptive discoveries. One of the key hallmarks of extractive political and economic systems has been their resistance to disruptive innovation, something that shakes the core of their extractive economic model and the stranglehold on key economic opportunities. Yet, this is exactly what Armenia needs to engage in, if it has any chance of a brighter future. In order to prepare a growing economy for participation in the GVC, it is far more advantageous to prepare a workforce, capable of exploiting opportunities, rather than trying to predict the exact nature and patterns of disruption that are likely to arise. Remarkably, a disproportionate fraction of these disruptive ideas relies on a fundamental set of skills rooted in the basic fundamental sciences and their interactions to create a reality that is bigger than the sum of its components. Therefore, Armenia must create critical capacity in these skills, so that the future workforce can both create and cope with disruptions. These skills include quantitative thinking, experimental skills, mathematical, physical and biological modeling, biomedical sciences and engineering, computational and data sciences, high-performance computation and advanced computer sciences, and incorporating state-of-the-art developments from research into applications and innovations as the final stop.

Armenia possesses the fundamental scientific knowledge base but lacks the infrastructure and the intermediate steps between basic research, technological development and implementation of that knowledge base into the economic engine in order to participate in the GVC and transform itself into a competitive country. For a small nation such as Armenia, there will be dividends from the knowledge-based economy only when the country acknowledges the need to and invests in the technological trends of tomorrow and becomes nimble and resourceful enough to adjust to changes in the global economy.

Therefore, scientific and innovation centers must be selected for: 

• Impact and transformational nature on the Armenian economy 
• Impact on the world economy and the global participation of Armenia
• Significant growth potential for the future
• Compatibility with resources available in the Armenian sphere
• Synergistic and interdisciplinary nature and potential to form a vertically integrated ecosystem expanding from science to market
• Potential for embracing GVCs, extending those GVCs to the region and the developing world and positioning Armenia as a GVC epicenter in consecutive phases

Multi-disciplinary sciences with interactions straddling the borders of different scientific fields have been the source of much of the worldwide innovation pipeline during the past decades. It has become abundantly clear that isolated hubs of excellence are no longer the driving force of the knowledge economy, and Armenia is no exception to this rule. Armenia’s segregated national academies governed by out-of-touch boards are not the answer to turn Armenia into a regional or world stage contributor in the next century. These academies and institutes work in a silo mentality, where turf protection is more important than collaboration, cooperation and joint pursuit of national interests. The time has come to do away with the models and kick science and innovation into a much higher gear. The goal is to adopt international best practices and a combination of parts from multidisciplinary sciences to create a sum that is much larger than its components. The idea of interconnected national laboratories for driving natural and social scientific advances for strengthening national infrastructure was initially developed in Germany (where it has evolved into today’s Max Planck Institutes), followed by the US government-funded national laboratory model. It has since expanded to the rest of the world. We must bring such a model to Armenia.

To support the innovation at the science and innovation centers, Armenia must establish a perpetual endowment fund to fuel the work. This endowment can start at the 100-150 million USD range and be supplemented over time with cash infusion from a variety of sources. The fund can be increased by contributions from the Armenian, Russian, US and French governments and private sectors. The large Diasporan networks in both countries must mobilize in support of this effort. The 2020 Artsakh War has left Armenia’s flanks open, and there are potentially relatively receptive governments in both countries that can be motivated to support such a cause. It will not be easy, nor will it be simple. But it must be accomplished; no excuses or justifications to avoid the needed heavy lifting. Now that the US Congress has acknowledged the Armenian Genocide, advocacy groups should set their sights on supporting transformative investments in Armenia. Advocacy efforts have run the gamut of combative relationships to lockstep movements with the lobbying governments. This is neither an indictment nor unique to Armenian advocacy entities. However, all must agree to commit fully to Armenia’s survival and future growth. This must be a red line that cannot be crossed, regardless of tactical and approach differences.

Infrastructure and funding are of little use without the human capital. The Armenian nation must commit to funding 100 endowed STEM chairs over a five-year period to attract the best possible minds to innovate and help train the next generation of leaders and scientists and innovators. This will be a $100 million USD investment to be supported by the Diaspora and other resources. The developed world is producing talent at an unseen pace, attracting talent from the world over, eager to receive state-of-the art training. However, the developed world cannot absorb these graduates into innovative roles at the rate that it produces them. Armenia can offer paid positions with research funding to attract such talent. Armenia needs to attract the best innovative minds that it can, who need not be Armenian, but willing to work and produce in Armenia. The kind and hospitable nature of the Armenian people will be an important asset to make them feel at home and integrate them into society. Structures must be put in place, such as five-year contracts, to be renewed upon accomplishing set milestones, to incentivize performance and not provide tenure shelter. While this effort must do all it can to attract talented Armenian candidates from Armenia and the Diaspora, it is unlikely that there will be enough Armenian candidates for such positions with the right training and background. Therefore, opening our doors to a wider source will serve the best interests of the nation, both in the short and long-term.

While the initiation of this innovation campaign is essential for Armenia, it will not be easy, even with all resources in place. Armenia lacks the systems-level expertise or the capacity to undertake such a task. Proper engagement of resources is essential. The Diaspora has provided and will continue to provide financial support to Armenia, something that it has been primarily relegated to in the past 30 years, but it can be a much greater resource if Armenia ever chooses to engage it fully. Thus far, efforts have been more lip service and maintenance of a safe distance, but if the Armenian political elite are ever to right the ship, they need to meaningfully engage the Diaspora’s immense potential. There is extensive expertise in academic, innovation, finance and entrepreneurial spaces in the Diaspora, but no realistic plan has been put in place to properly engage this resource. Empty platitudes and notions of bringing all Diasporans to Armenia are not plans; they are meaningless slogans. There needs to be a real structure in place to meaningfully engage Diasporan resources. This means bringing together a professional and non-volunteer team with Diasporan and non-Armenian experts to outline the overall approach, provide a detailed plan of action and put in place the right teams to execute. Most recently, the National Assembly held a four-hour meeting on the future of high tech in Armenia. With the exception of a few minutes of coherent thoughts here and there, the majority of the session was devoid of any real meaning or plans, other than repeating the same tired speeches, backed by no effort. It is quite possible that most speakers forgot what they talked about by the time they got home. The reflexive grandstanding with no discernable meaningful action has been a hallmark of Armenian leadership and authorities.  

This is as helpful and unrealistic as expecting most Diasporans to move to Armenia. There will be a need for a meaningful number of Diasporans to move to Armenia to offer their expertise toward developing the nation. But, this will not materialize by the few who have taken it upon themselves to move there and provide their services. Former US Secretary of Defense Donald Rumsfeld popularized the concept of known knowns, known unknowns and unknown unknowns. The Armenian political elite both now or before, through their actions, have shown little knowledge of this concept.

Diasporans have also been at fault by being content with their “cash cow” role and not willing their clout and expertise onto the leadership in Armenia to affect positive change. Showing up to galas and taking selfies with the powers that be have satisfied their needs by and large. Fear of taking difficult but needed/right stances, out of potential loss in pecking order or status with respective governments, has been another failing hallmark of the Diaspora. Armenia is undergoing unprecedented instability and upheaval, yet little is heard from the Diasporan “elites,” as they are playing the waiting game to see how best to hedge their bets, even as we are losing Artsakh and potentially Syunik in the near future. Diasporan organizations have been slow to adapt to the current times, treading in their comfort zone wheels and failing to engage meaningfully with Armenia or new Diasporans from Armenia. There has been a palpable separation between the traditional Diasporans and those arriving from Armenia, thankfully subsiding with the new generation. This was also in place when Middle Eastern Diasporans arrived in the US in the 70s and onward. Their integration took some time, but it was easier than those with Armenians from Armenia. There were more similarities among those groups than with Armenians from Armenia. Again, this is not unique to us, as Israel has experienced and is experiencing very similar rifts between its population and the immigrating Jews from the former Soviet Union. The divergent value systems and life experiences have been significant barriers for meaningful integration. It is fair to say that a significant number of Diasporan professionals stay away from Diasporan structures of all stripes and sides, because of their archaic and unprofessional approach. While these institutions have done significant and valuable work, they have been slow to adapt, evolve, embrace new realities and offer up-to-date solutions to the problems facing Armenia and the Diaspora. While the Armenian government bears the brunt of its inaction to properly outline a vision to engage the Diaspora and leverage its resources, Diasporans have not really stepped out of their comfort zone either.

Wealthy oligarchs must also be part of the mentioned transformation effort. The current leadership could have negotiated a deal with the oligarch class to bring order into the system over time, with specific milestones, such as reforming taxation of their assets and income, establishing “voluntary” contributions of funds by the oligarchs to a national endowment, setting up sunset dates on their less than desirable economic practices and other options to transfer the economy from its extractive form into a more inclusive form over a reasonable period. But, they used the concept of “going after the corrupt elites” as bait to social engineer the populace. They simply built relationships with some of the oligarchs and brought their own oligarchs back to the fore, essentially a rinse and repeat cycle. Establishment of a national endowment fund with at least one to two billion dollars would return 150 to 200 million USD per year, a respectable number for Armenia. This fund would allow the oligarch class to contribute a part of their wealth back to the nation, be held accountable in a conciliatory setting and set the stage for a gradual change from an extractive into an inclusive economic model. The fund would grow over time to provide the nation with rainy day funds and help offset key expenditures for a variety of needs, education or otherwise. Armenia is a tiny nation, where everyone knows and/or is related to everyone. An all-out hostile approach would not bode well with the fabric of the society, as we have seen by now. The mob mentality and the prevalent dichotomy in the nation precluded the development of any meaningful steps, instead focusing on zero sum games to appease the base.

While a highly literate nation, the Armenian nation has shown that it is no different than most other nations, where a large segment of the population lacks critical thinking capabilities to separate fact from fiction and is easily manipulated through social engineering and drawn into gossip and conspiracy theories with little evidence. 

The 2020 Artsakh War brought about an unprecedented level of financial contribution by Armenians worldwide. While a significant effort that offers a glimpse into the financial muscle of the Armenian nation, it was simply a drop in the bucket, given its one-time nature in response to an extraordinary event. Now imagine how far along Armenia and Artsakh would be, had a meaningful recurring contribution been set up 20 or 25 years ago, with a vision, concrete systems-level plans, quality execution and strict accounting, accountability and transparency. Instead, we settled for a small-scale plan with the Armenia Fund, embroiled with controversies and mismanagement from the get-go. How do we go about instilling confidence in people who part with their hard-earned money in support of a good cause? The result is the paltry 10 to 20 million USD per year collected as part of the telethon. We wax and wane about the clout and financial might of the Diaspora, yet we show little seriousness in tapping this resource properly.

Table 2

A cursory evaluation of the 31 largest Armenian Diaspora population centers accounts for 5.373 million Armenians, using best available data. A calculation of the number of Armenian households in each country (based on available census data) and using median household income per country puts the annual income of the Armenian Diaspora north of $40 billion USD (Table 2). This is a conservative estimate and yet a significant sum (more than three times the GDP of Armenia). Now, imagine if we can outline a vision for the future of Armenia and Artsakh, establish concrete systems-level plans, put in place a fund with quality execution and strict/best practices in accounting, accountability and transparency and ask the Diaspora to contribute 0.5 percent to 1.5 percent of its annual income to this fund recurringly. Doing so will help amass a war chest of 200 million to 600 million USD per year. Adding to this the contribution of Armenians from Armenia will bump up the annual sum to 220 million to 660 million USD. This fund can play a significant role in supporting the proposed innovation drive for Armenia and Artsakh and unburden state funds for other worthy efforts. Are we there? Absolutely not. Can we get there? Yes, but it will require significant effort, dedication, sacrifice and accountability, all in short supply both in Armenia and the Diaspora.

The financial contribution along with the professional expertise of the Diaspora must be harnessed and used wisely to lift Armenia and Artsakh.