top of page
  • Dr.-Eng. Ara Yeramian

Notes on the IT and Biomedical Engineering Domains in the Republic of Armenia: a White Paper


Prologue

As a biomedical engineer from Germany, specializing in medical software development and image processing with years in the non-development side of the domain, this short article is based on observations and discussions throughout my 2 years in Armenia since relocation. Expanding this article has been (and still is) a continuous process based on available information, objective observations, and retrospective analyses through which potential prospects are proposed. This is the first in such a series. Many points were written prior to Russia’s 2022 war in Ukraine and its financial consequences on Armenia, with a relevant short update paragraph added at a later time as you'll read below. Some points might not be fully accurate due to limitations of specific types of information.



The Main Challenges in Armenia’s IT Sector

From a business perspective, a company’s largest portion of its monthly renewable budget is dedicated to keeping a team. Based on prior information and multiple discussions it is possible to say that until 2016, costs in Armenia (particularly in the capital Yerevan) were lower than those in other countries like in East Europe.

At the time, maintaining an IT team in Armenia was affordable and made financial sense relative to keeping such a team in other countries. Noticing this, many IT companies started rapidly and aggressively expanding their existing branches in Armenia, while others established new branches of foreign firms. After a few years, that rapid expansion started to outpace the supply of developers within the local market which left employers with very few options to attract new talent, specifically mid-level and experienced senior developers: attracting them from other local companies through larger financial packages (and few non-financial perks and benefits). Within a year or two, this seemed to have started an “IT salary bubble” in Yerevan where experienced developers are compensated with similar financial packages and, in many cases, with considerably larger and more attractive packages relative to their peers in other countries. Meanwhile, a global shortage of IT developers started to exacerbate this point and increased the pressure on IT employers in the country. At the time, the rapid expansion and the seeming lack of a coherent sector growth plan also meant new workforce entering the IT job market was not up to the required quality and experience levels to sustain the sector in the long term.

These circumstances were the probable cause for the exponential growth of the gap between IT talent supply and demand, which forced many employers to get more aggressive with their talent acquisition efforts and, hence, unintentionally feeding the “IT salary bubble”.


Compared to East European countries, keeping an IT team in Armenia now (referring to the end of 2021) costs about as much, and in some cases even more. This made headquarters of some foreign IT companies with branches in Armenia decelerate their expansion plans, pause, or even question the move in some cases. Compared to Armenia, many East European countries offer few long-term advantages:

  • Logistics: they’re (mostly) in the EU which means a Support & Services employee can be at the client’s site within a few hours, no visa requirements, fast and direct connections.

  • Regulations: working in compliance with EU regulations and certification programs mostly increases product quality (until some of those regulations start throttling development). This usually also boosts client trust in the company and its products.

  • Political and economic stability: something that Armenia has been tediously focusing on even before the 2020 Artsakh war.


UPDATE, Q3 2022: with Russia’s war in Ukraine and its financial consequences on Armenia, particularly currency exchange rates, Armenia’s IT financial advantages from a corporate perspective have been diminishing and looking less appealing than they did just a few years back. It is currently believed that the currency exchange rates have accelerated Armenian IT’s status quo since the challenges the sector has been facing for many years now are beyond currency exchange rates. This is why we believe it is crucial to openly address these challenges and implement practical solutions, before even the war in Ukraine is over (whenever it might be) and the exchange rates are improved or recovered. For the record, Armenian central bank’s exchange rates prior to and during the war in Ukraine were as follows:

USD-AMD

EUR-AMD

01.02.2022 (prior)

483.38

544.29

01.10.2022 (during)

405.56

396.08



A Proposal for Future Prospects

Despite this bleak reality, Armenia offers few major advantages in the IT sector relative to other countries:

  1. Armenia is a potential large-scale beta-testing/end-user-testing country and proof-of-concept evaluation focal point for IT. This is mostly due to its small size (both in geography and population), flexible regulatory system, product feedback’s dynamic cycle, eagerness to be and remain with state-of-the-art, and limited privacy concerns which are considered beneficial in a progressive way and not in an abusive way. Unfortunately, it seems like there are no clear large-scale efforts deployed for this purpose yet; efforts to popularize end-user software product testing and large-scale potential-customer feedback programs. This is our first proposal.

  2. IT educational programs: since 2020 (and in some cases before that) there have been many successful educational and training programs in Armenian IT with promising results on the ground. However, let’s keep in mind that it takes 3-4 years for an IT university student to obtain a B.Sc. degree and enter the job market with fresh information but no industrial experience. Also, it takes a non-student person attending private intense educational IT courses at least 3 years to obtain a certificate and get to the minimum experience level required by employers. Education reform programs have formed and some are at early performing stages already. With this, Armenia’s main current IT challenge becomes the following: ensuring those 3 to 4 gap years and entry level employees are up to the minimum levels required by employers. All this while the IT developer supply and demand gap keeps growing. One approach to bridge those gap years could be through “importing” experienced developers from other countries. The details of this proposal is beyond the scope of the current article, but for this to work out in a practical way the involvement of specific government bodies is crucial from a regulatory perspective. This is our second proposal.

  3. Medical informatics and biomedical software development: the advantages of this domain and the challenges it faces are presented in the next section.



The state of Biomedical Engineering Development in Armenia

Since 2020, the biomedical engineering scene in Armenia is one of the focal points within the overall scientific and engineering development efforts in the country. In 2021, the Armenian Bioinformatics Institute (ABI) and the Biomedical Engineering Association of Armenia (BEAA) were founded. Additionally, the Armenian Association of Digital Health (AADH) is actively working with governmental bodies to formulate and implement the Armenian Digital Health Initiative, and shape the domain scene in the country since its foundation in 2008.

AADH, ABI, and other organizations have mostly focused on the educational aspect of scientific R&D in the biomedical domain. The BEAA, on the other hand, is focused on the translational aspect of development and the challenges imposed by the move brought on from the gap between R&D and commercialization (hence the term “translational”), from the infancy of a startup to commercialization efforts of established companies. in the domain.

In general, based on relevant entities registered in Armenia, it is possible to categorize biomedical companies and startups into three groups:

  1. Biomedical hardware developers: focused on prostheses, surgical implants, etc.

  2. Biologic material developers such as 3D printed biomaterials.

  3. Biomedical software developers: focused on machine-learning based solutions, statistical analyzers of medical data, protein folding and drug discovery solution developers, etc.

Out of these three, software development has gotten the most attention since it overlaps with the general IT scene in the country. The big challenges, however, are with companies in the other two categories, primarily regarding logistics and regulations.


To develop and manufacture a hardware part (prostheses, implants, biologic material), those companies, developers, and startups need raw materials imported from other countries. Since time is of essence here, Armenia’s import-export laws need domain adaptation for proper and smooth operations. Imagine a 3D printed biologic part or a metallic medical implant stuck at a stage within the logistics and regulatory pipeline (particularly paperwork-relevant stages) while a patient is in need of it. Additionally, since the domain is fairly new and young, relevant laws are ambiguous; is a 3D-printed prosthesis an industrial product or a medical product? For sure, it is not a software product even though some active products have embedded software components. This categorization makes all the difference when it comes to regulations, taxes, and paperwork.

It is mostly due to these obstacles that biomedical hardware developers face that probably made the biomedical IT sector seem like a “natural” or a “safer” choice of focus from a business perspective for many domain startups and organizations.


Talking about biomedical IT and all its subdivisions, Armenia offers few potential advantages. With flexible domain regulations (or the lack thereof in some cases) in the country, it is possible and practical for medical IT companies to establish collaborations and partnerships with medical institutions where the latter grants access to anonymized data. In exchange, these medical institutions could become early product adopters giving them a competitive advantage. The product feedback’s dynamic cycle previously mentioned also contributes to product improvement. Additionally, since Armenia is a member state of the Eurasian Economic Union (EEU) it might even have direct access to medical informatics and anonymized data of fellow member states. Exploring the possibility and feasibility of employing medical data available both locally and (particularly) through the EEU, via established programs and clear regulations, is yet to be seen.

With these in mind, establishing programs and accelerating progress in the two aspects below would give Armenia a competitive domain advantage (our third proposal point):

  1. Develop locally-grown medical informatics startups and provide proof-of-concepts based on medical data available both locally and through the EEU. We’ve already seen the rising of few promising U.S.-based Armenian medical informatics startups with branches in Yerevan, some of which have been supported by the Foundation of Armenian Science and Technology (FAST).

  2. Invite foreign medical IT startups and companies to take similar steps and establish collaborations with local private and public Armenian medical centers.


In General…

Embracing these challenges both in medical and general IT, establishing coordinated suitable long-term solutions, timely and properly executing these solutions are all crucial factors for Armenia’s IT to not only survive but also thrive and truly reach its full potential. This is something that many, including us at the BEAA, have been working on realizing. We thank our colleagues and fellow organizations (AADH, ABI, FAST, UATE, UEICT) for their work and invite them to join us in openly addressing these challenges, propose practical potential solutions and start implementing them with two main goals in focus: long-term sustainability and reducing the risk of a brewing wave of brain-drain, for a stronger IT in Armenia.

141 views
bottom of page