Why Tech Matters
The idea behind this column is simple: while we often reference the incredible global asset that the Diaspora is for Armenia, we have yet to find a formula for the systemic engagement of this asset for Armenia’s development. Yes, there are ample individual examples of diaspora-Armenia cooperation leading to significant progress forward for the country, but no structured, concentrated and coordinated effort to put into play the full force of the diasporan network across sectors of Armenia’s economy. While Armenia’s 6%+ annual GDP growth, sustained through every year except 2020 is impressive, the country needs to achieve 8%+ annual growth to hold its own and prosper in this difficult part of the world. This lofty target is achievable only through an active and coordinated effort between Armenia and its diasporan network. Over the next few months, we will explore not only successful examples of this cooperation, but highlight areas where a similar approach will lead to outsize benefits.
Raffi Kassarjian is CEO and Principal Advisor at Sensyan, a boutique advisory firm focused on the growing Armenian tech sector. Since moving to Armenia in 2008, Raffi has led the following organizations as CEO: iCON Communications (pioneer wireless internet service provider), TeamViewer Armenia (also serving as Senior Vice President at TeamViewer GmbH), and the Union of Advanced Technology Enterprises (UATE). He was also a member of the Management Board of Converse Bank Corporation. Previously, Raffi was Vice President and General Manager at Fair Isaac Corporation (NYSE: FICO). Prior to Fair Isaac, he was a Senior Manager with Accenture’s Strategic Services practice.
Raffi was born in Beirut, lived briefly in Tehran, and spent over 30 years in the San Francisco Bay Area. He holds Bachelor of Arts and Master of Business Administration degrees from Stanford University. He is an adjunct lecturer at the American University of Armenia, and founding board member of Repat Armenia Foundation, Impact Hub Yerevan, and EVN Report.
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September and October are tech event-heavy months in Armenia. By one count, over 23 tech events took place in the country in the three weeks between September 23 and October 16, including Emerge Yerevan, Engineering Week, WCIT-2024 and Digitec. One thread connected most events: Armenia’s success in developing the tech sector would not have been possible without close cooperation between diasporan Armenians in tech, and the industry’s strong technical foundation in Armenia. Said differently, diasporan presence and investment in tech in Armenia catalyzed the growth of the sector, at a clip far outpacing regional competitors. Diasporan Armenians featured prominently in each conference (mostly as a result of their involvement in ventures and organizations operating in Armenia), and most Armenian tech success stories showcased the synergy between diasporan networks and deep technical talent in Armenia.
There are several diasporan engagement models in Armenian tech: the most common is the championing of the creation of an Armenian operation (either through greenfield or acquisition of existing Armenian team) by a senior Armenian exec in an international/multinational corporation. Examples include the establishment of Nvidia (Rev Lebaridian), Virage Logic (acquired by Synopsys in 2010, Adam Kablanian), Integrien/VMWare (Al Eisaian), Ponte Solutions/Mentor Graphics/Siemens EDA (Sedrak Sargisian and Ara Markosian), Xilinx/AMD (Ara Markosian), ServiceTitan (Ara Mahdessian and Vahe Kuzoyan), National Instruments (Aram Salatian) and many others. Another approach is the return to Armenia of an Armenian-born entrepreneur who spent time in Silicon Valley or other tech hubs, such as Vahagn Poghosyan (Instigate group of companies), Davit Baghdasaryan (Krisp), Davit Buniatyan (Activeloop), Tigran and Vahan Petrosyan (SuperAnnotate), and others. A final approach is when a fully Armenia-born venture (such as PicsArt) expands globally by leveraging relationships with well-connected diasporans.
In all three models, neither side would have been successful without the other. This is particularly relevant because most traditional diaspora-Armenia models are considered one-way affairs, where funds flow from the diaspora to Armenia into impactful—but not necessarily self-sustaining or profitable—ventures. With the establishment of several Armenia-based/Armenia focused venture funds, such as Granatus Ventures, SmartGate VC, FormulaVC, Triple S Ventures and BigStory VC, diasporans now have an opportunity to consider funding the development of tech in IT as they would any other return-focused investment. This is possible because the Armenian start-up ecosystem is now producing investable, positioned-for-success ventures – this “circularity” is central to the relationship. The number of new startups at this year’s Digitec are a testament to the impact of this new dimension of diaspora-Armenia relations.
This diaspora-Armenia engagement extends beyond Armenians helping Armenians. At WCIT, Rodrigo Messi (Lionel’s brother and manager of his new investment fund) was here because Razmig Hovaghimian (close to both of them and founder of Play Time, Lionel’s new venture fund) chooses to highlight Armenia in his broad network. Similarly, Esther Wojcicki’s appearance at WCIT was prompted by Yervand Sarkisyan and facilitated through her connection with Nanor Balabanian, a former student from Palo Alto High School. Elon Musk sent a greeting to the WCIT audience because of his connections to several Armenian-American entrepreneurs. At the same time, Armenia has yet to tap into the highest-level networks of prominent Armenians such as Noubar Afeyan and many others who are extremely well-connected in countries as varied as France, the UAE and Saudi Arabia, and to further penetrate strategically important countries such as India and South Korea.
Armenians cannot, however, rest on the laurels of this synergistic relationship in tech. In the past few years—especially after the Russian invasion of Ukraine—several other regional players have aggressively pursued attracting foreign tech talent to their respective markets, quickly catching up to Armenia in terms of total people employed in the tech industry and number of new ventures launched. These include Georgia, Kazakhstan, Serbia and even EU members such as Greece and Portugal, who have instituted very attractive tax incentives and liberalized work permit/residency requirements to facilitate the soft-landing of tech talent in their countries. Armenia’s response, unfortunately, has been slow to materialize, and is stuck in institutional silos—while tax incentives to invest in the growth of the sector have just been announced, it is still frustratingly slow and difficult for non-Armenians to gain right to work/residency as a result of an overburdened and inefficient passport and migration service.
In response, Armenia needs to strengthen the value of its “trump card”, the global Armenian tech network. Most of the examples of successful diaspora-Armenia cooperation listed above are due to ad-hoc or individual efforts—there is no systematic or strategic approach in place to scale the value of this unique competitive advantage. One cannot expect IT’s contribution to GDP to grow beyond its current 8% to 15% or more without an active policy to mine the diaspora network. Several policy and action items can address this:
- Comprehensive cataloging of Armenian tech talent across the globe by category, position, geography and industry subsector—while many have tried to do this, it requires a centralized and focused partnership between the government and the private sector
- An active plan to reduce “degrees of separation” between Armenian tech executives and entrepreneurs in Armenia and the diaspora
- Simplification of tax and residency requirements to facilitate the smooth flow of talent and capital between Armenia and the diaspora
- Significant investment in educational and scientific research programs to “double-down” on areas of particular advantage in Armenia (EDA, subsegments of AI such as image and document analysis and processing, subsegments of AI in life sciences, incorporation of AI enablement into different educational programs)
Moreover, while this article (and this column in general) focuses on the tech industry, there are many other segments of the Armenian economy which could benefit greatly from this active diaspora-Armenia cooperation and engagement. We have already seen examples of success in healthcare and wine-making; it’s now time to apply this same model to agriculture, mining and other relevant sectors of the Armenian economy.
Armenians always trumpet the abstract idea of a strong diaspora network. It’s now time to put it to work for the benefit of Armenia, and by extension, the diaspora.
