From Dream to Reality: The Future Land of Innovators and Achievers

The Role of Technology in the Modern World

Sovereignty is defined as the highest degree of power or authority. This term, and even its existence, is only relevant to the idea that states or groups of people may not necessarily be sovereign or that their autonomy may not be guaranteed.

For a state to maintain its sovereignty, it needs bargaining power. Smaller states have fewer resources and less power to protect themselves. The power dynamic between and within small and large states creates instability, causing national geographies to expand and shrink as time progresses.

In an increasingly globalized and digitized world, sovereignty will depend more on technological resources. This leads to the question about our desire, motivation and ability to effectively compete with the rest of the world in developing the proper technological solutions.

A century ago, most issues and conflicts were localized, confined to specific regions. Today, technology transcends borders, boundaries, and other legacy obstacles. However, technology is not linear in nature. Putting all technology into a single basket is a recipe for disaster in the world ahead. Without a clear plan and motive, any state’s sovereignty will be compromised. This is even more critical in the case of Armenia, given its geopolitical reality. The stakes are enormous.

Are IT and HighTech and Deep Tech all the same?

We have made significant strides in adopting information technology. It is now critical that we pursue the high-tech revolution with excellence. To do so, we must understand the similarities and differences between information technology and high technology. Although the two concepts share many characteristics, they are as different as apples and oranges.

Humans have been managing information through written systems for thousands of years, yet the term “information technology” was not coined until a 1958 Harvard Business Review article by Harold J. Leavitt and Thomas L. Whisler. IT revolutionized communication and business by providing digital tools and infrastructure. It encompasses the management and utilization of digital information, including hardware, software, and networks, and involves storing, processing and transmitting information. Its definition has expanded over time from being a support system for management to covering all technologies used to collect, process and disseminate information, including e-commerce, network administration, cybersecurity and software development.

For more than half a century, IT has led the way. The development agendas of many nations began to include more sophisticated technology. This was driven by cutting-edge research that brought forth innovations and advanced products and services that pushed the limits of what was thought possible, creating groundbreaking projects and services in the fields of electronics, biotechnology and aerospace. 

For most nations, advanced technology was on the fringe for several reasons. Countries did not have sufficient intellectual capital, and they did not have a pressing need. Instead, they built their economies through legacy industries such as manufacturing, farming and exploiting natural resources.

Today, high-tech industries create high-wage jobs and play a pivotal role in driving economic growth. In the past, high-technology was predominately used for space and other niche industries. However, today, high-technology has expanded from industry and firm-based to life-cycle and product-based, becoming the driver of healthcare, wellness, food security and transportation. These cutting-edge technologies are based on scientific discoveries and engineering principles, such as artificial intelligence, blockchain, biotech and advanced materials. They are being developed to solve the world’s biggest problems, from cancer treatment to food production, climate change, waste recycling and clean energy. 

Further exploration of this topic reveals that a policy framework that encourages and supports technology investment at a government level can have a profound impact. The research shows that a 1% increase in R&D expenditures will increase high-technology exports by 6.5%, information-communication technology exports by 0.6% and economic growth by 0.43%.

The Three Pillars of the Scientific Ecosystem 

Any country seeking to remain competitive and drive economic growth must invest in IT and high-tech. Successful plans to attract foreign direct investment require a clear distinction between these two fields. These plans should also facilitate local economic development through educational initiatives and training. Considering the advancement of science and technology within an ecosystem built on three key pillars — Education, Research and Commercialization — is particularly relevant. Scientific knowledge is preserved through education, while its expansion and development are enabled by research. By contrast, commercialization facilitates the application and utilization of this knowledge. It is these three elements that drive the development of scientific ecosystems. 

R&D Builds Competitive Nations

The development of breakthrough technologies is crucial for driving economic growth, creating new industries, and addressing societal challenges. Therefore, examining how other states have fared is necessary, especially in smaller ones.

South Korea’s standing as one of the most innovative nations in the world is a remarkable accomplishment, considering its history as an agrarian-based Japanese colony and a battleground in the first half of the 20th century. South Korea’s chaebols, including LG and Samsung, focused on practical knowledge in R&D, leading to the creation of new heavy industries such as petrochemicals, car manufacturing, shipbuilding, and consumer electronics. By the 1990s, the government shifted its focus to high-tech industries such as semiconductor design, which resulted in the development of top national research institutions like the Korea Advanced Institute of Science and Technology. Bloomberg’s 2020 Innovation Index places South Korea second only to Germany, having previously held the top spot on the list of 60 nations for five consecutive years.

In another example, Israel’s educational and scientific infrastructure have combined with its most pressing problems to create a synthesis that has spurred development. For instance, Israel’s military infrastructure and agriculture are two examples that are crucial to the nation’s survival. Faced with multiple adversaries and difficulty obtaining weaponry, the Israeli government invested in its own weapons manufacturing. This led to the establishment of Israel Aircraft Industries and the Talpiot program, an elite Israeli Defense Forces training program. Both initiatives have proven to be wise investments. 

Today, Israel’s economy is essentially knowledge-based. Over half of the country’s exports, 54%, are high-tech, making them strategic. This is part of Israel’s business plan as a country.

In 1990, Singapore developed a five-year plan that prioritized economically driven research and development in nine sectors, including IT, manufacturing technology and biotechnology. During the 2003 severe acute respiratory syndrome (SARS) outbreak, Singapore shifted its focus to biomedical sciences, leading to the development of scientific verticals like bioengineering and nanotechnology. These initiatives developed genetic engineering techniques for stem-cell cancer therapy. Today, Singapore is recognized as a global hub for pharmaceutical and medical technology manufacturing. With a highly educated population growing up with the digital revolution, Singapore is focused on developing a knowledge-based and innovation-driven economy.

As demonstrated by these three cases, R&D plays a critical role in driving economic growth and diversification. Beyond these examples, the two global powers are also aligned. In its competition with the United States, China has emerged as a leader with the world’s top 10 research institutions across multiple fields, including synthetic biology, electric batteries and 5G technology. Meanwhile, the U.S. maintains its edge in other areas such as computing, satellites and vaccine research.

Unlocking Armenia’s Potential

So what about Armenia? Patience and persistence are crucial factors for achieving long-term success in innovation and technology. Countries like Israel in the 1960s, South Korea in the 1980s and Singapore in the 1990s all took a similar approach of planning advancements on a 20-30 year timeline –– essentially generational change. This long-term thinking allowed them to create strategic plans for investment in research and development, ultimately leading to their success.

It took approximately 20 years for Armenia to become a beacon of progress and development in the region after the devastation and chaos of World War II. The Soviet ecosystem stabilized in the 1960s, paving the way for the Soviet Republic of Armenia to flourish.

Today, it is clear that Armenia has significant potential to promote growth in academia and the defense industry, and attract foreign investments by modernizing laws and regulations. Effective policies can foster a thriving ecosystem for local tech start-ups and entrepreneurs, encouraging them to remain in the country instead of establishing themselves abroad.

Armenia’s start-up ecosystem has made significant progress through recent funding schemes and grant programs. Moving forward, there is an opportunity to develop a more cohesive national strategy to further unify and strengthen the ecosystem.

Governments should act as enablers, and Armenia has done that to some extent. Developing a culture of constructive questioning of decisions and processes is essential. There is, however, a lack of understanding of the role of the government and where the private sector should lead and the government should follow. We tend to spend time and resources on whatever comes our way. But now is the time for Armenia to use its growing high-tech sector to alleviate poverty, improve access to education and healthcare and promote sustainable development.

Education as Armenia’s Number One Priority: Challenges and Opportunities

Education should be a top priority on any agenda. In the modern world, society’s intellectual capital is increasingly vital for driving economic growth. For Armenia, which lacks significant natural resources or competitive industries, education becomes a priority national initiative. An innovative and intellectually superior nation can address all needs and issues, including food and national security, with the power of its intellect. Following this logic, strength of the Armed Forces is a by-product of an innovative society, not the other way around. Therefore, the highest national objective should be prioritizing education and building an innovative nation.

Armenia’s public expenditure on education is poor compared to other similar countries. This is demonstrated by the percentage of government spending relative to GDP, as well as the expenditures per student or capita across all education levels. Only 9.3% of the government’s allocated funds are invested in higher education, whereas countries that are members of the OECD and have high levels of development invest over 18% of their funds in higher education. 

Public financing of education in Armenia accounts for 2.14% of GDP, which is significantly lower than the average spending of countries with upper-middle-income economies (UMIC), which stands at 3.9%.

Allocating more funding and providing incentives for private investment by the government is the first step toward a solution. Investing in training programs for teachers and researchers, engaging the diaspora and international faculty, and improving the quality of education at all levels are vital steps toward creating a sustainable future for Armenia.

However, for any of this to become a reality, there must be an executable plan. Investing in economic activities without a proper understanding of their long-term contributions could lead to less than optimal results in most cases and disasters in cases where your neighbors or adversaries have more means at their disposal and a planned approach to growth. It is crucial to be laser-focused on what we do and who does it, rather than relying on loyalty and a tribal mentality, which were approaches of the past. In today’s world, where boundaries are increasingly invisible, it is essential to utilize the most capable talent available globally. The tribal approach to nation-building is always short-sighted and short-lived. Competing with sub-optimal human resources will not produce the necessary results to protect sovereignties and grow societies. You get what you pay for.

With strong potential in mathematics and natural sciences, Armenia has a competitive edge in establishing itself as a leader in global science, technology, and innovation, particularly with the help of AI. It is important to emphasize that Armenia has potential. However, activating that potential isn’t easy, it requires a laser-focus. In sports, many players have potential, but lack the necessary commitment or training environment to reach their full potential. History forgets them very quickly. We have the potential to be more than footnotes in history. AI can align well with our potential to be a tool that propels the nation forward.

Developing the next generation of AI and STEM researchers, promoting scientific communities and increasing R&D spending is a challenge that can be tackled. To sustain sections of the scientific community that produce tangible results, it is crucial to establish well-structured mechanisms for raising the next generation of researchers. One way to achieve this is by building and financing advanced research groups in Armenia under the supervision of competent foreign principal investigators (PIs). This effort must be complemented by educational opportunities to create a stable and robust pipeline of highly qualified scientists.

FAST’s Innovative Framework for Broader Impact

FAST’s ADVANCE Research Grants program encourages scientific research in Armenia by bringing international experts as PIs to work with local scientists. By leveraging global networks, since 2020, the program offers STEM PIs funding and a framework for collaborating with local researchers on cutting-edge research topics. By attracting local partners, initiating new research teams, building clusters around them, and building modern and up-to-date laboratories, it also contributes to forming a national support system for research. In response, several of these projects received co-funding and support from Yerevan State University, ushering in an era of cross-national collaboration and innovation. These efforts can become global success models and serve as incentives for repatriation.

Thanks to the generous support of donors, the program has flourished, expanding to include ten exciting research projects as of 2023. These projects are already underway and cover a wide range of fields, including Life Sciences, Artificial Intelligence and Materials Science. The program has attracted top-tier PIs from leading universities worldwide, such as Ecole Polytechnique and the University of California San Diego, ensuring diverse perspectives and expertise. As the program continues gaining momentum, the number of local beneficiaries is rapidly increasing, with 50 expected by mid-spring.

FAST’s strategic partnership with the Ministry of Education, Science, Culture and Sport of Armenia has yielded exciting results. In 2022, the Ministry launched state-funded programs with research funding mechanisms similar to those developed by FAST, marking a significant milestone in government collaboration. This successful partnership exemplifies how the state can apply FAST’s innovative framework to achieve a broader impact.

Creating a Favorable Innovation Environment

To attract foreign investors and entrepreneurs, Armenia needs to create a favorable business environment with tax incentives, advantageous regulations, and grants and subsidies for start-ups and technology companies. The government should invest in reforming the judicial system to ensure transparency and reliability for international investors. Additionally, it should maintain tax incentives that encourage beneficiaries to invest in human capital development.

Armenia has a promising future in science-intensive startups thanks to its talented scientists and research institutions. However, to sustain this growth, the government must invest more funds into fundamental and applied scientific research and address the barriers hindering science commercialization and technology transfer. Currently, Armenia’s R&D expenditure is only 0.21% of GDP, significantly lower than the OECD’s average of 2.67% of GDP. Although this percentage is low, it is also important to note that not all private sector expenditures are accurately accounted for in this indicator.

A Call for Self-Reflection and Strategic Planning

The cost we are now paying is a result of years of neglect and a haphazard approach. While it may be tempting to attribute blame to the government or previous administrations, it is imperative to acknowledge that ultimate responsibility lies with the people. The people make critical decisions, including the selection of their leaders, and these leaders often reflect the values and priorities of the society they serve. Therefore, we must take a self-reflective approach and critically examine ourselves and our actions before we pass judgment on others. We need to take responsibility for the choices we make and the impact they have on society. Only then can we truly take responsibility for what needs to be done.

We don’t seem to have had a plan –– not before the genocide, not after, not when we had an opportunity to have a state, and not when the Soviet Union was coming to an end. And we haven’t had one since. This isn’t about making reforms to please one constituency or another, or checking off a box for a politician. It is about determining the kind of state we want to have. This will guide the types of reforms we need and help us to stay focused. After all, no state, person, professional, or athlete can excel without focus and dedication to their work. 

A state is comprised of people, much like a sports team. If these “players” do not individually put in the necessary effort, the state is unlikely to succeed. It is unrealistic to expect a collective, such as a state, to achieve superior results without each individual pulling their weight. Therefore it is unreasonable to expect mediocre results from an individual but not a collective. 

Empty speeches, promises, and trivial actions will not lead to meaningful progress. In fact, they could even lead to a worsening situation, given the current geopolitical reality in which we find ourselves. 

Having a mindset unafraid of testing and failing multiple times is essential for continuous learning and growth from those experiences. However, this approach needs careful planning and should not solely rely on lofty promises or vague objectives for the distant future. Instead, the goals should be well thought-out and based on a thorough analysis of the current situation and future predictions. Meaningful progress can be achieved by guiding innovation efforts through a deliberate and strategic approach over the next 20-30 years. It’s vital not to become discouraged and to persist in pursuing innovation with a well-structured plan.

The Future

With this approach, we can expect a vastly different Armenia in the 2040s and 2050s. We could have a nation with a competitive education system that produces a large number of professionals with expertise in the hard sciences and fluency in multiple natural and computational languages. We would also have 10,000 active researchers per million population advancing science verticals in AI, Biotech, Bioinformatics, Material Scientists, Robotics, Cybersecurity, and other fields that humanity will create between now and then. Additionally, we would have venture builders, incubators and accelerators that regularly produce unicorns (we will probably need to come up with another symbol as inflation makes the $1B club less exciting) with major local applications and a deeply penetrated global marketplace.

We would have narrow and wide bridges with the rest of the world, with a heavily engaged diaspora as an equal partner, providing insight, investments and vice versa, where the country invests in its people abroad. Through innovation, Armenia would create dependencies for other societies, making its technology life savers and growth generators worldwide and linking other communities with ours. Armenia has become a state where people from all corners of the globe want to visit for academic, research and employment opportunities, besides non-Armenian retirees and diaspora Armenians. We have industries that others want to model, and the country can be a hub and not just a final destination for a few. 

Without dreams and imagination, we cannot reach our goals. The first step to achieving them is having a vision, and the second is executing it. We need a collective vision and a unified execution.

Magazine Issue N30

Over the last few years, as Armenia has faced tremendous security challenges, a full-scale war and unprecedented uncertainty, the country’s tech ecosystem has at times appeared to be the only corner of the country from which there has been a stream of positive news. Dozens of Armenian start-ups have successfully launched new and innovative products, while attracting substantial investments, including from prominent venture capital funds such as Sequoia, Sierra Ventures and AI Fund. 

Motivated by the lack of global awareness and understanding surrounding Armenia’s tech sector, EVN Report published “374,” the first print tech magazine in Armenia. The inaugural issue sheds light on the fascinating work being carried out by Armenia’s most innovative companies across various sectors such as AI, education, blockchain, and biotech. Additionally, we explore the necessary steps to ensure that the recent success witnessed in the industry translates into sustainable and inclusive growth for both the sector and the entire country. 

The magazine issue for June features some of the pieces found in “374”. We are delighted to feature prominent voices like Nina Achadjian, Armen Orujyan, Raffi Kassarjian, Ashot Arzumanyan, and Hovsep Patvakanyan, who provide valuable insights on these topics.

Magazine Issue N29