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Nestled in the Caucasus mountain region bordering Turkey and Georgia, Armenia is emerging as a prime outsourcing location that does not sacrifice quality of work for cost savings. Foreign investment is concentrated in the technology sector, which is growing at an average annual rate of 20%.
Talent Pool & Education
An influx of mostly young, skilled migrants from Russia and the relocation of software companies from Ukraine has led to a reported 50% surge in the number of officially registered workers in the tech sector. Once the Soviet Union’s scientific hub and center of its research activities, Armenia has a highly skilled engineering workforce, supported by specialized university programs. Free science and tech education is provided to thousands of students aged 10-18 through robotics and engineering club laboratories; a recent review found 75% of employed young people who’ve been through the scheme end up in the IT sector and 12% have founded startups.
Armenian is the official language. After Russian, English is the second-most common foreign language – and the fastest growing.
Slower growth in Russia, Armenia's main trading partner, poses risks. However, the most recent World Bank report notes that prudent macroeconomic policies, supported by an active inflation-targeting regime and pro-competition reforms, have buffered the socio-economic impact of the pandemic. Armenia’s tech sector continues to benefit from the Government’s commitment to creating a more favorable atmosphere for foreign investment and supporting local businesses, with a recently introduced policy providing a 50% income tax refund for IT companies that hire at least 50 permanent or freelance employees.
The COVID-19 pandemic, conflict with Azerbaijan over disputed territory in the Nagorno-Karabakh region and an attempted coup have marked a volatile period in Armenia. However, snap elections held in June 2021 resulted in a decisive victory for the ruling party and reconfirmed Nikol Pashinyan as prime minister. Violent clashes along the border continue. However, a poll released in September shows strong backing for the government and support for constitutional reform.