IT sector: Armenia vs. Israel

The IT sphere is rapidly developing in Armenia in the past several years and the products developed by Armenian specialists gain international recognition.

It is no secret that Israel, which covers a smaller territory (around 20 000 square kilometers, population at 8 million) than Armenia, is one of world leaders in IT industry with over 3800 startups operating in the country. Because of its high density of IT companies, Israel is often called Silicon Wadi (similar to Silicon Valley).

What similarities and differences are there between the IT industries of Armenia and Israel? We tried to get the answer to this question with IT entrepreneur who moved to Armenia from Israel two years ago, co-founder of Sphere mobile app Davit Khachatryan.

Similarities

-Both Armenia and Israel realize that future belongs to technologies in all sectors. The Armenian government has declared the IT sector as a priority for the development of the Armenian economy. The Israeli state also highly supports the IT sector.

-Israel understands that it should move forward adhering to the Western mindset. This conviction stems from their past when Jews brought their practice from various corners of the world and established their state. In the past years, many Diaspora Armenians have also returned to Armenia bringing their practice. That practice itself has positive impact on Armenia. The more Armenians return, the more development opportunities will be created. Development is conditioned by external experience rather than internal processes.

Differences

-The venture capital culture formed in Israel back in 1980s. Presently there are around 70 active venture funds out of which 14 are Israeli offices of international venture funds. As of today, there is only one venture fund in Armenia.

- Entrepreneurship in Israel is much less risk-averse than in Armenia. It is accounted by the fact that the Israelis develop a risk assessment tool at an early age and stand ready to face challenges. People in Armenia should step out of their comfort zone. Many in Armenia call themselves entrepreneurs and once they fail next day, they get disappointed and say we “bombed.” One of primary reasons for it is the lack of incubators, developers of “startup thinking.”

-It is common for IT specialists in Armenia to work for companies operating abroad in their own country. And in Israel, IT specialist does freelance work from home for foreign firms only when there is a need to combine work with study.  Also, IT companies in Israel are delighted to employ newly graduated specialists.

Narine Daneghyan