The IT and high-technology sector isone of the fastest growing sectors in the Armenian economy.Since 2006, the sector, excluding Internet serviceproviders, has grown with a CAGR of 22% reaching a totaloutput of US$294 million in 2013. The number of companiesoperating in the sector is 380, the number of employees8,000. About 13% of the companies operate in thehigh-technology domain, while the rest are IT companies.One of the driving factors of sector growth was itsattractiveness for foreign companies to establish branchesin Armenia. The prime competitiveness factor was theavailability of relatively cheap and competitive humanresources in Armenia. Currently, Armenia seems to be on theverge of losing this competitive advantage.Due to thegrowing number of IT companies in Armenia, demand for ITspecialists will continue to increase. According toconservative estimates, if the market and productivitycontinue to grow with an average rate of 18% and 1%respectively, the absorption potential of additional ITspecialists will grow at a rate of 17% annually and reach15,000 by 2017. The sector is currently undergoing a majortransformation: there is an increasing shift from theoutsourcing model to the model of own product developmentand entrepreneurship in the sector. This model of growthrequires a higher level of knowledge, new skills (such assales and entrepreneurship skills), and entrepreneurial knowledge.
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