Regional Post Caucasus spoke to Bagrat Yengibaryan, the Founding Director of Enterprise Incubator Foundation (EIF), about the inception of the organization that celebrated its 20th anniversary last year, EIF’s path, and the technological power that drives Armenia forward.
Interview: Margarit Mirzoyan
Photos: EIF
Mr. Yengibaryan, what has been the foundation’s mission for the past 20 years?
After Armenia gained independence, it became imperative to institutionalize its technological potential through an environment that would foster talent and attract investment. We knew that as experts in the field, we had to undertake such an initiative. Eventually, we came forward with an idea of how exactly it could be done. Both the technological community and the government of Armenia recognized the critical need to develop the IT industry.
Therefore, we formulated a model to support that initiative and accelerate Armenia toward becoming a top technological hub. The first step in this direction was the establishment of the Enterprise Incubator Foundation, which would initiate and coordinate the operations within this process. EIF was set to start with informational technologies and, if the experiment succeeds, cover the High-Tech industry as well.
As one of Armenia’s technological pioneers, how has the EIF’s mission, activities, and objectives changed over the last two decades?
Our primary goal has constantly been advancing the tech industry through discovering and testing various models for future development and expansion. The models we use aim to position Armenia as an independent, ambitious, and innovative country. We want Armenia to be and to be seen as a place with the full potential to become the next global tech hub. This objective was experimental at the beginning, and at first, our aspirations were quite humble. The goal was to create high-paying jobs, secure outsourced projects from international companies, facilitate multinationals’ entry into the country, and align educational standards with market demands.
The most crucial aspect was motivating and encouraging people to pursue careers in technology and showing them the opportunities. Based on our enormous, colossal success in the tech industry, our primary efforts are now focused on making Armenia a High-Tech destination and developing the Engineering, Material Engineering, Science, Cybersecurity, and Artificial Intelligence (AI) sectors in Armenia. From the very beginning until nowadays, we put a lot of effort into drawing the attention of the technological giants and bringing them to Armenia. It wasn’t easy because we did not have significant success stories then. What we did have was the solid technological and engineering legacy of Soviet Armenia, the potential, and the desire to work and cooperate with international partners. Multinationals trusted our potential and the ecosystem we built.
The strategy, as you see, has paid off for both them and us. It was vital to have several successful cases to initiate the snowball effect. We also negotiated with the government to get financial support or a grant of tax privilege, which is one factor that attracts foreign companies to consider investing in Armenia. We opened offices in Canada, the United States, and Austria in the first 5-6 years to gain access to larger markets. Based on our success, we expanded our activities and began assisting local companies and startups in entering global markets and regional development activities. That was when we realized that developing our products and solutions and making them available to the rest of the world would be the key to our success. During those years, we established our first grant projects, venture foundations, and technological centers.
Both the technological community and the government of Armenia recognized the critical need to develop the IT industry.
Therefore, we formulated a model to support that initiative and accelerate Armenia toward becoming a top technological hub.
What were the key moments in the history of the EIF?
There have been three such points in EIF’s history so far. The first pivotal moment was in 2002 when we secured financing from the World Bank and the Enterprise Incubator Foundation was born. Next, after the initial success, we turned toward creating a favorable environment and ecosystem for tech development in the 2010s. That second key moment also included entry to the regions of Armenia, as we established technological centers in Gyumri and Vanadzor. The third key moment began in 2017-2018 when we expanded into engineering, science, artificial intelligence, and cybersecurity. Each of those moments is special for us because it took a massive effort from our team. The establishment of the first multinational companies in Armenia, which in turn, resulted in the establishment of innovation centers of IBM, Microsoft, PMI Science, and others, was particularly memorable.
In terms of regional development, establishing technological centers in Gyumri, Vanadzor, and Stepanakert was crucial, and these centers play vital for developing the Tech ecosystem in the regions. It was also quite motivating to see local companies which are the beneficiaries of our grant projects secure their first venture investments and grow into global players. Right now, the most inspiring project for us is the foundation of Engineering City. It will create an ecosystem that enables Engineering and High-Tech companies to develop and implement innovative ideas for local and international markets using modern infrastructure and tools. It will become the catalyst for developing the second High-Tech sector in Armenia after IT. The technological centers in Gyumri and Vanadzor play a crucial role in the regional development of Armenia.
Why is regional development so important for the foundation?
The tech industry is based on human potential, and we must involve all the intelligent and bright people who can help us reach our goals. We are eager to use the full potential of the talent in every single Armenian town and village. There are plenty of fantastic specialists living in the regions of Armenia, and helping them get their dream jobs without moving to Yerevan solves several problems simultaneously. These people had the opportunity to stay with their families, earn high salaries, and inspire others in their communities to consider getting technological education. Our various educational programs in the regions are helping thousands of people to become tech professionals every year. This model has proven to be highly successful not only in Gyumri and Vanadzor but also for the whole of Armenia, and it is now being used in other countries as well (Moldova, Montenegro).
Creating Tech centers in areas far less developed and populated than the capital is, of course, no easy task for any country, and we are pleased to see how our experience can help others. Next, we consider opening a technological center in Armenia’s Syunik region, which could specialize in heavy industry solutions, as that industry is developed there. We decided to focus on these three regions – Shirak, Lori, and Syunik – because there are higher education institutions. I would also like to add that in the modern world, it doesn’t matter anymore where you work, you can connect with international partners from anywhere. The COVID-19 pandemic has proven that.
We are eager to use the full potential of the talent in every single Armenian town and village. There are plenty of fantastic specialists living in the regions of Armenia, and helping them get their dream jobs without moving to Yerevan solves several problems simultaneously.
Our current issue is about investing in Armenia. In terms of the tech sector, how do you assess the existing potential of the country for investments?
Our model attracted investment in three ways: we educated good specialists, created an environment that is favorable for investment, and when our work produced success stories, Armenia became even more attractive for investments. Our companies and specialists are of great interest to large multinational companies in terms of investment. So today, there is no lack of financing opportunities, but there is a problem with directing the money and having an environment to realize these opportunities. The technology sector in Armenia is quite diverse and can satisfy the interests of any type of company. Another area of investment is education.
Multinational and local companies realize that if they want to get the benefits of the technological ecosystem continuously, they need a regular inflow of new specialists, and therefore, they have to plant new seeds. Those companies understand that planning just a few years ahead will not give any result, so they think long-term, which requires quality infrastructure and a solid education level. Armenia is also attractive to potential investors as a pilot ecosystem. Our country appears suitable for companies to launch and test their innovative products. That is why EIF is currently creating Science Incubation projects, which are also aimed at contributing to scientific initiatives and projects.
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Let’s try to predict the future of the tech industry in Armenia. Is it bright?
Armenia’s technological future lies in the development of its own products in cutting-edge high-tech areas such as AI, cybersecurity, biotechnologies, material engineering, electronics, and space. Armenia can, indeed, grow into a top integrative hub for developing and testing new innovative solutions. At this moment, the sector’s overall progress makes Armenia’s technological future appear close and bright on the horizon. I am confident that we can make Armenia the next global tech hub.
Enterprise Incubator Foundation (EIF) is one of the region’s most prominent tech business incubators and development agencies, operating in Yerevan, Armenia. For 20 years, EIF has been called to support the development of IT and High-Tech sectors in Armenia by creating a productive environment for innovation, science, technological advancement, and company growth. EIF activities are directed toward business development, investment attraction, marketing and promotion, management, start-up creation, assistance to companies in improving professional and business skills, and creating learning partnerships within the industry and universities. These goals are achieved through numerous initiatives, each of which
is a complex and inclusive platform where private and public sectors, academia, research institutions, and multinational corporations cooperate and leverage each other’s knowledge for shared interests, targets, and goals.
Bagrat Yengibaryan has been the Founding Director of the Enterprise Incubator Foundation since 2002. 1992 Bachelor YSU Mathematics In 1994, he received an MBA from the American University of Armenia, Department of Business Administration, and a Ph.D. in Mathematics from the Armenian National Academy of Sciences in 1997. Previously, from 1994 to 1995, he was the Third Secretary of the Armenian National Commission for UNESCO, Ministry of Foreign Affairs of Armenia. From 1995 to 1998, he worked as Chief Program Officer at the Foreign Aid Coordination Center (FACC) in the RA Ministry of Economy of Armenia. From 1998 to 2002, Mr. Yengibaryan worked as the Executive Director of the Foreign Financing Projects Management Center (FFPMC) of the Armenian Ministry of Finance and Economics.
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