Regional Post Caucasus discusses the role of small and medium-sized enterprises in the economic development of Armenia and how the EU helps boost the capacities of local SMEs.
Text : Margarit Mirzoyan
SMEs – Key Driver of Economic Growth in Armenia
A successful dried fruit production company in the historic Armenian town of Yervandashat, a mobile application called Chessify with monthly downloads of about 10,000, an active recreation centre in Stepanavan, a honey farm in Alaverdi. What do all these initiatives have in common? Like many other small and medium enterprises (SMEs) in Armenia, they have received support from the European Union to advance their businesses and create more opportunities in their communities.
EU4Business Addresses Challenges and Creates Opportunities
The EU’s EU4Business initiative aims to boost the capacities of SMEs in Armenia and other Eastern Partnership countries. With support from the European Union, the business environment in Armenia has become much more accessible and attractive for new enterprises. Local SMEs have increased access to new opportunities, which fosters integrated community development and connects them to global markets.
Generally, the EU supports SMEs in Armenia in the following three directions: Access to Finance, Business Development Services, and Business Enabling Environment.
EU-Armenia Comprehensive and Enhanced Partnership Agreement Unveils New Perspectives
The European Union supports the development of SMEs in various areas – agriculture, tourism, information technology and others.
As part of large-scale projects implemented with EU support, a tourist information centre was opened in Dilijan, a ski centre – in Ashotsk, and tourist trails – in Syunik. With the support from the EU, dozens of SMEs in remote communities created job opportunities, which has helped to curb emigration and revitalise the social, economic and cultural life in the regions.
In 2019, the EU disbursed €18.3 million to support a total of nearly 8,330 SMEs in Armenia, a third of which are owned by women. This has resulted in over 4,588 new jobs and €102.9 million in extra income generated by the EU-supported SMEs in Armenia.
Currently a project is underway worth €15 million – the EU TUMO Convergence Center for Engineering and Applied Science. The EU TUMO Convergence Center for Engineering and Applied Science brings higher education and industry together, linking students, researchers, and professionals to each other and with their global peers while fostering innovation and entrepreneurship. As a result of the EU-funded project, a state-of-the art building will be constructed where students will be able to gain hands-on skills to meet the rapidly changing labour market requirements.
Another major project, EU4Business: Innovative Tourism and Technology Development for Armenia, co-funded by the European Union, contributes to ensuring balanced growth in tourism and innovative industries. The project is first and foremost designed to support those with outstanding innovative ideas. As part of the project, the EU-supported Catalyst Foundation in Yerevan has created education, job and collaboration opportunities for more than 1000 beneficiaries in the field of science and technology. The Foundation contributes to the development of hi-tech and entrepreneurship in Armenia.
In 2020, the world was shaken by the global pandemic of COVID-19 and many projects went down the drain. To alleviate the pressures created by the pandemic, the European Union provided rapid response support to different sectors. €300,000 was aimed at the development of the tourism sector supporting 30 enterprises, €400,000 was set aside for technology development supporting 20 enterprises, €70,000 was allocated to the agriculture sector as part of the rapid COVID response (42 SMEs), and €200,000 was provided to microbusinesses (44 companies).
The European Union is committed to providing continued support to Armenia for the development of entrepreneurship, the business environment and investment climate, which, in turn, will contribute to balanced social and economic development. The Comprehensive and Enhanced Partnership Agreement (CEPA), which entered into force in March this year, provides for a wider range of opportunities.
