The adoption of digital technology by firms in Armenia has been evaluated in a report based on the Armenia ICT Survey conducted in 2023. The survey, administered by the Statistical Committee of the Republic of Armenia (ARMSTAT), included over 1,900 firms and assessed their digital maturity against European Union standards. It also identified barriers and opportunities for further digitalization within the private sector.
Armenia's economic growth is marked by notable disparities in labor productivity both across and within sectors. In some industries, top-performing firms are outpacing lower-performing ones by more than 35 times. Increasing digitalization among Armenian firms could potentially boost productivity, close technological gaps with wealthier nations, cut costs, and strengthen resilience to economic shocks.
Key findings from the report reveal that more than 60% of Armenian companies have not adopted modern technologies and demonstrate limited digital maturity compared to European counterparts. Only 7% of businesses have incorporated advanced digital technologies into essential functions like production and service delivery.
A significant barrier is internet speed; over 75% of Armenian firms lack access to high-speed internet, crucial for effective use of digital solutions. Larger enterprises and sectors such as ICT and hospitality show higher rates of digital adoption compared to smaller businesses.
The report identifies challenges related to low labor productivity when compared to peer countries, emphasizing a large performance gap between leading and lagging firms within sectors. Digitalization can enhance productivity by streamlining processes such as logistics, ordering, oversight, and transportation.
Firms face obstacles including uncertainty about returns on investment in technology, a shortage of skilled workers, inadequate information on suitable technologies for their needs, management quality issues, and integration with global markets. Interviews suggest a skills gap that prevents some companies from implementing new technologies effectively. Concerns about employee retention post-training further delay investments in digital tools.
To address these challenges, recommendations include expanding digital connectivity through increased broadband competition; enhancing business advisory services; addressing skills gaps via educational initiatives; strengthening management practices through capacity-building programs; increasing financial support with targeted incentives; raising awareness about available technologies; and improving public program implementation capabilities.
By tackling these issues with targeted interventions focused on connectivity improvement, skill development, better management practices, financial support enhancement, awareness campaigns, and public program support—Armenia could bridge its technology gap while fostering innovation and competitiveness.