Development of Science and Technology:
The Role of the Armenian Diaspora

Despite high economic growth figures recorded in the recent years, Armenia is a country with 50% of the population below the poverty line and unemployment rate exceeding 30% (EIU, 2004). Gross Domestic Product (GDP) per capita still remains below the 1990 level and almost one third of the population has emigrated since independence in 1991 (National Statistical Service of Republic of Armenia, 2004).

Armenia has always prided itself on its highly educated human capital and R&D capacities and achievements during the Soviet period. The education and scientific systems in Armenia were affected equally in a negative way as all other sectors during 1990s, however the losses are not irreversible. Armenia currently possesses most types of science and technology institutions characteristic to modern economies, including higher educational institutions, state research institutes and innovative science-oriented firms (National Academies, 2004). While the Government realizes the strategic importance of the education and sciences for the development of Armenia, it did very little after the break up of the Soviet Union to preserve its human capital, and prevent the scientific and technological capabilities from deterioration.

In addition to human capital, the large and economically affluent Armenian Diaspora is largely seen as one of the most important competitive advantages of Armenia, which if utilized efficiently, is predicted to have a significant positive impact on the economic development of Armenia. There are a number of examples where the Governments of the countries, especially in the cases of Taiwan and Israel, were able to utilize the resources of Diaspora to assist in the development of the country via FDI, joint ventures, export expansions, and technology transfers.

The important role of technologies in economic development has been demonstrated by a number of studies and it is generally accepted that success in technical innovation is a crucial element in competitiveness (Freeman, 2004).

For the case of developed and industrialized countries, National Innovation Systems (NSI) and its linkages are considered major factors for technological advancement. Although the NSI concept was initially applied only to developed countries, it is also considered and currently applied to developing countries (Adeoti, 2002).

The current situation in the Armenian S&T sector is inherited from the former Soviet Union and can be best described with Sabato’s (1975) “Triangle model” with a “Privileged State”. The model proposed in this paper assumes a gradual shift from the “Dominant State” model to a new, more market-oriented system that encourages “trilateral initiatives for knowledge based economic development” and strategic alliances among Government institutions, universities, and private businesses (i.e. the Triple Helix model) (Etzkowitz, 2003). The definition of the NSI is further broadened by adding an external institution, namely the Armenian Diaspora, to the internal elements of the NSI. Initially, the State should have the leading role in mobilizing and directing the resources of universities, scientific institutions and the Diaspora in the NSI, and coordinating activities between different institutions.

Looking back at the economic development “miracles” of Israel, Ireland, Korea, and Taiwan, will make many developing countries that have been struggling with poverty and economic stagnation for decades very envious, but at the same time, these examples are also inspiring. Without assuming that the development models of any of the above countries can be a “quick fix” for any developing country, it is possible that each country can have its own unique development “miracle” given the willingness and strong commitment of the national leaders.

The intent of this analysis is to gain the attention of the Armenian Government, particularly the Armenian Development Agency, and motivate it to develop policies and procedures that are directed at the development of science and technology in Armenia, maximizing Diaspora potential utilization, with the ultimate goal of economic development and prosperity of Armenia. The Government of Armenia should take the leadership role to enhance the development of the NSI of Armenia, by promoting the development of each of the elements of the NSI, as well as close collaboration within the system.

Policy recommendations to the Armenian Government in order to promote significant positive economic development are in the following main directions:

• S&T development policy
• Enhancing relations with the Armenian Diaspora and mobilizing the Diaspora resources
• Organization and implementation.

• S&T development policy
  
  • Define specific S&T fields in emerging technology industries as priority industrial development directions, based on the competitive advantages of Armenia
  • Reduce the number of existing scientific research institutions within the National Academy of Sciences’ (NAS-RA) system and under the Ministries, eliminating those that are most unproductive and are not specialized in the fields defined as priority development directions
  • Establish special programs for training of the scientists in the priority development fields
  • Reform of the higher education system of Armenia to assure adequate supply of high quality specialists for the emerging science sectors
  • Establish special investment promotion and incentive mechanisms to promote scientific research projects and businesses in high-tech industries
  • Further develop and broaden bilateral and multilateral relations with US and European countries, establishing links with scientific organizations and universities.
• Mobilization of Diaspora resources
  • Involve businessmen and scientists from the Diaspora in identifying the priority S&T fields and niche development directions for Armenia
  • Form a special advisory committee to the Government with the participation NAS-RA scientist and prominent Diaspora business leaders and scientists to develop proposals on S&T development policy implementation mechanisms and addressing existing problems in the S&T sector
  • Provide assistance in creation of professional associations between scientist in Armenia and the Diaspora
  • Create joint Government-Diaspora venture capitals and technological incubators to enhance the NSI of Armenia.
• Organization and implementation
  • Create of a new high level committee under the auspices of the President or the Prime Minister, which will be responsible for coordinating the activities between different elements of Armenia’s NSI, as well as the formation of a national S&T development strategy.