Russia’s war turns Armenia into a booming tech sector

On a recent afternoon, Russian and Armenian colleagues gathered in a cafeteria at Picsart, a tech company that produces photo software, from its office in Yerevan, Armenia. 

They were sitting in comfy chairs and helping themselves to free snacks and drinks while two co-workers played at a pingpong table. 

The office resembled any tech office in San Francisco. 

For years, many Armenian migrants have gone to Russia to work low-wage jobs. But now, Russians are migrating to Armenia and helping to improve the local economy.

“Having so many new Russian colleagues on the ground has expanded the creativity, the mindset, the solutions — there’s just a more diverse opportunity at the table,” said Madlene Minassian, Picsart’s head of learning and development.

It’s estimated that at least 100,000 tech workers have left Russia since it invaded Ukraine last year for neighboring countries such as Kazakhstan and Armenia. 

After the full-scale invasion in Ukraine began last winter, data analyst Alexei Rostotskiy attended an anti-war protest in Moscow. But denouncing the war is a crime in Russia; its punishable by jail time. Police officers quickly detained and charged him with participating in an unlawful protest. 

Several weeks later, Rostotskiy managed to flee to nearby Armenia along with at least 40,000 other Russians. 

Many tech workers who fled to Armenia strongly opposed the war or feared getting drafted. And most have no intention of returning home as long as Vladimir Putin remains in power.

“If I had, like, a tiny piece of belief that something can be changed in Russia I would have stayed,” Rostotskiy said. 

Other tech workers fled Russia because the companies they worked for had difficulties paying them after Western nations implemented harsh new restrictions on Russia’s banking system. 

Rostotskiy had the opportunity to work remotely, which made leaving Russia and starting over in Armenia much easier. Many Russians in Yerevan also work remotely for Russian and foreign tech companies.

“One of the best-paying jobs in Russia is in IT, so my feeling is that most of the Russians that came to Armenia have tech jobs,” Rostotskiy said.

The exodus of so many tech workers is a blow to Russia’s economy. In Armenia, affluent Russians with remote jobs have caused a housing crisis with rents soaring. 

But their arrival has helped bolster Armenia’s tech scene, which has been growing steadily for years.

“The number of talent, the number of companies opening branches in Armenia, the number of startups is growing rapidly,” said Narek Aslikyan, the chief executive officer and co-founder of the Armenian Coding Academy in Yerevan.

Aslikyan said the number of tech workers in Armenia has more than doubled since the war started. It means that tech companies considering doing business in Armenia will be able to draw from a much larger talent pool.

For years, members of the Armenian diaspora abroad have launched tech companies in Armenia with the support of venture capital from places like California, with large Armenian communities. 

“I’m quite sure that if the Armenian diaspora in the United States weren’t located in California and Bay Area, and instead was mostly in Arizona, then maybe some of the Armenian startups wouldn’t have been created at all,” Aslikyan said.

Now, Russians coming from abroad are rapidly expanding tech’s footprint in Armenia even more. 

Aslikyan sees this moment as a key opportunity for Armenia. He believes the presence of more Russian tech workers is spurring Armenia’s tech industry to become more global as these two groups of workers — Armenian and Russian — have to find a common language: English. 

“It’s an opportunity for both Armenian companies and also for the Russian companies relocating here to insist to their employees to learn English,” Aslikyan said.

Since the war started, Russians have registered thousands of new businesses in Armenia – most of them in the tech field – and the economy has grown three times as fast as it was a year ago, according to Vahan Kerobyan, Armenia’s economy minister.

Although Russian migrants have helped drive a significant amount of the growth, Kerobyan also credits other factors like increased Russian tourism in Armenia and trade with Russia. 

“Many international companies left Russia, and Armenian goods now have less competition in Russia, so our exports to Russia skyrocketed,” Kerobyan said. 

Kerobyan also credited government programs and a general trend with economies accelerating worldwide as they recover from the COVID-19 pandemic as part of Armenia’s rapid economic growth. 

But tech remains a key part of Armenia’s economic strategy, with the war helping those efforts. Russia’s economy has grown more isolated since it invaded Ukraine, but Armenia’s is getting more competitive. 

Kerobyan said that Armenian and Russian tech companies that relocated to cities like Yerevan are competing for local talent, which is good for business.

“We will have much more competitive, locally born companies that can be more successful in the international market,” Kerobyan said.

But some Russian tech workers in Yerevan are more skeptical about the future of the tech industry in Armenia.

“It’s very possible that the Russian government will push IT companies to stop working remotely [in Armenia] or create big taxes to make it more difficult,” said a Russian tech worker in Yerevan named Andrey who didn’t give his last name due to fear of retaliation. 

Some Russian lawmakers have proposed harsh measures like seizing property from Russians who left the country to coerce them to return home and stop the brain drain. 

But those threats aren’t diminishing the optimism that Armenians feel right now about the future of tech in their country. 

And if the trend continues, more Armenians might be able to stay and work at home alongside their new Russian neighbors.