Armenia needs to shift from "subsidizing sustainability" to "investing in innovation," says Director of Management Consulting at Ameria

YEREVAN, October 14. /ARKA/. To foster economic growth in Armenia, a transition from "subsidizing sustainability" to "investing in innovation" is essential, according to Tigran Jrbashyan, Director of Management Consulting at Ameria and Head of the National Team for the Global Entrepreneurship Report.

"It is evident that in public policy, instead of concentrating on the quantity of programs or their numerical indicators, more emphasis should be placed on their interactions," Jrbashyan stated on Facebook, in response to the awarding of the 2025 Nobel Prize in Economics to Philip Aghion, Peter Howitt, and Joel Mochrie for evolving Joseph Schumpeter's concept of "creative destruction" into a contemporary theory of sustainable growth.

In the context of Armenia, Jrbashyan highlighted five critical areas that require transformation in the country:

1. Realigning subsidy programs towards innovative outcomes

The government subsidizes economic modernization but only considers the novelty (unused) of equipment as a criterion for modernization. Consequently, our entrepreneurs frequently acquire outdated technologies instead of the latest advancements. Stricter conditions are necessary for subsidized entities.

2. Integration of science, technology, and industrial policy

At present, public policy in interconnected sectors is formulated in isolation and fails to complement one another. For instance, several months ago, the Ministry of Economy unveiled a Strategic Plan for Enhancing the Competitiveness of SMEs, while recently the Committee on Higher Education and Science presented a Strategic Plan for the Development of the Science Sector of the Republic of Armenia for 2026–2030 for public discussion. It is surprising that the first strategic plan is not referenced in the second. Meanwhile, collaborative research projects among universities, startups, and businesses should be promoted; furthermore, universities should serve as genuine bridges for the transition from science to business.

3. Revise IT tax incentives to prioritize authentic innovation

Currently, IT tax incentives partially encompass subsidies for companies that offer outsourcing services, which inadvertently bolster the competitiveness of IT products from other nations. However, it is essential to refine our strategy, favoring organizations that focus on developing their own products and technologies.

4. Cultivate human capital for transformation

At present, educational reforms are inadequately aligned with market dynamics, while it is crucial for employers to take an active role in the creation and execution of programs and to establish an "innovation skills metric" to evaluate the workforce's preparedness for emerging fields.

5. Transition the approach to public policy development towards a more agile methodology

Currently, the public administration framework is sluggish in adopting innovation. Concurrently, it is vital to establish "policy sandbox" platforms where new initiatives can be trialed and expanded through innovation, thereby ensuring their effectiveness.

It is vital to establish "policy sandbox" platforms where new initiatives can be trialed and expanded through innovation, thereby ensuring their effectiveness. -0-