Efforts to promote a sector are much more likely to succeed if the sector has a fundamental comparative advantage and potential for growth. Right at the start of the project USAID/EDMC conducted a rigorous value chain analysis to reveal the high growth potential sectors of the Armenian economy. Quantitative (Domestic Research Cost analysis) and qualitative (SWOT analysis and Product Network Analysis) methods were combined to assess value chains in all sectors in terms of comparative advantage characteristics.

The general approach used in the study was to start with a broad number of potential candidates, chosen because they passed a threshold of exports of 500,000 USD over the past five years. This pool was then narrowed down through a pre-selection process to 20 subsectors comprised of 40 individual value chains. During the second phase of the study a quantitative ranking of the sectors was applied in order to identify those value chains within the Armenian economy that have the greatest potential for increasing incomes and employment through expanding exports. The results of the quantitative analysis were combined with those of the qualitative, using a system of weighted points.

The resulting ranking was then used in order to identify the leading candidates for project assistance, which are:

High Technologies

This sector includes a variety of value chains, initially subdivided into five general categories: 1) mobile and wireless applications, 2) computer graphics and visualization, 3) embedded systems and electronic design automation, 4) web and Internet applications, 5) engineering design and services.  Sector activities focus on:

  • Developing cross-sector synergies and encouraging the development of innovative ideas,
  • Supporting the development of skilled specialists,
  • Promoting Armenian high-tech products in international markets.
Pharmaceuticals / Biotechnologies

Project activities target the sector of generic pharmaceuticalss and are carried out in order to:

  • Foster compliance with good manufacturing practices,
  • Promote international standards awareness through training,
  • Support the export of Armenian pharmaceuticals products.
Food Processing (fruits, vegetables, and herbs)

This sector includes processed fruits and vegetables, juices, and herbal products. It also includes, as part of the value chain, production and marketing of fresh fruits and vegetables. Sector activities focus on:

  • Improvement of quality and food safety,
  • Introduction of new technologies,
  • Promotion of prerequisites to standards,
  • Expansion of market access.
Hospitality

USAID/EDMC carries out targeted interventions in order to:

  • Promote combined rural and cultural tourism initiatives,
  • Support the regional tourism concept to include regional packages,
  • Develop the concept of quality service provision throughout the sector.

In addition, EDMC helps build service delivery capacity in the Business Development Services sphere with a number of activities to enhance their performance and with a particular focus on enabling greater specialization and more market-relevant impact in service provision.