See also: Armenia in the international software market

In search of Armenia 's place

The first tier consists of major software exporting nations-such developed countries as the USA , Canada , France , Germany , and Japan , as well as the Netherlands , Sweden , Finland Switzerland, etc. They are joined by the three most successful nations of the 1990s - India , Ireland and Israel . The second tier - transition software exporting nations - is the least crowded, consisting of only of two countries - Russia and China . This underscores, in particular, the great disparity that exists between the major software exporting nations and most of the others who have aspiration to join them. The fact is, the second group consists of countries that have real potential to join the first group in the coming years (before 2010). According to 2002 data, the annual revenue from IT industry exports amounted to $350 million in Russia and $400-600 million in China.

The third tier is much more populous-the so-called emerging software exporting nations, who can already claim certain capabilities in this field. Among them are Brazil , Mexico , Costa Rica , Sri Lanka , Pakistan , Romania , Bulgaria , Ukraine , Poland , the Czech Republic , and others. Presumably, another group of nations including Estonia, Latvia, Slovenia, Argentina, Chile, Thailand, and South Africa belong to this tier as well (based on 2002 data), but there is no exact information available. And lastly, the fourth tier consists of "infant-stage software exporting nations" - Cuba , Jordan , Egypt , Bangladesh , Vietnam , and Iran . A great number of countries (about 200) are left off list completely, since their IT industries are too small to be tangible.

Armenia is not mentioned in this taxonomy, though if it had been included, it would have been in the fourth tier, according to 2002 data - the infant-stage software exporting nations. According to 2003 data, the annual revenue from IT industry exports in Armenia amounted to $24 million, approaching the third tier threshold but obviously it doesn't meet the first principle, maturity. If we consider 1997 as the beginning of the reemergence of the IT industry in Armenia (according to a report by the Enterprise Incubator Foundation (EIF)), then the duration of established export cannot be more than five years. It is even harder to employ the Cluster principle, due to the lack of necessary studies. Having said that, the most reasonable conclusion is that although Armenia has certain achievements as an IT exporting nation, it still belongs to the last tier according to the taxonomy described above. The main question here is: which countries are destined to advance to the next tier? As E. Carmel has noted, many countries in the third tier will never move to the second tier, just as many countries in the fourth tier will never have the honor of overcoming the maturity threshold and joining the third tier.

There are many reasons for this. With every passing day the competition grows and establishing a place in the international market becomes increasingly difficult and expensive. Moreover, the main element in the competitiveness of countries in the third and fourth tiers - cheap labor - is not enough to guarantee future success.

As we have mentioned, as of today, Russia and China are the countries most likely to join the first tier within a few years. Countries that are relatively large in area and population, and have strong capabilities - Brazil , Mexico , the Philippines , and South Korea - are likely candidates to advance from the third to the second tier. When discussing non-European countries, the examples of two small countries - Ireland and Israel - are not typical. India is more characteristic, and the current successes of Russia and China confirm this pattern. In this context, we have to acknowledge that Armenia 's chances are not great, or rather that the existing trends don't point to Armenia 's rapid ascent.

To be continued.