In recent years, the Government of Armenia has demonstrated a strong commitment towards promoting private sector-led growth, including with a specific focus on supporting the development of small and medium-sized enterprises (SMEs) and facilitating their digital transformation. The OECD has been actively supporting these efforts through various initiatives aimed at advancing the design and implementation of SME policies and promoting digitalisation within the business landscape.

[1] IMF (2024), World Economic Outlook, https://www.imf.org/en/Publications/WEO/weo-database/2024/April.

SMEs play a crucial role in Armenia’s economic landscape, comprising nearly 99.9% of all enterprises, collectively contributing to 69.5% of total employment, and generating up to 66.2% of the value added to the economy. Yet, despite their prevalence, a significant portion is concentrated in low value-added activities, with over half operating within the wholesale and retail trade sector.

Amidst geopolitical challenges and economic disruptions, Armenia has demonstrated remarkable resilience and growth. This introductory chapter looks at recent economic performance, with a specific focus on the growing ICT sector. It highlights the pivotal role of SMEs in the economy and provides insights on Armenia’s progress in the implementation of SME policies.

Armenia is working actively to enhance its digital infrastructure and foster a conducive environment for the digital transformation of its business sector. This chapter explores the importance of digitalisation for SMEs and describes the core elements of the framework conditions for Armenia’s digital transformation. It concludes with an overview of the main policy documents, governmental bodies, institutions, and private sector entities driving SME digital transformation.

Despite noticeable policy efforts, the overall level of digitalisation of Armenian SMEs remains low. This chapter starts by examining existing evidence on the current state of SME digitalisation. It then presents the results of a sectoral assessment of the digital maturity level of Armenian SMEs, identifying needs and obstacles faced by businesses in their digitalisation journey within and across different industries.

Building on the analysis presented in previous chapters, this section offers conclusions and policy options that Armenia could consider to further foster SME digitalisation. It is structured around three main objectives: 1) improving framework conditions for digitalisation, 2) building a structured system for SME digitalisation support, and 3) fostering synergies in the ecosystem to facilitate the digital transformation of SMEs.