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1
Overview of the Science, Technology, and Higher Education Infrastructure

HISTORICAL BACKGROUND

Following the collapse of the Soviet Union and the restoration of the independence of the Republic of Armenia in 1991 and continuing through the present, there has been a significant exodus of skilled professionals and talented students from Armenia due primarily to reduced economic opportunity. The depressed economy has resulted from the continuing effects of the devastating 1988 earthquake, economic blockades preventing trade with two neighboring states, and dislocations caused directly and indirectly by the conflict with Azerbaijan over the enclave of Nagorno-Karabakh. Combined with the serious energy shortage that Armenia experienced in 1992-1994, these hardships have caused a drastic reduction in national income. Although the Armenian government’s economic restructuring efforts have produced encouraging growth indicators every year since 1995, with particularly strong improvements in the most recent years, poverty, unemployment, and underemployment remain substantial problems for the country.

Although Armenia is small and does not have oil, gas, or other natural resources in significant amounts, it possesses most types of science and technology (S&T) institutions characteristic of modern economies—from important educational institutions to state research institutes to innovative science-oriented firms. Almost all of these institutions are struggling with inadequate financial resources and with little evidence of impacts they are making on the lives of individual Armenians or on the country’s economic development as a whole. Unlike most developing countries, however, there is an S&T tradition in Armenia



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Science and Technology in Armenia: Toward A Knowledge-Based Economy 1 Overview of the Science, Technology, and Higher Education Infrastructure HISTORICAL BACKGROUND Following the collapse of the Soviet Union and the restoration of the independence of the Republic of Armenia in 1991 and continuing through the present, there has been a significant exodus of skilled professionals and talented students from Armenia due primarily to reduced economic opportunity. The depressed economy has resulted from the continuing effects of the devastating 1988 earthquake, economic blockades preventing trade with two neighboring states, and dislocations caused directly and indirectly by the conflict with Azerbaijan over the enclave of Nagorno-Karabakh. Combined with the serious energy shortage that Armenia experienced in 1992-1994, these hardships have caused a drastic reduction in national income. Although the Armenian government’s economic restructuring efforts have produced encouraging growth indicators every year since 1995, with particularly strong improvements in the most recent years, poverty, unemployment, and underemployment remain substantial problems for the country. Although Armenia is small and does not have oil, gas, or other natural resources in significant amounts, it possesses most types of science and technology (S&T) institutions characteristic of modern economies—from important educational institutions to state research institutes to innovative science-oriented firms. Almost all of these institutions are struggling with inadequate financial resources and with little evidence of impacts they are making on the lives of individual Armenians or on the country’s economic development as a whole. Unlike most developing countries, however, there is an S&T tradition in Armenia

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Science and Technology in Armenia: Toward A Knowledge-Based Economy and a cadre of highly qualified specialists trained and educated during the Soviet era. Of course, during Soviet times their efforts were directed primarily toward serving the needs of the Soviet military complex and providing civilian products to other Soviet republics. The challenge now is to direct their skills and energies to endeavors that will help improve an economy that largely collapsed when access to these markets disappeared. EXISTING INSTITUTIONAL CAPACITY Structure and Role of Research Successful scientific research requires institutions that can fund and guide research by identifying important problems, assembling research teams, and training future scientific leaders. Of no less importance are efforts to integrate the country’s S&T capacity with national programs to promote economic development. In order to do this, the embryonic private sector must be able to draw on the resources of the state S&T sector for support of innovation activities. The institutes and centers of the National Academy of Sciences of the Republic of Armenia (NAS-RA) include most of the country’s research organizations. The NAS-RA has 37 institutes and centers organized into three divisions (see Appendix C for a complete list). According to the NAS-RA leadership, the Academy and its various institutes and centers employ nearly 4,000 people. By way of comparison, according to official Armenian government statistics, the entire Armenian research and development sector, including non-NAS-RA institutions, employed 6,737 people in 2002.1 The size and structure of the NAS-RA is a product of Armenia’s Soviet past. The Academy was founded in 1943, as Armenia became a center of S&T research providing support services for the entire Soviet Union. The NAS-RA was organized to address both general areas of science and specific development issues. Now, there are a significant number of “orphan” science organizations, which had been created to meet a crisis or a need that has since disappeared or greatly diminished. The collapse of the Soviet Union in 1991 significantly reduced the economic base that supports the NAS-RA and scientific research in Armenia in general and also reduced the demand for products of research. Diminished economic opportunity combined with the effects of the devastating 1988 earthquake in Armenia led many young scientists and engineers to seek jobs outside the country and often outside science. The war with Azerbaijan over the enclave of Nagorno-Karabakh further decreased the number of young scientists, both directly through the 1   National Statistical Service of the Republic of Armenia. 2003. Statistical Yearbook of Armenia. Posted at http://www.armstat.am/StatData/.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy requirements of military service and indirectly through dislocation of populations, reduction in government resources, and economic disruption. These developments have led to an increase in the average age of the scientists of the NAS-RA, with relatively few between 30 and 50 years of age. The lack of scientists in their most productive years reduces the research capacity of the NAS-RA and limits its ability to attract and train new scientists. The problem is exacerbated by the fact that retirement from a position with a subsistence-level salary to a lower-paying pension is not a viable option for older NAS-RA scientists. Some NAS-RA institutes and centers have strong capabilities and are making important scientific contributions. Others are of marginal viability—scientifically and financially. However, their employment of a significant number of people provides an important social safety net. Some NAS-RA employees are older workers who spent most of their careers within the Soviet science system and have few currently marketable skills. Although salaries are meager, they exceed the pensions that could be expected on retirement. Thus, the NAS-RA budget and organizational structure have a social rationale. Reorganization of the NAS-RA, which has been suggested many times, could entail significant social costs. It might also be difficult to reallocate funds saved from reduced Academy programs to support more productive scientific projects. Government-funded research is performed under the auspices of government ministries, universities, and other institutions. Research performed by the ministries and non-NAS-RA institutes is often of an applied nature tailored to meet specific needs in Armenia. As such, this research may have limited transferability beyond the borders of Armenia, but it could be quite valuable where circumstances and technology needs are similar to those in Armenia. Scientific research is also performed by a few companies, primarily small innovative firms. Such ventures have the potential to be important engines of economic development, but face several significant hurdles, including (1) a shortage of qualified specialists trained in technology transfer, marketing, and management; (2) a general lack of understanding of intellectual property issues and laws among technology entrepreneurs in Armenia; and (3) a lack of available credit on reasonable terms. Together, these factors make it very difficult for successful commercialization of the products of research. An important objective of scientific institutions should be to promote high-quality research. Ideally, a focused effort to achieve this goal can lead to a “virtuous circle,” with research and development leading to market opportunities, which then support training and more research and development. The engine that drives this cycle of economic development through S&T is high-quality, targeted research. This report examines public and private science and technology activities, ranging from basic to highly applied, but always with the objective of identifying those areas that have a potential economic and/or scientific return on investment.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy Leading Institutions of Higher Education Armenia has several important public institutions of higher education, including Yerevan State University, the State Engineering University of Armenia, the Yerevan State University of Architecture and Construction, the American University of Armenia, Yerevan State Medical University (YSMU), the Academy of Agriculture, and the Institute of Health. The committee concentrated on these major public institutions because they set the standard for the level of education in Armenia and provide leadership in curriculum development and research. A list of all institutions of higher education, public and private, is included in Appendix D. Table 1.1 provides data on the enrollment of students in Ph.D. programs in various disciplines. In Armenia there is a strong popular aspiration for education, with every family striving to have its children at least finish high school. In the former Soviet Union, Armenia was the republic with the highest percentage of higher education attendees per capita. Science was a particularly popular field of study, and that TABLE 1.1 Enrollment of Ph.D. Students by Discipline, 1998-2002 Discipline 1998 1999 2000 2001 2002 Physics and mathematics 106 120 90 95 101 Chemistry 12 16 26 27 30 Biology 69 71 52 83 75 Geology and mineralogy 12 6 8 26 48 Engineering 189 157 62 230 239 Agriculture 32 67 29 39 40 History 12 8 8 14 26 Economics 31 37 33 59 63 Philosophy 4 10 51 3 1 Philology 17 13 28 20 28 Geography 5 2 5 3 1 Law 5 8 12 8 19 Education 11 7 23 11 5 Medicine 48 64 66 95 73 Pharmacy — — 2 3 3 Veterinary medicine 10 15 66 45 45 Art 9 11 39 11 21 Architecture 20 8 7 11 9 Psychology 5 3 7 2 3 Sociology 1 4 3 7 4 Political science 1 — — 3 — Total 599 627 617 795 834   SOURCE: National Statistical Service of the Republic of Armenia, 2003. Statistical Yearbook of Armenia. Posted at www.armstat.am/StatData/.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy trend still continues, although to a lesser extent. However, most students terminate their education after receiving the bachelor’s degree, and few go on to obtain a Ph.D. This presents the problem of developing replacements for university faculty. Armenian universities have several important strengths. First, the country has a long tradition of respect for all areas of science and for science educators. The pride of educators in their profession is evident at each of the institutions. Second, Armenian educators survived even the disastrous economic period that followed the disintegration of the former Soviet Union. Administrators at YSMU and other institutions are proud that in contrast to many other universities in the region, classes continued to be held despite severe shortages of electricity, heat, and other basic services during the worst years of this period. Although the decayed infrastructure that remains as a legacy of this period is still creating a drag on educational progress, the tenacity and inventiveness that the period of privation fostered are impressive. Armenians are not only survivors, but professionals who came through very tough times with their morale intact and their standards high. There are many problems in higher education. At the top of the list is the missing cohort of middle-level faculty due to the mass emigration of scientists during the difficult economic times. Currently, the science faculties of the major institutions of higher education consist of a number of older scientists, many of whom are close to if not past retirement age, and a limited group of young scientists. The replenishment of the science faculties with younger members is being hindered by the lack of open positions and the low salaries offered for the jobs that are available. There are numerous stories about young scientists who had completed their training in the universities but ended up working as waiters or retail clerks because of a lack of opportunities to pursue scientific careers. Still, the number of current graduate students is far short of meeting needs to replace faculty members who will soon retire. In particular, software companies pay more than the universities, so graduates are going directly to salaried jobs, when available, instead of graduate school. Another major problem is the lack of programs for students to travel to the United States or Europe or to otherwise interact with foreign scientists without encouraging “brain drain.” University students and young scientists alike characterize older Armenian scientists as generally being distrustful of foreigners and not giving a high priority to providing opportunities for young scientists to travel. At the same time, older scientists speak frequently of their trips to meetings and their contacts with scientists in other countries. This contradiction reflects the disproportionate distribution of scarce funds for conference travel and research grants that favors senior scientists or those with connections. Although this pattern of resource allocation is by no means unique to Armenia, it is having a severe effect on the morale and education of young scientists who are vital for the continued development of Armenia.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy Attracting talented young students to science and retaining them in the professions for which they are trained are also difficult. As mentioned previously, there are not enough scientific or technology-related jobs, and most that do exist are poorly paid. Investments in the science and technology sector of Armenian education and industry should place a high priority on salaries for young scientists, reflecting the great respect that scientists are accorded by the general population. Continued lack of support for those students who spend the considerable time and effort required to master a scientific area could well erode the esteem currently accorded scientists in Armenia. Beyond financial support, exemptions from the military draft that accompany certain places for aspiring Ph.D. and master’s degree candidates have a significant impact on interest in these places (see Table 1.2 for a breakdown of the number of slots available on a free and paid basis, with and without draft exemptions). While most students accepted for graduate studies are talented and deserving, the heavy competition for draft exemptions apparently creates opportunities for inequities, with places sometimes going not to the best students but to those with the resources or connections to secure them. In February 2004, the Armenian government attempted to address this issue by introducing a bill in parliament that would have eliminated all draft exemptions for postgraduate students. Students and others in the research and education communities protested, arguing that mandatory service for all would either spur prospective graduate students to leave the country or leave them hopelessly behind in their studies and unable to continue after their two-year term in the army. In the face of this TABLE 1.2 Available Places in Master’s and Ph.D. Programs at All Institutions in the 2003-2004 Academic Year Master’s Programs Free of charge   350 With draft exemption 250   Without draft exemption 100   Tuition charged (with draft exemption)   180 Total   530 Ph.D. Programs Free of charge   224 With draft exemption 150   Without draft exemption 74   Tuition charged (with draft exemption)   40 Free of charge, part-time study   145 Total   409   SOURCE: Government of Armenia Decree 289 according to Official Gazette No. 20 (255), as posted by the Economic Development and Research Center at http://www.edrc.am/user_files/33.pdf.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy criticism, the government withdrew the proposal, stating that the matter would be given further consideration. Yerevan State University Yerevan State University (YSU) was founded in 1919. It renewed the ancient traditions of Armenian scholarship in language and history that during 600 years of foreign occupation had flourished only among the diaspora abroad. YSU continued to operate after Armenia became a Soviet Socialist Republic in 1921, and in 1999 it was reestablished as a self-governing, higher-educational, scientific, and cultural state institution. It is restructuring its program to confer degrees at the bachelor’s, master’s, and doctoral levels and currently has 20 faculties (divisions) comprising a total of 102 departments. Of 74 graduates who received Ph.D.s in recent years, 36 percent stayed at the university as staff members. Of the 1,300 Ph.D.s currently on the teaching staff, one-half will retire during the next 10 to 15 years. At this rate, YSU is not generating enough Ph.D.s even to replace its retiring staff. Yerevan State University has about 12,000 students, including 9,000 undergraduates. Some 4,000 are in the natural sciences. University leaders express the opinion that not enough Ph.D.s are awarded in the natural sciences and that Armenia should confer about 1,000 science Ph.D.s per year. They are less specific as to job opportunities, however. They attribute the shortage of science Ph.D. graduates to a lack of resources and advocate more financial support to keep graduate students in school. YSU also has about 400 research fellows, and their output reportedly represents about 40 percent of all Armenian scientific and scholarly publications. Their work is supported primarily by grants from the Armenian government. These funds cannot be used to buy equipment, however. Additional support is thus needed from elsewhere, and foreign grants currently provide five to six times the amount of money received from Armenian government grants. The university currently has 10 grants from the International Science and Technology Center (ISTC)2 and receives lower levels of support from the North Atlantic Treaty Organization (NATO), the Copernicus Program and other funding mechanisms of the European Union, the Initiatives for Proliferation Prevention program of the U.S. Department of Energy, the U.S. Civilian Research and Development Foundation (CRDF), and other foreign sources. Some researchers from the NAS-RA also work part-time as YSU faculty members. The university’s rector has proposed to 2   Headquartered in Moscow, the ISTC is an international organization established by the governments of the Russian Federation, the United States, the European Union, and Japan. It provides grants to former weapons scientists in the former Soviet Union to promote the redirection of their skills toward civilian-oriented research.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy the NAS-RA that YSU and the Academy should create centers of excellence to integrate their capabilities in those areas of S&T in which they are strong. The university’s biggest problem lies in the need to modernize its infrastructure for the sciences. With the exception of isolated pieces of equipment, laboratories are woefully outdated and unable to provide students with the hands-on research experience they need to meet current scientific standards. Grants to support individual research projects alone are not adequate to the magnitude of the task at hand. According to YSU officials, modernizing all the research and teaching laboratories would cost about $5 million. Buying additional major pieces of specialized equipment could cost up to $2 million to $3 million for some purchases. State Engineering University of Armenia The State Engineering University of Armenia (SEUA) was established in 1991 as a reorganized successor to the Yerevan Polytechnic Institute, which was founded in 1933. Today SEUA has about 9,000 students studying at the main campus in Yerevan and four branch campuses, 200 of whom come from other countries. The university offers five different types of degrees3 and includes departments of chemical and environmental engineering, computer systems and informatics, cybernetics, electrical engineering, mathematics, mechanical engineering, mechanics and machine sciences, mining engineering and metallurgy, power engineering, radio and communication systems, and transportation systems. SEUA has 1,022 full-time faculty and confers approximately 1,500 undergraduate and 200 graduate degrees each year. Tuition and fees for undergraduates from Armenia range from $300 to $400 per year; tuition for foreign students is about twice that amount. SEUA developed a strategic plan in 2002 that clearly states the mission of the university, presents a vision of its aspirations, and sets forth its leading values and goals. These goals are broad, but the description of each includes specific actions that are needed and directions of growth in specific fields. The plan is clear and concise and offers a model that should be considered by other institutions in Armenia interested in orderly, long-term development. Yerevan State University of Architecture and Construction Yerevan State University of Architecture and Construction (YSUAC) specializes in fields related to architectural design and civil engineering. Within the 3   Degree programs include the three-year junior engineer degree, the bachelor of engineering degree, the five-year diploma specialist degree, the master of engineering degree, and the two-year research engineer degree, the last of which, when followed by three years of supervised research, leads to the kandidat (Ph.D. equivalent) degree.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy university there are five faculties: (1) architecture, (2) civil and industrial construction engineering, (3) construction technology and management, (4) hydro construction and urban administration, and (5) transport construction. Courses from all of these schools except for architecture are also offered on a correspondence basis. Within the five faculties there are 18 departments. The university has 350 faculty members and 2,250 students, with some 250 of the latter coming from outside Armenia. Master’s degrees are awarded in engineering after a five-year course of study and in architecture after six years. The university is evolving toward a system of awarding credits toward degrees for specific courses. The major problems facing the university are obsolete laboratory equipment, lack of modern computer equipment, and employment for graduates. The problem with computer equipment is not as acute as that with laboratory equipment. Some graduates are finding employment immediately after graduation, but job opportunities are not balanced evenly for graduates from all of the departments. The YSUAC faculty members conduct research on about 40 topics, including transportation networks and energy issues related to closing the nuclear power plant, with funding for these efforts coming primarily from various Armenian government agencies. American University of Armenia The American University of Armenia (AUA) was founded in the early 1990s by Mihran Agbabian of the University of Southern California and Armen Der Kiureghian of the University of California, Berkeley. It maintains an affiliation agreement with the University of California system. Currently enrolling approximately 450 students, it offers master’s programs only (no undergraduate or Ph.D. programs) in the following fields, with instruction conducted in English: Industrial engineering and systems management Business administration Computer and information science Law Comparative legal studies Political science Public health Teaching English as a foreign language The AUA administration and faculty in general display an enterprising, can-do attitude. The School of Business and Management is of particular interest and importance. Its most recent graduating class included 57 M.B.A. students. All graduates in this program complete a semester-long practical internship in their second year of study, serving as consultants to small- and medium-sized businesses, manufacturing companies, government agencies, or nonprofit organi-

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Science and Technology in Armenia: Toward A Knowledge-Based Economy zations. AUA M.B.A. graduates are already beginning to have an impact on both the private and the public sectors in Armenia due to the excellent training they received. The operating budget of the AUA is $3.5 million per year. Approximately $800,000 is contributed by the U.S. Agency for International Development (USAID), $600,000 per year by the Armenian General Benevolent Union, and $400,000 per year by the Lincy Foundation. Tuition provides an additional $200,000 per year ($1,500 per year per student), although most students are supported with fellowships. Yerevan State Medical University Yerevan State Medical University is the leading medical school in the country, with more than 4,000 students currently enrolled. Instruction is offered in three languages—Armenian, Russian, and English. YSMU leaders are very forward looking and stress their efforts to maintain the highest level of medical education. In terms of objectives for the quality of medical education offered, university officials aim to ensure that their students are able to transfer to other leading universities and pass medical examinations to practice in other countries. About one-half of the students come from foreign countries, principally China and India, thereby validating the quality of the program. Recently, students from Iran and other Middle Eastern countries have also begun to apply, and a small population of such students is currently in residence. Of course, medical universities in other countries of the former Soviet Union and beyond have similar ambitions and may provide significant competition for foreign students, which in turn provides added incentive for YSMU to continue upgrading its facilities and programs. The success of YSMU in recruiting such a high proportion of foreign students suggests an interesting opportunity for economic development. Although Armenian students pay only several hundred dollars per year in tuition, foreign students are charged more than $2,500 per year. University leaders hope that the tuition for foreign students can increase and still attract these students, with $8,000-10,000 a year as the goal. There is currently an excess of doctors in Armenia, particularly specialists. Perhaps market forces will limit the number of domestic students considerably, with an increased influx of foreign students compensating for this reduction, thereby increasing the tuition income of the university. The university has recently acquired funds from an Armenian-American sponsor to build a state-of-the-art ultrasound facility. Gynecological services will also be available. Construction is under way on a modern diagnostic imaging facility. It is hoped that such facilities will attract patients from other countries and that YSMU will become a center in the South Caucasus region for certain types of medical services.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy University leaders indicated that the institution had already been involved in small human clinical trials and that the expertise to run such trials is certainly available, should U.S. or European pharmaceutical companies be interested. There is, however, no current marketing program and no infrastructure for handling the legal factors that are involved. Nonetheless, this area merits further exploration. Also, YSMU has the expertise for animal testing for pharmaceutical companies if assistance were provided to make the initial contacts and to establish the necessary quality control procedures. Armenian Academy of Agriculture While the Armenian Academy of Agriculture is overseen by the Ministry of Agriculture, the Academy itself has direct control over 80 percent of the programs involved in agricultural education and extension activity within the country. The Academy has recently completed an extensive revision of its curriculum. Emphasis is now being placed on agribusiness, food technology, and agricultural engineering. In particular, the Center for Agribusiness Education has been established. Admission to the center is highly competitive, and all instruction is in English. There is also a strong emphasis on economics. Although the curriculum has been updated to include subjects such as agricultural economics and marketing, the Armenian agricultural sector has not yet matured sufficiently to absorb all of the graduates with these skills, and job placement for students in these fields remains a problem. The Academy has strong ties to Texas A&M University, which has helped with development of the agribusiness curriculum. The Academy has also obtained support from the U.S. Department of Agriculture (USDA) for the development of education in marketing assistance and other agribusiness topics and the administration of an extension program that serves Armenian farmers. With funding from the USDA and the World Bank, the Academy participates in a program that offers grant support to faculty members and collaborating farmers for short-term scientific projects (approximately one year in duration) that have the potential for immediate application. About 25-30 of these projects are funded each year. The Academy is pursuing fundraising among Armenians in the United States and Europe that is intended to provide a continuing basis for support of this type of activity. The size of the student body has been increasing, and its makeup is changing. Previously, most of the students came from Yerevan or other cities. Now, more than one-half come from rural areas. This trend is important because there are many new landowners in Armenia who have little agricultural training. The student population comes almost exclusively from Armenia, but the Academy hopes to attract foreign students, primarily from the South Caucasus region. The Academy’s goal is to be a center for agribusiness in the area that will serve as a model not only for education, but also for research and agricultural practice.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy The rector has identified several pressing concerns. First, the tuition paid by Armenian students is only about $200-300 a year, the lowest among Armenia’s universities. This tuition barely covers expenses and leaves little for the development of research and extension activities. Second, there is a desperate need for new equipment for the teaching laboratories. Currently available laboratory equipment is 20 to 50 years out of date. Faculty members also lack modern equipment in the research laboratories. Students are expected to do research as part of Academy programs, but the quality of such projects is limited by the lack of equipment. Third, the number of veterinary graduates is insufficient to meet the needs of Armenian farmers and is below the number of veterinarians mandated by government policy. Finally, the Academy currently trains students in more than 30 specialties. Demand for some of these specialties has been low. The greatest demand is for students trained in such areas as food processing, enology, and veterinary medicine. The demand for specialists is increasing, but the Academy is reassessing the number and nature of the specialties in which it trains students with a view toward making students more employable. Institute of Health The Institute of Health is a government organization that conducts post-diploma programs for continuing medical education (CME) of doctors, dentists, and other health professionals. Each year, 2,500 of these professionals pass through the CME programs. The Institute administers a residency program that lasts from one to four years. Completing the residency program is now a legal requirement for all physicians who want to have their own practices. Institute officials are confident that the content of the residency programs and the quality of instruction are now up to international standards. The Institute also oversees research projects and is responsible for such areas as quality control, establishment of guidelines for good medical practice, and development of diagnostic tests. Research projects address fields such as household safety, epidemiology, microbiology, endocrinology, and genetics. Although there is no central source of funding to support the Institute’s research scientists, researchers have achieved some success in collaborating with U.S. and European universities to obtain grants. Also, they have obtained funds for equipment from Armenian-American foundations. Two Institute scientists recently obtained access to the Boston University library via the Internet, an interesting model for increased access by scientists to journals. Several problems remain to be solved. First, there are too many specialized physicians and not enough general practitioners in Armenia. The World Bank is supporting a program to retrain more than 2,000 specialists to become family practitioners by 2008. Meanwhile, the Institute is working on determining the appropriate number of physicians that should be trained and the areas in which training is most needed. A second objective is to strengthen links with the U.S.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy National Institutes of Health and with large U.S. and European universities to improve training and research opportunities. Improvement of contacts could be important for Armenian medical institutions to qualify as sites of human clinical trials in the future. FUNDING FOR SCIENCE There are three primary sources for the funding of research in Armenia: the government, international sources, and the private sector. Most government funding flows through the NAS-RA to its various institutes and through individual ministries to associated institutes and agencies. International sources support research and development in the NAS-RA, government institutes, the universities, and the private sector. Support for science from and in the private sector, where it exists, is directed toward specific applications or development of specific products. Government Funding Accuracy in numbers for the “funding of science” is always a matter of degree, even within the United States, since definitions of “science” funding vary among government agencies, nongovernmental organizations, and private enterprises. Scientific knowledge is applied in basic research, development of new products and techniques, and production of goods and services. In this report, the definition of funding for science is limited to funds devoted to basic and applied research and to the development of national scientific competence and capacity. Even in this restricted sense, the data on funding for science in Armenia are relatively unreliable. In February 2004, the Armenian ambassador to the United States stated that “the government consistently increased science funding: this year’s budget allocates approximately $6 million (1 percent of total government expenditures) to the scientific institutions” (see Appendix E for the complete text of his statement). Based on materials supplied by the NAS-RA, funding for the Academy in 2003 was $6.3 million, with almost $3 million coming from the government, $800,000 earned by performing services, and the remainder received from various international and private sources (see Figure 1.1 and Table 1.3). Thus, it appears that one-half of government funding for science goes to the NAS-RA to support 37 institutes and a total staff of about 4,000. On average, this is about $75,000 per year for each institute and less than $800 per year per staff member. These numbers may double if the total funding for the NAS-RA, including nongovernmental sources, is considered. However, reimbursable and international funding is not spread evenly over all Academy institutes. In addition, much of the international funding goes for equipment, travel, and field work, although the overall situation regarding the equipment infrastructure remains poor due to the limited

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Science and Technology in Armenia: Toward A Knowledge-Based Economy FIGURE 1.1 Sources of financing of the National Academy of Sciences of the Republic of Armenia, 2003. SOURCE: National Academy of Sciences of the Republic of Armenia, February 2004. amount of funding available. Distribution of government funding for science is detailed in Table 1.4, which shows the 25 separate budget line items. International Sources Foreign sources have provided substantial support for science in Armenia since the breakup of the Soviet Union. These sources include international organizations, foreign governments, and nongovernmental organizations and individuals. The International Science and Technology Center is an intergovernmental organization established in 1994 to engage weapons scientists, technicians, and engineers of the former Soviet Union in peaceful, civilian S&T activities. Non-weapons scientists can be included in ISTC projects. ISTC is the largest external funder of S&T in Armenia, and since its inception it has provided $20.4 million in support.4 Among the projects most recently funded are efforts to develop new 4   Figures provided by the ISTC, April 2004.

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Science and Technology in Armenia: Toward A Knowledge-Based Economy TABLE 1.3 Financing of the National Academy of Sciences of the Republic of Armenia, 2003 Financial Sources Amount (dollars) Budget (Armenian federal government) 2,925,927 ISTC 990,450 Proceeds from rent and other services 797,509 NFSAT 531,000 NATO 371,000 Union of Armenians of Russia 210,000 CRDF 89,300 INTAS 67,500 ANSEF 65,000 H. Vardanyan Foundation 64,789 USDA-FARA 55,100 DAAD 35,000 COPERNICUS-2 20,000 EU IST 20,000 Jinishyan Memorial Fund 15,000 UN SICS-WL 15,000 SCOPES 10,000 Nagao and Matsumae Foundations 9,900 M. Aschyan Foundation 8,921 U.K. Royal Society 8,600 Union of Armenians of Ukraine 8,500 UNESCO 8,000 National Assembly 4,942 Total 6,331,839 NOTE: ANSEF = Armenian National Science and Education Fund; DAAD = Deutscher Akademischer Austausch Dienst (German Academic Exchange Service); EU IST = European Union Information Society Technologies; FARA = Foundation for Applied Research and Agribusiness; INTAS = International Association for the Promotion of Cooperation with Scientists from the Newly Independent States of the Former Soviet Union; NFSAT = National Foundation for Science and Advanced Technology; SCOPES = Scientific Cooperation between Eastern Europe and Switzerland; UNESCO = United Nations Educational, Scientific, and Cultural Organization; UN ICSC-WL = United Nations International Center for Science and Culture–World Laboratory. SOURCE: National Academy of Sciences of the Republic of Armenia, February 2004. drugs to treat AIDS and cardiovascular disease, to design a safer cooling system for the Metsamor nuclear plant, to create new polymer materials for the treatment of burns, and to synthesize new glass ceramics for a variety of industrial applications. Currently, more than 40 institutions in Armenia receive funding for at least one ISTC project. Many institutes collaborate on these projects and share support, and some institutes have multiple projects. In 2004, for example, Yerevan

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Science and Technology in Armenia: Toward A Knowledge-Based Economy TABLE 1.4 Financing for Science Provided by the Armenian Government Budget, 2003 Project Amount Funded (million drams) Percentage of Total Science Budget Subsidies to the NAS-RA Presidium for the Maintenance and Development of Scientific and Scientific-Technical Infrastructure Programa 269.2 9.1 NAS-RA communications network 17.3 0.6 NAS-RA Arboretum 17.5 0.6 NAS-RA State Microbial Depository 7.2 0.2 NAS-RA Armenian Genocide Museum 14.5 0.5 Matenadaran (Mesrob Mashtots Research Institute of Ancient Manuscripts) 39.9 1.3 Subsidies for conferment of degrees in sciences 24.3 0.8 Institute of Management and Economic Reforms of the Ministry of State Property Management 19.0 0.6 Subsidies for editing summary list of Armenian monuments 14.1 0.5 NAS-RA Center for Molecular Structure Research 8.0 0.3 Circular accelerator of the Yerevan Physics Institute and the Aragats and Norhamberd Cosmic Ray Analysis Stations 60.0 2.0 Contractual (subject) financing of scientific and scientific-technical activities under state contract 2,045.0 69.1 Subsidies to scientific-technical information network 12.5 0.4 NAS-RA Byurakan Observatory 9.0 0.3 NAS-RA Center for Medical Genetics 34.1 1.2 Big Radio Optic Observer of Radio Physics Measurement SRI and 11 national standards within the Program for Maintenance and Development of Scientific and Scientific-Technical Infrastructure 31.7 1.1

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Science and Technology in Armenia: Toward A Knowledge-Based Economy Project Amount Funded (million drams) Percentage of Total Science Budget Greenhouses of the NAS-RA Botanical Garden 2.3 0.1 Psychological Research Laboratory of the Abovyan Pedagogical University 3.8 0.1 Garni Observatory 1.9 0.1 NAS-RA Institute-Museum of Biology 2.5 0.1 Yerevan State University 10.0 0.3 State contract for NAS-RA Ph.D. and doctor of sciences degree programs 25.6 0.9 State contract for Ph.D. and doctor of sciences degree programs operated by the Ministry of Science and Education 24.4 0.8 Special research and design work requested by the Ministry of Defense 240.0 8.1 Program of targeted use of scientific potential 27.7 0.9 Total 2,961.5 100.0 NOTE: At the February 2004 exchange rate of approximately 560 drams to the dollar, the total figure of 2.96 billion drams equaled about $5.3 million. aIt is likely that a substantial portion of these funds goes toward maintenance of the existing infrastructure because the facilities visited by the committee held little if any new equipment that was not purchased with foreign grant funds. SOURCE: Economic Development and Research Center, Simplified State Budget of Education and Science for 2003, posted at http://www.edrc.am/user_files/33.pdf. State University had 19 ISTC projects and the Yerevan Physics Institute had 11. As indicated in Appendix F, 11 new ISTC projects valued at nearly $3.1 million were approved for Armenian institutes in 2003. The U.S. Civilian Research and Development Foundation is a private, non-profit organization created by the U.S. Congress in 1995. In addition to a wide range of other activities supporting scientific initiatives with the countries of the former Soviet Union, CRDF supports individual collaborative research projects

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Science and Technology in Armenia: Toward A Knowledge-Based Economy between U.S. and Armenian scientists through two programs: its region-wide Collaborative Grants Program (CGP), which offers grants for research partnerships involving most of the countries of the former Soviet Union, and its Bilateral Grants Program for Armenia only, which is administered in conjunction with the National Foundation of Science and Advanced Technologies (NFSAT). In 2003, CRDF approved seven U.S.-Armenian CGP projects at a total cost of $467,000 (see Appendix G). In addition to the collaborative research grants, CRDF also promotes industrial development through travel grants that allow foreign scientists, engineers, and managers, to travel to the United States in order to visit relevant companies and attend conferences and trade shows. To date, CRDF has supported a total of 235 grants in Armenia (60 of which were awarded and administered by NFSAT using CRDF funds) with an overall value of $4.3 million. NFSAT was established by CRDF and the government of Armenia in 1997. An independent nonprofit organization modeled on Western competitive science funding agencies and principles, its mission is to offer merit-based support for Armenian investigator-initiated scientific and engineering research projects, with the ultimate goal of promoting scientific research and technological development in Armenia. Despite its rather brief history, the foundation has already become a significant mechanism for science funding, with the NAS-RA reporting NFSAT as its fourth-largest funder in 2003, at a level of more than one-half million dollars. In addition to the CGP mentioned above, which awarded 27 grants totaling more than $860,000 in 2002, NFSAT made the following awards in 2003: Instrumentation for scientific infrastructure: 6 grants, totaling $270,000 Scientific conferences and workshops: 6 grants, totaling $41,800 Travel grants: 31 grants, totaling $77,500 Long-term travel grants and fellowships for scientists under age 35:4 grants, totaling $22,500 It is also launching a new program entitled Basic Research in Universities and Integration of Science and Economy of Armenia. Although funding for NFSAT’s other programs was provided entirely by CRDF, the Armenian government has announced that it will contribute approximately $200,000 for this new initiative. According to NFSAT officials, the foundation is able to fund only about 10 percent of the research grant proposals it receives and many other proposals deserve support. Given the impressive peer review and grants management infrastructure that NFSAT has already created, a severalfold increase in its funding could provide support for important and scientifically worthy projects Various U.S. agencies provided about $120 million for a wide range of bilateral programs in Armenia in fiscal year 2003 (see Appendix H), with democracy building, public health, agriculture, and small business development being the primary areas of focus. Except for support channeled through CRDF, none of these programs was narrowly defined in terms of S&T development, but several

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Science and Technology in Armenia: Toward A Knowledge-Based Economy programs, such as energy and water management and assistance in information technology and agribusiness, help nurture this development. Various private organizations such as the Gulbenkian, Lincy, MacArthur, and Gates foundations and Armenian national groups such as the Union of Armenians of Russia and the U.S.-based Armenian General Benevolent Union and the Armenian National Science and Educational Fund provide limited support either directly or indirectly for the development of science in Armenia. NATO and the Organization for Security and Cooperation in Europe support scientific research and technology development projects in Armenia, such as the South Caucasus River Monitoring Project, but these investments are not large. Similarly, the United Nations Development Program (UNDP) and the United Nations Educational, Scientific, and Cultural Organization (UNESCO) support small, individual projects. One UNDP grant was to support a project at the Institute for Informatics and Automation Problems, and a UNESCO grant ($8,000) went to the Center for Ecological-Noosphere Studies to identify priority sites for biosphere reserves.