Business
Posted: 1 month ago

Small Business as an Innovative Development Factor of the Georgian Economy

Nowadays, the innovation can be determined as the vital part of competition, which is an essential for economy. In the contemporary world, main objective of Georgian government is to strive to the innovative development of the country.

One of the main mechanisms for economic restructuring, modernization and sustainable restoration is the national innovation system. This is the instrument, which provides innovative economic progress.

The major components of innovative systems are:

  • Business Sector (Producers of innovative products);
  • Government (Governmental organization that determine innovative politics);
  • Scientifics and Researchers (Universities and Research Institutions);
  • Elements of the Innovative Infrastructure (Techno parks, Business Incubators, Centers of Innovations Transfer and Commercialization);
  • Organized Public Societies (Public Societies that make influence on the innovative development);
  • Foreign partners with innovative work fields.

Small enterprises are the most effective and dynamically developing sectors. These factors make small enterprises the main sources of innovation, generator of new decisions, makes the basics for the innovative development of economics, offers the mobility and dynamics for the whole economic system, promotes the faster commercialization of the results of researches. Moreover, it helps the adaptation in the variable circumstances, which has significant influence on the accelerated innovative development.

While using the achievements of scientific and technological progress, development of small business has significant role for making economy of Georgia more competitive. Innovation in the small business provides economy with the innovative processes and helps the improvement of manufacturing and managing.

Advantages of Small Business

  1. There are most Supporting conditions for creativity in the small enterprises. Obviously, the creativity is individual. People have opportunities to do their best, realize their ideas;
  2. Small business operates independently, which provides with additional flexibility;
  3. Activity of the small business has more specific direction, which means additional efforts on the final stage and concentration of the resources on the early stage. Consequently, company has to start its activities with researches and development, aiming the high technological products and fast industrial manufacturing.

Georgia is the first county that appeared on the map of Fablab in the region of Caucasus. For the given moment, there are eight laboratories of the innovative manufacturing.

  1. Techno Parks – (includes incubators, business accelerators, educational centers and laboratories. Furthermore, office and recreational spaces):
  • Tbilisi – N7, Innovative Str., Oqrokhana.
  • Telavi – N11, Rustaveli Ave.
  • Zugdidi – N2, Laghidze Str.
  1. Innovative Centers:
  • Akhmeta – N1, Tchanturidze Str.
  • Baghdadi – N68, Rustaveli Str.
  • Rukhi – Shopping Mall;
  • Kharagauli – N50, King Solomon Str.
  • Tchoporti – Central Library.

223 project were financed by Georgia’s innovation and technology agency during the 2017-2019 years.

 

Number of Financed Projects

Amount of

the

Funds

2017

62

360318.54

2018

98

221426.18

2019

63

130360

 

 

 

Sum

223

3952104.72


Innovative directions of the financed projects are:

  • Agriculture;
  • Artificial intelligence/ Automatic learning;
  • Aviation;
  • Web-development/ Mobile Applications;
  •  

The main areas of the financed projects are:

  • Computer engineering;
  • Tourism;
  • Agriculture;
  • Game Industry;
  • Development of Social Media.

Georgia’s innovation and technology agency has started of co-financing grants in 2018. At present, 37 grants were financed

 

The sum of grants

2018

1631896.12

2019

3625812.8

Sum

5’257’708.92

 

Sectoral distribution and main areas of financed startups:

  1. Biotechnology, healthcare, pharmacy – 1;
  2. Energy, Environment, Green Technologies – 1;
  3. Computer equipment, electronics – 2;
  4. Mechanic and Civil Engineering – 1;
  5. Information Technology, Gaming, Media – 18;
  6. Consulting and other services -5;
  7. Agriculture and Nutrition Products – 4;
  8. Chemical Engineering and Nanotechnologies – 1;
  9. Artificial Intelligence.
  1. The state program “Produce in Georgia” - aims at developing and encouraging the small and micro entrepreneurs with technical and financial support.

Within the promotion of Micro and Small Entrepreneurship in 2017-2019:

 

Number of Financed Projects

Amount

Of the

Funds

Total Investment Value of  the Projects

2017

2109

15707037.17

20273095.74

2018

899

8266203.9

12118704.94

ჯამი

3008

23973241.07

32391800.68

In 2017-2019 the main fields of sponsored projects are:

Guest houses, sewing, cafes, winery, auto support, bakery, greenhouses.

As the history shows, small enterprises are the most effective and vital parts of the innovative development of the economy. They develop and implement technological, technic, organized innovations. Without them, it would be impossible for factories to work effectively. According to the data, there were 35 816 small entrepreneur registered in 2017-2019.

Reducing administrative barrier and supporting the employees of large, medium and small corporations are vital parts for the development of small business. Besides, Entrepreneurship expansion, promotion of small and medium businesses, entrepreneurship and new business incentives, integrating the world economic system into the country are necessary steps.

Entrepreneur:  Tea Charkviani