Research Reports

Priority Investment Sectors in Georgia
Thursday, 30 June, 2016

This project identifies sectors and subsectors of the Georgian economy which have a higher potential for growth and which the Georgian Government should prioritize when designing strategies to attract foreign investors and increase EU export levels post DCFTA. This project intends to help the Georgian Government foster higher rates of investment and job creation and to support the inclusive growth of the economy.

The objective of this study was to identify all sectors in which Georgian companies were or had the potential to be internationally successful. The study was prepared by using available statistical data, supplementary published sources, and field interviews. We have analyzed all sectors in the Georgian economy including services, creative industries, and start-ups due to their increasing prevalence and importance in the global economy. As data on services, creative industries, and start-ups were not available we analyzed these sectors based on data collected during field interviews and fragmentary published sources that enabled us to create a more comprehensive profile of these sectors.

Foreign investment and trade are both integral to global strategies, and measures dealing with the international success of Georgia must encompass both. In practice exports and foreign investment occur together.

There are several benefits of increased export levels for developing countries. Export can help boost development and reduce poverty by generating growth through increased commercial opportunities and investment and can broaden the productive base via the development of the private sector. Furthermore, it can enhance competitiveness by requiring developing countries to reduce the cost of inputs, acquire finance through investments and increase the value-added of their products. Export diversification can be achieved through access to new markets and new materials that open up new production possibilities. Moreover, it also expands business opportunities for local companies by opening up new markets and removing unnecessary barriers, and making it easier for them to export. Once the country is more open to the external markets, improvement in quality of labor and environmental standards through increased competition can be expected as well as the exchange of best practices between trade partners and building capacity in industry and product standards. Last but not least, increased exports created new employment opportunities by boosting economic sectors that create stable jobs and likely higher income levels.