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PRESS RELEASE

The new World Bank report says fostering high-growth entrepreneurship and innovation is paramount to job creation and sustainable growth in Georgia

September 23, 2013

Tbilisi, September 23, 2013. Today, the World Bank released its new report on Fostering Entrepreneurship in Georgia.The report presents the results of a survey of micro, small and medium companies in Georgia, and analyzes factors that inhibit growth of entrepreneurial and innovative activity of Georgian firms. SMEs name difficulties in access to finance, especially for start-up companies, deficient knowledge and technology transfer, limited skills, absence of special Government program in support of entrepreneurship and innovation among key factors that constrain their growth and development.  The World Bank report provides selected recommendations aimed at enhancing entrepreneurial culture and fostering innovative entrepreneurship.

Private sector creates 9 out of 10 jobs in the global economy. Therefore, creation of attractive investment climate and conducive business environment for new business entries and growth of private sector is paramount for sustainable economic growth of the country and poverty reduction. In Georgia, however, the share of small and medium businesses in GDP remains small at less than 20 percent of GDP and is much lower as compared to many countries in the neighborhood (like Armenia where SME contributes 42 percent to GDP) or in Europe and Central Asia region, with an average 60 percent share of SME in GDP.  According to the World Bank 2013 study Fostering Entrepreneurship in Georgia, Georgian innovative firms create 30% more jobs and are much more competitive in the domestic and global markets than non-innovative firms.  Therefore, fostering growth of entrepreneurship and creating environment for scaling up and rapid growth of innovative and more productive firms should become one of the key priorities of the country’s development goals.

Similar to many countries in the ECA region and in particular, EU member countries,  the government of Georgia jointly with the private sector can facilitate entrepreneurialism by raising importance of entrepreneurship, improving the  general business environment, increasing access to markets, information and supporting skills development, facilitating access to finance and creating special instruments and institutions to encourage innovation, increase firm-level research and development (R&D) and commercialization, facilitate knowledge and technological spillovers to increase firm-level productivity. 

Job creation and productivity growth are at the forefront of today’s global development agenda. The World Bank study results presented today offer important information about Georgian entrepreneurs. It includes detailed case study analyses to complement these findings and to highlight the determinants of high-growth entrepreneurship,” said Henry Kerali, World Bank Regional Director for the South Caucasus.”

Achieving high productivity and creating jobs are pivotal to the government’s medium- to long-term goals. Fostering high-growth entrepreneurship and innovative activity is thus paramount to achieving these objectives”, said Angela Prigozhina,  World Bank Country Sector Coordinator, for  Financial and Private Sector Development  in the South Caucasus Region, World Bank.

The report can be accessed at the World Bank website www.worldbank.org and Amazon.com

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