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Makasarashvili Tamar, Ph D., in Economics, professor Gori State Teaching University, Georgia E-mail: [email protected] Giguashvili Giuli, Ph D., in Economics, professor Gori State Teaching University, Georgia E-mail: [email protected] Khorguashvili Tea, Ph D., in Economics, professor Gori State Teaching University, Georgia E-mail: [email protected]
PROBLEMS OF THE FORMATION INNOVATIVE ECONOMY IN GEORGIA
Abstract: Development of innovations and technologies is one of the driving forces to develop country's competitiveness and improve economic prosperity. Despite the real existence of innovative potential, the share of innovative enterprises is quite low in Georgia; the institutional opportunity of introduction and implementation innovations is low in the regions. The urgent task is working out the country's innovative development strategy and state program of its realization, that will respond to the global challenges.
Keywords: Innovations, innovation economics, innovation infrastructure.
Georgia aspires to become a country based on European Determining the level of innovative development and
values and to make political and economic integration with working out of the appropriate measurement system is im-
it. One of the most important prerequisites for our country's future economic progress and further deepening of the European integration process is to move the focus on innovative development and facilitate the formation of the relevant system in both state and regional, local or sectoral context.
In order to promote the sphere of innovation and technology and to create ecosystem of innovations, in 2014, under the subordination of the Ministry of Economy and Sustainable Development was created LEPL "Innovation and Technology Agency", which promotes commercialization of innovations and stimulates the use of innovations. Since its establishment, the Agency has implemented legal reform in the sphere of innovation, created and developed infrastructure of innovations, established international cooperation for the development innovations, technologies and researches; It has implemented many educational events supporting innovations and entrepreneurship etc [1].
Later, according to the Decree № 32 of Georgian Government of February 3, 2015 was created and functions "Research and Innovation Council" its main function is promoting development of economics based on the knowledge and innovation in the country, development of information society, turning of the intelligent products and innovations into the main export product, entering in all spheres information and communication technologies and innovations [2].
possible without the existence of indicators system. According to Doctor of Economic Sciences, Professor Ramaz Abesadze, such methods are not available in Georgia yet and it may include: Indicators of innovative development of: 1) Country; 2) Region and; 3) enterprises [3].
With the opinions of separate experts, innovative climate in Georgia is unfavorable. Innovative infrastructure is weak; In the country, the state and private sector spending on research and development is low; The innovation market is limited; Despite the real existence of innovative potential, the share of innovative enterprises is quite low in the country; The institutional opportunity of introduction and implementation innovations is low in the regions.
Only a small part of Georgian companies try to offer innovation to the customers and to improve existing products. We consider it expedient for companies to conduct periodic polls to understand the consumers' opinion: what they like, which innovations do they like, etc. It is necessary, that innovative ideas must be based on analysis and researches of various statistical data.
The necessary condition for activating innovative activities in the country is the creation and development of the national model of innovative ecosystem. Four main models of the national innovative system are allocated in economic literature:
PROBLEMS OF THE FORMATION INNOVATIVE ECONOMY IN GEORGIA
1. "Euro Atlantic" (EU countries: Germany, France, Italy, Finland, Great Britain and others).
2. "East Asian" (Japan, Taiwan, Hong Kong, South Korea and others).
3. "Alternative" (Chile, Turkey, Thailand, Portugal and others).
4. "Triple Spiral" (USA, a number of European Countries) [4].
With our opinion, Georgian model of innovative ecosystem, which is in the process of formation, is more suited to the "alternative" model, because in the conditions of small financing, innovative ideas are generated mainly in technoparks and innovative laboratories. According to the information of Georgian Innovations and Technologies Agency (GITA), the following infrastructure supporting innovations has been created and operated throughout the country: Two Techno Parks (in Tbilisi and Zugdidi), Three Innovations Center, Three Innovations Laboratory, twenty-two Industrial Laboratories, by the end of October 2018 opens the third Techno Park (in Telavi), the foundation was laid to the construction of the fourth Techno Park (in Kaspi). Within the framework of the program startup Georgia, 20 startups were financed by 100000 GEL [5].
On 22.06.2016 was adopted Georgian Law,, about innovations" [6], this law aims creation and perfection ecosystem of national innovation necessary for socio-economic development of Georgia, construction of the economy based on knowledge
and innovations in the country, promoting the use of technologies in Georgia, which are created in other states, promotion of the introduction and export of intellectual property and technologies created in Georgia, entering of the advanced technologies in all spheres of science and economics in order to increase competitiveness of these spheres. The mentioned Law was prepared by the authorship of the LEPL Georgian Agency of Innovation and Technology of the Ministry of Economy and Sustainable Development of Georgia and it is the main legal framework in the sphere of innovations. The Innovation Agency still continues working on legal reforms and in the nearest future new legislative initiatives will be represented, which take into account creating mechanisms of venture investment funds and public financing (so called crowd funding) in Georgia.
In the long term in order to facilitate the development of innovative processes, Georgian Government has developed a socio-economic development strategy 2020 [7], according to which the Georgian Government determined priority directions, where development of innovations and technologies is one of the driving forces to develop country's competitiveness and improve economic prosperity. In the strategy it is presumed extension of the introduction progressive technologies by companies, strengthening of the communication between science and business, achieving satisfactory level of innovation and ultimately increasing of the competitiveness of local production. Our Government has the following objectives for the development of innovation and technologies: [8].
Table 1. - Goals for development innovation and technologies
Indicator Basic 2018 2020
The country's position according to the economy index based on the knowledge 68 55 45
Position according to the index of global innovations 73 65 60
The total productivity of factors,% 2,7 3,0 3,2
Position according to the of index of innovations capabilities 44 40 36
Position according to the index of global information technologies 65 58 50
The question arises: How realistic are these goals when the role of small and medium business in the country is small and programmed financing of the state budget is not oriented on innovations?
In the recent years, agreements concluded with the EU and other important activities serve for Georgia's coming under the unified space of European innovation policy and deepening cooperation with Europe, among them are: Eastern Partnership (EAP), a Deep and Comprehensive Free Trade Area (DCFTA) agreement, the Association Agreement and Brussels Agreement of April 29, 2016ratified by the Georgian parliament on December 22, 2016 "About
Georgia's participation in the European Union Program "Horizont 2020 - Research and Innovation Framework
Program (2014-2020)" between Georgia and the European Union" [9].
In addition, on March 28, 2016, the Government of Georgia and the International Bank for Reconstruction and Development (IBRD) signed a five-year (2016-2021 year) loan agreement for allocating $40 million USD to Georgia for the purpose of implementing the National Innovations Ecosystem (GENIE) project. The main goal of the project GENIE is to increase the innovative activities of firms and physical persons working in Georgia and to ensure their participation in digital economy. To achieve the mentioned, it is planned and it is actively going on formation of the regional and community centers of innovations, increasing the access to the internet for socially vulner-
able families and small businesses, developing digital and electronic literacy skills and capacities for entrepreneurs,
ensuring the access to financing for high-technological
and innovative startups. As a result, according to the innovation and technology agency, Georgia has advanced in global index rating of innovations. According to the data of 2018, our country is on 59th place, compared to the previous year the indicator has improved with 9 levels. Georgia is on the first place in global index rating of innovations in the region [10].
Thus, with the assistance of the EU and the state support in Georgia, some steps have been already taken for the formation national innovation system, we think it is necessary continuation of the targeted and consistent state policy, the state must provide political and economic stability in order to create a suitable environment for innovative policy. It is
necessary to take effective measures for the integration Georgian science and education system into a unified European space. The urgent task is working out the country's innovative development strategy and state program of its realization, that will respond to the global challenges.
References:
1. Georgian Innovations and Technologies Agency, URL: https://gita.gov.ge/geo/ecosystem
2. Legislative Herald of Georgia. URL: https://www.matsne.gov.ge/ka/document/view/2712487
3. Ramaz besadze. State Regulation Problems of the Formation Innovative Economics in Georgia, TSU Paata Gugushvili Institute of Economics Collection of International Scientific Conference Materials - Structural and Innovative Problems of Economic Development -June 23-24, 2017.- P. 11, 14.
4. Datunashvili Lina, the role of the state in the development of the innovative system of EU countries. URL: https://www. researchgate.net/publication/318497532_sakhelmtsipos_roli_evrokavshiris_kveqnebis_inovatsiuri_sistemis_ganvita-rebashi
5. Technopark Georgia. URL: https://www.facebook.com/TechParkGeorgia/posts/1495045793936649
6. The Legislative Herald of Georgia. URL: https://www.matsne.gov.ge/ka/document/view/3322328
7. Georgian Innovation Strategy "Innovative Georgia 2020". URL: https://idfi.ge/public/upload/IDFI/2020/Qashibadze2.pdf
8. Decree of Georgian Government, about the approval socio-economic development strategy "Georgia 2020" of Georgia and some activities connecting to it'' - No. 40. 17.06. 2014.
9. Ministry of Education and Science of Georgia. URL: http://www.mes.gov.ge/content.php?id=6888&lang=geo, 27.12.2016
10. Agency of Innovations and Technologies of Georgia. URL: https://gita.gov.ge/geo/static/31/genie
