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I.Gagnidze:Clusters and Georgia’s Economic Development Strategy

Under conditions of the open economy transition to the market system, obtaining global market niche and taking a solid position there require a great effort  of governments and citizens of any country. Resolution of such a difficult problem needs a great endeavor also in Georgia. 

Because of the above we would like to draw the reader’s attention to the cluster conception discussed in “Competitive Advantage of Nations”(1990) by M. Porter, one of the researchers of competitiveness theory. 

Except for the above we would like to provide additinal advantages of seeing  the country’s economy through cluster prism. Namly: 1) Cluster conception is based on a broader view of the competition for increased productivity between firms and regions; 2) Clusters influence competition in three ways: 1. increase  in productivity of the engaged industries and firms; 2. Improvement of  innovativeness;  3. Stimulation of new business;3) Clusters represent driving force of export growth and FDI attraction, which is one of the primary  tasks of  the Georgian government; 4) State and private investments aiming at improving  operation of clusters provide advancmenet for many firms simultaneously; 5) Famous firms get interested and a specific production chain is created; 6) The majority of cluster participants are not direct competitors of each other. They simply serve different segments of an industry. In a viable cluster the initial critical mass of firms enhances self-strengthening process. Information is accumulated and special preparation begins in local institutions, research activities are conducted, infrastructure is developed and appropriate legal regulations are laid down; 7) Becides, cluster becomes more conspicuous and its prestige rises; 8) Cluster intersection (for example, intersection of timber cluster with printing and publishing, transport, construction and wine making clusters and at the city level with  conference and restaurant clusters) show new impulses of their development which reduce business entry barriers; 9) As soon as the cluster is formed, mutual support for every industry within the group will  emerge; 10) Producers or individuals with original ideas migrate to the growing cluster region; 11) This will  contribute to resolution of  the problem  of emigration  from Georgia 12) Firms in the cluster can determine future development trends more quickly, than their competitor seperate firms; 13) Clusters may facilitate the adaptation process of local firms with changing economic conditions. This additionally reduces the risks of local economy. 14) Owing to cluster memebership  the sense of ”civil commitment” makes firms go beyond narrow private interests. As a result effecient owner is shaped, etc.

As a conclusion it should be mentioned, that following tipes of clusters can be developed in Georgia:

  • Transport (due to geographical location of the country this function has already been recognized by Silk Road, railway, air, pipeline, etc);
  • Tourism (eco-tourism, rezort and recreational tourism, piligrimage, etc);
  • Division of subcluster (timber, wine-making, gardenong and other food products) within a large agricultural cluster.

For the first step formation of Tourism and Transport clusters in the Caucasus countries (Georgia, Turkey, Armenia, Azerbaijan) economy will be an incentive for the development of infrastructure and economic activities. Tourism and Transport products are characterized by mutual supplements and would not be as efficient as management of their fields through clusters. Other reasons of mutual supplement within the clusters are related to the best planning and identifying sequence of activities not only in the Caucasus.

Category: Abstracts | Added by: margalita (18.10.2009)
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