LOCAL ECONOMIC DEVELOPMENT PLAN FOR TBILISI ... - LED

1. Cities matter
1.1. Cities are key centers of new economy
Transformation of an industrial town into a post-industrial city is a long-lasting and
complex process. The examples of cities that have already undergone this process offer
experience that is worth using when working on Tbilisi economic development plan.
In the process of transformation three phases can be distinguished:
• crisis of a traditional industrial town,
• attracting foreign investors to the city,
• inward development based on unique identity and own resources.
The phases can overlap and their duration cannot be determined in advance. The
intensity and directions of changes depend on the local actors, their cooperation and
capability to implement plans.
The first phase include:
• a substantial amount of workforce is made redundant in industry sector,
• entrepreneurs set up service and trading companies that do not require much
capital,
• deprivation of industrial districts,
• deprivation of housing districts with low skilled communities,
• development of informal sector,
• education sector have no clear perspectives and teaching standards in new
professions.
Finding foreign investors make it possible to introduce to the economy the elements that
in the first phase are available locally, such as:
• capital,
• new technologies in production and management,
• new standards of employees’ recruitment,
• new cooperation links with other national economies,
• new products that are competitive on global markets.
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