LOCAL ECONOMIC DEVELOPMENT PLAN FOR TBILISI ... - LED

This more recent phase of economic restructuring has been characterized by a
transformation to a knowledge economy. The future quality of life in advanced economies
depends on upgrading and moving the economy towards a concentration in high value
added activities from any industry. The key is to focus on the high order, innovation
based, high productivity activities in each industry. The quality of life and economic
development, depend on making a successful transition to a knowledge economy.
Unlike an economy based on traditional manufacturing and natural resource extraction, in
which factors such as access to raw materials may have played a central role, the
knowledge economy is driven by:
• well educated and high-skilled workforce,
• innovation – creativity, flexibility, research and development,
• entrepreneurship – mentoring, networking, strategic alliances,
• information and communications technology (ICT).
The knowledge economy is present in all segments of our society and our economy. It is
not confined to certain groups, such as university graduates, or certain industries, such as
information technology or telecommunications. Rather, the knowledge economy
represents a way of life and a way of producing goods and services that focus on
continuous improvement of the above characteristics. Even “traditional” industries, can be,
or rather should be, a part of the knowledge-based economy. Today successful
companies in older industries employ high quality design and flexible advanced
manufacturing.
Cities have always been areas of growth, the places where economic resources,
entrepreneurship, and a diverse population provided natural opportunity for starting new
economic, cultural and intellectual activities. Cities have always fostered the creativity that
produces technological advancements and new forms of commercial organizations. There
are a lot of good examples in the last century of the power of cities to create new
technological and commercial innovations, as a result of combined activities of
entrepreneurs, artists and technicians congregated in these places. What we are
witnessing now in successful North American and European cities is the concurrence of
cultural and technological creativity that drive the new economy. The multi-media
industries that have exploded in several places are example of this creative convergence.
There is an assortment of specific conditions that exist in cities and which make them a
fertile ground for innovation, creativity, and technological and commercial advancement.
The most important thing that cities can offer is the diverse pool of skilled labour required
to make large-scale and specialized production possible. Secondly, because of their size
cities should offer local markets of sufficient size for specialized goods and services to be
developed. Thirdly, because of their geographical conditions and the enhanced possibility
for formal and informal contacts of all kinds, cities are places where technology and knowhow
can spill over. Information flows easily, and chance encounters can bring together
diverse interests and expertise to create new products and services.
In this context, urban arts and cultural amenities - including not only formal events and
places such as galleries, music halls or museums, but also the vitality of its more informal
amenities like restaurants, street cafés, bookstores and outdoor festivals - becomes
tangible assets that play a role in fostering creativity and innovation.
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