LOCAL ECONOMIC DEVELOPMENT PLAN FOR TBILISI ... - LED

Real estate cluster.
The analysis of processes occurring on the real estate market requires long time series,
because their nature is related to long-term trade cycles. In case of Tbilisi is a difficult task
due to the economic transformation and political changes. Moreover, the reliability of data
collected in previous years is undermined by the discrepancies between the official and
market prices. The real estate and construction cluster in Tbilisi is characterized by high
dynamics of the market potential and high potential of product growth. The parameters
that apparently diminish its attractiveness include strong competition and people’s low
economic potential. It is obvious that an important element of the cluster growth is the
programmed aiming at keeping systematic record of available land, which will allow the
city to build a land market. The economic development is going to stimulate the real
estate market both in the housing construction sector and in office, storage and industrial
construction sector. Also the demand for new operating areas for trade companies is
going to grow.
Transportation cluster.
The attractiveness of the cluster related to transport and logistics companies results
mainly from the geographical location of Tbilisi where main Georgian and international
transport routes meet.
The globalization of manufacturing and the related supply chains increase the demand for
transport services. Logistics is getting increasingly important not only in Georgia itself, but
also as a part of international economic relations. When assessing the attractiveness of
the cluster the high marks have been given to the development potential and the products
(services) growth potential. The general mark of 1.2 places the cluster slightly below the
average, but the worldwide trends indicate that this cluster will develop dynamically in the
future.
The growth of commodity transportation logistics is first of all related to the economic
activity and is defined as the industry task. Main areas of the city intervention include
mainly giving access to developed land, promoting innovation and workforce training
Industry cluster.
The industry cluster has been marked as the least attractive. The old system left
businesses closely dependent on the Russian markets and carrying the burden of high
fixed costs. Consequently most of traditional industry companies closed down. Because
of growing productivity, that has resulted from the use of new technologies, and stronger
competition mainly of Asiatic countries the industrial sector is not very attractive. Apart
form highly rated political situation and social indices the other attractiveness parameters
of the cluster demonstrate low values. Therefore, it has been assessed well below the
average. The revitalization of buildings and warehouses that used to belong to closeddown
production plants should become one of the priorities while creating the economic
development plan for Tbilisi. Also the workers who have been made redundant should be
re-trained and instructed how to find new jobs.
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