LOCAL ECONOMIC DEVELOPMENT PLAN FOR TBILISI ... - LED

4.8. Identification of key problems facing City of Tbilisi economy
Good outcomes reflecting the satisfying condition of Tbilisi economy, when compared to
the rest of the country, results from the fact that the city does not face any competition as
far as economic indices are concerned. Other regions perform much worse than the City
of Tbilisi.
The authors of new programmes of economic development have to consider the fact that
their impact will not be restricted only to the metropolitan area of Tbilisi, but that they will
strongly influence the national economy. The increase of economic indicators is built
mainly on the growing production of low processed goods (e.g. cement, sawn wood) and
on the export of raw materials (such as ores), which will not contribute to the economic
growth and increased competitiveness on foreign markets. Also, these segments will not
attract technology transfer and will not generate new, competitive products.
As a result of economy transformation Tbilisi lost its traditional industries that were
generating incomes and workplaces for decades. Schools, universities and supporting
institutions were organized around them. Now, when most of old factories do not operate
any more all these institutions should transform their activities or will be closed down too.
To create Tbilisi new economy profile and face competition of global markets new city
products should be identified and new institutional infrastructure should be developed to
support key city development possibilities. Cluster networks should grow around
competitive city products that will be identified. Workforce development programs should
be created to support young people entering labour market and those who need to
change or improve their qualifications. Schools and vocational training institutions should
develop new educational programs to prepare qualified workforce for the new sectors of
economy. To build foundations for knowledge-based economy the research institutions
should offer companies new management and production technologies. The whole range
of institutions is needed to offer funding to growing companies (credit, capital and
guarantees). Business networks, organizations, consulting and marketing companies will
help companies and their products enter new markets and compete with foreign
companies. Public institutions should participate in the process of supporting promotion
campaigns, offering good quality space and qualified workforce for all new generation of
firms and institution, in order to build international reputation and recognition of the city.
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