LOCAL ECONOMIC DEVELOPMENT PLAN FOR TBILISI ... - LED

1. Role of Tbilisi for national economy
City are the more and more powerful engines of the national and global economy. Two
key forces - the globalization and the commercialization of new information as well as
communications technologies - have been driving the massive changes and thus
restructuring cities. Globalization is linked to liberalized trade and the opening up of world
markets through organizations and agreements such as the Word Trade Organization or
the European Union. Global corporations continue to expand their role on the world stage
through expansion, mergers and acquisitions.
Globalization would not be possible if there had not been for the explosion of new
information technologies with mobile wireless communication, personal computers, and
networks of internet, intranet and extranet. All of these have made it possible to manage
facilities distributed around the world, for the labour to move more freely across national
boundaries, and for the information, currencies and transactions to flow smoothly to any
destination. As globalization proceeds, regional and national economies become more
closely intertwined. National boundaries have gradually become less relevant as
globalization and information technology have reduced the role of the nation state. Big
metropolises with skilled workforce, globally connected businesses have emerged as the
engines of the new economy.
Globalization, and intensive competition which is integral to it, has led to a massive
restructuring of regional economies. The widespread de-industrialization of cities,
particularly of urban cores, is clear evidence of this. As the global marketplace expands,
each city is forced to focus upon the few things that it is very good at, in which it can
successfully compete at a global scale.
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).
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