PROJECT SUMMARY 

The CIIP project will aid the government of Georgia to provide critical resources necessary to develop and launch implementation of the Georgia’s competitiveness agenda. It also aims to support  the government in establishing effective PPD (public-private dialogue) mechanisms through Competitiveness and ICT and innovation council and the respective working groups co-chaired  by the industry-champions and private sector stakeholders.  
 
These working groups comprised of private and public sector leaders, academia and think tanks will develop the detailed road maps in support of the country’s 2020 Development Strategy and competitiveness reform agenda, and produce selected  industries strategies. These sectoral strategies will have  with executable actions with respect to policies, institutions and instruments to enhance Georgia’s competitiveness and growth.  
 
Additionally, the project will support the implementation of the reform process as outlined below through implementation of special tools and mechanisms to support innovation and technological absorption in selected industries and SMEs.  
 
It is expected that the government, through the Ministry of Economy and Sustainable Development (MOESD) and the Competitiveness Council working groups/taskforces will focus on the following industries and topics (to be debated and discussed through the PPD engagement): 
 
High value added manufacturing
Objective: To facilitate an improvement in the competitiveness of Georgian firms in high value manufacturing industries such as metal processing, machinery, electronics and automotive which are also among the largest and densest industrial clusters.
 

ICT & business services
Objective: development of ICT and business services is crucially important to enhance sophistication and competitiveness of Georgian’s existing exports in high growth sectors, as well as  increase the share of exports and employment for Georgia in ICT/business services thus  leveraging the country’s  large pool of highly educated, English speaking and underemployed workers, especially among younger  (graduates) and middle-age population.  

Agribusiness
Objective: To support the upgrading and value chain scaling up, and improve access to finance and investments for the agro-processing industry

Institutional solutions and support
Objective: To rationalize government support and ensure its effective engagement in close support and cooperation with the private sector while ensuring it is not crowded out through special programs, or institutions (Georgian Development and Export Promotion Agency, reform of Partnership Fund, development of Innovation Fund and design of SME support and  innovation programs, export promotion activities and programs, improving access to finance etc).
 

The project will include the following components:

Capacity building and PPD engagement through the Competitiveness Council Secretariat and Task forces: This component will focus on strengthening the implementation capacity and policy implementation impact assessment of the MOESD, Competitiveness Council Secretariat and taskforces.  The project will ensure that the counterpart is staffed with people with the right skill set and provided with training to implement the competitiveness agenda.  An important piece of this component will include development of a road map for selected competitive industries (specifically, high value manufacturing, ICT,  and agribusiness) as well as overarching programs on innovation, SME and entrepreneurship growth and facilitating PPD (through the mentioned taskforces and beyond this) and ensuring that businesses (particularly domestic firms through professional associations) are well represented in the decision making process.  The crucial process of designing an effective implementation and M&E framework will also be included in this component.
 
Financing innovation and technology absorption in key sectors: Innovative entrepreneurship development requires specialized platforms and mechanisms (both financial and non-financial) for proper development. The intangible nature of technological innovation and the uncertainty regarding their results make it difficult for innovative entrepreneurs to obtain financing.  This component will involve establishing financial and  non-financial instruments to support entrepreneurship in key sectors.
  
 
Enhancing competitiveness by upgrading knowledge and technology absorption and modernization of export SMEs  (proposed sectors high value added manufacturing, trade logistics, agribusiness): Upgrading is crucial to the long term competitiveness of Georgian exports, however experience shows that technology absorption is neither automatic nor costless and extensive effort is required to adapt technology to the local context. This component aims to empower the Government of Georgia to support SMEs more broadly and bolster export sustainability and survival.