Currently Georgia is focusing all of its attention on tourism. There is a challenge here, the only tourism that Georgia has to offer is small niche tourism. One of the current initiatives is to develop their tourism related to wine. This is perfectly fine but will not generate the revenue required to rejuvenate or invigorate Georgia's economy. Although it is a great starting point for building the local economies.
Due to the nature of growth related to the tourism industry, Georgia should now focus attention on three industries that could be used to overcome its small market. These industries could lead to significant revenue based on exports. The first industry is agriculture, the second is the continued development of its financial sector, and finally it should develop a stronger technology industry.
When it comes to agriculture the real challenge is in education and resources. Most Georgian farmers use traditional farming techniques that are outdated. This is due to the lack of agricultural education. If the country can manage to educate people in the industry it could see a revolution in agriculture that could make it competitive in the markets across the region. The other major challenge is resources, Georgian farmers have little access to modern reliable equipment for farming and this would require a significant investment by foreign aid and the Georgian government. By having access to innovative agricultural techniques and equipment it could also see major increases in productivity and crop damage prevention.
The financial sector in Georgia is growing extremely rapidly and is doing extremely well in a time the banking industry is in peril due to the economic downturn. The problem that I see in Georgia's banking system is much harder to correct. Unlike agriculture it isn't a problem with education it is a problem in the sense that it is completely mostly self-regulated. The regulatory body for banking in Georgia is made up of bankers and this in effect makes this industry lose and focus on protecting the customer. When mixed with a monopolistic business culture that strives to eliminate competition you end up with a bubble that is most certainly going to burst in the future. Georgia needs an innovative business person to step in and disrupt the banking industry, by provides customer oriented services, terms, and conditions you could potentially disrupt the system and correct some of the challenges that this industry could face in the future.
The final area that Georgia has real potential in is technology and in this area Georgia could truly shine. There are just a couple of major challenges that need to be met for this to happen. The first is intellectual property rights. Per capita Georgia has the worst IP protection in the world. You can see this on a daily basis. Take software as an example. You can go to any store in Georgia and buy a software. This lack of IP protection makes it challenging to develop a technology industry because people will not spend the time developing software if they see blatant IP infringement going on around them. They will see no way of protecting their investment. Now given that the Georgian market lacks IP protection it is a good market for export and Georgia could take advantage of the low cost of development and build a relatively stable industry. The next challenge is getting the population interested in technological degrees. This is a serious challenge as the most desired degree by students in Georgia is a business degree. For this industry to grow there needs to be a larger number of highly technical graduates and that will require government initiatives to develop an interest in these fields. By developing a nurturing this industry Georgia could actually become a major player in external markets.
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