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INNOVATIVE DEVELOPMENT TRENDS IN GEORGIA




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Highlights of Innovation in the Global Rankings

Highlights of the enhanced competitiveness in the world ranking. The government is doing its best to improve the competitiveness rating further. Recently, it becomes better in such areas as macroeconomic stability. Global competitiveness ranking of the World Economic Forum (WEF) published annually.

2014-2015 World Economic Forum on «Global Competitiveness Report» of the previous year and improved its position in the 72th (4.15 points) from 69th place (4.22 points) moved.

«Global Competitiveness Index» structure consists of three main sections. This blocks are: basic requirements, efficiency and innovative factors stimulating factors. The basic requirements include: state institutions, infrastructure, macroeconomic environment, health care and basic education. The effectiveness of stimulating factors include: higher education, goods and labor market efficiency, financial market development, technology, and market size. Innovative factors include: the development of business and innovation.

2014-2015 Annual Report, the basic requirements of Georgia 48th place (4.88 points), the effectiveness of stimulating factor — 79th position (3.92 points), while the innovative factors in terms of the 118-th place (3.1 points) holds.

The factor of macroeconomic stability is one of the basic requirements. During 2015, Georgia ranked 48th place (5.14 points) on macroeconomic stability. Macroeconomic stability is determined by the index of the five components. These components include: the budget deficit, domestic savings, inflation, public debt, and the country’s credit rating. In 2014-2015 in the world rankings following country took place on indicators: the budget deficit — 40 th place (1.3% of GDP); Domestic savings — 72 th place (19.4%); Inflation — 78 (-0.5%); Public debt — 41 (31.8% of GDP) and the country’s credit rating — 84 th place (38.3 points).

According to the 2012-2013 years (2 years ago), the macroeconomic stability of Georgia is in the 88th position. Budget deficit — 37th place (0.9% GDP), domestic savings — 122th place (10.9%), inflation — 115 (8.5%), government debt — 53 minutes (33.9% of GDP ) and the country’s credit rating — 91th place (35.7 points).

2014-2015 year, according to the report, the most difficult situation in terms of innovation and business development has. For this indicator, Georgia is 113th (business) and 121 (Innovation) respectively. Market size is the most problematic factor in determining the efficiency of the economy – Georgia is on 103th place (2.98 points), higher education and training in 92th place (3.89 points).

How much of a place in the global competitiveness ranking improved, from 2014-2015 to 2006-2007 in order to determine under section published reports have reviewed. Basic data on global competitiveness ranking, according to the individual, presented in table form.

According to the table, the index of global competitiveness of Georgia began to grow from 2010-2011. Since 2011, all the main indicators have improved. Only the innovative factor grew by a few points, and the country ranks 118th stable position.

According to the report of the World Economic Forum «Global Competitiveness 2014-2015», Georgia has improved its position in 72th place from 69th place. 2012-2013 year, according to the report, the rating of Georgia was ranked 77th.


 

Table 1. Georgia «Global Competitiveness Report» Ranking [3; p. 15]

Competitiveness Ranking Basic Requirements Effectiveness Stimulating Factor Innovative Factor Macroeconomic Stability
2014-2015 69 48 79 118 48
2013-2014 72 57 86 122 61
2012-2013 77 64 87 120 88
2011-2012 88 86 89 117 137
2010-2011 93 95 94 121 130
2009-2010 90 85 89 117 117
2008-2009 90 91 87 109 118
2007-2008 90 87 90 119
2006-2007 85 82 87 113 93

The last two years, all the major indicator in determining the rating is enhanced. 2014-2015 on the rating, the basic requirements, according to the Georgia 48 th position (in previous years, the 64 th and 57th place), the effectiveness of the stimulating factor of 79 (in previous years, the 87th and 86th place). Also slightly enhanced rate of innovation factors and the countries belonging to the 118th place (120th in previous years and the 122th place).

The last two years, according to reports, most of the improvement in macroeconomic stability has increased. The ranking of 88th place (2012-2013) 48 (2014-2015) place. As well as improved production efficiency rate of the market, according to the country from 82 to 60th place. Also, financial market development in 93 to 76 minutes on the ground moved.

In two years, none of the special rate of deterioration has not suffered. Steadily problematic Innovation and Business Development (118th, 122th place) and market size (99th, 103th).

We analyzed the World Economic Forum in the last few years on the basis of the report and conclude that our competitiveness is improving.

According to the Global Innovation Index, Georgia occupies the 73rd place in the ranking, in comparison with the last year index deteriorated in the 2 position. According to the data of the business school INSEAD, Cornell University and the World Intellectual Property Organization, Georgia ranks 61st place, behind the two top entry Armenia (Armenia — 59th place) and ahead of Azerbaijan, which occupies the 105th position.

Global Innovation Index includes seven components — institutions, human capital and research, infrastructure, market development, business development, knowledge and technology, creative achievements. Institutions of the component parts of the business, where Georgia ranks 34th, ease of business in the country in 5th place, business liquidation simplicity — 73th place, while the simplicity of paying taxes — 20th place.

The level of market development component (34th place) loan facility of making Georgia the 4th place in terms of ease of obtaining credit for the private sector — 93 th place, while protecting investors simplicity — 21 th place.

This year’s data, Georgia is a country with a group of 18 hit, who are trying to dramatically improve their ability in terms of innovation.

«These countries are increasing the level of innovation show, which is due to the improved results which they achieve the development of institutions, workforce capacity building, infrastructure development and innovative global investment and trading markets, to establish tight integration» — the report said. [3; p.11]

2013 Global Innovation Index in the previous year, the first place in Switzerland, followed by Sweden, the third — the UK, the fourth — in the Netherlands, on the fifth — in the US. Ranking of the world’s 142 countries.

In September 2015, the Forum was held on the theme «Global Innovation Index and Georgia», which was seen of Cornell University, INSEAD and the World Intellectual Property Organization (WIPO), prepared by the «Global Innovation Index 2013» and the results of innovative development in the world ranking.

«Global Innovation Index 2013» deals with the world’s 142-country development of innovative features. Report for 2012 on the basis of detailed studies took place.

The event was aimed, tsarmoacheniliqo Innovation Development hindrances, we have offered a critical analysis of the situation for the public and representation of recommendations for improving the country’s innovative development. Georgia ranks 142 countries on the ground 73. Passed last year, the country was on the 71th position.

Global Innovation Index and Multi-parameter indicators, which in turn allows for the production of various ratings. Many of the important indicators of the failure of the detector, as well as such important components, such as the prevalence of the environmental certificate ISO 14001, the neighboring countries have among the worst condition.

Education is also an important failure of fixed costs in the current expenses (109 positions); Political stability (position 111); Market capitalization (99 positions) and the intensity of local competition (123 positions), etc.

Georgia’s rapid economic development is important for the economy to be competitive at the global level in the past. Among the countries of the global competitiveness of the issue of the Swiss organization — the World Economic Forum (WEF). The organization publishes an annual report since 1979, which analyzes the business environment and competitiveness of countries around the world. Every year gets a rating that reflects the competitive position of the countries in the world. The report is to identify the obstacles to economic growth, governments, business and the future of the investment decision-making aids.

Economic Forum, the economic competitiveness through the development of institutions, policies and natural factors that determine the level of productivity of the economy. Harvard Business School Professor Michael Porter explains productivity, natural resources, labor, capital and technology level of efficiency — from the resources of the proceeds of the excess of the costs. Organization for Economic Cooperation and Development (OECD), the competitiveness of the country’s capacity to produce goods and services for the international market demand, and at the same time steadily increase the real income of the population in the long run. [1; p. 87]

2014 Global Competitiveness Report published by the World Economic Forum in September. The report studied 144 countries competitiveness. Analysis was carried out in 2013, based on the data. Each country is assessed 119 for out of 33 criteria (for example, government debt, budget deficit, inflation, tax levels, export, life expectancy, school children and the number of students and other) data source is the country’s official statistics, while the other criteria (for example, , property rights, trust in politicians, judicial independence, transparency policy, crime, medicine and education level, quality of infrastructure, etc.) is a source of information for small, medium and large enterprises in the survey, which was carried out by the world economic Forum. Survey responses are confidential and the companies have the possibility to attend only to the Swiss side.

2014 Global Competitiveness Index of the 69-th place, three places above moved from the 2013 position. The fourth year, the positive trend in the index (Figure 1).

Figure 1. The position of the Global Competitiveness Index [2; p. 9]

Competitiveness Evaluation Criteria 119 12 thematic groups is distributed. These groups, of the efficiency of the labor market has a good position — 41 th place in the world. The lowest position (121-th) is innovation.

Georgia top ten in the following specific criteria included: starting a business required by days — 2nd place in the world, starting a business for the necessary procedures — 3rd place, trade barriers — 6th place, customs procedures — 7th place, state regulations according to the cargo — 8th place, the level of tax rates — on the 10th place. And in the worst positions in the following criteria in accordance with local suppliers of — 138 th place, universities and business studies, in collaboration with — the 128 th place, antitrust policy — 127th, company’s expenses in research and development — the 126th place, local financial markets financing — 126th place, metsnierebita and engineers — 122nd place, local product quality — the 121st place.

Interestingly, in 2013, which has undergone significant progress or regress criteria compared to 2012. Is to move forward on the following criteria: property rights index 120th place from 85th place, Competitiveness Evaluation Criteria on 12 thematic groups is distributed on 12 thematic groups. These groups, of the efficiency of the labor market has a good position — 41 th place in the world. The lowest position (121-th) is innovation.

Table 2. The Rating of the Global Competitiveness Index [2; p. 8]

Georgia top ten in the following specific criteria included: starting a business required by days — 2nd place in the world, starting a business for the necessary procedures — 3rd place, trade barriers — 6th place, customs procedures — 7th place, state regulations according to the cargo — 8th place, the level of tax rates — on the 10th place. And in the worst positions in the following criteria in accordance with local suppliers of — 138 th place, universities and business studies, in collaboration with — the 128 th place, antitrust policy — 127th, company’s expenses in research and development — the 126th place, local financial markets financing — 126th place, metsnierebita and engineers — 122nd place, local product quality — the 121st place.

Interestingly, in 2013, which has undergone significant progress or regress criteria compared to 2012. Is to move forward on the following criteria: property rights index 120th place from 85th place, Court independence in 91 to 65-th place, increasing domestic competition 123 to 105, the volume of exports to gross domestic product of 97 to 76, the strength of the banking sector from 82 to 67 on. It should be noted that all of these criteria (except for export) are set directly by the survey of companies and is not based on official statistics.

Table 3. The Position Criteria[2; p. 5]

 Criteria for Groups Position in the World Points (maximum 7)
Basic Requirements 48 4.9
Institutions 48 4.2
Infrastructure 59 4.3
Macroeconomic environment 48 5.1
Health and primary education 63 5.8
Boosting Performance 79 3.9
Higher Education and Training 92 3.9
Goods Market Efficiency 60 4.4
Labor Market Efficiency 41 4.5
Financial Market Development 76 3.9
Technological readiness 67 3.8
Market Size 103 3.0
Innovation and sophistication factors 118 3.1
Business sophistication 113 3.5
Innovations 121 2.7

Source: http://forbes.ge/news/453/saqarTvelos-ekonomikis-konkurentunarianoba

In 2013, the noticeable decline from the following criteria: foreign direct investment and technology transfer 101th place from 113th place, borrowing the ease of 98-to 110-moved, the costs of inappropriate distribution of 58 to 67, the electricity supply degrees from 52 to 57, the quality of roads in 60 to 65 minutes on the ground. These figures are based on a survey of companies directly.

Summing up the picture of the benefits and shortcomings, we: Georgia is competitive compared to the development of institutions, infrastructure, labor market efficiency, low taxes and regulations, the absence of exchange control, low crime, a lack of bureaucratic procedures for starting and doing business. Problems in the following areas: protection of property rights, innovation, secondary and higher education, science and research, the level of competition in the domestic market, access to finance, professional workforce, politicians and the public trust in the political instability.

Popular opinion, that Georgia will never occupy the leading position in the ranking, because of the small-market country. This is not true, because the ranking 2nd place in Singapore, with a population of 5.4 million people (of a population of 1.2 times), area of ​​718 square kilometers (of the 95-times smaller), and the economy’s 40-th place in the world. The only limiting criteria for a small country, which includes the index, the market size is indeed, according to which of the 103-th place. However, the impact of the criteria jamobriv of about 5% to be. Singapore is the same rate of 31-th position, but in the first place is the politicians and the public trust the government’s policy of transparency, the low level of inflation, the quality of air transport, the primary education level, mathematical and scientific education, customs procedures simplicity. In the second place uchravs property rights protection, the protection of investors, attracting talent, port infrastructure and export-largest economy.

This comparison shows that even a small country can become the most competitive in the world and raise the amount of capital, the high economic growth and development of the country to contribute. It is not necessary for the abundant natural resources, a large area, tens of millions of people, the US or the European neighborhood. Economic prosperity favorable business environment, property rights, transparent and effective public policy, the Court and reliable infrastructure brings.

Competitiveness Report is a long list of problems facing the existence of objective reasons for a just and elimination of the government depends on political will. For example, such as: protection of property rights, judicial independence, favoritism reduction in government decisions, public spending targeted spending, legal mechanisms to effectively use disputes, small shares of stock with ownership rights, the reduction of inflation rate, air transport services improvement, primary, secondary and higher improving the quality of education, scientific research, education and capacity building, research and development of innovative centers.

In general, the government often relies on its own assessment of the measures, and indeed the different ratings. The Global Competitiveness Report of the successes as well as failures of the most comprehensive picture to be analyzed will help politicians to understand what he perceives to be a problem and how severe the problems of Georgian companies in other countries Compared with the situation. At the same time, do not forget that this report is prepared by a reputable organization, such as the World Economic Forum and its results will be taken into consideration investors from different countries.

References:

  1. Allan Afiiah. Innovation management: strategies, implementation and profits. Oxford University Press, 1998.
  2. Forbs; The Competitiveness of Economics, Georgia.

http://forbes.ge/news/453/saqarTvelos-ekonomikis-konkurentunarianoba

The Global Competitiveness Report; http://www3.weforum.org/docs/gcr/2015-2016/Global_Competitiveness_Report_2015-2016.pdf.

INNOVATIVE DEVELOPMENT TRENDS IN GEORGIA
An innovative way of development is important for the development of science and innovation strategy. Such a strategy main objectives include the development of fundamental research, innovation and efficiency of the research sector, the integration of the global economy, innovative infrastructure. Effective Management of innovative processes at all levels give us the economic growth and sustainable development of country, its regions and certain areas. The article describes the parameters of Georgia innovative development for the last 10 years for all components, with internationally accepted analysis. In addition, the article analyzes the selected indicators, which are important for Georgia at this stage of economic development.
Written by: Alexandre Khvedeliani
Published by: БАСАРАНОВИЧ ЕКАТЕРИНА
Date Published: 01/05/2017
Edition: ЕВРАЗИЙСКИЙ СОЮЗ УЧЕНЫХ_30.11.16_31
Available in: Ebook