SMEs and Country Growth Strategy: Evidence from Georgia

Abstract

Last decade in Georgia the main drivers of economic growth were foreign direct investment (FDI) and banking sector development. Since global financial crisis of 2007-2008, business activity in Georgia has been constrained by weak FDI and slow global recovery. The revision of Georgian pre-crisis to post-crisis strategy consists of diversification of investment sources. FDI should be accomplished by internal (private) investment, the main generators of which are SMEs. Nowadays SMEs contribution to economic growth is insignificant. The importance of SME sector is under evaluated by Georgian society and government.