Policy Briefs

Georgia’s potential in selected engineering goods
Tuesday, 04 August, 2015

ISET-PI analyzed the potential for Georgia to specialize in the production of several types of engineering goods: Insulated wire and cable; Pleasure and sport vessels; Cargo containers; Derricks, cranes, and straddle carriers.

The analysis of the current situation in Georgia and on the world market revealed very limited current production in the engineering sector and showed that technology generally is not up-to-date.

Past infrastructure in the engineering industry in Georgia has either been abandoned or is largely technologically outdated, which has caused a need for the sector to essentially start from scratch. In the team’s comparative analysis of Georgia versus other Eastern European and Asian countries, we have identified three key competitive factors: An analysis of Human Capital showed competitive wages, but limited qualifications of the workforce. Consequently, Georgia is initially most suitable for production techniques that call for low-skilled industrial labor. Additionally, Georgia has an excellent business environment with relatively sound levels of political stability with low administrative tax burdens. Finally, the outlook for transportation and supply-chain logistics is heavily dependent on the type of good in question, although the newly constructed East-West highway is mitigating many problems in this regard.

Since September 2014, the ISET Policy Institute has been working with the German Economic Team (GET). In May 2015 ISET-PI and GET extended their partnership and began working on a variety of policy briefs for Georgia's industrial development. These briefs will simultaneously advance research in the sector and provide the Georgian government a set of guidelines for the development of its own policy, exploring where Georgia's comparative advantages lie. The German Economic Team is a consulting group that provides advisory services to the Georgian government on economic policy and is supported by the German Federal Ministry for Economic Affairs and Energy.

Project Team