Economic development of the municipalities (outside capital) is one of the key sustainable development challenges in Georgia. The capital city of Tbilisi, while accounting for nearly 1/3 of the country’s population generates 53% of GDP and keeps expanding, whereas the municipalities, with few exceptions, are losing population and suffering from high incidence of poverty, unemployment, and slow and weak economic development.

Innovation-driven growth has long been understood as a restless, uneven process. In the Schumpeterian tradition – captured formally by Aghion and Howitt’s model of creative destruction – economies progress when new, higher-quality technologies displace older ones, pushing the productivity frontier outward.

Georgia's post-pandemic recovery has been marked by strong macroeconomic performance, with real GDP surpassing pre-pandemic trends and labor market indicators showing notable improvement. However, this research note examines whether this recovery reflects genuine structural transformation or masks deeper challenges of labor market polarization.

Economic development of the municipalities (outside capital) is one of the key sustainable development challenges in Georgia. The capital city of Tbilisi, while accounting for nearly 1/3 of the country’s population generates 50% of GDP and keeps expanding, whereas the municipalities, with few exceptions, are losing population and suffering from high incidence of poverty, unemployment, and slow and weak economic development.

This is a working note outlining the initial processes behind the SME Test Methodology. It is a notable deliverable part of the Developing an RIA SME Test Methodology for Georgia, while strengthening the capacity of the Government of Georgia to utilize SME RIA tools in practice Project, as funded by the UNDP and led by ISET Policy Institute.

Please note that the research report 'Gender impact assessment of the law of Georgia on public service' is available in Georgian language only.