ISET Policy Institute, in partnership with UNDP, has launched a new project, entitled "Developing RIA SME Test Methodology for Georgia", with the aim of strengthening the Government’s capacity to analyze policy impacts on SMEs by providing essential tools, knowledge, and practical experience.

On 6 June, a Memorandum of Understanding between ISET’s Policy Institute and the SME Development Association (SMEDA) was enacted. The document was signed by Tamar Sulukhia, the ISET and ISET Policy Institute Director, and Grigol Paikidze, Executive Director of SMEDA.

The COVID-19 pandemic and consequent stringent lockdown measures have had a drastic toll on the Georgian economy. The economic downturn has significantly affected the resilience of local Small and Medium Enterprises (SMEs), whose sales decreased by almost 13% (YoY) in the first two quarters of 2020. These negative impacts of the economic contraction have been particularly severe for Women-led Small and Medium Enterprises (WSMEs).

The economic policies of successive Georgian governments have arguably lacked cohesive direction when it comes to inclusive growth. There still remains an open question of whether the overall goal has been to pull people from agriculture or to leave them where they are while pushing productivity up via, for instance, funding the development of cooperatives or clusters. Concurrently, the state also has introduced industrial policies, like establishing SME support agencies that operate under the auspices of different ministries.

Independent entrepreneurship is one of the main drivers of economic development and often manifests itself in the form of small and medium enterprises (SMEs). These start-ups trigger innovation, boost productivity, and bring about structural change.