We live in a world where the production of a single good typically involves manufacturing inputs from many different countries around the globe. For example, a typical iPhone production takes place in as many as 7 countries, including the USA, Mongolia, Japan, Korea, Taiwan, China, and even Switzerland. This is what is known to economists as global value chains (GVC). The emergence of GVC more than two decades ago transformed the way economists think about countries’ comparative advantage and specialization in production.

This nationwide cluster mapping was conducted under EU Innovative Action for Private Sector Competitiveness in Georgia (EU IPSC), implemented by UNDP, FAO, UNIDO and IOM, and funded by EU. UNIDO’s component of the UNJP aims at strengthening the capacities of policy-makers and other stakeholders to identify and develop clusters.

The advent of globalization in recent decades has had a profound impact on the development path of countries around the globe. The rapid development of ICT technologies coupled with global tendencies to reduce tariff and non-tariff barriers since WWII made possible economic integration between countries on the scale never imagined before.

In the first quarter of 2020, BCI increased by 7.3 index points reaching 25.8. Business confidence improved across all sectors with the exception of the service industry. The largest growth was observed in agriculture, followed by the manufacturing industry. In both sectors, the increase in BCI was driven by improved past performance as well as more optimistic future expectations.

ISET Policy Institute, with the support of UNIDO, conducted a study to map emerging and potential clusters in Georgia with a focus on the manufacturing and agri-business sectors. The objective of the project was to enhance entrepreneurship and business sophistication by strengthening the capacities of government and local entities to develop and operate clusters and supporting companies directly with strategic investments and to better connect with diaspora groups, while also demonstrating the effectiveness of these strategies to businesses.