ISET

This report highlights the derivation of sector-specific output (revenue), employment, and investment multipliers based on the Input-Output framework for the Georgian economy, which portrays the potential spillover effects of an increase in final demand for the products of a given sector on the whole economy. The resulting multipliers capture the total impact on the economy consisting of initial, direct, indirect, and induced effects on the economic variables of interest, respectively, as a result of an exogenous shock to one of the components of final demand (e.g. household or government consumption, export).

At the heart of the analysis is the Input-Output Table (IOT), containing information on inter-sectoral dependencies, as well as existing relationships between sectors, final users (e.g. households, government, etc.), and economic production factors. Measured over a specific period (typically one year), an IOT presents inter-sectoral transactions that are generally recorded in monetary terms. Therefore, sectors are connected by the amount they require each other’s production as an input.

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.

As part of this component, UNIDO mapped 57 emerging and potential clusters with a focus on manufacturing and agribusiness in Georgia using the UNIDO cluster definition which defines a cluster as a sectoral and geographical concentration of enterprises and/or individual producers that produce a similar range of goods or services and face similar threats and opportunities. A cluster encompasses enterprises as well as their supporting institutions (public and private), and civil society and academia. The report was prepared according to the UNIDO cluster development approach, which argues that a well-designed and executed cluster selection process is a precondition for a successful initiative.

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