Development Priorities for Small and Medium-Sized Enterprises in Georgia: Digitalization, Innovation, and Competitiveness

Abstract

The rapid development of digital technologies is significantly transforming the conditions for the development of small and medium-sized enterprises (SMEs), positioning digitalization, innovation, and competitiveness as interconnected dimensions of enterprise growth. This issue is particularly important for Georgia, where the SME sector continues to face challenges in translating digital capabilities into productive and innovation-driven outcomes. This paper aims to identify the key development priorities for small and medium-sized enterprises in Georgia by examining the interrelationships among digitalization, innovation, and competitiveness. The study is based on a comparative and critical analysis of Georgian and international statistical data, government policy documents, and the relevant academic literature. The findings indicate that access to basic digital infrastructure in Georgia has developed significantly; however, the integration level of digital technologies into business processes and the extent of innovation activity remain limited. Accordingly, the key priorities for the further development of SMEs include deepening digitalization, strengthening digital and managerial skills, supporting innovation, and enhancing integration into international markets. Particular importance should be attached to the productive adoption of e-commerce, data analytics, cloud technologies, and artificial intelligence. The findings of the study can contribute to SME policy improvement and strengthening of enterprise competitiveness in Georgia.