Modern Challenges and Small and Medium Enterprise Development Trends in Georgia

Abstract

Purpose:The purpose of the study is to study the modern trends of SMEs development in Georgia, sectoral structure, directions of diversification and transformation, the spread and implementation of approaches based on digital platforms, the identification of existing problems and the search for solutions. Theoretical framework:Based on many international and local studies, it is revealed that SMEs make a great contribution to the formation of a sustainable economy. Accordingly, there is a need to adapt to the changes facing the world and national economies and to make appropriate transformations to deal with the challenges. Design/methodology/approach: This study was carried out based on SME-related scientific articles and studies published by international organizations. In addition, with the methods of econometric analysis and empirical research, the factors affecting the production of small and medium-sized businesses were analyzed and identified, and the sectoral features were evaluated and the needs were identified. Findings: The study found that SMEs are represented in large numbers in traditional sectors, which are not characterized by high added value and with a high level of "spillover effect" in other sectors. There is a need to develop innovation-based industries, invest in human capital, and increase the capacity to use digital platforms. Research, Practical & Social implications: The provisions given in the study will be a recommendation for the better development of the SMEs small and medium business sector and for making appropriate decisions on the part of the government. Originality/value: The work is a complex study, where the sectoral structure of the small and medium business sector, shortcomings, factors affecting the growth of productivity, aspects of the influence of innovations and digital platforms are studied.