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Market Research and Analysis of Innovation and Technology

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Market Research and Analysis of Innovation and Technology INNOVATION AND TECHNOLOGY IN GEORGIA ANNUAL REPORT: 2017 USAID GOVERNING FOR GROWTH (G4G) IN GEORGIA 31 August 2017 This publication was produced for review by the United States Agency for International Development. It was prepared by Deloitte Consulting LLP. The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. INNOVATION AND TECHNOLOGY IN GEORGIA ANNUAL REPORT: 2017 USAID GOVERNING FOR GROWTH (G4G) IN GEORGIA CONTRACT NUMBER: AID-114-C-14-00007 DELOITTE CONSULTING LLP USAID | GEORGIA USAID CONTRACTING OFFICER’S REPRESENTATIVE: REVAZ ORMOTSADZE AUTHOR(S): PMO LLC INNOVATION AND TECHNOLOGY: 5510 LANGUAGE: ENGLISH 31 AUGUST 2017 DISCLAIMER: This publication was produced for review by the United States Agency for International Development. It was prepared by Deloitte Consulting LLP. The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. USAID | GOVERNING FOR GROWTH (G4G) IN GEORGIA INNOVATION AND TECHNOLOGY IN GEORGIA i International Development or the United States Government. DATA Reviewed by: Malkhaz Nikolashvili, Michael Martley, Nino Chokheli Project Component: GoG Capacity Strengthening Practice Area: Innovation and Technology Key Words: Innovation, Technology, Sector Study, Georgia USAID | GOVERNING FOR GROWTH (G4G) IN GEORGIA INNOVATION AND TECHNOLOGY IN GEORGIA ii ACRONYMS AA Association Agreement ADSL Asymmetric Digital Subscriber Line AI Artificial Intelligence AMD Armenian Dinari AR Augmented Reality B2B Business to Business B2C Business to Consumer BA Bachelor of Arts BERD Business Expenditure on R&D BfD Broadband for Development BGN Bulgarian Lev BPO Business Process Outsourcing BS Bachelor of Science BSTDB Black See Trade and Development Bank BTU Business and Technology University CAGR Compounded Annual Growth Rate CBC Creative Business Cup CDMA Code Division Multiple Access CIC Community Innovation Center CIS Community Innovation Survey COSME Competitiveness of Enterprises and Small and Medium Sized Enterprises DCFTA Deep and Comprehensive Free Trade Area DSC Differential Scanning Calorimeter EaP Eastern Partnership – EU cooperation initiative EBRD European Bank for Reconstruction and Development ECA Europe and Central Asia EDGE Enhanced Data GSM Environment EEN Enterprise Europe Network EIB European Investment Bank EIF European Investment Fund EPI Economic Prosperity Initiative EQE Education Quality Enhancement ERP Enterprise Resource Planning EU European Union FabLab Fabrication Laboratory FDI Foreign Direct Investment FEZ Free Economic Zone G4G Governing for Growth in Georgia USAID | GOVERNING FOR GROWTH (G4G) IN GEORGIA INNOVATION AND TECHNOLOGY IN GEORGIA iii GAU Georgian American University GCI Global Competitiveness Index GDP Gross Domestic Product GEL Georgian Lari GENIE Georgian National Innovation Ecosystem Geostat National Statistics Office of Georgia GERD Gross Expenditure on R&D GII Global Innovation index GIPA Georgian Institute of Public Affairs GITA Georgian Innovation Technology Agency GITR Global Information Technology Report GNAS Georgian National Academy of Sciences GNCC Georgian National Communications Commission GoG Government of Georgia GPS Global to Pivot Success GRDF Georgian Research and Development Foundation GTU Georgian Technical University HDM Harmonization of Digital Markets HEI Higher education institutions HTP High Tech Park IBRD International Bank for Reconstruction and Development IC Innovation Council / Information and Communication equipment ICT Information and Communication Technology ICTBC Information and Communications Technology Business Council of Georgia IFC International Finance Corporation Ilab Innovation Laboratory IMF International Monetary Fund Innocens Enhancing Innovation Competencies and Entrepreneurial Skills in Engineering Education IP Intellectual Property IPB ICT Price Basket ISP Internet Service Provider ISWD Industry-led Skills and Workforce Development IT Information Technology ITO Information Technology Outsourcing ITU International Telecommunication Union LTE Long-Term Evolution M&A Merger and Acquisition MA Master of Arts MCA Millennium Challenge Account mln Million USAID | GOVERNING FOR GROWTH (G4G) IN GEORGIA INNOVATION AND TECHNOLOGY IN GEORGIA iv MNC Multinational Company MoD Ministry of Defense MoES Ministry of Education and Science of Georgia MoESD Ministry of Economy and Sustainable Development of Georgia MoF Ministry of Finance MS Master of Science NACE Statistical Classifications of Economic Activities in the European Community NGO Non-Governmental Organization NIB Nordic Investment Bank OECD Organization for Economic Co-Operation and development PC Personal Computer PISA Program for International Student Assessment PMPR Policy Mixed Peer Review PPD Public-Private Dialogue PPP Public Private Partnership QS Quacquarelli Symonds R&D Research and Development RFP Request for Proposals RIH Regional Innovation Hubs ROI Return on Investment SDSU San Diego State University SME Small and Medium size Enterprise SRNSF Shota Rustaveli National Science Foundation STC Science and Technology Centre STEM Science Technology Engineering and Mathematics STEP Science and Technology Entrepreneurship STI Science Technology and Innovation System SWOT Strength Weaknesses Opportunities and Threats TAM Tbilisi Aircraft Manufacturing TCP Technology Commercialization Project TDZ Technology Development Zone TIEC Texas International Education Consortium TIMMS Trends in International Mathematics and Science Study TPP Technology Product and Process TSU Tbilisi State University TTCG Technology Transfer Center of Georgia TTO Technology Transfer office TUM Technical University of Munich TVET Technical Vocational Education and Training UAV Unmanned Aerial Vehicle USAID | GOVERNING FOR GROWTH (G4G) IN GEORGIA INNOVATION AND TECHNOLOGY IN GEORGIA v UG University of Georgia UMTS Universal Mobile Telecommunication System UN United Nations UNESCO the United Nations Educational, Scientific and Cultural Organization USAID United States Agency for International Development USD US dollar VC Venture Capitalist VR Virtual Reality WB World Bank WDCMA Wideband Code Division Multiple Access WIPO World Intellectual Property Organization USAID | GOVERNING FOR GROWTH (G4G) IN GEORGIA INNOVATION AND TECHNOLOGY IN GEORGIA vi CONTENTS 1. EXECUTIVE SUMMARY .............................................................................................................. 8 2. BACKGROUND .......................................................................................................................... 13 3. METHODOLOGY ........................................................................................................................ 14 4. COUNTRY OVERVIEW .............................................................................................................. 15 5. SECTOR ANALYSIS .................................................................................................................. 20 A.1 MARKET ..................................................................................................................................... 20 A.2 KNOWLEDGE AND EDUCATION ............................................................................................. 31 A.3 ENVIRONMENT .......................................................................................................................... 38 A.4 INFRASTRUCTURE ................................................................................................................... 46 A.5 ACCESS TO FINANCE .............................................................................................................. 52 A.6 R&D ............................................................................................................................................. 54 6. GEORGIA IN GLOBAL RANKINGS .......................................................................................... 61 7. REGIONAL OVERVIEW ............................................................................................................. 65 8. GLOBAL OVERVIEW ................................................................................................................. 98 9. SWOT ANALYSIS .................................................................................................................... 100 10. RECOMMENDATIONS ............................................................................................................. 103 APPENDIX A: ..................................................................................................................................... 106 APPENDIX B ...................................................................................................................................... 116 APPENDIX C ...................................................................................................................................... 121 USAID | GOVERNING FOR GROWTH (G4G) IN GEORGIA INNOVATION AND TECHNOLOGY IN GEORGIA vii 1. EXECUTIVE SUMMARY This report covers work performed by PMO LLC to create the first version of Georgia’s Innovation and Technology Sector Study. This document includes findings driven from extensive interviews with stakeholders, representatives from academia and business and desk research obtained during the study policy documents, data and
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