A new assessment released by UNDP Georgia highlights promising export opportunities for Georgian small and medium-sized enterprises (SMEs) in four key sectors as the country deepens economic ties with the European Union. The study, conducted under the Inclusive Access to Markets (IA2M) project, identifies beverage manufacturing, packaging, apparel production, and IT services as sectors with the highest potential to succeed in European markets.
Funded by the European Union and carried out by the Policy and Management Consulting Group (PMCG) and the Policy Institute of the International School of Economics at Tbilisi State University (ISET-PI), the research offers a comprehensive look at how Georgian SMEs can overcome export barriers and scale up for European standards.
Unlocking Potential in Four Strategic Sectors
Beverage Manufacturing – Home to 88% SME participation, the beverage sector has seen an average annual turnover growth of 14% between 2017 and 2023. Georgian drinks, known for their unique flavor profiles, are increasingly in demand in niche markets abroad. However, challenges such as EU certification hurdles, inconsistent raw materials, outdated production equipment, and skills shortages must be addressed to unlock full export potential.
Packaging – SMEs represent 99% of Georgia’s packaging sector, which recorded GEL 710 million in turnover in 2023 and 26% annual export growth since 2018. While heavy reliance on imported materials and logistics costs pose constraints, the sector stands out for its eco-innovation, adherence to EU standards, and growing use of recycled materials. Experts recommend building local certification services and leveraging sustainability credentials to drive exports further.
Apparel Production – Georgia’s fashion industry is experiencing global interest, with a 19% annual growth in value-added from 2017 to 2023. Artisanal and high-end handmade clothing holds strong export appeal, bolstered by affordable labor and participation in international trade shows. The report notes that improved logistics, better understanding of compliance requirements, and investment in skills development are key to expanding exports.
IT Services – One of the country’s fastest-growing sectors, IT services generated GEL 4.2 billion in 2023, equivalent to 5.2% of Georgia’s nominal GDP—a 13-fold increase since 2017. With a favorable business environment and a large pool of English-speaking professionals, Georgia is well-positioned to offer competitive digital services abroad. Strengthening vocational training, increasing global partnerships, and enhancing visibility in European markets are seen as crucial next steps.
Coordinated Support Needed for Sustainable Growth – The report underscores that realising Georgia’s export potential will require a coordinated effort from the government, private sector, and international partners. Key recommendations include modernising production processes, improving EU regulatory compliance, strengthening logistics infrastructure, and enhancing SME access to financing and skills development.
“Georgia’s SMEs have what it takes to compete in Europe, especially in high-value and niche markets,” the assessment concludes. “With the right support, they can become engines of sustainable economic growth.”
About the Project
The Inclusive Access to Markets (IA2M) project is a EUR 5.16 million initiative funded by the European Union and implemented by UNDP in partnership with the Estonian International Development Centre (ESTDEV). It aims to build the capacity of Georgian SMEs, enhance value chains, and promote greater access to European markets.
Disclaimer: The findings and views expressed in the assessment are those of the research team and do not necessarily reflect the official positions of the European Union or UNDP.
By Team GT
