MINISTRY OF ECONOMY
AND SUSTAINABLE DEVELOPMENT
OF GEORGIA

An event dedicated to the 10th anniversary of the Innovation and Technology Agency of the Ministry of Economy and Sustainable Development was opened with a welcoming speech by the First Vice Prime Minister, Levan Davitashvili. "We can proudly say that with the establishment of the Innovation and Technology Agency, we have launched the formation of an innovative ecosystem in Georgia from a scratch. Until then, the country had no specific, goal-oriented policy that would have supported and helped the innovative and technological sector. Today, we really have a lot to say" – the Minister of Economy and Sustainable Development stated.

Prime Minister of Georgia Irakli Kobakhidze delivered a speech while the representatives of the government, parliament, diplomatic corps, international organizations and the private sector, as well as the beneficiaries of the agency, also participated in the event. The event emphasized the importance of innovation and technology sector development for the country's competitiveness in any direction in the modern world. The GITA Chairman Avtandil Kasradze introduced the vision of the Government of Georgia and new initiatives in this regard to the audience with an extensive presentation.

"Development of the country's economy, increasing its productivity is impossible without the use of innovations and technologies. Today, all countries are focusing on innovation and technology, and those who succeed in achieving this goal will be very competitive and successful in the future. Of course, we cannot achieve developed economy without human resources, human capital, therefore, the direction of innovations and technologies is one of the highest priorities for the Ministry of Economy" – the Minister of Economy and Sustainable Development stated.

During the 10-year activity statistics of the Innovation and Technology Agency, over 200 startups with global potential were financed within the framework of the co-financing grants program, and the amount of grant financing amounted to 38 million GEL. It should be noted that as a result, the funded startups gained half a billion GEL of private financial benefits and created up to 3000 new jobs. In addition, 9 techno parks were created throughout Georgia, and within the framework of the grant program "Up to 25000 GEL Innovation Grants for Regions", in total 80 projects were financed.

As it was highlighted, it is important that Georgia is becoming a regional innovative and technological hub - on the initiative of GITA, the powerful global venture capital platform "500 Global", one of the top three accelerators of the world, entered the country, which implements an international level acceleration program together with Georgian startups, with participation of international startups. In addition, the first venture fund was created in Georgia with the volume of 20 million US dollars, where the Agency is represented with a 25% share.

As a result of the establishment of tax incentives for the IT companies by the Georgian Government, 120 international IT companies entered Georgia, which, according to the data of the 12 months of 2023, gave billions of GEL in the form of salaries and created over 10000 jobs.

In order to further develop innovations and technologies in Georgia, several important initiatives are planned: the status of an innovative start-up will be defined, and companies with this status will be exempted from income and profit taxes for 3 years; the status of an innovative small and medium-sized company will also be additionally determined, and companies with this status will be able to deduct 500% of their R&D expenses from the taxable profit base and get 30% of the R&D expenses back as a grant; companies engaged in the R&D activities will be aligned with companies with international company status and profit and income tax will be reduced to 5%.

Three main technological directions of the country were also determined which are artificial intelligence, phages and agro-technologies. In order to promote their development, the Ministry of Economy and the Innovation and Technology Agency will continue the active work.

"Today, we offered a very important, new vision to society on how to develop the country economically by using technology and innovation more effectively. These initiatives will further strengthen the startup ecosystem in the country and promote the direction of innovation and technology, as well as research and development - they will be introduced and closely linked to various sectors of the real economy. We can safely call these initiatives revolutionary, they will soon be reflected in the legislation and will play a decisive role in the country's economy in the medium term" – the First Vice Prime Minister noted.