Do entrepreneural activities lead to Georgia's economic development?

While I was discussing the relationship between entrepreneurship and economic development in my previous post, I tried to link the issue to my country’s economic stand. My country, Georgia is developing on a rapid rate. Many foreign investments have been made during last 4-5 years. Gross Domestic Product (GDP) has been increased for the previous few years. After many years of Georgia being in budget deficit, the country has a budget surplus at the present. As a student majoring in business administration, I was always interested in the mechanisms our government could use to foster economic development. Now, when I understand the significance of entrepreneurial activities in a country for its economic development, I realize that our government has been trying hardly to encourage small businesses or start-ups in the country. This conclusion can be made from the activities and programs government has been initiating and exploiting. For example, there was a huge simplification made in tax policy, by and large taxes were decreased and certain types of tax exemptions were introduced. Another important case to be mentioned is that the government introduced several competitive programs for financing subsidies, particularly in agriculture. As a result of support from the government, we have now factories that produce fruit juices from the citruses Georgia is endowed with. Despite the efforts of the government to motivate and support entrepreneurship in Georgia using various mechanisms, I believe there is lot of to be done in future.

As a result, when talking about economic development and growth of Georgian economy, I think that the idea of Growing Pains discussed by Flamholtz, E. G. (1990) can be also applied to the governmental activities. When an economy grows on a rapid rate it should have an infrastructure that will take up that growth. If a government anticipates rapid growth, then required infrastructure must be built before it is actually necessary. I think Georgia is experiencing Growing Pains if you consider the case of tourists who are interested in Georgia and want to explore it but they face difficulties due to the lack of infrastructure and communication problems still existing in the country. After all, my advice for the Georgian government would be to build requisite infrastructure before they promote or achieve goals leading to economic growth of the country.

Reference:

Flamholtz, E. G. (1990). Growing Pains: How to make transitions from an entrepreneurship to a professionally managed firm (pp. 53-72). San Francisco: Jossey-Bass Inc.