DIGITALIZATION FOR BREAKING THE INSTITUTIONAL “TRAP” IN GEORGIAN ECONOMY

Abstract

The integration of digital technologies in the business sphere has been carried out at a particularly fast pace as a result of the spread of the Covid-19 pandemic. Digitization has become an essential requirement for companies of almost all sizes to survive the lockdown. The implementation of modern technologies in business processes is uniquely beneficial for companies, however, the issue of generating finance is highlighted, which is a big challenge for small companies worldwide. Barriers to access to finance are particularly acute in developing economies. Georgia represents the post-Soviet space, and it was the Soviet experience that separated the country from a healthy development trajectory. Accordingly, it is a difficult process for a country in the process of institutional formation to promote the competitiveness of operating companies in the international markets under the conditions of a market economy. (Surmanidze, 2022) Technological progress is a condition for any business to create a final product with high standards, but it requires investments in research and development. The limited resource of access to finance limits the ability of companies to produce high-standard products and, accordingly, the ability to create additional value. That is why it is necessary to focus the digitization process as much as possible in the direction of increasing access to finance, which will ultimately allow companies to generate additional financial resources.