Effectiveness of state support programs for digital small and medium businesses in Georgia

Abstract

The digital economy is one of the central trends of modern global development. In addition, the small and medium-sized business segment is one of the main pillars of the economy. Digital transformation of businesses requires the integration of new business models, digital technologies and innovative solutions. State support plays a crucial role in this process, especially for small and medium-sized businesses, which often do not have sufficient financial or human resources for digital transformation. Various state programs implemented in Georgia aim to strengthen the digital skills of small businesses and develop the technological ecosystem. However, it is important to assess how effective these programs are in practice — how they affect business productivity, employment, regional development and the overall growth of the digital economy. The aim of the study is to assess the effectiveness of state support programs for digital small and medium-sized businesses in Georgia in the context of economic development. The objectives of the study are: to examine the structure and goals of the main programs implemented by the state; To analyze the impact of these programs on the digital level of business, employment and innovative activity; to identify problematic aspects of the effectiveness of the programs; to develop recommendations for improving state policy. The study is based on a mixed approach - a combination of quantitative and qualitative analysis. The study shows that Georgia's digital support programs actually contribute to the growth of small and medium-sized businesses, especially in urban environments. However, limitations in effectiveness are visible in various areas, including access to financing, digital skills shortage, lack of long-term monitoring, etc. The study showed that the programs contributed to the formation of a startup ecosystem, the development of digital services and employment growth, however, maximizing their effectiveness requires the implementation of structural reforms.