Policy Paper 02/2017

The creative sector in Georgia: Situation, potential and policy issues

Georgia has a rich cultural tradition as well as an affinity for unique designs. Can this creativity be an economic asset? This can in principle be assessed by using the standard “creative industries” approach, which measures several industries in the creative sector. Due to data limitations, we develop and use a slightly simplified method based on the international approach for Georgia.

At present, the measurable creative industries – 7 out of 11 industries – together make up 1.5% of gross value added (GVA) of the Georgian economy and 1.1% of employment. The creative sector is hence small, but has been growing considerably, almost doubling its share of the economy between 2010 and 2015. However, the configuration of the sector is heavily tilted to only one creative industry. Advertising makes up more than half of current economic activity in the sector and almost all of the gain of the share in the economy. Other large components of the sector are radio & TV and the books and press industry, which both make up around 20% of the creative sector each, but did not substantially contribute to growth in the past.

The potential for future growth of the creative sector appears positive, but limited. At the same time, some complementarities may arise with tourism, textile & furniture and the production of beverages. However, large potential industrial users of design or other creative services do not exist in Georgia. There is some potential for a creative scene in the capital Tbilisi, but it is as of now unclear whether this can develop into an economically relevant scene.

Due to the limited current economic significance and unclear potentials for its own growth or contribution to growth of other sectors, we do not recommend large-scale measures with sizeable funding for developing the creative sector of Georgia at the moment. The current cash rebate programme for international film productions in our view is unlikely to produce significant and sustainable economic results. However, we recommend establishing a “creative cluster management” under the umbrella of the “Produce in Georgia Agency” in order to improve monitoring and understanding of the creative industries, strengthen their networking among themselves and with potential users and in order to leverage the creative sector for location branding (tourism and investor attraction) purposes. A close monitoring of the sector and its interaction with the rest of the economy appears warranted.

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