Digitalisation can bring significant benefits to economies and societies. In particular, for SMEs, it can help increase firm productivity through easier access to strategic resources, broaden the customer base and market access, achieve scale and capitalise on network effects. This chapter delves deeper into the ways Georgia can accelerate the digital transformation of the SME sector. It provides an overview of the current state of play in terms of framework conditions, such as broadband connectivity, the regulatory environment and digital literacy, and SME digitalisation. To this end, it looks at past policy achievements and upcoming measures. The last section provides further policy options to support the digital transformation of SMEs.
Fostering Business Development and Digitalisation in Georgia
2. Accelerating the digital transformation of SMEs
Abstract
Why SME digitalisation matters
Digitalisation offers countless new opportunities for businesses
Digitalisation can be defined as “the use of digital technologies, data and interconnections that result in new activities or changes to existing ones” (OECD, 2019[72]). Digital technologies have been developing at an ever-increasing pace since the advent of computers and the creation of the World Wide Web, offering individuals, governments and businesses a wide range of new tools (Table 2.1). Their use in turn can have profound economic and societal effects, commonly referred to as digital transformation (OECD, 2019[72]).
Several studies investigated the effects of the adoption of digital technologies on businesses’ performance and identified a substantial increase in productivity as the result of the digital transformation.1 This can happen through different channels, ranging from increasing efficiency of operations to reaching a wider set of customers through improved marketing and sales. By adopting technologies such as advanced data analytics, resource planning software, and automation, businesses can improve quality at lower cost. Moreover, by using digital solutions to analyse consumers’ online shopping behaviour, preferences and social media activity, enterprises can gain better insights and tailor more effective marketing messages (BCG, 2020[73]). Depending on the firm’s characteristics, and notably on the sector of activity, digital tools can respond to specific needs (Table 2.1) provides a list of selected technologies that can be adopted by SMEs and an example of their potential applications. As illustrated by the example of the construction sector in Box 2.1 digital instruments can serve different functions tailored to the company’s level of digitalisation.
Moreover, digitalisation can foster overall improvements in the business environment, as digital tools offer a variety of solutions to strengthen the rule of law, increase transparency, and limit corruption. For example, the use of e-signatures and digital authentication services improve security in transactions with public authorities, while data analytics can support applicants’ integrity check during public procurements biddings (Santiso, 2021[74]). The digitalisation of public services, including that of administrative processes, limits the opportunities for corruption and increases reliability since it reduces intermediaries and the use of paper. Within SMEs, technology can help increase transparency and compliance to rules, as it allows to make data publicly available, and provides instruments such as e-invoicing that ease the process of tax declaration and reduce mistakes (World Economic Forum, 2020[75]).
Nonetheless, businesses cannot overlook the many risks and challenges digitalisation poses, such as cybersecurity threats and privacy issues relating to consumers’ data. This applies to both established technologies, such as digital payments, and emerging ones: artificial intelligence (AI), for instance, raises ethical questions that require policymakers to set a regulatory framework, as well as objectives and values to observe (OECD, 2019[76]). The Internet of Things (IoT) offers another example, as its use raises increasing privacy/security concerns (OECD, 2018[77]). Understanding all the potential sources of risk and identifying strategies to address them are integral and fundamental parts of the digitalisation process (Deloitte, 2018[78]). Policymakers should therefore ensure that these concerns are taken into account and addressed when designing digitalisation policies.
Table 2.1. Selected established and emerging digital solutions
Box 2.1. Example: Stages of adopting digital solutions by a construction company
Stage 1
The first stage should focus on exploiting digital tools to automate and strengthen basic capabilities, as well as to optimise operations through better cooperation. Instruments such as Building Information Modelling (BIM), a tool based on different technologies, and 3D Modelling, can improve visualisation and analysis capacities, easing project design. ERP tools such as collaboration platforms allow contributors to easily access each other’s work, constantly remaining up-to-date on the progresses.
Stage 2
In the second stage, the target shifts to implementing integrated ecosystems and streamlining processes to further increase coordination and facilitate project management. To this aim, BIM for Facilities Management, an ERP technology, automates the maintenance of equipment and facilities, and allows to easily prevent future issues. Built Environment Digital Platforms, another type of ERP based tool, enables contributors to report issues and keep track of their resolution, and connects the partners to a large number of suppliers, making the choice of raw materials faster.
Stage 3
In this stage, the automation of operations is widened to new, more complex tasks, which allows centralising the control of all the aspects of project implementation, increasing optimisation. Blockchain technology allows having a constantly updated and trustable overview of the project’s advancements. Data analytics, with the support of AI, can provide essential information on the project’s most common risks and usual implementation practices, decreasing costs and increasing security. Robotics can also be adopted to support construction work, avoiding repetitive tasks and leaving more time for individuals to perform jobs with higher value-added.
Note: Example based on the industry plan for the construction sector created by Singapore’s SMEs Go Digital Initiative.
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With regard to the business sector, digitalisation is a major driver of structural transformation. On the one hand, technologies and the profound changes they generate by enabling new ways of working, collaborating and organising processes, create new market opportunities that firms can tap into and unlock new business models. As a result, digital-by-default firms have been emerging: a number of Georgian fast-growing digital start-ups has flourished over the past years, such as B2C.ge, a firm helping other businesses set up their online shops (more examples are detailed in Table 2.3). These are, however, only a small part of the picture. More importantly, digitalisation is also an opportunity to bring incremental changes in more “traditional” sectors, e.g. by optimising processes, products (for instance using data analysis to get consumer insights), improving customer outreach and entering new markets via e-commerce practices. ERP technologies can support sectors that engage with trade such as wholesale retail and agriculture to fasten transactions and reduce costs, e.g. by allowing monitoring inventories, thereby limiting the risk of overproduction and waste. In addition to this, the use of digital tools such as e-invoices and e-payments fosters an increase in transaction security. The use of CRM platforms can play an important role in improving coordination in different sectors, notably in construction and agriculture, two major fields for the Georgian economy. For the first one, it enables the different project contributors to be constantly up-to-date with the current developments, while, in the agricultural domain, it promotes direct contacts between local farmers and global distributors. These are only some examples of how digital tools could bring improvements to a number of traditional sectors.
The COVID-19 crisis has provided strong incentives to accelerate the digital transformation, as governments, businesses and individuals have been forced to operate remotely and have therefore increased the share of tasks carried out using online platforms. Successive lockdowns and long-lasting social distancing measures have led to a sharp decline in mobility: use of public transport hubs fell by up to 78% in April 2020 compared to baseline2, and visits to workplaces by up to 81% (Google LLC, 2021[84]). As of end August 2021, although Georgia has not reintroduced stricter containment measures despite the new wave of infections, figures have not yet returned to normal, registering 14% and 27% decreases for visits to transit stations and workplaces, respectively. Citizens have been increasingly interacting online, while schools have had to resort to distance learning. Businesses also had to show flexibility and adapt by switching to teleworking and moving activities online: by autumn 2020, over a third of Georgian firms had started or increased online business activities (Figure 2.1), while traffic to online shops more than tripled between 2019 and 2021, reflecting changes in consumer habits that are likely to persist (Galt & Taggart, 2021[85]). Likewise, Georgians have significantly increased their use of e-government services: while the authorities have almost doubled the number of services made available on the dedicated portal my.gov.ge, which reached 700 in 2020, the use of these services has increased by more than 9 times (OECD, 2021[86])
Figure 2.1. COVID-19 impact on businesses’ online activity, by firm size
Note: R-1 corresponds to the results of the follow-up survey carried out in June 2020, R-2 to the one conducted in October/November 2020.
Source: (World Bank, 2020[15]).
The potential of digitalisation remains untapped, especially among SMEs
Although the use of digital technologies and services has been increasing, people and organisations have not yet reaped the full potential of digitalisation (OECD, 2019[72]). While over 80% of individuals in OECD countries use the Internet to exchange e-mails, less than 60% do so to get information from or interact with government services, and only half of the population buys goods or services online (ITU, 2021[87]). This gap is considerably wider in Georgia, where the uptake of digital tools remains below OECD and EU levels (Figure 2.2). E-commerce, for instance, is not yet as widespread: less than one third of the Georgian population seeks information about goods and services on the Internet and only 14% shop online. Some estimates suggest that e-commerce represents as little as 1.1% of total retail sales in Georgia in 2020, against 12% in Europe (Galt & Taggart, 2021[85]). However, local online marketplaces, such as Mymarket.ge and Extra.ge, are currently experiencing strong user growth.
Figure 2.2. Internet activities undertaken by individuals in the EaP, OECD and EU-8 countries
Note: Median values for OECD and EU-8. Data not available for Armenia and Moldova. Data on selling goods or services, doing a formal online course and getting information from general government organisations not available for Belarus and Ukraine.
Source: (ITU, 2021[87]).
Similar gaps in technology uptake appear with regard to businesses. Despite good connectivity (94% of Georgian companies had access to the Internet in 2020), most of them are not using basic digital technologies such as enterprise resource planning or e-booking and orders systems (Figure 2.3).
Moreover, despite the presence of some high-tech companies in Georgia, the majority of traditional businesses have not yet adopted advanced technologies. Only few Georgian companies offering AI services for traditional businesses have emerged: the fintech start-up Optio.AI, for example, enables financial firms to categorise their customers’ transactions and provides tailored advice on spend optimisation through an AI-powered Chabot. The firm has recently partnered with the Bank of Georgia to develop a Virtual Assistant (Optio.AI, 2021[88]).
As for blockchain technology, although its uptake remains low among traditional companies, Georgia is home to the largest cryptocurrency mining company in the world, Bitfury (World Bank Group, 2018[89]). This company controls 10-15% of global cryptocurenncy mining, and, as a result, it has expanded across the world through the construction of new facilities in a number of countries. Due to its success in the field, the company is now a partner of the Georgian National Blockchain Agency (GNBA), with aims at accelerating the adoption of this technology in the country (Georgian National Blockchain Agency, 2018[90]). Finally, although IoT can increase the efficiency of supply chain and logistics management, its adoption by Georgian businesses is still at a nascent stage. However, a few international companies, like the French-based company Prodware, provide support to adopt IT solutions aimed at improving production processes in the country.
The gaps in technology adoption are more evident when diffusion rates are analysed by enterprise size classes. Despite the lack of size-disaggregated data for Georgia, statistical evidence from other countries suggests that this tendency affects all countries, with relative gaps between large and small firms becoming more evident as technologies are more advanced (Figure 2.3). Large firms are twice as likely to adopt online tools to receive and process orders than smaller ones but about four times more likely to use emerging technologies such as big data analytics or AI.
Figure 2.3. Diffusion rates of digital technologies, by technology and enterprise size class
Note: Median value for OECD. Data does not include enterprises with less than 10 employees, as small enterprises refer to firms with 10 to 49 employees.
Source: OECD ICT Access and Usage by Businesses Database, National Statistical Authorities of Azerbaijan, Belarus, Georgia and Ukraine. Data for Armenia and Moldova not available. Adapted from (OECD, 2021[81]).
These digital divides harm economic growth and risk increasing inequalities, as SMEs’ delay in digitalisation prevents them from reaping the productivity gains offered by the adoption of digital tools, thereby widening the existing productivity gap.
Policymakers have a key role to play to support the digital transformation
While the COVID-19 crisis has incentivised firms to accelerate their digital transformation, policymakers have a major role to play to facilitate this transition through complementary policy interventions. Building a truly digital economy and society will require a comprehensive cross-governmental approach to ensure access to high-quality and affordable broadband connection, to create an enabling regulatory environment for the development of digital practices while also ensuring users’ security and trust, as well as to develop high levels of digital literacy. These efforts need to be complemented by tools to support SME digitalisation in particular.
In this regard, policymakers should level the playing field between small and large firms by addressing the factors that hinder the former and benefit the latter. This requires a two-fold framework aimed at a successful digital transformation of SMEs that includes stimulating technology adoption while concurrently promoting digital culture diffusion (Figure 2.4).
Figure 2.4. Framework for supporting the digital transformation of SMEs in the EaP
Source: OECD analysis.
Georgia has been developing the institutional and policy framework to support digitalisation over the past decade. It was one of the first Eastern Partner countries to adopt a dedicated strategy, A Digital Georgia: e-Georgia Strategy and Action Plan 2014-2018. Organised around 11 thematic pillars, the document aimed at setting a framework for ICT use and developing e-government, while fostering digital innovation in the business sector and the civil society. Regarding digital government, the strategy became part of the Public Administration Reform 2020, the policy roadmap adopted in 2015 to enhance the efficiency, effectiveness and transparency of the central public administration and its services, which included digital government as a priority. This policy framework enabled the operationalisation of an open data portal (data.gov.ge) and the further development of the unified portal of e-services (my.gov.ge), as well as awareness-raising campaigns to provide information and train civil servants and the public on the use of such services. Additional measures on digital government are currently being planned under a second National Digital Governance Strategy and Action Plan, drafted with the support of the UNDP and United Nations University experts.
As for the business sector, the previous e-Georgia Strategy focused on facilitating business transactions by encouraging the uptake of digital tools, such as online payments, setting standards of security and transparency, and improving broadband infrastructure. For example, the National Bank of Georgia introduced in 2017 a regulation to protect customers’ rights and ensure transparency, by registering payment service providers and by introducing the obligation to respond to complaints (National Bank of Georgia, 2017[91]). Moreover, e-commerce regulations have been strengthened to include data protection, and access to broadband infrastructures has been widened (see below for more detail).
More recently, within the framework of the EU4Digital programme and with the support of the European Commission and the World Bank Group, Georgia elaborated the National Broadband Development Strategy of Georgia (NBDS) and its Action Plan for 2020-2025, which was adopted by the Government of Georgia on 10 January 2020. The key objectives of this umbrella document are to enhance the legal and regulatory framework for broadband development in line with the EU norms and to overcome the digital divide across urban and rural areas. The targets of the NBDS are based on the EU’s Gigabit Society objectives 2025. The NBDS foresees work on three main directions: 1) increase competitive pressure; 2) attract investments; and 3) build digital skills & demand. For the implementation of these directions, the Government of Georgia together with the World Bank started the Log-in Georgia Project, aimed at increasing access to affordable broadband Internet, promoting the use of broadband-enabled digital services, and providing project implementation support.
Additional policy measures related to the digital transformation are included in cross-cutting policy documents such as the new SME Development Strategy 2021-2025 and related action plans, and the government programme for 2021-2024 “Toward Building a European State”, which encompasses a chapter dedicated to ICT. The COVID-19 pandemic also incentivised the Georgian authorities to take additional ad-hoc measures in response to the crisis (see Box 2.2). The solutions adopted have further encouraged the diffusion of digital tools across the Georgian society and fostered the digitalisation of public services, while showing the authorities’ ability to react in a quick and innovative way.
Georgia is currently developing a Long-term National Strategy for the development of the digital economy and information society and its implementation plan. The goal of this umbrella document, drafted by a working group under the Ministry of Economy and Sustainable Development with the help of the World Bank, will be to foster economic development through the expansion of e-government services, the use of digital technologies to boost sustainable development, the promotion of digital literacy and skills to foster job creation, and the promotion of fintech, e-Trade, eHealth, cybersecurity, ICT innovations, and the fourth industrial revolution, including through AI.
Box 2.2. Examples of digital solutions adopted by Georgian authorities in response to COVID-19
Ad hoc digital tools
Communication and notification operations centre
A communication and operation centre was established and supervised by the order of the MoESD. This Operations centre, which included representatives of the Ministry, of the Communications Commission (ComCom) and of the telecommunication and postal companies, aimed at strengthening co-operation and coordination, so that companies could respond immediately to damages and delays in telecommunication and postal courier services due to the increased demand.
“Stop Covid” mobile application for iOS and Android
The Ministry of Health created this mobile application as a platform that allowed to trace the spread of the infection and to give relevant information to the population.
Other mobile tools
A number of hotlines (e.g. 112, 144, 114) were introduced to provide information and guidance on different issues related to the COVID-19 crisis, e.g. to obtain a one-time movement permit. SMS were also used to provide updated information, including a version in minority languages and a formal communication channel in Georgian and English was created on the social media platform “Telegram”.
Increase in the provision of online services
Online clinics were developed in order to provide virtual medical consultations, and reduce doctors’ visits. This instrument helped monitoring cases, as it allowed reaching a larger amount of individuals.
Distance learning was introduced, as well as a number of digital tools to support it. The Georgian Government together with the Public Broadcaster launched the “TV School”, which broadcasted lessons from the national curriculum. A “Webschool” project promoted by the Ministry of Education offered webinars to final year students to prepare them for exams. Access to pupils’ profiles, without the intermediary work of the school administration, was provided through a portal created ad hoc. Teachers were also supported in the transition to online schooling through virtual consultation spaces where IT experts provided assistance, as part of the “New School model”.
Legal services have been adapted to an online format, e.g. court trials and meetings of the Standing Commission (that decides over conditional sentences and lifting of conviction) took place online.
Additional e-government services were introduced to my.gov.ge, e.g. all business registry services, as well as reservation to visit Public Service halls, Community Centres and several public agencies. Pensions and allowances were set or renewed electronically by sending a document copy by email.
Tighter co-operation between the government, regulator and telecom operators
Wholesale broadband service providers were able to double their international data capacity to ensure that the increased demand would not affect the provision of the service.
An agreement with mobile operators allowed to distribute free sim cards at Georgian airports in order to provide access to the “Stop Covid” application and “112” hotline. Free Wi-Fi hotspots were equipped to show pop-up information upon passengers’ connection.
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The main stakeholders designing and implementing digitalisation policies in Georgia are the MoESD and the Digital Governance Agency (DGA). The MoESD, through the Communications, Information and Modern Technologies Department, acts as the main policymaker in the digital field and implements different reforms, projects, programmes and activities with other stakeholders to improve the accessibility of broadband Internet and ICT technologies for individuals and businesses, including SMEs. The Digital Governance Agency was created in 2020 as a result of the merger between the former Data Exchange Agency and Smart Logic, an LEPL under the Ministry of Justice of Georgia that used to provide services for a number of Ministries, Departments and Agencies. The DGA operates under the Ministry of Justice of Georgia, and it is responsible for the digital transformation of public services and interagency co-ordination, notably creating a unified data exchange system, preparing draft legislation on digital governance and cybersecurity, and fostering regional and international co-operation. The Ministry of Education and Science is also involved on digital literacy policies at all stages of the education system and through vocational education. With regard to small and medium businesses, the bulk of support to SME digitalisation is currently provided by GITA, while Enterprise Georgia offers assistance on e-commerce, such as co-financing of fees to place products on digital marketplaces (Figure 2.5).
Figure 2.5. Institutional framework for digitalisation in Georgia
Source: OECD authors based on fact-finding questionnaires, working group meetings and desk research.
Building an enabling environment
Improving broadband connectivity
Reliable connectivity is a pre-requisite for the development of digital economies and societies. Internet access has become more and more important for individuals and businesses alike, as they increase and diversify their online activities – from getting information and sending emails to Internet banking and e-commerce. It is also fundamental for the digital transformation of businesses: an increase of 10 percentage points in the adoption of high-speed Internet among firms can improve productivity by 0.8 to 1.9% (Sorbe et al., 2019[92]). Broadband connectivity can benefit even smaller firms, for instance by enabling them to enlarge their customer/market base and/or increase operational efficiency by giving them access to cost-effective solutions (e.g. CRM, ERP, payment solutions), although SMEs operating in traditional sectors often lack awareness of them. The necessity of ensuring a high-speed and affordable connection throughout territories has been further highlighted by the COVID-19 crisis: following the introduction of social distancing measures, remote work and education, the demand for broadband soared, increasing by up to 60% during the first wave of infections in Spring 2020 (OECD, 2020[93]). While this unprecedented surge put a considerable pressure on communication networks and operators, it also revealed persisting digital divides between individuals and firms – e.g, between age groups, with individuals aged 55-74 lagging behind the 16-24 year old population, and between education levels (less than half the OECD adult population with low or no formal education used the Internet to interact with government authorities in 2018, against 80% of those with tertiary education) (OECD, 2020[94]). There is also remaining gaps between urban and rural areas, and between large and small businesses, as further explained below.
Overall, Georgia appears as one of the most connected countries in the Eastern Partnership, with fixed and mobile subscriptions per 100 inhabitants reaching 24 and 80 in 2019, respectively (Figure 2.6, Figure 2.7). These numbers have seen the sharpest increase of the region since 2010 (+429% against +207% in the EaP and +36% in OECD for fixed broadband, and +1011% for mobile broadband, against 938% in the EaP and 216% in the OECD).
Figure 2.6. Evolution of fixed broadband subscriptions in Georgia compared to EaP, EU and OECD
Note: Median values for OECD and EU-8 (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Slovenia, Slovak Republic, Poland).
Source: (ITU, 2021[95]).
Figure 2.7. Evolution of mobile broadband subscriptions in Georgia compared to EaP, EU and OECD
Note: Median values for OECD and EU-8 (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Slovenia, Slovak Republic, Poland). Data for 2019 not available for Ukraine.
Source: (ITU, 2021[95]).
Although 86% of Georgian households had access to the Internet at home in 2020, data show persistent disparities across space. Rural areas still lag behind, with a 16-percentage point gap between them and the urban parts of the country. However, this difference has shrunk over the past years, and is now lower than that of most EaP countries, albeit well above OECD and EU figures (Figure 2.8, Figure 2.9 ) .The Georgian authorities are well aware of this connectivity challenge and have put the issue at the top of the digitalisation agenda. Some mountainous regions such as Tusheti, Pshav-Khevsurebi and Gudamakari have benefitted from the development of community networks, i.e. community-deployed communications infrastructures resulting from public-private partnerships involving the local community, local and central governments, the MoESD, ComCom (formerly GNCC), private businesses, the European Bureau of Internet Society (ISOC), and international donors. These provided Internet connection to two ravines and 24 villages in mountainous Tusheti in 2017, and to up to 100 villages (i.e. about 500 families) in Pshav-Khevsurebi and Gudamakari valleys in 2020. They also fostered the local economy through tourism and agriculture: as an example, equipping local hotels and guesthouses in these mountainous areas with a reliable connection helps attract more demand from local and international hikers (Small and Medium Telecom Operators Association of Georgia and Tusheti Development Fund, 2018[96]). Further policy efforts are planned, as the government aims to continue supporting the deployment of community networks in less-densely populated areas. Adjara notably should benefit from these.
Figure 2.8. Rural digital divide in EaP countries
Note: Data refer to 2019 except for Armenia (2016) and Ukraine (2018). Median values for OECD and EU-8.
Source: (ITU, 2021[95]).
Figure 2.9 Rural digital divide in Georgia, 2012-2019
Source: (ITU, 2021[95]).
Access to broadband alone is however not sufficient to bridge the connectivity gap: the digital transformation requires ensuring high-quality connection at affordable prices. The quality of the Internet connection in Georgia has improved over the past years: 3G/4G mobile networks now cover the majority of the Georgian territory, and 85% of fixed broadband subscriptions offer a speed beyond 10 Mbps. However, many Georgian businesses do not yet benefit from quality Internet connection: while the vast majority have access to the Internet (94%), 41% still have a connection below 10 Mbps. Moving forward, the new NBDS 2020-2025 aims at ensuring a 99% 4G coverage and the introduction of pilots for 5G services in three municipalities by 2025; that all households have access to high-speed Internet (at least 100 Mbps); and 1 Gbps for all institutional entities. Georgia is also working on 5G deployment, notably through large-scale works on developing infrastructure (ITU, 2020[97]). In addition, the ComCom has worked on spectrum availability, reserve price calculation and license obligations, and an auction should be held in 2021 to issue the frequency spectrum required, although it has not yet been announced. The country is also co-operating with neighbouring countries to coordinate frequencies: the ComCom reported having reached agreements with EaP countries on the topic, which should minimise incoming signals from them and help preventing radio interferences between communication networks, thereby ensuring their proper functioning.
The gap in uptake between fixed and mobile broadband can be partially explained by the differences in affordability. While prices for mobile connection in Georgia are among the lowest in the EaP region when expressed as percentage of monthly gross national income per capita, fixed broadband still appear quite costly, as they remain above ITU’s 2% affordability target (Figure 2.10, Figure 2.11). Yet businesses need strong and reliable broadband connections, as their activities can be bandwidth heavy – fixed broadband often offers better speed, e.g. for uploading/downloading content or running software. Reducing costs for fixed broadband would therefore help improve firms’ connectivity and foster their uptake of digital tools. However, the NBDS does not foresee business-specific measures, but rather focuses economically disadvantaged groups, for which subsidies to access the Internet are planned.
Figure 2.10. ICT prices – fixed broadband
Note: GNI = gross national income. Prices refer to a fixed-broadband basket with a monthly data usage of (a minimum of) 5 GB. Median values for OECD and EU-8.
Source: (ITU, 2021[95]).
Figure 2.11. ICT prices – mobile broadband
Note: GNI = gross national income. Prices refer to a data-only mobile broadband basket with a monthly data allowance of 1.5 GB. Median values for OECD and EU-8.
Source: (ITU, 2021[95]).
Affordable access to high-speed broadband can be increased by policy and regulatory measures, such as promoting competition to attract investment in communications infrastructures and services (OECD, 2019[72]). Georgia’s new NBDS defines it as a priority, and the country has already taken some steps in that direction. The Law on Electronic Communications was amended to increase market regulation and address the current oligopoly, as the ComCom reported that a few operators gather significant market power and reportedly try to ignore legal requirements (Communication Commission, 2021[98]). The new provisions grant more power to the ComCom, allowing for more effective enforcement mechanisms in case of non-compliance, including sanctions in case of violation of the tariff regulation. The new regulation also enables ComCom to appoint more easily a special manager to enforce state decisions instead of revoking the authorisation of the non-compliant company, which ultimately aims at ensuring the services’ stability and thereby at safeguarding consumers. Foreign direct investments can also play an important role in fostering infrastructure development and strengthening competition. In the OECD FDI Restrictiveness Index, Georgia scores high among EaP countries, having no formal barriers to foreign direct investment in the telecommunication sector, with conditions that could be compared to the most open OECD economies (OECD, 2019[99]). As the Index considers only formal barriers, informal barriers, e.g. corruption, could still reduce competition and should not be overlooked.
Georgia could build on its existing good quality infrastructure and encourage infrastructure sharing by adopting the draft law on Sharing Telecommunication Infrastructure and Physical Infrastructure Used for Telecommunication Purposes. This regulation would enable operators to make use of the existing infrastructure on non-discriminatory and competitive terms, allowing for more market competition and optimised hence reduced costs for network providers. In turn, this should incentivise them to offer higher quality services at lower prices.
Finally, Georgia is involved in several regional and international initiatives aimed at improving broadband telecommunication infrastructure, speed and affordability. The country has the ambition to become a digital hub for the South Caucasus. To that end, negotiations between the MoESD and foreign telecommunications operators are underway to encourage them to enter Georgia, as well as to establish data centres on the national territory. The establishment of a digital telecommunications corridor that would provide a modern transit fibre optic infrastructure network connecting Europe to Asia via Georgia, Armenia and Azerbaijan is also being discussed. At the Eastern Partnership level, the six countries have been working towards the harmonisation of their regulatory frameworks and prices with the support of the EU4Digital initiative, which should improve interoperability and reduce charges. A Regional Roaming Agreement has been negotiated to harmonise the international mobile roaming regulatory framework and costs among them. It should enter into force on 1 July 2022 and is expected to lead to an 87% decrease in roaming prices by 2026 (EU4Digital, 2021[100]). EU4Digital is studying options for a similar agreement between EaP countries and the EU.
Creating a regulatory framework for the digital transformation
Georgia has been developing a legal and regulatory framework in the field of ICT in line with EU standards (EU4Digital, 2020[101]), which is reflected by its good performance in the indicators of the World Economic Forum’s Network Readiness Index 2020. Georgia’s ICT regulatory framework ranks 21st out of 134 countries, and its regulatory quality 24th (World Economic Forum, 2020[102]). The country benefits from a national regulatory authority (NRA), the above-mentioned ComCom, whose institutional and financial independence is guaranteed by Georgia’s Constitution since 2017. A recent independent assessment also found the authority’s activities to be transparent and matching EU requirements in many regards – e.g. its decisions can be appealed and are subject to a fair judicial process (EU4Digital, 2020[101]).
However, in order to align further with EU regulations, any budget surplus should be transferred to market participants (instead of being sent to the State Budget, as it is currently the case). Overall, the harmonisation of ICT regulation is facilitated by the regional co-operation: Georgia regularly exchanges with other EaP countries and the EU on these topics through the EaPeReg network and expert groups, to which the ComCom participates as an active member. This platform gathers NRAs from EaP countries and provides them with a platform for co-operation on regulatory matters related to electronic communications. Further enhancing the legal and regulatory environment also appears as a key objective of the NBDS.
E-commerce and consumer protection
E-commerce practices have been growing in Georgia, with a sharp increase prompted by the COVID-19 crisis. The size of the Georgian e-commerce market more than tripled in 2020, reaching GEL 138 million (approx. USD 44 million) (Galt & Taggart, 2021[85]). Many firms have been forced to move their activities online due to lockdowns and social distancing. As for the demand side, the share of Georgians above 15 years of age using the Internet to shop online increased by 15% between 2016 and 2020 (+50% among 15-29 year-olds) (Geostat, 2021[103]). However, there is still huge potential for growth, as e-commerce accounted for only 1.1% of total retail sales in 2020, and OECD estimates show that the e-commerce market in Georgia is one of the smallest of the EaP region in absolute terms (Statista, 2021[104]). In that regard, enhancing the legal and regulatory framework for e-commerce practices would help tap into the potential of online trade: on the one hand, harmonisation with EU directives would facilitate access to the EU market. On the other hand, legal tools can foster consumers’ trust by ensuring their protection online.
E-commerce legislation is Georgia’s lowest ranked indicator in the Network Readiness Index (World Economic Forum, 2020[102]) (115th out of 134 countries). Indeed, the country still lacks a legal framework regulating e-trade practices, which is required by the Association Agreement with the EU. Online platform regulation and consumer protection are incompletely covered by fragmented acts of legislation. In order to tackle this issue, the MoESD has elaborated a draft law on e-Commerce in 2018, which should align with the EU e-commerce directive and DCFTA requirements. This new legislation should define the rights and obligations of operators of intermediary service providers, and strengthen consumers’ protection, increasing reliability for SMEs as well as costumers.
Another draft law, dedicated to Consumer Rights, should provide further guarantees by setting requirements against aggressive commercial practices, standardise contracts between parties transacting online, and ensure that the consumer receives all relevant information (EU4Digital, 2021[105]). In general, legal harmonisation is fostered by Georgia’s active participation in the EU4Digital programme, where the MoESD acts as national co-ordinator, to facilitate EaP countries’ access to the EU’s Digital Single Market.
However, some obstacles to e-commerce with the EU are not yet covered by any of the draft laws. There is for instance a lack of interoperability of parcel-delivery operations due to the absence of national standards in tracking, tracing and labelling parcels. On a similar note, the legislation does not define whether a contract is ruled by the law of the consumer’s country of residence. Georgia is also not in line with several provisions of the new EU 2021 e-commerce package, e.g. regarding customs declaration, fiscal regulations, and cross-border parcels’ supply chain practices. Moreover, there is a lack of awareness of the upcoming EU changes in VAT payments, customs procedures, and electronic declarations, which prevents stakeholders to start preparatory actions.
E-signatures
E-signatures can take a variety of forms, ranging from a simple photocopy of a physical signature to different levels of verified signature. They are important in ensuring that a document respects integrity requirements while avoiding physical paperwork, and can provide in many cases proof of one’s identity. Due to e-signatures’ legal value and the variety of forms they can take, a legal framework that regulates their use is essential to guarantee reliability and thereby strengthen interaction transparency and security, and increase users’ trust.
With this aim, the parliament introduced as early as 2008 a Law on Electronic Document and Digital Signature (Government of Georgia, 2008[106]), which defines how to request the certification of electronic signature and the requirements to issue such a certification. The legislation was profoundly updated following Georgia’s e-Strategy 2014-2018. Indeed, the action plan highlighted the importance of promoting the use of e-signatures, as they can ensure increased security in online interactions such as e-commerce transactions and procedures involving public authorities. As a result, in 2017 the Law on Electronic Document and Electronic Trusted Services granted legal status to electronic signatures and documents (Government of Georgia, 2017[107]). These modifications made it possible to receive a number of legal services remotely, advancing Georgian e-governance, and envisaged that any entity meeting the requirements outlined by the law can become a qualified trust provider. As a result, this service is not anymore carried out only by the governmental body LEPL Public Service Development Agency (SDA), as happened until 2018, but can be offered by a variety of bodies. The use of e-signatures was further encouraged since 2019 by obliging any company that conducts business with administrative bodies to sign documents using a recognised electronic signature or stamp (EU4Digital, 2019[108]). Since 2020, the law has been subject to an update, which has not yet been finalised (Parliament of Georgia, 2020[109]).
Nowadays, Georgia enjoys, along with Ukraine and Moldova, one of the region’s most complete legal frameworks for e-signatures. However, Georgia, unlike Ukraine and Moldova, has not yet harmonised its legislation with the EU electronic IDentification And Trust Services (eIDAS) regulation and recommendations. The diversity of electronic identity (eID) and eSignature systems across the EaP countries hinders cross-border exchanges (EU4Digital, 2020[110]). In order to overcome this issue, EU4Digital Facility has launched the eSignature pilot initiative, which consists in the recognition of cross-border eSignature between Ukraine and Moldova (EaP-EaP), and Ukraine and Estonia (EaP-EU). The aim is to analyse the technical as well as the organisational aspects of this mutual recognition process, in order to extend the Digital Single Market to the other EaP countries, including Georgia.
Digital security, data privacy and protection to enhance trust
Building trust in the digital economy is a pre-condition for the digital transformation. As individuals, governments and businesses rapidly increase their online activities, they face ever-growing digital security threats such as phishing campaigns, malwares or cybersquatting. These can cause significant economic and social losses, from disruption of operations to damages to reputation and competitiveness, leading to financial losses. They particularly affect SMEs, who often lack awareness of the risks and resources to counter them (OECD, 2016[111]). Georgia has developed a policy and legal framework to address this issue, which has positioned it among leaders in the EaP region in international rankings such as ITU’s Global Cybersecurity Index (GCI) 2020 (Figure 2.12) and the National Cybersecurity Index 2020.
Figure 2.12. Georgia’s scores in the Global Cybersecurity Index 2020, per pillar
Note: Legal measures refer to the presence of legislations, regulations and other rules related to digital security; Technical measures to the existence of technical institutions and framework for digital security; Organisational measures to the presence of coordination institutions, policies and strategies at the national level; Capacity Development to research and development, education and training programmes, certified professionals and capacity building, and Cooperative measures to partnerships, cooperative frameworks and information sharing networks.
Source: (ITU, 2021[112]).
Georgia is one of the few EaP countries to have adopted a dedicated strategy and action plans on digital security issues. It enacted its first Cybersecurity Strategy as early as 2012 (Government of Georgia, 2012[113]), followed by a second one in 2017. Both documents focused on researching these issues for evidence-based policymaking, enacting a legal and regulatory framework, defining stakeholders’ responsibilities and coordination mechanisms, raising awareness and fostering international co-operation (United Nations, 2019[114]). The DGA elaborated a third National Cybersecurity Strategy and Action Plan for 2021-2024, which has been enacted by the Government of Georgia in September 2021 (Government of Georgia, 2021[115]). This new document is expected to strengthen the resilience of both the public and private sector by developing a culture among society and organisations of cybersecurity risks and the skills to enact mitigating measures, bolstering the governance systemic-operation, and enhancing Georgia’s participation in international co-operation initiatives.
Georgia has also built a dedicated institutional framework, composed of stakeholders responsible for designing and implementing digital security policies: the DGA (formerly Data Exchange Agency until 2020), the State Security Service of Georgia, the Cyber Security Bureau of the Ministry of Defence, and the National Bank of Georgia. With regard to the legislation in place, Georgia adopted in 2012 a Law on Information Security, which provides an initial legal framework, refining roles and notably creating the above-mentioned Cyber Security Bureau. As of June 2020, EU4Digital reported that the Georgian legislation is still not in line with the EU’s Directive on Security of Network and Information Systems (NIS directive), but the law was amended in June 2021 to strengthen the framework (Parliament of Georgia, 2021[116]).
Moreover, building “incident response capabilities” is necessary to help public and private organisations manage risks and improve resilience (OECD, 2015[117]). Such systems enable firms and administrations to report cyber incidents – and thereby centralise and monitor them – design adequate responses to tackle them, raise awareness of potential threats, and foster national and international co-operation. Georgia has established three computer emergency response teams (CERT) so far – cert.gov.ge, created in 2011, operating under the DGA, the Cyber Security Bureau (for the Ministry of Defence) and the academic CERT GRENA (Georgian Research and Educational Networking Association). However, they could be improved: the cert.gov.ge website is not yet user-friendly and often suffers from disruptions, and the resources made available online are very limited. Georgia also lacks funding and expertise on digital security issues (EU4Digital, 2020[118]). Moreover, private firms are not, as in some European countries such as Austria, legally obliged to meet any minimum cybersecurity requirements or to report cybersecurity incidents – such legal obligations only apply to operators of critical infrastructure, which reduces the response and monitoring capacity.
At the individual and firm levels, Georgians have benefitted from several initiatives aimed at raising their awareness of cybersecurity threats and developing their skills. GITA’s IT training for instance include a cybersecurity component (GITA, 2021[119]). Cyber Olympiads are organised by the CERT of the DGA since 2016, where cybersecurity students can improve their knowledge and skills by trying to solve real-case scenarios. Georgia could consider taking part in similar exercises at the regional and/or international level, akin to the European Cyber Security Challenge (https://ecsc.eu/) powered by the European Agency for Cybersecurity. Such competitions would also allow for benchmarking against peer countries.
Finally, Georgia is co-operating with international partners, such as the EU through the EU twinning project, the Council of Europe (CyberEast), the OSCE (e.g. Confidence Building Measures), and NATO. Georgia is also involved in the regional initiative GUAM (Organisation for Democracy and Economic Development) together with Azerbaijan, Moldova and Ukraine. The country also signed a memorandum of understanding on 5G security with the United States in January 2021.
Protecting personal data is another major aspect of digital security policies. Due to the steady rise in online activities and transactions, users’ personal data are being increasingly collected by digital services providers, which expose them to potential breaches and personal data leaks. The law of Georgia on Personal Data Protection, adopted in 2011, aims at protecting users from these risks by setting some security requirements and rules for data processing, as well as obligations to data controllers and processors. In addition, the existence of a dedicated national supervisory authority, the State Inspector’s Service, contributes to increasing online security. The authority controls the lawfulness of personal data processing activities in both the public and private sector, including e-commerce platforms. It inspected five private online platforms in 2020. It also issues recommendations on personal data processing for companies selling online.
Despite these achievements, the law on Personal Data Protection does not align with EU standards, such as the once-only principle (there is no legal requirements for data sharing and re-use), and the General Data Protection Regulation (GDPR). A draft law on Personal Data Protection has been drafted and registered in the Parliament on 22 May 2019 to bring Georgian legislation closer to the GDPR, but has not yet entered into force.
Fostering digital skills development
Promoting digital skills is an essential component of the digital transformation: individuals and businesses cannot reap the benefits offered by new technologies without the ability to make use of them. Studies have shown that higher levels of digital literacy are positively correlated with higher employability and wages (OECD, 2015[120]). Conversely, skills shortages risk increasing the pre-existing divides between individuals, as those with higher digital proficiency levels can benefit from a wider range of online activities (training, shopping, e-government, etc.). That also applies to businesses, where the lack of digital skills among employees can limit the positive impact of digital technology on firms’ profitability (Sorbe et al., 2019[92]).
Although Georgia benefits from high education levels and a skilled workforce, the country lags behind regional peers in terms of digital literacy (Figure 2.13). In 2019, only a third of the Georgian population had basic digital skills – against over half of the population in OECD and EU-8 countries. The share falls to 18% for standard skills such as basic usage of spreadsheet and presentation software, and to only 1% for individuals capable of writing a computer program using a specialised programming language.
Figure 2.13. ICT skills in EaP, OECD and EU-8 countries
Note: Data not available for Armenia, Moldova and Ukraine. Basic skills correspond to copying or moving a file or folder, using copy and paste tools, sending e-mails with attached files, and transferring files between a computer and other devices; standard skills to using basic arithmetic formula in a spreadsheet; connecting and installing new devices; creating electronic presentations with presentation software; and finding, downloading, installing and configuring software; and advanced skills to writing a computer program using a specialised programming language.
Source: (ITU, 2021[87]).
However, Georgia has made digital skills a public policy priority through various policy documents. The e-Georgia Strategy 2014-2018 already recognised the importance of digital skills (Krabina et al., 2017[121]), and the new NBDS set their promotion as one of its three key objectives. This political goal was also supported by Georgia’s Unified Strategy for Education and Science 2017-2021, which defined the purpose of teaching ICT in schools and set the objective for all students to have a basic knowledge of ICT and practical experience in ICT usage upon completion of secondary education. To this end, and in order to facilitate teaching and learning, the New School Model introduced in 2018 foresees the implementation of digital technologies in teachers’ working process (e.g. to make a schedule or communicate), and the effective use of electronic educational resources in the teaching and learning processes.
This impetus is supported by international partners such as the EU4Digital network3. As part of this, Georgia created an Action Plan to develop digital skills including measures to monitor and forecast national digital skills gaps to identify priority actions, and the creation of national coalitions for skills and jobs. The European Training Foundation is also helping with the promotion of digital competence in national curricula, and 15 VET institutions took part in one of its initiatives – the pilot of the Self-Assessment Tool SELFIE, an electronic questionnaire that assesses the uptake of digital technologies by educational institutions and allows Georgia to be compared to other countries such as France and Germany. The tool showed that VET institutions have a strong ICT base and use digital tools in teaching process. Lastly, the World Bank supports the use of digital tools in schools via its Innovation, Inclusion and Quality project.
The government has enacted several policy documents covering digital skills development. The NBDS plans, in co-operation with the Ministry of Education and Science, to support digital skills and literacy programmes, notably on digital security, focusing particularly on the youth. Additional measures are planned for people with disabilities and minorities. The Log-In Georgia Project has a component on training and capacity building programmes in regions to foster the uptake of e-services, from e-commerce to e-learning and e-government. The Unified Strategy of Education and Science 2022-2032 and the VET Strategy 2021-2025 are expected to further support the development of digital competencies among students and of remote learning.
Table 2.2. Selected policy initiatives to promote digital skills in Georgia
Source: OECD fact-finding questionnaires, June-August 2021 (OECD, 2021[86]), and desk research.
Fostering the uptake of digital technologies and services by SMEs
While favourable framework conditions are fundamental enablers of the digital economy, SMEs also need targeted support programmes to embrace their digital transformation. Indeed, SMEs’ digital gap is due to their lack of awareness of the opportunities offered by new technologies, as well as their low levels of digital skills and limited resources to go digital (in terms of financial means, information and knowledge). This is a common feature across OECD and EaP countries, and is confirmed in the case of Georgia, where the local SME agency Enterprise Georgia quoted these issues as the main challenges for advancing the digital transformation of SMEs (OECD, 2021[86]).
In this regard, policymakers have a key role to play. SME agencies in particular are essential to provide such support programmes. In Georgia, GITA is responsible for implementing support measures for SME digitalisation. However, its actions focus on innovative start-ups and/or digital-by-default firms, and does not entail measures to help “traditional” SMEs adopt digital solutions. Other policy initiatives exist, but they appear scattered across different stakeholders (e.g. Enterprise Georgia that supports e-commerce practices, and the GCCI that launched e-commerce training). The following section takes stock of both financial and non-financial projects implemented so far.
Non-financial support
Georgian businesses benefit from an ecosystem built to encourage the digital transformation – but these infrastructure rather target firms that are developing an innovative digital product or service. In this respect, GITA acts as a business incubator, helping entrepreneurs scale up their disruptive ideas by offering them various products and services – from infrastructure (co-working spaces) to training, networking and financial support. As mentioned in Part 1, GITA has also developed 22 FabLabs across the country, three technology parks and five innovation centres (mini-tech parks). Three university-based innovation laboratories particularly foster skills development in programming and contribute to the organisation of events such as hackathons and Olympiads. Innovation infrastructure is to be further developed, notably through the GENIE project (Box 2.3), which has a component aiming at developing a network of regional innovation hubs and community innovation centres across the country.
Box 2.3 Georgia National Innovation Ecosystem (GENIE) project
Project overview
In March 2016, the Government of Georgia and the IBRD signed a five-year agreement, which has been extended by 23 months, i.e. until 2023, that granted Georgia 40 million USD to implement the GENIE project. This programme aimed at fostering the participation of individuals and firms in the digital economy and at increasing the number of innovative activities they perform. The project has been carried out by GITA.
The GENIE programme consists of four basic components, which frame and guide its action:
Creation of innovation infrastructure to improve internet access, develop digital literacy and increase public awareness on broadband internet connection and its use;
Ensure innovative support services, i.e. training and technical assistance to support digital skills development among individuals and firms;
Funding of innovations through co-financing grant competitions directed at innovative companies and start-ups;
Project implementation support
Selection of GENIE initiatives
Based on these components, GITA implemented a wide range of initiatives. A selection is presented below together with their results:
Broadband-for-Development (BfD) programme to support the adoption and use of broadband by MSMEs and households, especially in rural areas;
SMEs’ e-commerce Capacity Building, which aims to deliver face-to-face training on digital skills, with a focus on e-commerce capacity development for BfD beneficiaries. However, a World Bank evaluation of the programme has highlighted its limited success for now: Internet is still predominantly used as an information source, and trainings hold a low participation rate – but more results could appear in the longer term. The evaluation’s findings point to the need for a more comprehensive approach to ensure the effectiveness of the initiative;
Regional Innovation Hubs (RIH) that allow access to co-working and prototyping facilities such as innovation labs;
Community Innovation Centres (CICs), they allow innovative entrepreneurs from small cities and rural areas to access the appropriate infrastructure, services, and financing opportunities within the innovation ecosystem, by providing equipment, training and conferencing facilities, and co-working spaces;
Innovation Matching Grant programme, i.e. financial support to projects that demonstrate innovation and market potential;
Start-up Matching Grants Program, i.e. financial support to foster the creation of innovative enterprises;
ICT training programme, that consists in a collaborative strategy to improve digital skills of Georgian professionals in one of the 30 fields covered (front-end programming, cybersecurity, project management, etc.), while preparing them for specific certifications. The goal is to train at least 3 000 participants by March 2023.
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As a result, innovative, tech firms benefit from this constantly growing ecosystem, which also help them get an overview of the support services available. The above-mentioned technology parks for instance operate as one-stop-shops for IT companies and start-ups, promoting innovation and entrepreneurship while gathering technological, educational and professional resources in one physical space. Such a one-stop-shop does not exist for traditional firms looking to digitalise, which reduces the outreach of the services available, as SMEs are often not aware of existing solutions.
A growing number of initiatives support skills development, many of them aimed at equipping young people with advanced IT skills, to create a talent pool of IT specialists. This is the case of the above-mentioned ICT training programme within GENIE, and of the Youth Coding and Tech Entrepreneurial club networks, which are expected to form 2 000 students in programming and tech entrepreneurship and match them with mentors, IT and tech firms across eight target regions. Training on basic digital skills specifically for SMEs are also available on the Georgian market, although they remain rather scarce: GENIE’s Broadband for Development Initiative for instance has trained about 1 500 SMEs in rural areas, notably on e-commerce, digital marketing and use of social networks and office programmes. Additional e-commerce training are offered by GITA within GENIE as well as by the GCCI: the latter designed the training programme based on the results of two needs assessments conducted among Georgian SMEs, and thereby trained over 600 business representatives on advertising products online, both on social media and online marketing platforms, between February and August 2021. The Chamber also provided individual aftercare services to businesses, and encouraged peer learning by inviting guest speakers from major e-commerce outlets and enterprises that successfully digitalised to share their experience. As mentioned in Part 1, it is supporting 100 businesses in developing their own website, and is developing, together with Georgian e-commerce experts, an e-book outlining guidelines for SME digitalisation, focusing on e-commerce practices. Building on this, these programmes could be scaled up and their impact better monitored. Indeed, such trainings are highly needed, notably to help firms improve their online sales: the Galt & Taggart report quotes the poor customer experience as a major challenge for Georgian e-commerce shops, resulting in local customers spending over three times more time on international online shops (Galt & Taggart, 2021[85]).
However, Georgia lacks advisory services. Entrepreneurs can receive free consultations on e-commerce development as part of the GENIE project, but none of the SME agencies nor private sector associations offer a comprehensive support programme to provide “traditional” firms substantial advice on how to go digital or similar resources. Moreover, only little is done to raise SMEs’ awareness of the benefits of digitalisation. Digitise Georgia is one of the few awareness-raising initiatives implemented – it consists in training so-called “digital missionaries” in regions and develop their digital skills. These volunteers (about 300 so far) can then reach out to local businesses to help them ensure that they are covered on Google Maps with relevant information, including in English, thereby maximising their outreach among the population and tourists. However, there is no similar programme for other technologies – yet ensuring online presence through a dedicated website and/or social media platforms for instance is of crucial importance to increase customer outreach, and can improve the impact of Google Maps coverage.
Financial support
Financial support is another major pillar for SME digitalisation. Access to finance remains one of the main barriers for SMEs in general, for they encounter more difficulties to access financing than large firms – as outlined in Part 1. Their lack of resources partly explain their lower uptake of digital technologies, as these require both investments and relevant skills from managers and employees. Digital start-ups face similar financial issues because of the absence of local risk capital.
To tackle this funding issue, several programmes have been implemented by GITA to offer financial support to innovative SMEs, including digital ones. The co-financing grant programme for instance has financed 20 firms in 2021 for an overall amount of GEL 2 million. Throughout the years, financing initiatives have enabled the emergence of successful digital start-ups, such as Optio.AI, which was a beneficiary of the Matching Grant programme. The Georgian government continues to increase its expenditure on digital innovation, while working to attract foreign investments. As an example, an agreement was signed in 2020 between GITA, the NBG and 500 start-ups, a leading US business accelerator, to launch the latter in Georgia and thereby contribute to the development of a regional ecosystem.
Initiatives to help traditional firms finance their digitalisation process are scarcer, mainly limited to Enterprise Georgia co-financing fees of placing products on digital marketplaces.
Way forward: Roadmap to accelerate SME digitalisation
Objective 1: Strengthen the institutional and policy framework for digitalisation
Adopt a comprehensive National Digital Strategy with clearly defined objectives, actions and resources
Almost all OECD countries have adopted a National Digital Strategy to ensure a comprehensive approach to the digital transformation (OECD, 2020[94]). Such strategies enable governments to define objectives and policy measures for the different aspects of digitalisation of economies and societies. By gathering them in one document, they allow for increased co-ordination between stakeholders. In that regard, Georgia should finalise and adopt its Long-term National Strategy for the development of the digital economy and information society, covering the various policy areas outlined below – from framework conditions to support programmes for SMEs, and related action plans containing clear measures, responsibilities, budget, timeframes and outcome indicators. The Strategy should be both robust, but allow enough flexibility to adapt to the fast-changing environment and changes in new technologies (OECD, 2017[122]).
Throughout the Strategy’s development, it is of major importance to set up a co-ordination mechanism such as a dedicated working group including all public and private stakeholders (Ministries, relevant agencies, business associations), and ensure public-private consultations to take into account private sector’s views. This will also contribute to an effective implementation of measures by stakeholders, while improving the co-ordination between them. Evaluations should also be carried out regularly to assess the policies’ effectiveness, identify gaps and adjust accordingly.
Regarding emerging technologies, whose benefits for SMEs (see Table 2.1 and Box 2.1) remain largely untapped, a growing number of countries are establishing national AI strategies. Georgia could consider doing the same, as the country lags behind OECD levels in terms of policy framework for that technology. This shortcoming is reflected in the AI Government Readiness Index, where Georgia ranks 72 out of 172 countries analysed. As AI start-ups are emerging in the country, measures could be planned to establish a dedicated strategy that guides the adoption of this technology by providing legal, ethical and technical frameworks. Indeed, it is important to account for AI’s far reaching and global implications that are likely to profoundly transform economies and societies (OECD, 2019[76]). Other emerging technologies such as IoT and Blockchain are not necessarily a policy priority, as they are still at a very nascent stage in Georgia as well as in other countries. Their benefits for firms are still being studied and remain so far less known than AI and, although these technologies offer a number of opportunities, they present a number of issues that have not been addressed yet and need to be accounted for. IoT can increase the likelihood of security incidents that can cause disruptions (OECD, 2018[77]), while Blockchain is characterized by high energy consumption, high costs and higher risks (Golosova and Romanovs, 2018[123]). Moreover, since many of the implications of these technologies have yet to be uncovered, the international community still lacks a common set of dedicated regulatory principles which is necessary for their effective use in cross-country operations such as supply chain. Nonetheless, policymakers should be aware of the latest developments in this regard, in order to be able to quickly respond to the constantly evolving conditions.
Task one of the existing SME support agencies with leading support for SME digitalisation
As noted above, Georgian firms do benefit from some support for digitalisation, but initiatives appear to be scattered across stakeholders. This is especially the case for the few services targeting “traditional” SMEs willing to go digital. These businesses would therefore need a “digital one-stop-shop”, a single point of reference where they could seek information, advice and various resources on how to digitalise. Enterprise Georgia is well positioned to take this role, as the agency is already leading the overall support to SMEs and has developed extensive and valuable experience in helping firms from various sectors. Moreover, it has been working with the World Bank on developing measures to foster the digital transformation of SMEs within a recently launched five-year project, the Georgia Relief and Recovery for MSMEs project.
The chosen agency would need a strong mandate to lead initiatives on digitalisation. The latter could constitute a separate work stream for the chosen agency, with dedicated human and financial resources, and be easily identifiable in policy documents and external communication material such as governmental websites. The services to be offered by this one-stop-shop could include assessments of the state of digital maturity of different sectors, e.g. through surveys among firms of a given industry. This would enable stock taking of both the level of digital awareness and the uptake of digital technologies, in turn allowing for data collection on business practices by sector, as well as monitoring of the progress achieved. Moreover, the agency could list the financial and non-financial services available (see below) and ensure the co-ordination of resources and stakeholders. This would contribute to defining a clearer role for actors involved in the digital transformation, increase programmes’ outreach, and ultimately increase efficiency of the related public policies.
Objective 2: Improve other framework conditions
Ensure broadband connectivity of higher quality and at lower prices
The NBDS foresees a wide range of measures to improve Internet access and notably to bridge the digital divides between urban and rural areas, which, despite improvements over the past years, remain an issue in Georgia. In order to further improve local broadband speed and affordability, especially of fixed broadband, and bring them closer to OECD levels, the government could consider the following:
Foster competition, investment and innovation: in addition to adopting the draft Law on Sharing Telecommunication Infrastructure and Physical Infrastructure Used for Telecommunication Purposes, several measures could further support competition and, ultimately, faster Internet connection at lower prices. Georgia could improve multi-stakeholder dialogue on these issues through consultations between governmental bodies, network operators, regulatory authorities as well as consumers, in order to ensure that measures and regulations are understood, accepted and considering the views of all parties. This would help foster endorsement and avoid conflicts, such as the ones that followed the adoption of the Law on Electronic Communications. Moreover, periodical reviews of the legal and regulatory frameworks would help ensure its continued adequacy and detect if changes/improvements are needed (OECD, 2021[124]).
Strengthen the demand-side: the NBDS has planned measures to support the demand-side through increased digital literacy. These provisions could be completed by measures to enhance consumer rights and choice, e.g. by eliminating information asymmetries. Ukraine offers an interesting example in this regard, having introduced several tools to build citizens’ knowledge of broadband services and quality, such as an interactive map of telecommunication infrastructure and a free, online speed test for citizens to assess the quality of their Internet connection. In addition, collecting and making publicly available data on quality-of-service, including on network outages, could not only inform users’ choice, but also encourage network improvements. Ensuring effective dispute resolution mechanisms in case of conflict between a consumer and an Internet provider is another policy option.
Harmonise regulatory framework with EU standards to allow for more interoperability and exchanges with the EU market
Strengthening Georgia’s legal and regulatory frameworks are of utmost importance to create conditions where individuals and businesses can make the most of the digital tools available while being protected from digital threats, breaches and personal data leaks. To this end, Georgia should:
Adopt a legal framework regulating e-commerce practices while enhancing consumer protection, as required by the Association Agreement. The latter should align the national legislation with the EU e-commerce directive, the DCFTA requirements, and the new EU 2021 e-commerce package, e.g. on custom declaration and consumer protection, which is one of the main issues for cross-border transactions (EU4Digital, 2021[105]). The law should include provisions regarding e-payments, e.g. to ensure payment security and cap surcharges in transaction costs. The regulation would level the playing field, improving conditions for both consumers and businesses.
Align standards for e-signatures with the EU eIDAS regulation while harmonising them with other EaP countries’.
Enhance digital security to build trust in the digital economy
Building on its existing policy framework, Georgia could further improve its citizens’ trust in the digital economy by considering the following measures when preparing its third National Cybersecurity Strategy and related Action Plan:
Improve the policy framework for digital security: Georgia could improve its detection and response capacity by empowering the existing CERT cert.gov.ge with more prerogatives, human and financial resources. The structure’s website could be improve to serve as a platform to share information on digital risks, latest trends, and provide advice on preventive measures, thereby offering a centralised point of reference and contributing to raising awareness among individuals and firms. The same online platform could entail a feature for visitors to report incidents. Monitoring of digital security incidents could be improved to allow for more precise analyses and adapted responses, tailored to the most frequent types of attacks.
Foster the development of a digital security ecosystem: co-operative measures appear to be one of Georgia’s weakest indicators in the GCI 2020. Yet having a multi-stakeholder ecosystem for digital security is a key element to ensure an effective digital security management. Such co-operation can be fostered e.g. through sector-specific partnerships, and/or partnerships with Internet service providers to enhance the detection and response capacities (OECD, 2020[125]).
Step up awareness-raising initiatives through dedicated training for firms, especially SMEs, to inform them of the different risks, help them minimise them by adopting good practices, teaching them how to respond, while improving their trust in online technologies. More generally, digital security should be taught to the general population as part of digital literacy trainings. Box 2.4 offers some good practice examples in this regard.
Complete the legal framework on digital security and data protection: the current legislation could be updated to align with security requirements of the GDPR. The legal framework could incentivise firms to adopt a risk management approach. As for data protection, the amendments should notably introduce the once-only principle, frame data sharing and re-use, and introduce the obligation to notify data breaches.
Box 2.4. Toolbox for digital security policies
Facilitating reporting: Denmark’s Common Digital Portal for Reporting
Within the Danish Cyber and information security strategy 2018-2021, the Danish authorities created a Common Digital Portal for Reporting, which allows businesses and authorities to report security incidents easily and quickly, and to receive contemporaneous information to act upon them and to prevent future threats. Several guidebooks are available in this regard. This reporting tool has been integrated to virk.dk, the country’s one-stop-shop portal gathering all e-government services for businesses, making it easy for users to find and access.
Raising awareness: Cybersecurity Mexico
The Federal Government of Mexico has stepped up its awareness-raising initiatives since 2017 as part of its National Cybersecurity Strategy. The Federal Police notably implemented a National prevention campaign “Cybersecurity Mexico” to this end, which reached 680 000 citizens and generated more than 48 million interactions on social media. In addition to that, National Cybersecurity Weeks have been organised since 2015 in cooperation with the Organization of American States.
Education and training: Korea’s Internet Security Agency (KISA)
KISA, launched in 2009, offers one of the most complete educational and professional training programmes to raise awareness among the population on Internet security. The agency provides trainings to foster the formation of security experts that can instantly respond to cyber-attacks, provide companies with the required protection depending on the industrial sector, and strengthen response capacities. These abilities are then certified through the Information Security National Technical Qualification Test. To establish an information security workforce, the programme supports undergraduate and graduate university courses that train future talents, and organises hacking defence competitions to discover the next-generation experts. KISA also provides seminars on cybersecurity for SMEs employees and school students. Moreover, as part of the Global project, KISA promotes international cooperation in the fight against cyber threats, offering invitation-based trainings for other countries on incidents response and the adoption of dedicated policies.
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Foster digital skills development
Georgia has already taken a certain number of steps to foster digital skills development at all levels of education and has planned additional measures in the NBDS, the Unified Strategy of Education and Science 2022-2032 and the VET Strategy 2021-2025. In addition to the recommendations and good practice examples provided in Part 1 of the present report, the government could consider the following actions to address the persisting digital skills shortcomings and skills mismatch in the labour market:
Regularly assess digital skills needs: in order to tailor its trainings to market needs and ensure an increase of participants’ employability, Georgia should conduct on a regular basis digital skills needs assessments. The SME agency, once designated as the digital one-stop-shop, could be responsible for this task. This could be done building on Enterprise Georgia’s experience in the area of training needs analysis, as the agency conducted, with the support of the European Training Foundation, several quantitative and qualitative employer surveys over the past years.
Improve digital competences of teachers, as these have been identified as one of the main shortcomings in the above-mentioned SELFIE assessment.
Raise awareness of the available training offer through a single-window portal: the current initiatives to train citizens and firms in digital skills appear scattered across SME agencies, business associations and firms. Gathering them in a single place, e.g. on a governmental website, would help maximise their outreach. Such online platform could also enable participants to provide feedback on the quality of the trainings and skills acquired.
Foster the development of an ecosystem while ensuring a co-ordinated approach: the many stakeholders acting upon digital literacy policies, such as industry players, intermediaries (clusters, business associations, etc.) and education providers, could be mapped and the links between them strengthened. This would allow for more co-ordination between initiatives, an increased public-private cooperation notably to design courses, and resource sharing within and across sectors.
Monitor and evaluate the impact of the policies and programmes implemented: the recently adopted SME development strategy for instance plans to pursue GCCI’s trainings on digital skills. Upon OECD advice, outcome indicators to assess the efficiency of these trainings have been included in the logical framework. Such evaluations should be carried out regularly and apply to all similar initiatives in order to ensure high-quality programmes. They could also help introduce certification mechanisms, as suggested in Part 1 (Box 1.2).
Objective 3: Develop comprehensive support for the digitalisation of non-IT sectors
Finally, Georgia needs to build a thorough understanding of SME digitalisation, beyond innovation and IT sector. The substantial support provided by GITA to innovative start-ups and digital firms, which has been bearing fruits and leading to the emergence of successful digital companies should be completed by comprehensive support measures for “traditional” firms, in order to enable the latter to reap the benefits of the digital transformation. To this end, the designated digital one-stop-shop should (i) raise SMEs’ awareness of opportunities and digitalisation benefits, thereby tackling SMEs’ lack of knowledge and information; (ii) accompany firms in carrying out an assessment of their digital maturity and identifying their needs; (iii) provide a range of non-financial solutions that can be tailored to the firm’s needs, as diagnosed; (iv) introduce financial tools to support SMEs’ uptake of digital technologies and (v) foster the effective development of an ecosystem for the digital transformation.
Figure 2.14 drafted based on OECD analysis of international best practices, provides a ”blueprint” to design the policy instruments to respond to SME needs and facilitate their digital transformation.
Figure 2.14. A policymaker’s blueprint to accelerate the digital transformation of SMEs
Source: OECD analysis.
Raise awareness of the benefits of digitalisation and build a digital culture among SMEs
Raising awareness is the first step to SME digitalisation. As explained above, SMEs’ lack of knowledge of the digital technologies available and of their benefits is one of the factors widening the gap between them and large firms. They often see digitalisation as a cost factor rather than an opportunity. The agency chosen as digital one-stop-shop should implement initiatives to overcome this issue. These could be expert webinars, workshops, dedicated events featuring successful examples of digital transformation in different sectors, and/or focused on one specific technology. Material solutions can also be useful, such as learning platforms and handbooks. Finland for instance has successfully implemented a wide range of such tools (Box 2.5).
Box 2.5. Raising awareness of the benefits of digitalisation among entrepreneurs: the case of the Federation of Finnish Enterprises (FFE)
The FFE is Finland’s largest business association, including more than 115 000 Finnish enterprises within local and regional associations, and aiming at improving entrepreneurial conditions.
Finland is one of the most advanced countries in terms of SME digitalisation, as about 80% of the country’s SMEs use basic digital tools on a daily basis. The gap between small and large firms is however significant when it comes to more advanced technologies and digitalisation of processes. The FFE has therefore implemented a number of support measures to raise awareness of the opportunities digital tools and technologies can bring, which include:
Entrepreneur’s Digital School, as mentioned in Box 1.2, i.e. the annual series of events that takes place in the main cities, bringing case examples and motivational peer learning activities, targeting small business owners that have just started the digitalisation process;
Webinars, directed also to SMEs outside the organisation, to provide low-cost and easy-access training on the utilisation and application of the latest digital tools;
Entrepreneur’s Digital Guidebook, an online and free manual on different aspects of the business’ digitalisation process. The guidebook is thematically linked to a platform that connects SMEs willing to digitise and digital service providers in Finland;
Entrepreneur’s GDPR Handbook that assists SMEs in meeting the requirements of the EU data protection regulation;
Entrepreneur’s Media, a print and digital media outlet that allows reaching a large number of small-business owners on a daily basis, to inform and inspire them on the latest digital developments and on the potential applications of digital tools.
Source: (SMeunited, 2019[126]), Invalid source specified. and Invalid source specified..
Enable firms to carry out a diagnosis of their digital maturity and needs assessment
Another way to raise SMEs’ awareness while tailoring the support offered to their needs is to help them carry out a diagnosis of where they stand in the digitalisation process. Several tools can be introduced to this end:
A digital self-assessment tool: many OECD countries, such as Austria, France and Luxembourg (quoted in Box 1.2), have introduced online questionnaires that companies can fill in within a short amount of time to estimate how digitally mature they are. Such test can include questions on the adoption of traditional technologies, such as CRM, SCM, social media, etc., but can also contain a sector-specific section focusing on the particular trends in a given industry. Upon completion of the test, the platform can generate a digitalisation percentage as well as initial recommendations on how to move forward. This tool not only enables entrepreneurs to assess themselves while learning about the technologies available for their sectors, but the results generated can also be used to collect anonymous data on SME digitalisation, allowing for more evidence-based policymaking.
Advisory services under the form of an appointment with a specialised consultant: consultations with digitalisation experts can be introduced separately or as a complement to the self-assessment tool. In the second case, the entrepreneur can book an appointment with a specialised consultant: the latter can provide help in filling out the questionnaire, who can provide more explanation regarding the questions, and then discuss their results and the way forward, allowing for more explanation, exchanges, and better-tailored recommendations. The Austrian initiative KMU Digital offers an interesting example in this regard (see Box 2.6).
Sector-specific plans can be developed and used as a reference to assess the level of digital maturity of a firm. The complexity of the digitalisation process does not allow for the emergence of a “one-size-fits-all” approach as businesses differ in products and services, goals and resources. However, some common features can be found within a given sector, e.g. tourism and catering. Recommender Systems for instance can be particularly relevant for tourism: this technology, based on data analytics, can direct customers towards the services that best fit their current needs and preferences, thereby reducing time, cost, and improving quality and satisfaction rates. Establishing sector-specific plans including step-by-step recommendations and a list of existing capabilities and trainings could constitute a useful source and point of reference for both for businesses and digitalisation consultants. As an example, Singapore created such plans within its SME Go Digital Initiative, which offers sector-specific Industry Digital Plans, i.e. step-by-step guides for SMEs containing digital solutions and training for employees tailored to the firm’s needs, as well as recommendations.
Box 2.6. Supporting SMEs in their digitalisation journey: the case of KMU Digital
Programme overview
Launched in 2017 by the Austrian Federal Ministry for Digital and Economic Affairs and the Federal Austrian Economic Chamber, this public-private programme aims at supporting the digital transformation of SMEs in all its phases, offering
An analysis of the firm’s potential (4 hours, financed at 80%);
Help in designing a digitalisation strategy (2 days, financed at 50%);
Help in implementing the strategy (financed at 30%).
KMU Digital provides consulting services, from a free online self-assessment check and free analysis by consultants to advisory services and trainings for entrepreneurs and their employees. It also organises events and webinars on various topics, notably advanced technologies (e.g. blockchain, industrial IoT, etc.).
The role of certified consultants
One of the programme’s success factors lies in the training and certification of local consultants, technology companies and agencies, resulting in an expert map publicly available (https://firmen.wko.at/suche_kmudigital).
On one side, the programme provides financial support to hire a certified consultant, covering a number of topics: business models and processes, e-commerce and online marketing, IT and cybersecurity, and digital administration. The consultation process is structured in two stages: first to guide the entrepreneurs in determining the company’s opportunities, and then help them defining a strategic implementation plan. Following the sessions, consultants are required to document their work in a structured report that contains further recommendations for the entrepreneur. The reports delivered by consultants simultaneously provide valuable insights on digital trends in the country, including by firm size, sector, and region for instance.
On the other side, KMU tries to gather consultants that can provide their services, and to support them in strengthening their skills. Consultants are not only provided with webinars and trend cards to inform them of the programme and the latest technological developments, but they also receive information on available grants to further their professional development.
Outcome
Since its establishment, KMU Digital has supported around 15 000 digital transformation projects, and in March 2020, a survey of funding recipients confirmed an overall high level of satisfaction. Nearly 800 consultants have been trained and certified. The programme has been renewed in 2021, and it is now planned to continue until 2023.
Source: Invalid source specified., (SMeunited, 2019[126]), and exchanges with KMU Digital.
Provide SMEs with non-financial solutions tailored to their needs
Once a diagnosis has been made, SMEs need to have access to relevant resources and support to act upon the shortcomings identified and implement the action plan ensuing from the preliminary assessment.
Among the options for capacity building instruments, Georgia could consider:
Providing relevant trainings: Georgia could scale up and expand its training initiatives in the field of digitalisation based on the needs identified by the self-assessments and sector-specific plans.
Developing a network of certified consultants and advisors: in order to deliver quality advisory/consulting services and improve consumers’ trust in them, the SME agency acting as the digital one-stop-shop could identify and train specialised consultants and advisors who could help SMEs in their digitalisation journey, from needs assessment to digitalisation strategy design and implementation. To this end, a mechanism should be implemented to certify the competences of these experts and thereby ensure that they meet certain quality standards – as done by the KMU Digital initiative described above (Box 2.6). In that regard, the existing infrastructure ecosystem of Fablabs, technology parks, etc., could play a role in building up and certifying expert knowledge with consultants or local communities. In addition, policymakers could facilitate SMEs’ access to these services by co-financing or subsidising the costs of the services. Moldova’s SME agency ODIMM for instance offers vouchers worth up to LEU 20 000 (EUR 975) for accessing such consulting services.
Mapping and promoting existing market solutions: encouraged by GITA’s many support measures implemented for them, a significant number of Georgian start-ups offering B2B solutions for the digital transformation, such as the previously mentioned B2C.ge and Optio.ai, has been emerging over the past five years. Table 2.3 provides a non-exhaustive list of examples. These market solutions help firms in their digital journey. It would therefore be beneficial to promote them, for instance through an online portal created and managed by the digital one-stop-shop and listing existing solutions – following the example of Start-up Friendly, GITA’s platform linking start-ups and large businesses, or of the official website of the Business and Technology University btu.edu.ge, which has a section dedicated to start-ups. This measure would facilitate, at low cost, the connection between firms seeking to digitalise and start-ups offering relevant solutions, and thereby be mutually beneficial, as it would simultaneously foster the expansion of these digital start-ups, which often lack marketing and advertisement.
Table 2.3. Examples of existing market solutions for SME digitalisation in Georgia
Increase financial support options for the digitalisation of “traditional” firms
Moreover, SMEs’ access to finance should be facilitated, as this remains one of the main issues impeding their development. Various financial tools can be created to support the digitalisation of traditional firms. Most of them are similar to mechanisms that Georgia has already implemented in the past, but for other types of beneficiaries – e.g. grants such as GITA’s Matching grant programme, where the applicant still co-finances part of the budget to ensure some private investment and share risks. Such scheme could be replicated for non-digital firms. Likewise, vouchers have been granted as part of the GENIE project to foster the uptake of broadband among businesses: similar instruments could be introduced to encourage SME managers’ use of trainings and advisory services, as done by ODIMM in Moldova.
Ensure coordination and cooperation within the digitalisation ecosystem
Finally, the digital one-stop-shop should coordinate the different public and private stakeholders involved in SME digitalisation (Ministries, dedicated infrastructure such as incubators, accelerators, techparks, etc.). To this end, the agency should keep track of all initiatives aimed at accelerating the digital transformation, in order to ensure complementarity, avoid duplicates and optimise resources. In this context, the role of business associations should not be overlooked. They can provide expertise to guide SMEs in the digitalisation process, but also serve as coordinating agents among the multitude of stakeholders involved, create opportunities for networking, and inform policymakers of the needs and interests of their members. Some of the business associations active in Georgia have started offering some support to SME digitalisation: GCCI for example provides vocational courses to strengthen digital skills among its members; the Georgian Small and Medium Enterprises Association (GSMEA) invites expert members to inform interested SMEs on the latest legislative developments and share best practices, and Business Association of Georgia (BAG) organises networking opportunities for entrepreneurs of different sectors, an initiative that can promote knowledge exchange. Building on this, the involvement of these business associations should hence be encouraged, by giving visibility to their initiatives through the one-stop-shop, and by making use of their valuable experience in the design and implementation of new programmes. The Malta Chamber of SMEs for example has actively supported the government in designing a grant scheme to help SMEs develop an e-commerce platform. In particular, since the application for the grant required a high volume of documents, including business plans, it has supported the adoption of an additional grant scheme that would provide SMEs with the necessary resources and expertise to comply with the requirements, making the programme more effective and easily accessible (SMeunited, 2019[126]).
Notes
← 1. See for example Gal et al. Invalid source specified.
← 2. The baseline corresponds to the median value for Sundays between 3 January and 6 February 2020 for the use of public transport, and for Mondays of the same period for visits to workplace.
← 3. EU4Digital is an EU initiative aiming to extend the EU’s Digital Single Market to EaP countries and help them tap into the potential of digitalisation. For more information, see the dedicated website eufordigital.eu.