In recent years, Georgia’s information and communication technologies (ICT) sector has experienced a substantial growth, becoming a significant driver of the country’s economy.
A recent study by the PMC research center reveals that the average salary in the ICT sector is now twice the national average. This boom can be attributed to tax incentives for international companies and the influx of IT specialists who arrived in Georgia due to the Russia-Ukraine war.
The Georgian government’s decree, which provides international company status to eligible enterprises, has contributed to the growth of the ICT sector. These enterprises benefit from a reduced profit and income tax rate of 5% instead of the standard 15% and 20%. Additionally, the war in Ukraine triggered a significant migration of skilled ICT professionals from Russia, Ukraine, and Belarus to Georgia, with many finding employment in the information and communication sector.
In 2022, the real GDP growth of the ICT sector in Georgia skyrocketed to 49.9%. As a result, this sector became one of the main drivers of the country’s real GDP growth. The ICT sector’s contribution to Georgia’s total nominal GDP has been steadily increasing since 2016, reaching 2,943 million GEL in 2022. The number of people employed in the ICT sector also grew by 20% compared to 2021, with the average nominal wages increasing by 56%.
Despite this impressive growth, Georgia has fallen in some international rankings related to ICT sector development. The country has lost ground in areas such as the production of innovative products (Global Innovation Index), readiness to use breakthrough technologies (Frontier Technologies Readiness Index), and the ability to leverage ICT to boost competitiveness and overall well-being (Network Readiness Index).
To address these challenges and capitalize on the ICT sector’s potential, the PMC research center recommends that the Georgian government: