Role of innovations and investments in the financial provision of privatised enterprises (ABSTRACT)

Prof. Evgeni Baratashvili, Dali Sologashvili, Lali Abashidze

Development process is directly linked to the process of state’s development.

Therefore, in achieving state’s particular purposes special attention is attached to the development process of different regions. As far as we know, tax, budget, tariff, investment, structural, institutional and social policy are considered main elements of regional policy.
Based on the typology of regions in relation to innovation process developed by E. Kuklinski, I think it advisable to recognize Imereti region, in particular Kutaisi, as creative and innovative region that can meet the modern methodology approach for determining region’s strategic development by means of orienting towards material sphere. Formal and informal capitals belong to creative or innovative regions. They can generate base, political, social and scientific-technical innovations and have appropriate business and creative environment. Territorial resources as basis of regional potential can be classified according to the following principal groups:
– region’s principal funds;
– natural resources;
– land as part of property complex;
– labour resources;
– financial resources;
– informational resources.
Beneficial regime applied to foreign investors may lead to deplorable outcomes in the branches already developed by home production. However, we think it useful to invest their capital in such branches that local entrepreneurs can not develop by themselves. For instance, in order to activate privatized Kutaisi enterprises, we consider it necessary to attract from abroad such scarce resources as capital, new equipment, technology and management methods for such branches as mechanical engineering, chemical industry, and energy. Of no less importance is sale of home production on foreign markets with the support of foreign investors.
– Attraction of foreign investors is advisable for export-oriented and import-substituting branches, which promotes inflow of currency funds into the country and positive payments balance as well as fast economic development.
– For cities and regions as well as for the whole country such foreign investments that would help to use still unused local labour and material resources are helpful. This will contribute to the development of local high-tech export production with certain part of profit being re-invested with the purpose of production development on the spot and putting other new branches into effect.