By Dr. Tamaz Maglakelidze

Experience of last decade in Georgia and post-soviet area has shown the wide spectrum of economic security and its highly multiplying effect.

If Soviet Union, with its autarchic mechanisms, depended on competitiveness less, now situation has changed. Increase of dependence on import prioritized many aspects of economic security. Special attention here should be paid to the problems of ethnological security and intellectual property protection.
Economical decrease in Georgia as well as in others like us has turned into huge transformational depression. It appeared more durable and deep then authoritative international organizations expected. For example, GDP of Georgia in 1998 comprised only one third of that in 1989. Among post-socialist countries, only Poland (in 1996), Slovenia (in 1998), and Slovakia (in 1999) could achieve the state of readiness to reform with the GDP figure. In 1999, GDP comprised $596 per head in Georgia, while that in Estonia did – $3060, and in Poland – $3230 (number one in the world is Luxembourg – $45,750).
That environment, with many of other factors, branded our scientific and technological fields challenging also the serious hazard. And as the result, we’re now managing the huge decrease of scientific-technological potential and innovative activity. Little by little, appears the trend of Georgia becoming the periphery for supplies of developed countries. From the sight of economic security, keeping, inclination that way, objectively supports the fortification of dependence of our country on world market conjecture, scatter of natural resources, and finally, deepen of structural misbalance if economy. The final one appears within broad misbalance between consumption and production, which is compensated with import and on the other side scrapes out the macro-structural inequity between demand and supply. Dominant in net demand is that of family farms on imports for consumption, which noticeably decreases the domestic production. With the decrease of economy, deteriorates the utilization of technological and personnel potential and reduces the innovative investment related to scientific researches, technological and marketing researches, technological preparation of enterprise, personnel management etc. Relevant for modern technology investments even do not exist in country, state is unable to support the innovative processes and allocate even the tiny amounts for that. With all other reasons, this tendency causes the flow out of labour resources abroad and dangers the development of national economy.
In terms of existing conditions, innovative field carries the role of kernel for structural transformation. Constant process of shifting old technologies with modern ones is the basis for efficient economy. That process is the prior among economical strategies of developed countries and integrates both material resources and intellectual ones as well. Discarding these experiences means inescapable recession for our country, which makes economic growth doubtful and provision of economic security thereof.
Strong economic growth should rely on strategy that orientates on development of production activities in country. But on the other hand, in existing conditions, such development requires the multilateral advance of scientific and technological potential. Expansion of technological innovations, activation of industrial resources and organizational-structural factors should serve as a basis for the realization process of investment projects. Therefore, as the most important resource for economic growth world acknowledges the development of science and innovations. As economists forecast, right that direction will be the most prior in advancing the socio-economic environment in the 21st century. Besides technologies, innovative character of development will involve all the institutional forms of society. Moreover, it will influence the industrial mechanism of country and encourage it to positive transformation. It mostly indicates to the influence of such global informational services as internet.
Thereof, economic growth, in recent conditions, acquires the innovative character. Scientific and technological progress makes production that relies on indignant factors like science and technology more intensive. Without that, it’s impossible to talk about investment activity.
Implementing any industrial decision on macro, micro or mezzo levels, economic analyze of each innovation should rely on presumption of national security including, special attention to socio-economic and ecological securities. Therefore, firstly, economic analyze of objective with its positive and negative sides should be carried out before accepting the expert’s final decision on validation of innovative process; secondly, on all stages of analyze, important is to stipulate implementation of the socio-economic, defensive, ecological, demographic and other securities and exclusion of probable negative outcomes of realization process; thirdly, the most important is the concordance of interests by state, society, regions, and industrial structures with each other, in achieving the high economic growth. For that it’s important to approve the socio-economic startegies, programs and projects on all levels of management and industry. Each project is anticipated positive, if the profit exceeds the social loss.
The analyze and assumption of socio-economic effectiveness of innovative projects and purposes has to include the elements as follows: 1. Development of technologies for -sparing the savings. 2. Envision of prior directions for socio-economic transformations with stipulation of an accelerated transition to innovative policy. 3. Definition of decisions for investment projects, competitiveness and rationality of purposes as well as those of technological, organizational and managerial intentions. 4. Definition and investigation the positive and negative outer factors influencing projects of competitiveness of industrial subjects and produced goods. 5. The research of potential reserves for the increase of production effectiveness, for the establishment of modern scientific-technological achievements, on the basis of recent marketing and management developments, perfect utilization of labour, material, financial and natural resources of country.
Arguing the real effectiveness of investment projects and purposes, world’s economic theory and practice appeal to different methods those could be useful for Georgia to manage the economic growth today. These methods include:, economical and mathematical simulation, expert’s assumption, correlation, extrapolation, and equations analyze that is the most accepted among all.
Economic stimulation of innovative affairs has to be carried out with special tax and customs allowances. Commodities and technologies brought in by foreign investor to invest in Georgian business has to be released from customs duties.
If looking through the world experience, production costs include within the expenditures for scientific researches and preparation works, that’s vice versa at ours. Therefore, it’s important to count the costs for employing the new technologies with that of production.
With the purpose of economic security, state, running innovative affairs, should provide the control upon the field of employing natural resources, stipulating also protection of national interests. It should draw up the scientific-technological policy that will indicate to positive reference of state to science and the development of technologies.
According to experience gained by developed countries, Georgia should establish the investment bank that could be relied in the principle of joint stock companies, which will accumulate amounts for realizing the investment projects and developing the high efficient innovative affairs. That will give an opportunity to develop not only the small business, but the large one as well. Otherwise, Georgia will never liberate up from the status of developing country and the economic security – from doubt thereof.
In terms of existing trend of the investment activity decrease, prior remains to attract foreign investments including, those of technologies, which has to be implemented carefully. According to 1998 estimates, 9% of total investments in country were treasury ones, and 91% – the private sector one. If foreign investments in 1997 were 63% of all, in 1998 it comprised 80%. Besides, we could notice that activities by local organizations and enterprises did not exceed 9%, and the amounts by population only 2%. In such case, when the investment environment is not quite pleasant, state, coming up from the interests of country, should define the directions and priorities of innovative policy and draw up the mechanisms of coinciding interests of the state and private sector to each other.
The real basis of economic security of Georgia is an industrialization of economic security and, first of all, development of science. With that purpose, state should pay special attention to provision of scientific and technological security. But important for that is to: develop the scientific and technological potential; expand the fundamental researches and refinery; provide the juridical basis for scientific and technological development and informational security etc.
In close with technological security we can always see one of the main purposes of economic security called governmental protection of intellectual property. That’s also important for the integration of Georgia with the world market.
Intellectual property covers the products of human’s intellectual affairs, which are protected with authority rights.
The world organization of intellectual property convention that was approved in 1967 sees within to protect the objects of intellectual property as follows:
– Invention in all fields of society;
– Scientific discoveries;
– Scientific works and those of art;
– Commercial appellations and denotations;
– Products’ design;
– New methods of solving technical tasks;
– Trademarks;
– Industry marks;
– Service marks;
– Symbols and appellations.
The decrease of demand on innovations and production in Georgia is caused by imperiling authority rights on inventions; demolish of utilization mechanisms of patent inventions; braking the rights of intellectual property on local as well as on foreign markets etc.
For improving the intellectual property import, we consider creation of below given mechanism of regulating innovative processes:
– Control upon quality of imported goods;
– Increasing customs duties upon low quality goods;
– Creating the informational system for inventions;
– Shifting the registration rule of joint ventures (with foreign capital);
– Establishing tax allowances in cases of utilizing inventions as well as that of improving economic parameters of production process etc.
For providing the security for national industry, special attention should be paid to the development of national intellectual property production, which, itself, requires the stipulation of science development and creation of relevant conditions for employing intellectual property. The most important at this sight is that technological security and protection of intellectual property should be provided featuring within Georgian economic policy.