DIGITAL TRANSFORMATION OF SMEs IN GEORGIA: BARRIERS, OPPORTUNITIES AND ECONOMIC EFFECTS IN THE CONTEXT OF EVOLVING ECONOMIC POLICY

Abstract

Digital transformation has become a central condition for SME productivity, resilience and participation in data-intensive markets. This article analyses the digital transformation of small and medium-sized enterprises in Georgia in the context of evolving economic policy. It develops a policy-capability interpretation of the Georgian case and argues that the main constraint is not only access to technology, but also the ability of firms to convert digital tools into routines, market access and productivity gains. The study combines secondary statistical evidence, policy document analysis and international benchmarking. It shows that Georgia has strengthened SME support, digital public services and innovation policy, while small firms remain weak users of ERP, CRM, AI, e-commerce and sophisticated websites. The paper proposes a sequenced roadmap that links diagnostic support, digital finance, sector-specific skills, cybersecurity, regional inclusion and outcome-based monitoring. It concludes that digital policy can generate economic effects only when it is aligned with firm-level absorptive capacity and measurable business outcomes.