Relevance of the topic: Modern companies spend a lot of time and money on implementing innovative activities. In the post-industrial era, these activities provide them with a competitive advantage, allowing them to survive in a constantly changing market environment. A business that produces and uses scientific and technical innovations becomes innovative. On the one hand, innovators who offer companies original ideas and investors, without whose financial support the functioning and development of innovative companies is impossible, play a major role in implementing this process. In this context, the study of general trends in the development of innovative business and the identification of existing problems is a topical scientific task. The aim of the article is to establish a typology of innovations and innovative technologies, analyze the types of innovative business and world experience, identify the problems of innovative business at the modern stage of Georgia's development and determine specific ways and directions for solving them. The object of the study is innovative business in Georgia, its development trends and features. Research methods: The paper uses quantitative and qualitative research methods. In addition, the analysis process uses systematic, economic-institutional, historical-dialectical, scientific abstraction, positive-normative, statistical analysis, prognostic, expert assessment, and diagnostic methods. Practical significance: This article provides politicians, business leaders, and academics with information about the practical steps that need to be taken to develop innovative business in Georgia. Results and discussion: 1. The share of companies engaged in innovative products in Georgia (small-6.6%, medium-11.4%, large-13%) is extremely low. The share of businesses engaged in research and development (R&D) in the country is about 6.8% (respectively, in the USA - 70, in France - 50, in Japan - 78 percent). In 2023, only 6.8% of industrial firms were engaged in the creation and adoption of innovations, and in 2024 this figure practically did not change. This indicates that not all innovative projects achieve the final result - a new product, and not all innovations find their customers.
- The average age of equipment has exceeded 15-20 years, which is twice as high as in developed countries. The level of development of key industries in Georgia lags behind developed countries by 15-20 years. Companies are mainly engaged in cloning innovations (copying promising business solutions. In the 2023 Global Innovation Index (GII), Georgia moved to 65th place, and the country received one of the lowest scores in recent years (29.9).
- The share of innovative companies is only 6% (last place among OECD countries), compared to 35% in Japan and Germany, and 55% in Denmark and Finland. Such a low level of innovative activity is associated with the low income of companies from the implementation of technological innovations against the background of increasing costs.
In Georgia, there is no such important structure supporting innovative businesses as the National Association of Business Angels, whose function is to protect and develop the interests of individual venture investor organizations and early-stage venture funds.
The constant outflow of capital plays a negative role in the Georgian In the development of innovative business. In 2023, this figure amounted to 81.2 million. USD, in 2012 - 56.8 million, the outflow of capital replaced its inflow in previous years. This process indicates the distrust of potential investors towards state agencies.
Conclusion: Taking into account the above circumstances, the following steps are recommended for the development of Georgian innovative business:
- In the long term, the state should develop a clear strategy for the country's innovative development, supported by the appropriate ideology of the attractiveness of innovative activities.
- For the well-being of innovative business, an institutional environment should be created that meets the requirements of the country's innovative development.
- The state should more actively use the program-targeted method of introducing innovations.
- Like Great Britain, France and the USA, Georgia needs to develop a state administration and regulatory mechanism that ensures the implementation of innovative projects in priority areas.
- The state should also use indirect methods of regulating innovation activities, namely legislative norms, tax measures, support for venture investors (business angels) and small and medium innovative businesses) on the basis of venture funds established with government support.
