DOI: 10.52340/ekonomisti.2026.01.21

Expanded Summary

The article examines the impact of a countrys economic standing on the development of its business environment. In this regard, we characterize and analyze specific indices and Georgian data points that, in our assessment, serve as primary determinants of the business climate. At the contemporary stage, significant scholarly and practical emphasis is placed on investigating the business ecosystem and the systemic influence of national conditions upon it. Consequently, a comprehensive analysis of the business environment is conducted, entailing the study of all internal and external factors that critically influence a companys operational functioning, growth trajectory, and long-term viability.

Keywords: Business Environment, Economic Indices, Sustainable Development, Georgia, data Analysis

This research explores the critical relationship between national performance indices and the evolution of the business environment. At the contemporary stage, analyzing a country\\'s "business ecosystem" is essential for understanding corporate survival and growth. By utilizing frameworks such as PESTEL, Porter’s Five Forces, and SWOT analysis, this paper evaluates Georgias current standing in the global market. The study highlights Georgias significant advancements in innovation, government effectiveness, and labor productivity, positioning it as a leader among EU candidate nations and upper-middle-income economies.

The business environment comprises an intricate "ecosystem" of internal and external factors that dictate a company\\'s trajectory.

• Internal Environment: Controllable factors including corporate culture, human resources, management hierarchy, and capital assets.
• External Environment: Factors beyond direct corporate control, categorized into the Micro-environment (customers, competitors, and suppliers) and the Macro-environment (economic shifts, technological disruptions, and legal frameworks).

To navigate this macro-environment, businesses must adapt to the "rules of the game" set by national and international forces. Economists utilize Indices to quantify these complex shifts—such as the Consumer Price Index (CPI) or Gross Domestic Product (GDP)—into actionable data.

To evaluate the business climate, three primary analytical frameworks are employed:

1. PESTEL Analysis: Monitoring Political, Economic, Social, Technological, Environmental, and Legal variables.
2. Porters Five Forces: Assessing competitive intensity and market attractiveness within the micro-environment.
3. SWOT Analysis: Synthesizing internal strengths and weaknesses with external opportunities and threats.

According to the Global Innovation Index 2024 (published by WIPO), Georgia has demonstrated a remarkable upward trajectory:

Global Ranking: Advanced 8 places to rank 57th out of 133 countries.

Regional Leadership: Georgia leads all EU candidate countries and ranks among the top 10 upper-middle-income economies globally.

Key Strengths: The country received exceptionally high marks in "Government Effectiveness," "Business Environment," and "Entrepreneurial Culture."

Georgia’s institutional framework has seen significant strengthening:

Government Effectiveness: Ranked 39th globally (79.1%), surpassing several G7, EU, and NATO member states.

Public Integrity: Reached a historic high of 7.56/10, ranking 29th in the world.

Judicial Independence: Improved by 21 positions to rank 36th globally, placing it within the top 20 in Europe.

Transparency: Georgia achieved a perfect score of 10/10 in Administrative Transparency, sharing the top global spot.

Based on the World Justice Projects 11-year study, Georgia ranks 18th in Europe for the Absence of Corruption. With a score of 68%, it outperforms 14 EU and NATO members and remains the leader in the Eastern Europe and Central Asia region.

In 2023, Georgia reached a milestone in economic prosperity. For the first time in its post-independence history, the nominal GNI per capita (PPP) surpassed the global average:

2023 GNI per capita: $23,040 (a 10% annual increase).

Comparative Growth: In 2012, this figure was only $9,960. Georgia now exceeds the general level of upper-middle-income countries by $225.

Georgia has emerged as a global leader in productivity growth:

Global Rank: 1st in the world for labor productivity improvement in 2023.

Mid-term Growth: Since 2019, productivity has increased by 24%, the second-highest growth rate globally after Guyana.

Impact: This growth aligns with SDG Indicator 8.2.1, promoting sustainable, inclusive economic growth and decent work for all.

 A critical data point for investors is Labor Productivity Growth. According to 2024–2025 World Bank reports, Georgia recorded a 10.4% increase in labor productivity, ranking 2nd globally (following only Guyana).

 Conclusion. The data indicates that Georgia has successfully transitioned into a highly competitive environment for business and innovation. By outperforming many established EU and NATO members in transparency, entrepreneurial policy, and productivity, Georgia has solidified its position as a primary destination for investment and a model for rapid institutional development in the South Caucasus and beyond.