Galt & Taggart published a 2023 study of the Georgian IT industry, which once again confirmed that last year was the best in history for the Georgian technology industry. The fact is that the sector of information and communication technologies is the fastest growing sector of our country, and this trend is driven by the IT industry and the export of services of companies involved in the industry.

Last year, IT companies registered in Georgia exported $892 million worth of services. The largest part of this amount, namely 26%, comes from American companies, but we also find the United Kingdom and Malta in the top three.

Why is the Georgian IT industry growing?

According to the assessment of the investment bank, as well as the widespread and, one might say, consensus opinion in the industry, the development of the country’s technological industry should be attributed to several internal and external factors. The first are the benefits that the government of Georgia has established, including in terms of taxes. These decisions put Georgia on the global technological map as an interesting country for investment and doing business, and the Russia-Ukraine war, which resulted in the migration of highly qualified IT specialists from Russia, Ukraine, and Belarus to Georgia, accelerated the processes exponentially.

Among the reasons for the growth of the Georgian IT industry, we also find the relatively low price of the Internet, the competitive prices of the desktop, and the relatively low cost of living, which, together with the Georgian climate and culture, make Georgia an interesting destination for foreign IT talents. The attractiveness is also enhanced by an environment acceptable to foreign specialists and a favorable geographical location.

Although the largest part of the growth of the technological industry of Georgia comes in the last two years, in order to better understand how this field has developed in Georgia over the years, we need to look at the dynamics of 2017-2023. According to Galt & Taggart, during this period the IT industry showed great growth in absolutely all directions, including turnover, exports, number of employees, and average salary.

What was the dynamic of the Georgian IT industry in 2017-2023?

— If in 2017, the turnover of the sector was just 200 million GEL, in the next six years it increased 14.3 times and reached 2.4 billion GEL last year;

— The increase in turnover comes mostly from the export of services, the rate of which increased 13.3 times in six years and reached 2.1 billion GEL last year;

— Against the background of growing demand and income, many companies entered Georgia and started hiring employees. As a result, in 2017, only 2,700 people worked in the IT sector; in the next six years, this number increased 11.2 times, and last year it was 30,200. According to Galt & Taggart, most of these people, namely 70-75%, are citizens of foreign countries;

— Against the background of increased competition in the sector, the wages of employees increased sharply, namely 3.5 times. If in 2017, the average salary of an IT talent was 1,958 GEL, last year this figure increased to 6,940 GEL.

Despite the sharp improvement of all four main fundamental economic parameters, there are still some unsolved problems in the Georgian IT industry. According to Galt & Taggart, the sector has two main challenges, namely – lack of skilled labor and low Internet speed. If the second problem can be solved by improving the infrastructure, the shortage of personnel is a global problem.

As we read in the assessment of the investment bank, if the industry overcomes the above-mentioned challenges, and the government establishes additional tax benefits, including the provision of services by international companies to Georgian organizations, the Georgian IT industry will grow even more. Galt&Taggart notes that the demand for IT services is growing rapidly, which allows companies registered in Georgia to double their exports in the medium term.

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