Strategies of the Development of Entrepreneurship and SME

obtained only different sources. Businesses only register themselves when they go to banks toget credit,” Sutiashvili says.Definition of Small, Medium, and Large Enterprise in GeorgiaIn Georgian legislation, small, medium, and large enterprises are defined as follows:• Small enterprise - average number of employees does not exceed 20 and sales do notexceed GEL 500,000 per annum;• Medium enterprise - average number of employees does not exceed 100 and sales donot exceed GEL 1,500,000 per annum; and• Large enterprise - average number of employees exceeds 100 and sales exceed GEL1,500,000 per annum.There are two criteria for determining the size category of a company: the number ofemployees and annual turnover. For example, a company with four employees but with annualsales of GEL 2,000,000 is categorized as a large enterprise. A company with 80 employees butwith annual sales of GEL 1,000,000 is considered a medium enterprise.Meanwhile, SME sector couldn’t achieve the desirable level because of some generalmacro -economic and specific factors. SMEs have less productivity level and capital facilitiesthan large enterprises. There is a disproportion in the sectoral and regional structures of smallentrepreneurship. Leading fields of SMEs are trade and service (more than 70%), but for thelast years the number of small enterprises has temporary been increased in processingindustry, construction, transport and communication. Small enterprises are mostlyconcentrated in the capital, Tbilisi. This situation is relevant to the countries in transition. Insome industrial regions (Adjara A/R, Imereti, Kvemo Kartli etc) favourable conditions arecreated for development of small entrepreneurship vice versa in high land regions (Tsalka,Samtskhe-Javakheti, Mtskheta-Mtianeti, Racha-Lechkhumi, Svaneti). That’s whyimplementation of priority support measures in high land regions is an argent issue.It should be emphasized an inadequate growing of SME quality relevant to SME number.But the tendency points on increasing role of SME in creation of a new economy. In particular,small enterprises already produce more than 20% of GDP and almost one fifth of the addedvalue. Small entrepreneurship covers one third of total entrepreneurial employment.113