Georgia's artificial intelligence positioning in the international rankings

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Gori State University

Georgia's artificial intelligence positioning in the international rankings

Giuli Giguashvili Doctor of Economics, Professor

Tamar Makasarashvili

Doctor of Economics, Professor

Gori, Georgia

Summary

Intelligent technologies have a distinct role in the growth of macroeconomic indicators and raising the standard of living. The most global pandemic of the 21st century, COVID-19, has significantly changed the world agenda. In almost all countries of the world, economic, social, cultural, legal, educational, and other problems have become highly acute, for what artificial intelligence offers us a great prospect of solving, economic growth, and achieving high productivity. Keywords: intelligent technologies, artificial intelligence, post-pandemic economy.

Introduction

The global crisis caused by COVID-19 has significantly affected almost all areas of economic activity. The consequences of the pandemic were particularly severe for developing Georgia with a small economy. A reduced rate of economic growth, a worsening standard of living, a crisis in the health care system, poor indicators of the quality of education, a devalued national currency, and increased unemployment are the main problems that post-pandemic Georgia is facing.

Along with anti-crisis measures already implemented by the government, such as social support for citizens, assistance to entrepreneurs and attracting international financial flows, etc., it is essential to promptly introduce intelligent technologies, namely artificial intelligence, and use new opportunities for the recovery and development of the post-pandemic Georgian economy [1].

Intelligent technologies have the potential to perfect traditional approaches to managing socio-economic processes. The use of technology increases productivity, reduces costs, gives us knowledge and new opportunities for making technological decisions. intelligent macroeconomic productivity

Literature review

The study of the growth rates of the introduction of technologies and the impact of technological changes on the economy is a field of peculiar interest for scientists of all times. Most of them recognize the irreversible nature of technological growth rates, although some are not convinced of this and try to put forward in the research process the reasons that hinder progress, which may get caused by the exhaustion of the stock of new ideas [2]. The era of globalization also allowed us to introduce avant-garde technological trends in our country. Intelligent technologies, artificial intelligence - a set of "smart programs" aimed at solving a specific task, offering new ways of solving problems in the postpandemic period, gives opportunities for making technological decisions, developing business processes using modern innovative achievements, improving management processes, improving medical services, etc. According to international studies, by 2030, artificial intelligence alone may provide an additional economic effect of 10 to 15 trillion dollars, which creates massive prospects for achieving economic growth and high productivity [3].

Methodology

In the scientific work, Georgian and foreign scientific literature, studies, and statistical data got studied to determine the possibility of using intelligent technologies, in particular, artificial intelligence, and to analyze the current situation in depth. By using quantitative-statistical methods of research, certain conclusions and recommendations got developed based on the sharing of existing practices regarding the use of intelligent technologies.

Results/Discussion

It is crucial to involve the educational system in the process of introducing intelligent technologies. Educational programs related to artificial intelligence get actively implemented in many universities of the world, and specific steps have been taken in our country as well - the Department of Artificial Intelligence got established at the Technical University of Georgia, and the doctoral program "Digital Governance and Artificial Intelligence" is operating at the University of Business and Technology of Georgia; From the point of view of teaching artificial intelligence - Tbilisi Free University is the leading institution; Kutaisi Technical University (KIU) developed three academic programs in partnership with TUM International. One of the programs BSC in Computer Science offers AI-related studies; At Ilia State University we have a research center with the resources, by them is possible to carry out high-level computing works; A large-scale study is underway to develop a national strategy for artificial intelligence, which will contribute to the formation of the research infrastructure, the preparation of the legislative base, and the adaptation of the educational system to new systems.

The first artificial intelligence business association AI Georgia [4], got founded in 2019. Its purpose is to promote artificial intelligence as a field in the country and raise awareness in this regard. The main task of the Artificial Intelligence Business Association is to promote the introduction of artificial intelligence in the private sector and to ensure dialogue between business companies and executive and legislative authorities.

The governmental organization with the most relevant specialization in AI is Georgia's Innovation and Technology Agency (GITA), offering funding mechanisms for innovative startups with the potential to enter the global markets.

During the last three years, GITA received a total of 65 applications for funding AI startups [5].

Table 1

Source: GITA

Two types of companies could be distinguished while discussing AI and the business sector. The first ones are the so-called AI companies, whose business models get based on developing and offering AI products and/or services, whether to other companies on a B2B model or to governmental organizations. The second ones are the entities, that do not develop/offer AI products/services themselves, but rather use AI-related technologies in their operations. These could, for example, include companies from the healthcare or financial sectors [4].

The use of artificial intelligence in the economy and public life is extremely important. Georgia is actively involved in these processes: we already have interesting startups and state-government initiatives that show relatively good results for our country. Similar companies include Flashbot AI, Pulsar AI, Optio AI, Maxin AI, etc. They have created several products for companies operating in Georgia and abroad, in which artificial intelligence gets integrated.

Through artificial intelligence, it is possible not only to develop digital governance, and digital politics but also to transform individual fields, including healthcare, education, agriculture, and justice systems. It is especially important to use artificial intelligence in the field of national security and defense, in particular, in terms of defense and borders. Technologies affect not only competitiveness, business success, and viability, but also the surrounding world and society.

For the implementation of artificial intelligence in the country, there should be a highly developed ICT infrastructure and the practice of large-scale use of digital governance, and interoperable databases [6]. According to the "AI Readiness Index 2020" of Oxford Insight, a British international consulting group, in terms of state readiness for AI, Georgia ranks 72nd in the global context, and 5th out of 16 countries on a regional scale (South and Central Asia) ( 43.39) and lags behind such countries of the region as Turkey (46.01), Azerbaijan (46.44), Kazakhstan (46.55), India (55.58). Figure 1 illustrates the scores received by Georgia, in each of the 10 sections of the AI readiness index evaluation areas.

Fig. 1. AI Readiness Index of Georgia

Source: Oxford Insights

Figure 2 Demonstrates how Georgia is compared to some of the other members of the region and the World Average score.

Fig. 2. Regional positioning of Georgia based on AI Index

Source: Oxford Insights

The 2020 index highlights that, despite a supportive business environment, Georgia lacks an AI strategy, lacks a systematic approach to ICT ecosystem development, including private sector investment policies and sector development programs, coupled with underdeveloped infrastructure [7].

Of particular interest is the Bloomberg Innovation Index [8], which primarily assesses countries' innovation potential, including spending on research and development, production capacity, and the concentration of high-tech public companies. At the top of the top ten most innovative countries in 2021 is South Korea, which replaced last year's leader - Germany. It now ranks 4th. The 2nd and 3rd places are shared by Singapore and Switzerland, followed by Sweden, Denmark, Israel, Finland, the Netherlands, and Austria. The USA left the top ten this year and moved to 11th place.

Georgia is not among the top 60 countries, although the index also calculates the indicators of our country. According to the 2021 study, only 0.30% ($130 million) of our country's GDP gets spent on research and development, which is a prerequisite for digital transformation in the post-Covid era. Ten years ago, this figure was 0.18% ($32 million). The growth is remarkable, but we are still far behind the pace by which modern technology is advancing. For example, Belarus spends twice as much as us, Bulgaria spends 2.5 times more, and Hungary and Estonia spends three times more [8].

In the 2020 e-Government study of the United Nations, which discusses new trends in digital transformation, a special place got given to the use of new technologies, namely artificial intelligence and blockchain. According to the data for 2020, the e-governance rate of Georgia is 0.72. Thus, Georgia ranks 65th among 193 countries [9].

As we mentioned, the covid pandemic has affected all sectors of the economy. There is a global economic recession. In the post-pandemic period, special attention should be focused on the innovative development of the economy and the development of medicine, biotechnologies and healthcare systems, agriculture, the digital economy, and artificial intelligence. Online learning, online commerce, and remote activities should be widely introduced, which, in addition to human safety, will lead to significant resource and time savings.

We think that in the post-pandemic period, intelligent technologies can be actively used in all fields of service and production. In the future, artificial intelligence can be used on a large scale in the field of shipping. According to data compiled by Learn Bonds, the largest investment news platform, the global artificial intelligence market, estimated at $22.6 billion in 2020, will grow to $126 billion by 2025. North America is the leader in this direction, and the Asia-Oceania region is in second place [10].

Digital workers and the hybrid workforce have already established a massive role in manufacturing, retail, banking, and insurance. They also play a huge role in investment and lending platforms, where AI makes business decisions far faster and without errors than humans.

Although automation and the use of AI are associated with the loss of jobs, due to the global pandemic, in order to reduce the negative impact of the virus on the economy, the digitization of the economy must be accelerated. Some researchers predict that the near term will see increasing integration between human and digital workers, creating a new hybrid workforce that will likely reduce costs, improve efficiency, and create better products and services for customers.

Conclusion and recommendations

Thus, the pandemic can be seen as a stimulating process that can accelerate society's progress in creating proper mechanisms for managing artificial intelligence. Let's think that the introduction and development of intelligent technologies in Georgia will create new opportunities for the development of the post-pandemic economy. It should also be taken into account that the development of technology reduces the use of human capital, which in turn increases the risk of an increase in unemployment levels. Thus, it is extremely important to assess the full potential of AI technology, maximize benefits and minimize risks.

Intelligent technologies do not mean only the emergence of high-tech startups in the market. The main thing is the consistent introduction of intelligent technologies in all sectors of the economy, which is possible through the joint efforts of the state, business, and educational sectors. Barriers that exist in this direction primarily include problems in the education system, the absence of digital entrepreneurial culture, and post-pandemic difficulties, the solution of which is the prerogative of the state.

References

1. Report about the measures taken by the Georgian Government against COVID-19,

2. Giguashvili, G., Makasarashvili, T. (2019). Perspectives of Introduction of Avant-garde Technologies in Georgia. 12th international scientific conference "Innovative Development of Education and Science: Directions, Problems, Perspectives". Gori State Educational University, November 15-16, 2019. Gori, Georgia.

3. Parulava, G. (2021). Georgia - Fit for the Age of Artificial Intelligence?

4. Artificial Intelligence Business Association - AI Georgia,

5. GITA - Georgia's Innovation and Technology Agency.

6. Giguashvili, G., Makasarashvili, T. (2021). Possibilities of Using Artificial Intelligence in Post-Pandemic Georgia. Globalization and Business. 12, 83-87.

7. AI Readiness Index 2020.

8. Bloomberg,

9. The Institute for Development of Freedom of Information (IDFI), Georgia in the UN E-Government Survey - Review of 2020 Results

10. Jastra Ilic, (2020). Global AI Software Market to Grow Five Times and Reach $126bn Value by 2025.

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