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Data Tool · GILS

Labour Productivity — Georgia

Output per worker and per hour worked — Georgia's productivity performance, sectoral breakdown, and the productivity-wage gap driving inequality.

Source: Geostat / World BankILO Productivity DatabaseUpdated: 2024
Key Figures
Labour Productivity Overview — Georgia 2023
USD 28.4K
GDP per employed person (PPP)
2023 estimate, World Bank
31%
EU-27 average
Georgia productivity as % of EU27
+3.2%
Annual real productivity growth
2018-2023 average
9×
ICT vs agriculture productivity gap
Highest inter-sector gap in Georgia

Labour productivity — measured as GDP per employed person — reached approximately USD 28,400 (PPP) in Georgia in 2023. This is 31% of the EU-27 average (USD 91,700 PPP), placing Georgia below EU member states but above many CIS economies. The productivity gap with the EU reflects both the sectoral structure (large low-productivity agriculture share) and within-sector efficiency gaps.

Georgia's productivity growth has been positive — averaging 3.2% annually in real terms since 2018 — but insufficient to close the gap with the EU neighbourhood. At current growth rates, Georgia would reach 50% of EU average productivity in approximately 25 years. Structural transformation — moving workers from low-productivity agriculture to high-productivity services and industry — could dramatically accelerate convergence.

Productivity by Sector
GDP per Worker by Sector — Georgia 2023 (GEL thousands, annual)
Financial and insurance services
GEL 182K
GEL 182K
ICT and professional services
GEL 171K
GEL 171K
Mining and energy
GEL 160K
GEL 160K
Real estate
GEL 131K
GEL 131K
Manufacturing
GEL 76K
GEL 76K
Transportation
GEL 69K
GEL 69K
Construction
GEL 58K
GEL 58K
Trade and retail
GEL 51K
GEL 51K
Education and health (public)
GEL 33K
GEL 33K
Agriculture (commercial)
GEL 27K
GEL 27K
Agriculture (subsistence)
GEL 4K
GEL 4K
Sources: Geostat National Accounts 2023 · Geostat LFS Q4 2023 (employment by sector) · World Bank WDI 2023 · ILO ILOSTAT productivity database · GILS calculations. Sectoral productivity = estimated sectoral GDP / sectoral employment. Subsistence agriculture productivity estimated from Geostat agricultural output surveys.
GILS Analysis
The Productivity Imperative: Why Georgia's Wage Growth Depends on Productivity

Georgia's labour productivity of USD 28,400 (PPP) per worker — 31% of the EU average — is the fundamental constraint on wage growth. Wages cannot sustainably grow faster than productivity without generating inflation or reducing profitability to the point of investment deterrence. The widening unit labour cost gap (wages growing 6.8% vs productivity 3.2% annually since 2020) is unsustainable and will eventually either compress wages or deter investment.

The sectoral productivity disparity is striking: a worker in the financial sector generates GEL 182K of GDP annually; a subsistence farmer generates GEL 4K. This 45-fold gap is the single largest driver of both income inequality and the aggregate productivity shortfall. Every worker who transitions from subsistence agriculture (GEL 4K productivity) to formal services (GEL 51K-171K productivity) increases national average productivity dramatically — this is the structural transformation dividend that policy must accelerate.

Productivity leaders: Financial services, ICT, and mining have world-class productivity levels — comparable to EU member states in these sectors. ICT productivity growth has been exceptional (18% annual real growth 2018-2023). These sectors demonstrate that Georgian workers in the right institutional and technological environment can achieve high productivity.
The subsistence agriculture drag: 360,000 subsistence farmers with GEL 4K annual productivity represent an enormous drag on national averages. Even modest transitions — 50,000 workers moving from subsistence farming (GEL 4K) to formal services (GEL 51K) — would increase national average productivity by approximately 2.5 percentage points. Structural transformation is the most powerful productivity policy available.
International Perspectives
What Other Institutions Say
World Bank Productivity and Growth Team
Georgia's productivity gap with the EU reflects three factors in roughly equal measure: (1) sectoral structure — too much agriculture, too little high-productivity services; (2) within-sector efficiency — Georgian firms in any given sector are less productive than EU peers due to lower technology adoption, smaller scale, and weaker management practices; (3) skills mismatch — workers in the wrong sectors for their qualifications. All three require different policy interventions. (WB Georgia Productivity Note 2023)
IMF Article IV 2023
Georgia's total factor productivity (TFP) growth — the efficiency component, independent of capital and labour — has been positive (0.8% annually) but modest. IMF recommends: accelerating technology adoption through R&D incentives and FDI attraction; improving competition policy (monopoly rents reduce productivity incentives); and investing in skills. (IMF Article IV Georgia 2023)
EBRD / EIB Technology Transfer
Georgia's technology adoption rate is low by regional standards. Only 18% of Georgian SMEs use any form of enterprise software; 6% conduct any R&D. This technology deficit is a primary cause of the within-sector productivity gap. EBRD and EIB have co-invested GEL 180M in technology adoption grants for Georgian SMEs since 2018 — scaling this to GEL 500M would have transformative impact. (EBRD Technology Transfer Report 2023)
GITA (Georgian Innovation and Technology Agency)
ICT sector productivity growth (18%/year) is the clearest evidence that Georgia can achieve high productivity with the right policy environment. GITA's tech park programme, startup grants, and skills initiatives have been catalytic. Scaling GITA's budget from GEL 45M to GEL 150M annually and extending the model to advanced manufacturing and green technology would accelerate productivity convergence. (GITA Annual Report 2023)
GILS Position Statement

Productivity growth is the only sustainable foundation for wage growth and living standard improvements. Georgia's 3.2% annual real productivity growth is positive but insufficient to close the EU gap in any reasonable timeframe. GILS advocates for a National Productivity Strategy — a government commitment to: structural transformation (moving workers from low to high productivity sectors); technology adoption support for SMEs; skills investment aligned with high-productivity sectors; and FDI attraction targeted at knowledge-intensive industries. Without a deliberate productivity strategy, Georgia will remain at 30-35% of EU productivity indefinitely.

— GILS Research Position on Labour Productivity Policy, September 2026
GILS Policy Recommendations
Five Priority Reforms
Recommendation 01
National Productivity Strategy 2025-2030

Adopt a formal National Productivity Strategy coordinated by MoESD: target — reach 40% of EU average productivity by 2030 (from 31% in 2023). Three pillars: structural transformation (sectoral reallocation); technology adoption (SME digitisation); skills (VET and upskilling aligned to productivity sectors). Annual productivity report to Parliament. ILO and WB technical assistance available.

Estonia (productivity strategy) · Ireland (National Competitiveness Council) · Poland (productivity enhancement programme)
Recommendation 02
SME technology adoption fund — GEL 200M

Only 18% of Georgian SMEs use enterprise software. State co-fund: GEL 200M over 3 years, 50% matching grants for technology adoption by SMEs (ERP, automation, digital marketing, quality management). Eligible: SMEs with 10-250 employees, turnover GEL 50K-5M. ILO evidence: technology adoption grants generate 15-25% productivity uplift within 2 years. EBRD/EIB co-finance available.

Georgia (GITA SME grants — scale up) · Estonia (Enterprise Estonia digitalisation grants) · Poland (SME Innovation Fund)
Recommendation 03
R&D tax credit — incentivise innovation

Georgia has no R&D tax credit. Introduce: 25% tax credit on qualified R&D expenditure (personnel, equipment, external research) for all companies; 50% for SMEs and startups. International evidence: R&D tax credits generate GEL 3-5 in additional private R&D per GEL 1 of fiscal cost. Estimated cost: GEL 30M annually; expected private R&D increase: GEL 90-150M.

Ireland (25% R&D tax credit — transformed productivity) · France (Crédit d'Impôt Recherche) · Poland (R&D relief 2016)
Recommendation 04
Management quality programme — Georgian Business School partnership

Management practices explain 30% of the within-sector productivity gap (WB research). GITA + Georgian Business School + EBRD: (1) subsidised management consulting for SMEs (40 hours, GEL 2,000 co-pay); (2) management excellence award (annual, with GEL 50K prize); (3) management training module mandatory for all Produce in Georgia grant recipients.

UK (Management Made Simple) · US (Manufacturing Extension Partnership) · Estonia (management productivity programme)
Recommendation 05
Structural transformation — productivity-linked reallocation

The fastest productivity gain is moving workers from GEL 4K (subsistence farming) to GEL 51K+ (formal services). Every 10,000 workers reallocated adds approximately 0.3pp to national productivity. Target: 50,000 reallocation transitions by 2027 through: agricultural cooperative commercialisation; rural enterprise grants; ESDC vocational retraining. Track and publish annual reallocation statistics.

ILO structural transformation framework · World Bank jobs diagnostic · Georgia ESDC (expanded retraining mandate)
ILO Standards — Georgia
International Compliance Status
ILO ConventionSubjectRatifiedComplianceKey Gap
C142Human Resources Development 1993PartialVET misaligned with productivity sectors; employer engagement in training weak
C122Employment Policy 1993PartialNo productivity strategy; employment policy disconnected from productivity goals
C095Protection of Wages 1993PartialWage-productivity link absent; unit labour costs rising unsustainably