What Do Georgian Companies Prioritize — Quality, Product Improvement, or Customer Retention?

Innovation is not just about inventing entirely new products. Often, it starts with a basic strategic decision companies make: which direction deserves the most focus — improving quality, upgrading existing products, or retaining customers?

According to the National Statistics Office of Georgia (Geostat, 2025), in 2024, 47% of Georgian companies prioritized improving product quality. 36% focused on upgrading existing products or services, while 34% concentrated on retaining existing customers.

This means that nearly half of businesses view quality as their key competitive advantage. The rest are mainly focused on improving what they already offer or securing their current client base — a more short-term and risk-averse strategy.

Globally, leading economies approach innovation more broadly. In the European Union, companies often pursue multiple directions at once: creating new products, digitizing business processes, and developing customer-centered services (EUROSTAT, 2024). In Finland, for example, companies continually analyze customer needs and reshape their offerings accordingly — this flexibility is one of the reasons they remain highly competitive internationally.

The concept of “quality” also varies. In Georgia, improving quality often refers to reducing product defects and meeting technical standards. In contrast, advanced economies define quality far more broadly — covering the full customer experience, service speed, digital convenience, and even environmental standards.

The 36% share focusing on product improvement largely reflects incremental innovation — small, gradual improvements to existing products. In such strategies, companies rarely create entirely new products for the market. Globally, however, true market breakthroughs and global competitiveness often stem from bold, entirely new offerings.

The 34% concentrating on customer retention indicates that many Georgian businesses worry about maintaining stable sales in a limited domestic market. As a result, they often avoid risky innovation projects and instead focus on protecting their current positions.

There are clear reasons behind this cautious behavior: Georgia’s small market size, limited access to innovation funding, shortage of highly skilled personnel, and underdeveloped research infrastructure. For example, according to OECD data, Georgia invests only 0.2% of GDP in research and development, while the EU average exceeds 2% (OECD, UNESCO, 2024).

In global practice, governments play an active role in overcoming such barriers. Public programs, tax incentives, close partnerships between universities and businesses, and large-scale R&D investments create ecosystems where companies are encouraged — not discouraged — to pursue radical new products and markets.

At present, Georgian business strategies remain more conservative — focusing on cost reduction, maintaining current markets, and avoiding major risks.

However, for Georgia’s economy to advance in the long run, companies will need to adopt strategies that combine quality, bold product innovation, and deep customer understanding — just as global innovation leaders do today.