Identification of Functional Regions and Their Competitive Advantages in Kakheti, Georgia

Abstract

The present research report aims to identify functional regions in Kakheti, Georgia and analyze the most competitive subsectors in each of the regions. As such, the report is composed of two main components: identification of functional regions and identification and analysis of competitive subsectors. The study of functional regions relies on the data obtained from a mobile company to analyze interactions between Basic Spatial Units of Kakheti. Three methods are used for the delineation of FRs – Chains, CURDS and Intramax methods. The results of three approaches are evaluated using Fuzzy Set Theory approach and validated in a workshop with field experts. Based on FST evaluation and validation workshop outcomes, results of the CURDS method - 7 functional regions are chosen as the final product of the research project. In the identification of competitive sectors and subsectors, the research relies on Location Quotient and Shift Share methodologies. The most competitive subsectors identified within each of the functional regions are analyzed through in-depth interviews with companies, experts in the field and a government official. In six of the functional regions of Kakheti, wine production surfaced as the most competitive subsector while in the seventh functional region the most competitive economic activity was egg production. Based on the analysis of interviews, the research report discusses the main challenges and opportunities present in these subsectors and offers relevant recommendations to policymakers.