Nearshore Americas

Country Visitation Report: Republic of Georgia

I took the opportunity last week to visit Tbilisi, Georgia, as part of a business mission organized by Peter Ryan, founder of Ryan Strategic Advisory, as well an ally and partner of Nearshore Americas.

Virtually every delegate, traveling in from six continents, got to experience Georgia for the first time. I often find it challenging to “sum up” one’s experience in a country because judgements and interpretations based on a few days’ of meetings and observations can lead to faulty conclusions. There is no doubt that understanding a location is greatly accelerated when absorbing things first-hand. Visiting will always beat the reflexive tendency to “learn” by reading reports from market experts and gathering all the data you can get your hands on. 

Emerging markets are not all the same by any stretch. People are complex. Cultures are multilayered, and what appears before your eyes is almost always only a small portion of a much bigger story. 

With that heavy disclaimer out of the way, I’d like to point to the four things that I found most compelling when visiting Georgia.

Keeping the Chasm Wide with Russia

As a former member nation of the USSR and part of the territory where Joseph Stalin was born (in 1878), one might presume that Russia’s past overlording would, to some degree, define contemporary Georgia. Nothing could be further from the truth. 

You learn very quickly that Georgia wholeheartedly seeks to stand alone. The country possesses its own language, traces its ancestry to the Caucasus region (not Russia) and remains largely fixated on the prospect of joining the European Union. (The EU is supposed to decide soon whether Georgia can advance along the path toward membership). 

The Georgian people, in my own limited view, appear to envision an emerging Georgia that is characterized by stability, prosperity and independence. 

Photo by: Mauricio Velásquez Muñoz

Sitting on the Eastern side of the Black Sea (Georgian beaches are quite amazing, we heard) and positioned along the old Silk Road, Georgia has seen more than its share of clashes with invading empires over many centuries. Although a good number of Russians have relocated to Georgia since the start of the Ukraine War, Moscow is viewed quietly literally through a rear-view mirror, with zero regret. 

Despite these observations, many will argue that current Prime Minister Irakli Garibashvili has taken a more conciliatory attitude toward the Kremlin. A few days ago, the CBS News program “60 Minutes” made the argument that Moscow is deliberately engaged in a “quiet invasion” which strives to give Russia more control over Georgia in the coming years. Time will tell. 

The Big Spending of USAID 

Of course the United States wants Georgia to remain independent and  is putting real money behind this objective. 

Everywhere you turned during the mission you saw signs of the largesse of USAID, one of the world’s most active international development agencies, funded by the US government and dolling out a stunning US $60 Billion-plus this year. Its mission includes serving as a “catalytic actor” in advancing US national security and economic interests. The agency is actively involved with supporting and nurturing the core levers that result in a prosperous global outsourcing sector. This is done through underwriting of training programs, investment attraction initiatives and even physical office spaces and startup hubs. 

From the perspective of a global outsourcing investor, it is hard not to believe that the US government wants just what you would want: a reliably functioning democracy that is fully committed to stability and the rule of law. 

Conditions for Software Engineering Talent Reach Every Corner of the World 

Not surprisingly, Georgia has an increasingly strong case to make in the global custom software business. 

Photo by: Mauricio Velásquez Muñoz

Despite a modest population (approaching 4 million inhabitants), the country is getting more attention as a thriving value play. (Some deeper thoughts on the importance of value in our 2023 Nearshore Value Index). The country graduates about 1,000 IT graduates per year, and there continues to be a steady flow of professionals migrating from Belarus and Russia. (EPAM Systems is probably the biggest “marque” operator currently in Georgia). 

It seems there is no corner of the Earth that hasn’t been impacted by the generally intense demand for mid-to-senior level engineering talent. This is certainly apparent in Georgia. Demand is high and supply is low. Greater numbers of teams and entrepreneurs are servicing US customers, and as a result, salaries are climbing. Based on our own quick glance on wages for a mid-tier developer, we would rate Georgia at just below the total-cost levels of Mexico, with annual salaries in the range of US$65K to US$80K, depending on the required skill sets. 

Development teams commonly begin working at around 4pm Georgia time, which aligns with 8am in Eastern Daylight Time zone. 

Enterprise Georgia: A Highly Competent Investment Agency

As many of our readers know, the quality and competence of trade and investment agencies varies widely from country to country. It doesn’t take long to identify the weak ones. It is harder and takes longer, however, to determine whether an agency is performing at a high level. In the case of Georgia, I would consider its agency (Enterprise Georgia) among the best we have ever encountered. 

Members of the Enterprise Georgia team have a high “fluency” when it comes to the many issues and nuances that inhabit the global outsourcing sector. This fluency is directly connected to a set of investor-friendly incentives and policies, some of which are purpose-built for BPOs and tech exporters. 

We also found the team is willing to admit that not everything is rosy. There are weak areas in the investment proposition, putting Georgia in the same category as every other nation in the world. (There is no perfect place to do global services, of course).  

The importance of a focused and responsive trade agency cannot be underestimated. I asked some of the key leaders for examples of how they execute their “aftercare” activities, designed to look after newer operators who are finding their way in an entirely new geo. The leaders rattled off several examples of discrete challenges providers faced and how the agency sought to be an active partner in driving solutions. 

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In sum, Georgia benefits from its uniqueness. The country is well on its way to understanding how to instill that unique character in the creation of a globally recognizable country brand. 

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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