Proceedings of the 2021 International Conference “ECONOMIC SCIENCE FOR RURAL DEVELOPMENT” Jelgava, LLU ESAF, 11-14 May 2021, pp. 241-249 DOI: 10.22616/ESRD.2021.55.024 241 REGIONAL SUSTAINABLE DEVELOPMENT THROUGH ENHANCING THE REGIONAL GRADUATES EMPLOYABILITY; CASE OF GEORGIA Natela Tsiklashvili 1 , Doctor of Economics/ Professor; Tamari Poladashvili 2 , PhD student of Business Administration /Invited Lecturer 1,2 Batumi Shota Rustaveli State University Abstract. Education, in general, creates strong basics of sustainable development. Higher education is one of the important settings for accomplishing better education and quality of human life. Region based higher educational institutions (HEIs) have high input in regional economic development through traditional functions of teaching and research. Educational institutions acquiring graduates with relevant knowledge and skills for the labour market. The given paper examines: How Georgian regional universities enhance the graduates’ employability and workforce formation? Do the institutions encouraging university-business interactions? What are the main challenges and optimal ways of improvement? The article is using a qualitative research method with a combination of mixed research techniques by collecting and analysing other qualitative and quantitative information from national governmental reports, scientific articles, and annual statistical data. The paper draws the background information, that enhances the bed climate for recent graduates on the labour market, the unemployment and employment rate, proportion of horizontal mismatch, fields or groups of studies that students are most likely to be mismatched, its cause and effects relationship. Results show that institutions have week interaction with regional enterprises and SMEs: HEIs do not have skills anticipation strategy based on the regional business sector to avoid potential misbalance in the labour market. HEIs instead of showing initiative often take a proactive position and are looking at interactions between labour market stakeholders; they have weak interaction with public and private enterprises. Regional SMEs’ participation in creating curriculums is uncommon. Key words: regional sustainable development; higher education; labour force; employment; Georgia. JEL: R23; J21; I23 Introduction Scholars and academics have broadly discussed the sustainable development concept. The United Nations Decade of Education for Sustainable development (2005-2014) mobilizes educational resources for a sustainable prospect. According to UNESCO “education alone cannot achieve a more sustainable future; however, without education and learning for sustainable development, we will not be able to reach other sustainable goals” (2005). Higher education keeps the central position for sustainable development, as it is one of the main pillars of delivering advanced knowledge, skills, and appropriate values for the local community, to address the suitable behaviour, which is necessary for sustainable development. HEIs have the primary goal of acquiring graduates with new knowledge, prepare leaders, managers, teachers, and other professionals for the future. Sufficient education will help them to take action considering sustainable development goals. Therefore, the quality of education and well-planned education-job transition process creates good bases for employment and enhances the better quality of life. In Georgia, graduates' employability issues and occupation by profession are getting more and more attention. Questions raise on addressing Authorities and Higher educational institutions. There is a debate, discussion, and arguments among politicians, education authorities, labour market stakeholders, and experts regarding the qualifications and skills of recently graduated students. Since 2005, the Bologna Process has been announced and a three-cycle HE system has been implemented. In the last 20 years, the higher education sector created a high number of graduates in a variety of disciplines. However, individuals