MODERN MANAGEMENT REVIEW 2016 MMR, vol. XXI, 23 (3/2016), pp. 115-129 July-September Agnieszka RZEPKA 1 Ioseb MASURASHVILI 2 STRATEGIC PERSPECTIVES FOR GEORGIAN BUSINESS – AN ANALYSIS FOR MEDIUM-SIZED ENTERPRISES IN EU AND GEORGIA Small and medium-sized enterprises (SMEs) belong to most important factors which drive the economic development. The strength of the economic system of a given country is based on the potential of SMEs as they substantially contribute to employment and national income. SMEs may be perceived as a catalyst for economic growth. If companies cooperate with larger enterprises, they contribute to the efficient use of joint resources, information and technology and knowledge. SMEs have also an impact on the growth of gross domestic product, the formation of the middle class, and the increase of economic and political stability. Well- developed and strong sector of SMEs significantly contribute to export and import increasing the level of prosperity on a national scale. It is also important to take into account that the culture of enterprises from this sector, the way people identify with the place they work, their founding purpose may raise the organizational culture and foster achieving the overall organization goals. If the employees of SME have a strong sense of their duties and values they may guide the culture of the organization and have a positive impact on other enterprises with which they cooperate. In the first part of the article the authors present the experience of SMEs in the EU, in the second part they discuss the main directions of the development of SMEs in Georgia based on the analysis of statistical data. The article ends with conclusions taking into account strategic priorities for SME development in Georgia. Keywords: SMEs, development, EU, Georgia, Global business, enterprise 1. INTRODUCTION SMEs play an important role in the economy. As globalization proceeds, transition and developing countries and their enterprises face major challenges in strengthening their human and institutional capacities to take advantage of trade and investment opportunities. This has become a top priority on the global development agenda over the past few years. Small and medium-sized enterprises (SMEs) are a very heterogeneous group. SMEs are found in a wide array of business activities, ranging from the single artisan producing agricultural implements 1 Agnieszka Rzepka, Ph.D, Department of Economics and Management of Economy, Faculty of Management, Lublin University of Technology, Lublin, Poland, email: a.rzepka@pollub.pl (Author for correspondence) 2 Ioseb Masurashvili, Doctor in Economics & Management, Head of Innovation Management Center at Javakhishvili Tbilisi State University. Professor at Georgian Technical University, Founder & Director of Venture Business Center at GTU (Georgia); e-mail: ioseb.masurashvili@tsu.ge