In parallel to the globalization of the modern world economy, the development of innovative policies for economic development is considered as a topical problem in a number of countries around the world. For developed countries, innovative economies have become one of the key preconditions for the country’s economic success. In Georgia, despite recent economic reforms, the country has not achieved tangible results in terms of innovation development. Hence the development of the economy needs to facilitate the formation of an innovative economy. Experience in developed countries shows that in a transformative economy the crucial role lies in the development of innovations and technological novelties. Accordingly, the article examines the contribution of innovation to the economic development of transformational countries. Priorities of innovation policy in Georgia have been identified, and the role of innovation in creating a competitive environment, increasing productivity and raising living standards has been assessed. The article uses the Global Innovation Index (GII) to assess the level of innovation in a country. There are discussed mechanisms that can help achieve long-term economic growth, productivity and job growth as well.
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