Issue 6, 2014. December-January



A measure of country's overall development has always been the educational level of its society. In Georgia, despite the fact that more than 1.6 million people have higher than secondary education, only about 673,000 people have a household income of more than $40 per month . While managing resources is an integral part of success, unfortunately, many forget the importance of intellectual capital and how it should accumulated.

Nikoloz Akhalaia, (Grant Thornton)

Overview of the higher education system in Georgia

There are 20 public and 37 private universities in Georgia, while about 62 percent of all students are enrolled in the five largest public universities (Tbilisi State University, Georgian Technical University, Ilia State University, Tbilisi State Medical University, and the Agricultural University of Georgia).

Currentlypublic HEIs (higher education institutions) rely on two sources of income - tuition fees and state subsidies. Tuition feesare payments by students, while state subsidies represent grants awarded to students. Public and private universities have different income sources. Private HEIs' only funding from the government is via state-funded grants awarded on the ability testto qualified students.Private universities' annual tuition fees are at least twice as high, and therefore grants can only partially cover student costs.

Tuition fees comprise 90 percent of university funding, while subsidies account only for 10 percent. For the 2014-2015 academic year, grants allocationsare 12.6 million lari, meaning that, roughly, total funding for both HEIs is 126 million lari.

Another difference between private and public universities is annual enrollment. On average, each of the top five private institutes accepts about 250 students per year. Nevertheless, competition is stiff and has helped to increase the quality of education over the years. Major private HEIs follow modern Western-style curriculums, applying methodology and study materials used in Europe and the US. Well-organized programs and modern facilities have helped them win the market.

Teaching Staff

The number of university lecturers has increased by 25 percent since last year. It should be noted that the private sector holds an advantage over the public sector, demonstrating 32 percent versus 20 percent growth in the number of professors, respectively. Furthermore, the number of total students in private universities has grown by 18 percent, versus 11 percent in public ones. Private HEIs offer higher salaries with smaller student classes and more resources devoted to research, therefore providing more favorable working conditions.

According to Geostat, there are about 1,844 professors, 2,996 associate professors and 1,296 assistant professors in Georgia; total teaching staff is 6,136. Women comprise about 50 percent of academic staff.

The average number of students per teacher is 19, the same as in the Czech Republic, Belgium, Italy and New Zealand.

Despite having a large pool of academic staff, the lack of research funding from the government, coupled with the lack of work experience among lecturers, contributes to the problem of modernizing outdated teaching methods in public universities.

In 2009 about 0.2 percent of GDP (21.5 million USD), was spent on research in Georgian universities. Compared to some Eastern European countries, that means that research is underfunded in Georgia. For example, in Estonia, Latvia and Lithuania state funding of research is 1.41 percent ($273.6 million), 0.46 percent ($119 million) and 0.84 percent ($311.2 million), respectively.

The figures for some other European countries are as follows: Bulgaria - 0.53 percent ($257.4 million), Czech Republic - 1.35 percent ($2.66 million), Croatia - 0.85 percent ($528.7 million), and Poland - 0.67 percent ($2.88 million).

Students' choice

The most popular degrees are well-known, even without official statistics. In 2013, 14,542 students entered social science, business, and law faculties, which is about 45 percent of the total number of new entrants in that year.

The figure has been the same for more than six years, and it is unlikely that trend will change.

Such a large percentage of students prefer the social science, business, and law faculties because their graduates may be potentially employed in financial services or the public sector, which offer the highest remuneration (1,505 GEL and 1,152 GEL, respectively) and stability. The least in demand is agriculture, chosen by only 147 (0.45 percent) students in 2013. Modest growth of the agriculture sector, in which the average salary is the 3rd lowest in the country by sector (495 GEL) and the lack of modern teaching practices are the reason for its unpopularity.

After these popular faculties, humanitarian, engineering and construction faculties are the most popular. While humanitarian, and engineering and construction faculties had shares of 16 percent (5,157 students) and 10 percent (3,326 students), respectively, the number of new students in the engineering and construction faculties has more than doubled, rising from last year's 1,576 to current 3,326 students.

The picture is different in Eastern Europe, where on average at least 2 percent of students opt for a career in agriculture. In addition, compared with Georgia, where 45 percent of students live in rural areas, 31 percent of studentsin Eastern European countries live in rural areas. The slow development of these fields is linked to the fact that their respective industries have been experiencing slow growth for the last several years, as well as the fact that they require more investment.

Nikoloz Akhalaia is a consultant at Grant Thornton and holds a Bachelor's degree in Business Administration from Georgian American University, specializing in International Finance. Prior to joining the Grant Thornton Advisory team, Nika worked as a financial analyst in the tourism industry. During his time with Grant Thornton, he has worked on a range of assignments including valuations, due diligence, financial modeling assignments, and feasibility studies for clients in a diverse rangeof industries.