The state of Georgia and the concept of the Digital Silk Road

In the recent past, it was widely assumed that the most sophisticated and technologically advanced developments originated in the West and subsequently diffused back to the East from the West. However, in the contemporary era, the traditional hierarchy of global innovation has been reversed. China has historically demonstrated a greater proclivity for digitalisation and the integration of information technology (IT) into various facets of life when compared to European countries.
Another Asian nation, India, is emerging as a global leader in the field of information technology. Consequently, in the near future, the development of IT infrastructure will occur from east to west, rather than vice versa. In this context, the digital component of the Middle Corridor is of significant importance.

In 2015, the concept of the "Digital Silk Road" was first articulated. The term was first introduced in an official Chinese government white paper in 2015 as an addendum to the Made in China 2025 strategy, which aims to establish China as a global leader in modern technology.

Moreover, China is assuming an increasingly prominent role in the development of global digital infrastructure. As of 2019, China provided 11.4 per cent of all submarine cables globally. However, projections indicate that this figure is set to rise to 20 per cent between 2025 and 2030. China's two largest video surveillance companies are responsible for supplying 60% of all surveillance cameras in the world.

The Digital Silk Road initiative is positioned as a means of establishing China as a global leader in the provision of physical infrastructure for digital systems. The Chinese government and Chinese companies are providing the financial resources for the construction of fibre-optic cables and 5G cellular networks, the establishment of data centres, and the investment in artificial intelligence, nanotechnology and smart cities. The extensive digitalisation of states linked to the Digital Silk Road is creating new market opportunities for Chinese technology conglomerates, including Alibaba, Tencent, Huawei, ZTE, and others.

A total of 84 completed and planned Digital Silk Road projects have been identified in Central Asia. Of these, 30 are located in Kazakhstan and 26 in Uzbekistan. Ten projects are currently being developed in Tajikistan and Kyrgyzstan, with a primary focus on smart city and telecommunications network initiatives. Eight are currently operational in Turkmenistan, with the majority engaged in the deployment of fibre-optic cables along the Caspian Sea bed.

Additionally, the countries of the South Caucasus, specifically Azerbaijan and Georgia, have also demonstrated a notable level of engagement with the Digital Silk Road initiative. Azerbaijan occupies a pivotal position not only in the telecommunications corridor between China and Europe, but also between India and Europe. Consequently, Azerbaijan and Georgia are currently emerging as transit countries for the transmission of digital content for internet services and major content operators. This is due to the construction of fibre-optic cables along the Caspian and Black Sea bed.

In addition to the aforementioned initiatives, Azerbaijan and Kazakhstan are engaged in the development of collaborative efforts within the framework of the Digital Silk Road, particularly in the domain of telecommunications. Consequently, the telecommunications operators of Kazakhstan and Azerbaijan intend to invest a sum in excess of $50.6 million in the construction of the Trans-Caspian fibre-optic cable line, which will be laid beneath the Caspian Sea. For these countries, the project will constitute a significant step in the reinforcement of the region's digital infrastructure and the guarantee of reliable communication between Europe and Asia. The project is scheduled for completion in the near future, with the cable line expected to span a distance of 370 kilometres beneath the Caspian Sea. The submarine fibre-optic communication line will traverse the Aktau-Sumgait route, offering a maximum bandwidth of up to 400 terabits per second.

Concurrently, Georgia is developing "digital links" with European countries via the Black Sea. Consequently, at the conclusion of 2023, Georgia and Romania (a pivotal nation within the southeastern region of the European Union in regard to information technology advancement) entered into a memorandum of understanding regarding the intensification of collaboration in the domain of digital technologies and the utilization of Georgia as a digital conduit between Europe and Asia.

As a principal participant in the Digital Silk Road initiative, Georgia is not only engaged in the development of digital infrastructure. It is of greater significance that Georgia is becoming a regional platform for the experimentation of new digital services and products. To illustrate, in 2023 Georgia was among the top five countries in the world in terms of the rate of adoption of contactless payment systems.

The accelerated uptake of digital technologies in Georgia offers valuable insights for other countries seeking to accelerate their own digital transformation. Consequently, Georgia is, in certain instances, assuming a pioneering role in the domain of digitalisation. For instance, this is already evident among Georgian citizens who have visited the EU. They frequently observe that Georgia is already ahead of numerous European countries in terms of moving away from "paper bureaucracy" and implementing digital innovations.

Furthermore, there is another domain in which Georgia's contribution to the contemporary global digital landscape is already disproportionately significant relative to its actual share in the global economy. The subject under discussion is the significant movement of IT professionals from Russia to Georgia following the conflict in Ukraine and the imposition of international sanctions against Russia. Furthermore, it is important to consider the presence of IT professionals in Georgia itself. There has been a notable influx of IT professionals from India, a country that has become a significant source of talent for the global IT industry, to Georgia. The implementation of a well-designed state policy aimed at preserving and attracting human capital in the field of IT will significantly contribute to the realisation of Georgia's aspiration to become a "regional Silicon Valley" along the "Digital Silk Road".

Elbrus Mammadov,
Director of the Azerbaijan-Georgia-Türkiye
Strategic Partnership Information Support Centre

SR-CENTER.INFO