History of Georgian Entrepreneurship (late 19th-early 20th cc.)

The incorporation of the country into the Russian Empire at the beginning of the 19th century quite surprisingly worked as a catalyzer for the development of entrepreneurial activity in late 19th-early 20th century Georgia. There were several important factors favoring this development in Georgia: stable internal as well as external political situation around the country; the geographic proximity of the Ottoman and Persian empires; and the Russian Empire’s economic interests, such as growth of trade in order to compete with major European states (France and Great Britain) for the markets in these two Middle East countries. Thus, the proximity of Georgia to the Ottoman and Persian empires was reflected in trade growth and other economic activities between the two countries on the one hand, and the South Caucasus overall on the other.

This development is well reflected in various biographies of the Georgian entrepreneurs discussed in this work. For instance, Akaki Khoshtaria’s wide business network was spread across the Ottoman and Persian empires. This, in turn, reflected the Russian Empire’s wider economic aspirations which we mentioned above.

These economic and political developments led to Tbilisi being steadily transformed throughout the 19th century into an entrepreneurial center of the South Caucaus. A look at the map shows that the geographic location also favored the city, as it is located right in the center of the entire Caucasus. Moreover, the relatively good condition of transportation roads around Tbilisi also helped the city gain a prominent position in the region. For instance, in Mikael Aramiants’ biography, we learn how he left Baku to manage his business empire from Tbilisi. Yet another reason for transforming Tbilisi into a hub of political and business activity was the Tsarist administration, which chose the city as its capital in the Caucasus.

The Russian Empire, under the Romanov dynasty, was a capitalist country. Entrepreneurship in general, and various stories of businessmen in the Empire, were very similar to what could quite often be found in western Europe of the time. As a result, in the late 19th century, entrepreneurs in various fields emerged in Georgia and began creating world-famous Georgian brands. Their products were exported not only across the Russian Empire itself, but were also traded extensively in the Middle East and Europe.

The advantageous geographic location and developing economy also brought many famous European companies and entrepreneurs into the South Caucasus, and to Georgia in particular. Nobels, Rotschilds, Siemens and many others from western Europe clearly saw those big business opportunities which existed in Georgia at the time. Surely, Georgia’s importance in these families’ business calculus was based on clearly determining the country’s transit potential. It is also worth noting that foreign investors and inventors, by extending their entrepreneurial activity in the South Caucasus, contributed to the notable technological development of Georgia.

Still, it is hard to perceive why the history of entrepreneurship in late 19th-early 20th century Georgia has so far remained largely unexplored. One of possible explanations could be found behind the establishment of the Bolshevik regime in Georgia in 1921. Foreign and local entrepreneurship in Georgia was almost entirely wiped out of the country through expropriations or other means. Wealthy merchants and entrepreneurs became class enemies of the new political leadership, and it was quite logical for the scholars of the Communist era to deliberately avoid researching Georgian and foreign entrepreneurs working in Georgia.

The Nobels’ activities in Georgia shed light on another important family, the Rotschilds, who were likewise heavily involved in business across Georgia and modern Azerbaijan. The two contributed extensively to the development of the largest railway and pipeline infrastructure in Georgia.

Another famous family, the Siemens, laid the longest telegraph in the world, London-Calcutta (modern Kolkata), through Georgia. This contributed to regional connectivity, enabling Georgian cities to receive news from Europe and other parts of the world on a daily basis rather than after several days. Moreover, the Siemens were the first inventors and entrepreneurs to found and extract oil in Georgia, in the Kakheti province. Thus, overall, foreign entrepreneurs contributed extensively to the technological progress of the South Caucasus and Georgia, which perhaps had the largest effect on the population in general.

Entrepreneur Akaki Khoshtaria’s biography is largely unknown to the wider public, yet his life and business activities reflect how interconnected Georgia was with the Persian and the Ottoman empires of his time. Khoshtaria was famous for his patronage of the arts and for his support of Georgia’s short independence of 1918-1921.

Mitrophane Laghidze’s life is also notable, as it shows how small businesses were developing across Georgia in the late 19th and early 20th centuries. Laghidze’s entrepreneurial life proves that despite the fact that Tbilisi held a central economic and administrative position in the region, other small Georgian cities too had an active business life.

Mikael Aramiants’ biography is notable as, beyond the South Caucasus, his business was also spread throughout major European and Asian cities. Aramiants’ life shows the economic and administrative centrality of Tbilisi in the region. Indeed, after each success and failure in his business career, Aramiants headed to Tbilisi, where he eventually settled to manage his business empire. Moreover, research on his life provided here is far more important from a purely academic point of view as, to date, there have been no notable works created on this issue.

These are only a fraction of the famous entrepreneurs which indicate how fast-developing capitalism and industry in general was in early 20th century Georgia.

By Emil Avdaliani

The Nobel brothers