Regional development policy promotes economic development, employment growth, social protection and living standards, which has been relevant since the 1950s. This policy aims to reduce regional inequality by supporting the economic activities of the region (employment and wealth generation). Tbilisi is not only formally the capital of Georgia, but also the centre of the country's economic development. Tbilisi accounts for 49% of the country's GDP. Tbilisi is home to 31% of the total population of the country, which as of January 1, 2018, is 1.16 million people. Recently, a general trend has been to study the economic connections of the surrounding areas with the centres of attraction. Due to its proximity to Tbilisi, the Kvemo Kartli region was selected as the study area of ​​Tbilisi. The main goal of the research is to identify, study the competitive economic sub-sectors of Tbilisi and its surrounding area (Kvemo Kartli) and to make recommendations to the central and local governments. This will increase the competitiveness of Tbilisi and its surrounding areas, which in turn will lead to increased economic activity and living standards, as well as reduced poverty and unemployment. The current study is based on the Smart Specializations Strategy developed by the EU, which sets national and regional level priorities to create competitive advantages by adapting research and innovation strengths to business needs.