You’re here for a reason.  I’m not exactly sure of what YOUR reason is but whatever it is I’m sure it is a good one.

Maybe it’s because even though you earn an excellent salary, it comes at the expense of quality time with your friends and family.

Maybe you’re working at a job where you make a 6-figure salary but meaning and fulifillment are missing from your daily activities

Or maybe it’s because you are pursuing your dreams with passion but are having to live paycheck to paycheck.

Regardless of what brought you to this blog take comfort in knowing that I was also once looking to make a big change in my life.  Before I had my own personal breakthrough I had struggled with being able to find fulfillment and financial abundance in the same place.  The two always seem to chase after each other.

If I was living passionately, I was poor.  When I was earning nice income, I was tired, unhealthy and irritable.  I see-sawed between the two falsely believing that you could only have one or the other but NEVER BOTH.

That was of course, until I WOKE UP to the abundance in my life and realized that I could have it all.  And this is something that I would like to share with every visitor.  Think of it as my way to PAY IT FORWARD and spread the ideas, strategies and opportunities that have created wealth in my life.

I will contribute to this blog regularly with my explorations and reflections into the different ways that you can awaken abundance now in your own life with suggested tools and step-by-step action items that you will be able to immediately implement and integrate into your daily routines.

My goal is to positively influence as many people as possible and create a space where insights into practical ways to create abundance (emotionally and financially) can be shared in the spirit of giving an love.

I’m glad to have you by my side for this journey.

May you awaken to the abundance that is patiently waiting for you.

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You’ve been visualizing on the end result that you want. All your focus goes straight to the end result, yet everything but what you focus on comes into your life. What gives? Isn’t the Law of Attraction supposed to bring to you what you want? Remember, the Law of Attraction brings what you focus on whether it is what you want, or what or don’t want. Then throw in your feelings and thoughts throughout the day and you really can get a chaos of vibrations going on.

The Law of Attraction isn’t just about what you focus on. When you have a certain focus whether it be on something in particular or a certain emotion like lack there are many other factors as to when and why something attracts back to you. You can focus and think on something all you want but if you have conflicting emotions mixed in, it can take some time to manifest your desires.

Let’s say you are focusing on having lots of money. You visualize everyday and you focus on having the money and what it feels like to have it. Then you go to work and negative thoughts and emotions begin running through your mind as every part of the day offers something other than what you want. When you have so many negative thoughts and emotions going all throughout the day, even if they have nothing to do with your focus, you are in fact vibrating at the level of those negative thoughts and emotions. You may have felt positive when you visualized but then you can undo some of that positivity by how you handle the rest of the day. The positive is much stronger than negative but if the negative is more prevalent then it will be what attracts back to you. So by being positive sometimes and negative most of the time, you are in fact going to have a chaotic version of what you want in your life.

So how do you get what you focus on? How do you get what you want?

By living day to day in the positive vibrations as much as you can. Be aware when you emit negative vibrations, and shift your focus to positive. Watch how you react to what others say to you or what others do to push your buttons and realize that it isn’t important what someone else says or does unless YOU think it is important; and then it becomes a part of your reality.

Move forward from past experiences that drag you down. Realize that you can create your future the way you want it by focusing on AND living the process positively. Life is worth living, and living is part of the process of getting what you want. Then, when you get what you want, you can begin to find another focus to manifest upon. What a wonderful Universe!

Beth & Lee McCain
http://www.articlesbase.com/self-improvement-articles/focusing-on-one-thing-and-getting-another-706927.html

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The Difference Among Viral, Buzz, and Word-of-Mouth

There are certain words, jargon that stands in for theory, that starts with marketing industry insiders and before you know it becomes the ‘in’ subject of books, blogs, articles, and MBA dissertations. But as jargon filters down to the less sophisticated, the meaning and ideas behind these words becomes lost. Such is the case with the current state of thinking on Buzz, Viral, and Word-of-Mouth marketing.

These terms are often used interchangeably but are they the same thing? Dave Balter and John Butman in their book, “Grapevine,’ describe Buzz as a marketing tactic aimed at generating publicity or awareness often without regard to any specific message, while Viral marketing is a means of spreading a marketing message through the use of contagious creative most often Web-video and Word-of-Mouth is the process of product story-telling. Balter’s marketing agency concentrates on creating word-of-mouth campaigns for his clients but the name of his company is BzzAgent – no wonder the confusion.

Mark Huges, author of the book ‘Buzz Marketing- Get People to Talk About Your Stuff’ points out that in order to create buzz about your company or product you must develop a marketing campaign that incorporates at least one, and preferable more, of his Six Elements of Buzz:

1. Taboo,

2. Unusual,

3. Outrageous,

4. Hilarious,

5. Remarkable, and

6. Secret.

It would seem that these six elements are the same elements that generate the contagious spread of information – Viral marketing. In order for something to become viral, people must talk about it, ergo word-of-mouth. But people can talk and spread the word of a video or stunt without ever generating much talk about the product. The famous, or infamous, Oprah Winfrey-General Motors audience car give-away stunt is a prime example of generating talk about a stunt without generating much talk about the product. If as Balter suggest, word-of-mouth is ‘product story-telling,’ then there is definitely a difference between Buzz and Word-of-Mouth.

So if Buzz is the tactic for drawing attention to your company; and Viral is the method of spreading the message; and Word-of-Mouth is the result; we then have a clear distinction between the three marketing terms.

The question is how can we construct a Web-based marketing campaign that uses the Buzz tactic, Viral method, and Word-of-Mouth message to produce the ultimate marketing objective: more sales and profits; and are Huges’ Six Elements of Buzz the only media attributes that deliver a marketing stir?

Solve The Marketing Mystery: Discover Means + Motive + Opportunity

We’ve all watched enough ‘Law and Orders’ on television to know that solving a mystery requires learning the means, motive and opportunity of the puzzle. For today’s marketers these elements are clear.

Motive: to attract attention, breed interest, stimulate desire, and generate action that ultimately produces increased sales and profits.

Means: the advent of relatively low cost desktop digital video tools and the creation of a new class of professional multimedia Web-video producers brings affordable multimedia creative to businesses that in the past could not afford professional video content.

Opportunity: the penetration of high-speed Internet connections plus the Web’s ability to delivery multimedia audio and video combined with the introduction of Web-video search databases by dominant Internet players like Google and YouTube create the necessary opportunity.

Why Web-Video Solves the Buzz-Viral-Word-of-Mouth Mystery

1. The 5 Strategic Goals of Marketing

2. The Anthropomorphization of Brands

3. Maslow’s Extended Hierarchy of Needs

4. The 5 Elements of Communication

The 5 Strategic Goals of Marketing

Increased sales and profits is every company’s prime motive, however, in order to achieve those goals, certain intermediate objectives must be met, especially as it concerns the Web that by its nature is a sterile, remote environment. Marketing campaigns should be constructed to provide the appropriate audiences with five essential elements:

a. Awareness

b. Emotional Utility

c. Functional Utility

d. Process Facility

e. Confidence

Target audiences must be made aware of the company’s existence and must be made to comprehend its relevance to their needs; and market audiences must be provided with a platform to participate or get involved with the company.

A successful marketing campaign must tap into an audience’s need for emotional utility, a quality created in the audience’s collective consciousness from brand personality resulting from corporate behavior and audience experience.

The campaign must also be able to speak to the functional utility of the company’s products or services. Hard information and easily understood instructions must be made available so that customers are actually able to generate the promised benefits of the product or service.

The campaign must facilitate the process of moving potential customers easily and conveniently from awareness, to utility, to incentive, to sale. The process must be transparent and mechanisms must be put in place to accommodate customers when things go wrong.

The campaign must also create confidence in the organization’s ability to deliver the promised benefits both emotional and functional.

The Anthropomorphization of Brands

More marketers are beginning to appreciate the effect of brand personality on their relationships with customers and prospects. It is apparent that markets have a clear idea as to a brand’s personality, whether a company pays attention to it or not. And just as significantly, it is clear that companies can’t just change their television commercials or advertising agency to overcome an unwanted or undesirable personality.

Brand personality is a function of audience experience: everything from the way you respond to telephone inquiries, to users ability to comprehend packaging instructions, to your website and email inquiry response times. No amount of smiling friendly faces in advertisements will make up for the irritation of a multiple-transfer-disconnect when trying to resolve a problem over the telephone.

Companies are ultimately separate entities whose personalities are composed of a collective consumer consciousness created through experience, interpreted from a very human perspective. It is human nature to anthropomorphize non-human entities in order to better deal with them. Batra, Lehman & Singh point out in their 1993 paper that there are five significant human personality traits.

The Big Five Human Personality Traits:

1. Extroversion/Introversion,

2. Agreeableness,

3. Consciousness,

4. Emotional Stability, and

5. Culture.

Jennifer Aaker in her ‘Journal of Marketing Research’ article, Dimensions of brand personality, relates the Big Five Human Personality Traits to the Big Five Brand Personality Traits.

Big Five Brand Personality Traits:

1. Sincerity,

2. Excitement,

3. Competence,

4. Sophistication,

5. Ruggedness.

When companies build a website or implement any marketing initiative there are consequences in the market collective; managing those consequences is critical to not just developing a brand personality but managing and fostering it to meet your ultimate marketing motive; generating more sales and profits.

Maslow’s Extended Hierarchy of Needs as it relates to Marketing

Abraham Maslow, who was the chairman of the psychology department at Brandeis University in the early 1950’s, developed a theory for the hierarchy of human needs. Before his death in 1970 he revised his theory by extending the hierarchy to include higher value components.

The bottom of the pyramid starts with our physiological needs: the need to maintain physical well-being and self-preservation; as you move up the pyramid the needs become more socio-cultural: the need to be accepted in society; while at the top of the list the needs become more abstract and intellectual as they relate to self-identity and the need to communicate that identity to others.

Maslow’s Extended Hierarchy of Needs

1. Physiological Needs

Water, food, sleep, warmth, health, exercise, sex.

2. Safety & Security Needs

Physical safety, economic security, comfort, peace, freedom from threats.

3. Social Needs

Peer acceptance, group membership, love, and association with successful groups.

4. Self-esteem Needs

Association with importance projects, recognition of strength, intelligence, prestige and status.

5. Self-actualization Needs

Need to take on challenging projects, opportunities for innovation and creativity, learning at a high level.

6. Cognitive Needs

Need to acquire knowledge and to understand that knowledge.

7. Aesthetic Needs

Need for beauty balance, structure.

As marketers, Maslow provides us with a blueprint for developing a brand personality that can effectively deliver a compelling, comprehensible, effective marketing message. Decide which of Maslow’s needs your company satisfies and then construct a marketing plan that delivers both the personality and message that speaks to those needs.

We are lucky to live in the age of the Internet, for even the smallest of companies has the opportunity to communicate its brand personality and marketing message using the most effective communication environment ever invented, The Web.

The 5 Elements of Communication

To effectively take advantage of the Web’s ability to communicate, you must understand the five elements of communication:

1. The Environment: the Web is a sterile environment that needs to be humanized in order to effectively deliver your brand personality and marketing message.

2. The Message: the Web is an information-infotainment environment where compelling, informative, memorable content is paramount.

3. The Messenger: the Web is a one-to-one communication system compared to traditional broadcast and print communication that is a one-to-many system.

4. The Audience: the Web is a place where visitors choose to visit you, do not short change them with second-rate information, poorly delivered in unimaginative, ascetically challenged presentations.

5. The Process: the Web’s multimedia audio and video capabilities combined with the penetration of high-speed access makes for the perfect system to deliver brand personality and needs related marketing messages that humanize your website, speak directly to your audience on a one-to-one basis, and inform, enlighten and entertain your audience in a compelling, memorable manner.

Conclusion

There has always been an ongoing business battle between those responsible for technology services and those responsible for marketing services. The Internet may be a great technological achievement, and it no doubt can be used to provide extremely useful technological solutions, but at its core and from its earliest pre-Web days, it was always a way to connect and communicate information and ideas, and isn’t that the essence of marketing?

The need for businesses to create awareness (Buzz), to spread that awareness throughout the marketplace (Viral), and to involve an audience in the spread of needs fulfillment (Word-of-Mouth) is achieved by taking advantage of the Web’s multimedia communication capabilities. In short, the Web is a communication tool that can be used by marketers to speak with a human voice and human face directly to your attentive publics on a personal, human, one-to-one basis in order to achieve the prime business motive: more sales and profits.

Jerry Bader
http://www.articlesbase.com/affiliate-programs-articles/how-to-create-profits-using-viral-marketing-techniques-58464.html

A residual income business opportunity is really not that hard to find. There are many all over the place – online, on television and in the newspaper, to name a few. Making the choice is likely to be quite easy, but actually getting started is another thing. It is very easy to fail in this type of business opportunity if you do not know the keys to getting a good start.

Part of getting a good start is choosing the right opportunity. A person has to choose an opportunity which interests them. They should be able to easily form the determination and drive to make their business successful. It also helps to choose wisely. An opportunity should be well set up. It should be easy to start up new people and to both learn and teach the system. The right choice can influence success in a big way, so choosing a good opportunity is one of the most important aspects of starting off on the right foot.

The next part of a perfect start is establishing a good team. Residual income is all about building a team that works hard and turns a profit. If an owner’s team is not making money then they are not making money – that is the bottom line. An owner should choose their team members carefully. It should be a serious process. Many times people simply advertise and let anyone who contacts them become part of their team. This is not the way to do it. An owner needs to take it seriously. They should conduct an interview and explain the opportunity to the person. They should make absolutely sure that the person is serious and is willing to put forth a good effort to be successful. A well chosen team goes a long way to making a person successful. Each should feel as the owner of their opportunity.

Lastly, for the perfect start a person must think about the big picture. It is easy to get discouraged in the beginning because it takes some time to build a good business and start earning a profit. It is not going to happen overnight, but once an owner gets their business going they will reap the benefits. If an owner allows themselves to get boggled down by the little things and not keep their eye on the long term then they probably will give up. Starting out is sometimes a slow process, so a person needs to focus on their goals and keep them in mind.

An owner can get a perfect start in a residual income business opportunity if they stay focused, take it seriously and remain committed to their main goal. A perfect start will allow an owner to have a stable business right from the very beginning. They can avoid common pitfalls and make their business successful.

Paula McDermott
http://www.articlesbase.com/home-business-articles/the-perfect-start-for-a-residual-income-business-opportunity-85313.html

The number of home-based business opportunities is rapidly growing. In fact, over 50% of small business owners work from home. Numerous programs and options are available. If you would like a legitimate home based business but are having trouble deciding which is right for you, exercising a few precautions can go a long way in making sure you choose the best program for you.

There are legitimate home business opportunities that can start you on your way to financial freedom. Research each opportunity thoroughly and choose wisely. You can earn an excellent income, be your own boss, and work the days and hours you desire.

The home business industry is expanding continuously and research suggests that revenue generated from home-based businesses will increase by 17% yearly through the year 2008. Legitimate home business opportunities are highly successful when they are more than just get rich quick schemes. Valuable marketing tools combined with affiliate/prospect systems, discussion groups, and contact with those who are already earning money from the same company are excellent ways to help you make your business successful.

There is a wide range of business opportunities to consider, including Internet based businesses, retail sales, import/export, and even stuffing envelopes. Some are legitimate businesses, and some are not. It’s important to know everything about the company and to communicate with those already involved so you understand completely any risks you may be taking, how long before you can reasonably expect to make serious money, and what amount of work is required to make that money.

Have practical expectations when starting a home-based business. Expecting to make enormous amounts of money in a very short time is unrealistic. Most legitimate home businesses do not promise instant wealth, but may offer a steady income stream that can increase gradually. It takes a certain amount of time to build a successful home business. Spend adequate time researching your business.

Make sure there is a large market for your service or product to help ensure your economic success. There is plenty of information on the Internet and through the US Small Business Administration to assist you in making informed decisions as to starting a home-based business.

People start a home-based business for many different reasons. They may be dissatisfied with their current job, unemployed, or have family situations that require them to be at home. By starting and maintaining a legitimate home-based business, you can realize your dream of being your own boss.

It is a good idea to write a business plan, as it may be your roadmap to reaching your objectives. There are numerous articles on the Internet and in libraries that can assist you in developing your business plan as well as addressing the many other issues involved with starting and operating a business from home.

And last, but not least, seek the advice of a tax professional. Your first reaction may be that you can’t afford such expenses right now; but in reality you can’t afford not to seek such advice from the very beginning of your home business start-up. They can advise you about ways you may be able to reduce the amount of taxable business income at the end of the year. Paying for an hour or two of consultation with a tax professional at the beginning will probably save you much more than that amount later on down the road.

An amazing number of people seem to think that magic is somehow created when you put the words “home-based” in front of the word “business.” It’s still business…it just happens to be based in the home.

Mal Keenan
http://www.articlesbase.com/home-business-articles/tips-for-starting-a-legitimate-homebased-business-80010.html

Important appropriateness of  development of modern economy is its cycled  character. Puriny every structural crisis of the world economy new opportunities are formed. Capital of the countries, which were leaders during last cycle, is being devaluated. Qualification  of lab our forces in field using old technologies are being ruined, while the countries, which managed to create innovational potential proved to be in the center of attracting capital which is independent from the old production. Consequently, the countries that implemented  scientific-technical and industrial capital investment policy in prospective fields will be given a competitive advantage. The realization of  this policy in the phase  of structural crisis gives its authors the opportunity to achieve  economic growth on the  basis of competitive advantage.

Basic scientific and radical innovations are recognized as the main means of overcoming structural crisis, that are implement thought acquiring new achievements and rising the effectiveness of traditional development .

In order to move to the stable stage of economic develop it’s important to increase innovational-investment act vitas and to involve new technological directions and basic technologies at trajectory  of firm economic development. The economic policy that is oriented at encouraging  investment, in innovations provide modernization of economy, also gives rise to its competitiveness.

Innovative way of development in investment policy. Thus, the main importance is given to the innovative type of development, that implies the growth of government role in exercising investment policy. Highly development countries. Take the responsibility of financing fields like fundamental  science and high-risk research, as well as the development of scientific research infrastructure. Spreading new ideas and educating population. The implementation of this functions takes place against the background of high-scale investments. that creates favorable conditions  for production growth on the basis of scientific innovations.

Currently, the government tries to develop institutions that will support vestment in new  technologies, stimulate innovative activities, encourage progressive technological changes, that unities financial tab our and informational recourses.

Currently government  tries to create development institutions , which will support investments in new technologies, stimulate innovative activities, encourage progressive technological changes, that unites financial, lab our and informational resources. The state may avoid the responsibility of developing   the production activities , where special markets and competitive relations are formed. At the same time it must encourage new, high-risk directions of investment activities, that pave the way to creating production on the   basis introducing scientific and technical achievements.

For example the wave of economic regulations that spread from developing countries in the late 8 th lost century covered the traditional branches of economy but it had no connection with high-technological sector, conversely the importance of direct state support institutions for innovation activities were risen. At the same time, the importance of working out state strategy for scientist technical and social economic development grows. The state aims at creating enterprises , that will manage to gain com putative advantage over the companies of inner and foreign markets. They  must consentrate their resourses on prospective  fields of production.

The direct instruments of state influence are oriented at supporting  private initiatives and innovative enterprises that will stimulate investment activities in certain fields and production initiatives.

The necessity of financing science and its current condition:

Active investment process, especially in scientific and technological fields, innovative and scientific-technical activities lays in the foundation for economic growth. Nowadays the decline in scientific technical potential is caused by  the fact that there is no more unity between scientific researches and their usage  former. scientific staff has been dismantled  and number of intellectuals have left the country.

Consequently, the country becomes more dependent on foreign trader.

So, in order to create favorable conditions for economic growth capital renewal is essential, but it’s very complicated, because of  the decrease in state financing and absence of ordering production, Science and education have no inner resources for development.

During the last few years there has been significant  reduction of scientific and educational research expenditures. As a result, the share of expenditures in GWP spent on science in 1999 amounted to 0,97%, which is twice less than in 1990. In 2006, the expenses spent on educational field amounted to only 1,5% of the GWP, which is the lowest index among the transitional countries.

Significant reduction of company’s demand on innovations resulted in increase of financing Scientific field from the state budget. Budgetary expenditures on scientific-research and construction work have been absolutely reduced and they are tend to decline against the GWP as veil as the budgetary share of the expenses. The degradation of Scientific potential is proved by sharp decline in expenditures used in research and construction work pond it resulted in dropping behind highly developed countries. Expenditures on Scientific research in the USA (1998) amounted to 794% per person, in Japan – 715. in Germany 511 and 611in Russia, whilst in Georgia it only amounted to 2,8%.

Due to the sharp decline in financing the Scientific field, renovation of scientific facilities detoriorated. The salaries in Scientific field were decreased, The coefficient of renewing main foundations in Scientific technical field significantly dicreased. According to the latest statistical data, 311 ml. Gel was invested in renewing main capital, that amounted to 60% of all the capital invested, in Georgia Instead of renewing Countrys technical market, most of the capital was invested  in activities connected to local market. 29% of this capital was invested in real estate and construction worth.24% in transportation and communications The problem of heeping, supporting and developing fundamental and research centers of science aggravated. During the Soviet era 20% of production was created in the USSR, but now Georgia’s shave in the  World scientific production in only 0,3%.Implementation of innovations require a wide range of activities, from doing research to producing new output. Priorities of innobative activities change at every stage of economic development.

In order to achieve economic growth in current conditions in the country. it is necessary to develop scientific innovations that create new and don’t take into consideration current directions of technological development This lays the foundation for putting so-called innobative multiplication into motion. which is connected to investments and results in production increase. that creates improved scientific innovations. They exchange old technologies. Introduction of this innovations is exercised by new investments, that encourage the further growth in production. Thus, innovative multiplication makes good influence on production growth and takes the economy out of depression and leads it to a long-term development stage.

Distribution of investments on Scientific – technical works.

It’s relatively typical for developed countries to distribute private and state capital investments even on scientific and technical works. For example, The USA’s private investment share in innovative market amounts to 50%. Similarly, according to the figures of state Expertise, 10% of innovations is given a strategically important status and accordingly they are financed from government sources. Japan finances 33% of all scientific research, 73% of scientific-research and constructive works is implemented on the basis of self – financing in the USA, in Germany this index amounts to 70%, in Japan and UK 62%, France and Italy 57%, So the only possible mechanism for promoting social and economic development is it’s technical modernization and move to innovative type of development.

Technical modernization of equipments and their reconstruction requires attracting important investments in innovative field. Here it is important to activate state policy on scientific and technical branches and to work out important directions for scientific-industrial development of economy. AT the same time, the state, that takes important part on technical modernization of the economic sector must take the responsibility of financing fundamental sector of science and high-risk researches, restore activity of  science financing from the state budget and develop scientific infrastructure. In order to define the proportions of sharing investments its essential to focus on cyclical development of economy and, on Intensive types of re-production, that is reflected on the statistical law of dividing expenditures, for example, spending on fundamental research, applied work, capital investment amounts to 1:3:9:27.

Statistical law of resource division in accordance with scientific-technical potential is used at the production development stage where scientific and technical progress is achieved by practical laws, which help to solve the problems of production stabilization and development.

The reason of decrease in scientific potential the decrease in scientific potential in post communist countries is  caused by lack of restructuring  scientific organizations privatization of research centers has   not brought any desirable results. The reason for this is that enterprises don’t order them to do research. Simultaneously,  scientific staff has got older, the last tend years science suffered from loosing its intellectual potential. In this case, it will  be reasonable to merge different scientific organizations and some research institutions must be transferred to enterprises to manage , in this way  scientific technical potential will become much  stronger.

The sources and ways of funding science restructuring research institutions and dividing it into firms with developed financial, economic marketing and commercial infrastructures will increase the practical use of research work results. Contract based applied science makes the realization of  scientific technical projects they will be implemented at the expense of the state budget, non state expenses attracted by Ventura, sharing  other financial mechanisms. The question of mobilizing these sources  can be solved on the basis of aimed, scientific and technical programs on regional and federal levels in accordance with the market demand.

They can be implemented in the    form of portfolio investments using stock marked tools. Providing  the state with grants and sale guarding institutions by investment agency and trust management has practical  us eye. For forming non budgetary recourses for financial    innovations it is necessary  to use amortization funds on renovation in the part, where production expenses, especially those. spent on research and innovations. are taken into consideration as well as the expenses of wearing out financial expenses , that is included  in the production cost and is reflected on the production prize. In addition to that revenues that  came from selling scientific-technical production, or having the right to own intellectual and industrial units as well as the revenues from scientific and technical units and selling the right to own them must  be considered, too.

The role of innovation foundations .

Practical usage of abovementioned sources is implemented according to the special rules and amounting , on the basis of used methods. The expenses received from these sources are transferred  to a separate  sub account `innovation foundation”  Greeting. State funds for innovations which is aimed at realizing prospective directions  of science  and technical development enables to  work out modern competitive production and organize its production. besides using state budgets expenses,   other  market mechanisms for attracting investments are used as well .

Nowadays mechanism for investing in innovations are used only in case banking structure , which mobilizes recourses and regulates this use in science is taken  into consideration banking  structures directed at investments, accumulate vast sums through creating consortiums and other financial and investment institutions, in order to attract own funds for innovative programs of investment. On condition of Budgetary deficit banks au the phases of innovative   cycle and provide insurance service. Participation of banks in the field creates extra   stimulus for different firms. No other structure manages and controls innovative recourses as the banks.

Effective use of stock market instruments provide opportunities  to attract investments in innovative field. Its main aim is to divide investment recourses among fields and provide inner and foreign  investment flows in more prospective sectors of national economy. Transitional economy doesn’t provide the conditions for populations to transform their savings  into innovative investments and provide economic growth. Monetary potential saved in the country is practically unused. According the same data the amount of savings is much more higher than in the USA and west European countries. In order to invest funds existing in the country in essential sectors of economy it is necessary to make the forms of collective investment perfect, it includes. investment share  funds, credit contacts joint stack and commercial funds . After that government should control their activity and they must draw their . attention to new forms of scientific-innovative and investment forms.

Main stages of innovative development.

Innovative development of economy as any process must be oriented at its stages, levels and phases. First of all the technological basis of the field  whose production has more demand on the market must be renovated. At the  same time the market is expanding  with importing goods, introducing innovations that is oriented at modernizing  recourse-saving technologies and improving consuming qualities. So at this stage our main aim is to create infrastructural and institutional grounds for firming scientific technological  potential. than we have to organize the enterprises that produce and sell new technological range-that enables the country  to restore its positions on the world market of scientific technologies.  Simultaneously the role of the country in production and investment activities that is directed at commercializing innovations must be strengthened. Little  by little of will move from supporting  quantity aspects of scientific technical field to quality aspects and to new  forms of engineering, that use  modern informational technologies.

Main directions of state investment innovative policy of the state in future main directions of  state innovative investment policy are: 1. choosing national priorities of innovative field development for realizing innovative projects, choosing the projects of technologies that influence production growth and rise in country’s  competitiveness. 2. Coordination of activities of  legislative and  executive bodies to work out complex approach to solve this question concerning country’s innovative development, effective functioning of innovative systems and implementation of state’s innovative investment strategy.

3. maintaining and developing scientific and industrial-technological potential of fundamental science, working out employee’s training system for maintaining and developing modern scientific and technological level and developing science to a higher level.

4. Providing favorable economic and financial conditions for activating innovative works, developing ventral, engineering and investment-industrial activities and for rising competitiveness creating  favorable conditions for investing in innovation field enables  modernization of scientific and technical basis of national industry as well as rising the competitions of the country.

New directions of innovative activities and priorities of innovation policy consists of three stages. At on initial stage the main goals are reproduction of the technical basis of the field whose production has stable demand on the market than market expands by producing the goods that replace the imported ones  innovations  are oriented  at modernizing the enterprises, that  use the recourse-saving technologies and improve consuming qualities. So at first it’s necessary to create economic infrastructural and institutional basis for moving to investment stages of state development. At the second  stage the enterprises  that realize the technological order are created. After that the production is introduced on inner and foreign markets that  makes production competitive in the sector where national product were not presented before, and it creates new scopes for demand, where national products dominates to must the demands. At this stage country’s activities are directed at attracting high-scale private investments, creating necessary infrastructure for investment-development their support and perfection.

At the third stage the following important questions must be solved. Country’s support for innovative infrastructure, creating conditions for demand on national products, informational support to enterprises making stable contact with science and industry.

New ways of implementing scientific-innovative  and engineering activities.

A State focuses on new forms of scientific innovation and engineering, that use modern informational technologies and little by little they move from quantity aspects to quality ones, that are implemented in the following way:

1. Maintaining and developing scientific and industrial potential and using them in achieving modern technological level.

2 Choosing rational strategy and priorities for developing innovative field. Implementation  of critical technology and innovative projects in the fields that  influence the effectivness of production and their competitiveness.

3. Creating favorable economic and financial condition for activating innovative works, legal industry and competitiveness.    

-           To implement this measures following practical activities must be exercised:

The process of providing information must be radically improved and commercial structures must be involved in developing scientific educational and innovative activities.

- reconstructing the part of research and project institutions and closing the places working ineffectively.

- Creating the system at venture investment. state support of venture business in scientific technical field is necessary until the industry get interested in them.

- Developing the system of noon. state innovative risk and private  supplly, creating insurance groups within the framework of financial-industrial groups, that will undertake high-risk insurance, that is linked with creating innovative production. insurance companies, together will share the risk.

- Using modern methods for prognosing engineering and scientific production marketing.

-  Developing small innovative business by creating favorable conditions and infrastructure for setting up small enterprises and their functioning.

- Creating suitable legislation, that will regulate relations in intellectual  property field, work out normative acts that are directed at exercising state policy. It foresees involving the results of scientific-technical results in industrial circulation, that is implemented at the expence of the state budget.

- making typical state contracts in order to balance legal interests of the participants in the process from the point of using scientific-technical results.

Thus, following the innovative way of development, must not be the only factor white  working out investment policy. In connection to that, the role of country is defined by creating the mechanisms, which forms national innovative system and develops innovative production.

Creating favorable conditions for developing innovations provides modernization of technological basis of the economy and grows the competitive of national production.

- Preparing typical state contract for balancing legal interests of those who participate in the process of using the results of scientific-technical work.

So the main factor while working out investment policy is to move economy to the innovative way of development. In this regard a country’s main role is to create the mechanisms, that will provide the formation of national innovative system and development of innovative business, that will make the modernization of economy’s technological market of the economy possible and will give risk to competitiveness of national production.

The formation of adequate investment activity model in the market system of economy provides replacement of investment recourse division with new forms of investments. For its part it has to work out the investment policy, that will accord with changed economic conditions.

Official concept of reforming Georgia’s market economy is based on simple monitory principles. Their realization was expressed in size minimizing the country’s role, robotizing foreign economic activities, privatizing state property and forming market structures.

The principles, boundaries and forms of state participation in investment activity

Analysis of Georgian-economic conditions shows that solving important problems in country’s investment development is impossible only on the basis of self regulation, that is distinguished with its low quality. A state needs to strengthen its role in the field of investments, correct economic policy.  At the same time state participation boundaries in the investment process must be defined by taking the way of economic development, that is characteristic to the period of moving to market economy, into consideration conditions of strengthening the state role in the investment process.

Analyzing the possibilities of strengthening state role in investment process, we must take into consideration the fait, that counting’s participation in the process has same boundaries, these boundaries are defined by real financial possibilities, on  the other hand the country must encourage the process of attracting investment rather than blocking them. State participation in investment process is not the same as turning economy to administration process. It implies the increase of a long-term policy of the state, effectiveness of particular activities in the conditions of encouraging investments.

The topic of state participation pineapples in the investment activities is closely linked with limiting necessary financial potential for investment promotion Approximate calculations show that in order to restore the amount of investment to the pre-reform level, foreign investment growth is possible. According to 2002-2012state program in the next five years 10 $ are expected.

As we have at ready mentioned the role of the country as the investor in the market economy is maintained for the fields that are vital and important. More importance is given to regulating the investment process in the way, that creates favorable regime for private investors activities.

The conditions existing in Georgian economic investment strategy is oriented at moving from stable investments to creating necessary investment environment for private investors. These two parts that are essential for the state investment policy must support prosperous fields of production and the policy must have systematic character. 

Defining strategic priorities of investments.

 On defining strategic priorities we must take into consideration competitive advantage exiting on the world market, that is reflected on high-technologies. The brunches which maintain potential advantages are: energy sector, turism, agricultural machines and technologies, food etc .

Investing in innovative production will encourage new directions for investment flow, rising production level and encouraging economic growth. This approach is well known in the world products. Our priority must be effective programs that meet inner needs in economy, in this regard we  have to support national enterprises, and the development of vital brunches of economy.

At the same time it must be taken into account that in the world integrated economy, development of investment cannot be stable and increasing source of profit in producing rival products only in the inner market.

Significant  condition of effectiveness in the state investment policy is to work out the conception of structural alteration in industrial sector. It’s especially concerns about such prioritative approaches according which must be defined the reform strategy and mechanism of industries from different groups, supporting forms and methods from the state, organization models of industrial structures in accordance with real, amongst them institutional conditions in the world economy.

The basis of economic growth and quick development can be large corporations, that have scientific – technical potentials in mobilizing resources and effective  integration possibilities in the world industrial unions. Small business industries, that have really important meaning for the function of market economy, nowadays are singled out with extremely low technical level and lack of investment resources, that make it necessary  to quest  their place in industrial chains of the large structures. The formation of stable and effectively developing, diversificational, corporative unions and financial-industrial groups demand state supporting reinforcement of corporative circle from the state, amongst  them even by means of participation of corporations in the capital. Development of corporative forms will help the realization of long term industrial programs, and create conditions for the stable economic growth.

Stirring to activity of stake investment politics. At a modern stage, stirring to activity of stake investment about the stable economic growth in the basic condition of Georgian economy. Essential approaches of stake investment politics are: the reinforcement of supporting in prroritative tendencies of economic development formation of justifiable and economic conditions of stimulating the interest of investments in the real sector of economy and the agreement between central and regional investment politics.

State investments and supporting in prioritative tendencies of economic development. The realization of up-to-date tasks of economic development demands more active state backing of investment field. Simultaneously, the importance of state investment must be growing up not as mush from the standpoint of size of centralized sources, but from the positions of state guarantees, insurance and orient list of private investors.

The problems of investment budgetary financing. Budgetary financing of investment activities has still been happening on the basis of these approaches that essentially limit the state influence on the course market alterations and structural changings in economy.

Herewith, these shortcomings are not as mush conditioned by restricted possibilities of budgetary system, as by complicated and wrong strategies of sharing centralized investments and the lack of effective control of their usage.

Failures in the state investment politics make it necessary to solve this problem, as afterwards not having orientation or having defective one becoming the problem investors. Analysis confirms the existence of distinct dependence between state priorities and investment motivations of private investors. that must surely be taken into account while working out on perspective tendencies of investment politics. Otherwise  it will be impossible to make ground for stake investment politics and for the agreement of investors’ interests of different levels. Reserved dimensions will again have more passive character and will not guarantee planned results. It must also be mentioned that insufficient or unsystematic backing of separate manufacturers or regions, falls down stimuli of accumulation and afterwards self-financing process and it prevents the formation of business executives market behavior.

While analyzing the problem about the possibilities of manufacturers’ investment support it is impossible not to take into consideration the extreme restriction of budget/ At the same time, modern conditions, the increase of levels in the realization clearness and confirmation of investment politics and consideration of budget planning reality are not less important.

In Georgian economy. where unreliable forms of calculation dominate. it is difficult to male real prognoses about the mass index of money. Budgetary politic is being worked out in the conditions of complicated factors, that aggravates the difficulty of real budget formation and fulfillment of the received one.

State investments, as in the realization of economic growth of prioritative factor; usage of international experience will not be perspective without mentioning up-to-date conditions of Georgian state finances and the inevitability of budget  system alternation. e.g. one of the successful example of economic reforms is the experience of Germany. Its budget system is well formed and it is manifested clearly in the distinction of current and investment expenses in the control of pure usage of budget sources in establishment and protection of maximum size of budget deficit financing at the expense of credits with the sum of for seen investments expenses. This method is called “golden rule” and is established the 115th article of the basic law of Germany.

In Georgian economy, as it is clear from the results of reforms, the compensation of the growth of state non-productive expenses was not happening, correspondingly with the growth of budget investment expenses. On the contrary, it was one of the factors, that conditioned the reduction of state centralized investments and weakening of state investment function. In accordance with, the usage of state investments as the factor of economic growth, requires essential changing’s in the organizations of budget politic and budget system.

While working on the budget, it is necessary to define the prioritative tendencies and use the forming principle of the normative that define the levels of budget, according to the singled out tendencies; division of current and investment budget on the normative basis, denial the possibility of exceeding expenses over incomes while planning the budget; strict definition of sources, how to cover the investment budget deficits. It is also necessary of budget on the usage of sources in control realization technology, in order to reinforce the frscal role of budget fulfillment.

An  important problem, connected to the usage of state investments is their low effectiveness compared with the private ones. While sharing the state Financial resources, used tendencies do not help to increase the effectiveness of investment and restructure national economy.

In the organization of investment process, lack of systematic ground and insufficient quality of budget planning caused permanent  failures in financing the state investment programmers.

This fact approves  that, it is necessary to reinforce the role of selective approach, gather state investments towards the strictly defined prioritative approaches, keep strict control and select competitive projecting during state investment.

Selecting mechanism of investment projects on the basis of competition/ In market economy, where basic criterion of investment is the effectiveness of investment, it is impossible to use the old technologies of sharing unpaidly, among enterprises in centralized capital investments, which don’t stimulate industries to improve their effectiveness, as direct state investments are less effective compared with the private ones. Thus, the most acceptable approach is the state supporting to private investments.

State supporting to private investments is realized in these investment  projects by means of the partial participation of the state, which have passed the competitive casting. The goal of centralized investment resources on the competitive basis is the reinforcement of investment assets, mobilization of private national and foreign investor’s capital towards the prioritative approach in economic development, and the growth of effectiveness in all forms of property such as commercial, budgetary and national-economic investments.

A new rule of financing investment projects in the financial ensuring of investment competent project, gives the right to investors to choose the participation forms. These forms can be as follows:

State investment revocable two year-term credit; its payment percent for the usage, compiles ¼ of central banks refunding rate;

to strengthen the port of these shares of an oncoming enterprise in the state property, that is sold in the market from the income of investment project during two years and the income obtained in this way goes to the state budget.

While taking decision about giving funds from central budget, a leading criterion is to insure the setting of object (industrial powers) into action in the given term, in the conditions of decreasing funds, attracted from the state budget and to increase the effectiveness of the usage of centralized resources.

The obligatory conditions, to present investment projects for the competition are:

In the total amount of money, spent on project realization, the share of centralized investment resources must not be exceeded more than 20%, it must be ensured at the expense of private investor’s own, attracted and borrowed funds.

In total amount of common expenses, investor’s own share mustn’t be less than 20%.

In the field of investors’ supporting, new approaches such as connection to the certification of investment projects, giving state guarantees, creating the budget for development are used.

Certification of investment projects, defines the possibility of increasing state supporting share up to 50%, while such analogies are not producing industrial products for exportation about 30% – for importation, with less price.

In the conditions of budget funds restriction, many investors consider the state guarantees of certified projects, as the most desirable form of state supporting. Guarantees secure about refunding not the total amount of money of risk, but part of it, in case of failure the effective investment project realization, due to the reasons that are not in investor’s compensation; On its side, investor must present counter-guarantees, amongst-mortgage.

Development budget can be formed as the special instrument, that collects investment resources of state budget in order to finance investment projects and attract the funds of private investors.

Development budget resources can be used for partial financing of investment projects, at the initial – competitive, valuable and refundable stages, also the borrowed funds for giving state guarantees on the competitive basis. (When upper limit of guarantees compiles 40% of borrowed funds).

In the competition of procuring the funds for development budget, such investment projects should be taken, that satisfy the following conditions:

Correspondence of development budget to the goals;

Security of positive meanings of pure discounting income;

In the total amount of money for project realization, investor’s own share mustn’t be less than 20%, but for large projects (more than 50 million $ – less than 30%.)

In the countries of developed economy, as a rule, examination of investment projects is made by experts, invited by investors themselves or by the participant financial institutes of project financing.

Selective, restricted supporting of prioritative approaches in industrial development by governments and the competitive selection of effective projects gives distinct results. Foreign experience proves that, such measures, as a rule is an efficacious stimulus of investment attraction and helps to realize projects.

Governance of state property in the state economic sector.

Governance of state property, as the factor of investment effectiveness in the state economic sector. Activation of the state role in the investment field, implies the development of state governance, reaching quantitatively higher level, restructurization of state sector and development for investment providence.

In must be said that, in the countries even under developed market economy, the governance of state sector is fulfilled under strict state governance control, from the interests of national economic development. State sector fulfillers the supporting function only for vitally important and unprofitable industries, but also stimulates local industries.

State sector, must distinctly occupy the leading positions in achieving priorities of economic development and form the potential of economic growth. Simultaneously, investment projects of state industries must be drawn up according to the demands of competition and effectiveness. It is essential that, invested funds to be used purposefully and the movement of financial flows be controlled strictly by the state.

Herewith, while realizing state activities in the real field (amongst in the field of investments), stimulation in  the activities of analogical faces in  non-state sector and not their restriction must surely be taken into account, as enterprises under  the state support are stable on the one hand, but less effective on the other side.

Activation of the state investment role must not be manifested only in effective investment projects of science-capacious industries, high technologies and vitally important fuelds by direct participation. More important constituent part of investment supporting of society in the conditions of market relation development is the encouragement of economic subjects’ investment activities and it must be oriented on progressive structural alteration. This implies the working out of optimum methods of economic regulation, development of accumulation mechanisms and active assistance to turn them into industrial investments.

Formation of institutional-legal and economic surroundings for the stimulation of investments in the real sector of economy.

Greating the available conditions for increasing investment actives by the state, requires purposeful influence on reproductive processes at macro and micro-economic levels. This. most important sphere, where the activation of the state investment role must be manifested effectively and in a new manner, at a new stage of economic reforms is – monetary-credit field.

Monetary-credit methods for investment stimulating. Insuring the growth of stable investments, first of all implies the augmentation of economic monetarism, era diction of money disproportions, reduction of interest rate, renewal of taxation system, depolarization of national currency and its role augmentation.

The increase of economic monetarism is possible by means of restriction of monetary-credit emission. While defining the level of danger of its inflation results, it must be mentioned, that inflation can also be caused by the other factors, besides emission. Thus, struggle against it, cannot be defined only at the basis of emission restriction. First of al it is necessary to provide the functioning of manufacture solidly. The growth of monetarism level in the real sector of Georgian economy is the most indispensable condition, that on its  side is the leading, deflationary factor.

Essential condition to protect against  the inflated results of monetary-credit emission is to create and put in motion such mechanisms, that change macroeconomic conditions and direct money-flows for supporting manufacture. During the process of using such approach, the size of emission defines the objective demand of industrial sector of economy, expert the funds moved to financial markets.

While defining the parameters of purposeful growth of money, calculation of the structure of money delivery is vitally important. Different channels of money emission have heterogeneous sensibility towards the inflation.  Therefore, expansion of money delivery is possible by payment of promissory notes of non financial industries, by means of banks refinancing and under the purposeful direction of emitted sources to finance the industrial investments. Less inflation channel of emission  is financing industrial investments by the state institutes of development.

Basic instrument for the regulation of money flows, is purposefully the state influence on the dynamic of interest rates. e.g Project supporting of the most importantly acknowledged industries for the purpose of investment activation is possible with preferential rates and by credits. Movement of preferential credits, this time must be realized by state banks system of development and the strict control establishment must expel the usage of funds aimlessly and financial speculations.

Experience of the countries under market economy shows that, regulation of interest rates is generally effective method to reinforce business activity in the period of crisis, when disbalance of economic systems situation is deepening. After achieving balanced progress in economic balance and financial sectors, generally the necessity of state interference in economy is lessening and accordingly the role of state influence on the dynamics of interest rates, formed on money markets is also decreasing.

The usage of state regulation is distinctly cyclic. In the conditions of sharp structural disproportions, when the working of market mechanism can’t provide the keeping, on the one hand, development  of surplus production and devaluation of main capital off, but  on the other hand augmentation of investment activity, the role of state influence on economy, amongst in the field of purposeful control on money flow is expanding, but while moving to the stable growth of economy-decreasing  . It is proved  by the practical analysis about getting over the structural depressants  (post war) in Western European countries and in the USA, and by the restoration of economy in France and Germany.

State regulation of interest rates was applied in the countries, under developed market economy (post war-in Japan, during along period –in France and in the USA during the period of so called `Roosevelt’s new policy, as well as the range of those developing countries , that showed the solid high tempers of economic growth (India, China, South – Eastern Asian countries etc). Important scales of accumulation here was reached for the purpose of national manufacture development, as a result of active influence on interest rates ( on its side, accumulation made it possible to hasten the speeds of economic development) also, for this purpose, direct and indirect methods for the purposeful regulation of money flow and inner accumulations convert into investment were used, namely for the formation of development state banks, loan-saving association and other  specialized credit institutes, through founding district  normative of credit politics for non-state banks and rates of preferential taxation.

For example, in Japan, investment financing and production growth conditions were formed through the state control strengthening on using the population savings and interest rates, which were gathered in postal-saving institutions and banks, afterwards their remittance to the state institutes, long-term crediting banks and truste savings banks took place.

Savings transt formation mechanism into investments in the USA was based on the wide development of loan-savings associations, that attracted the savings of private sector for giving purposeful credits to the range of housing construction and industrial branches.

In many developing countries, stable growth of economy was conditioned by localization of the greater share of money flow in the state banks, that locate mobilized savings in industrial investments and crediting resources, in accordance with the installed priorities of social-economic development.

Improving the structure  of mass of money is also connected to the cutting down  the share of cash, that is in circulation, for what it is necessary to set up strict  restrictions about the cash payment in all the field of economy, to continue calculation through computers and widen barren forms of  payment circulation. Taking these measures will expense the business economic field of banking sector and will be propitious for investment potential growth of the banks.

One of the basic task of payment system, at modern stage is its complete renewal, restriction of barter transaction, driving a great part of taxation means out of circulation, as they don’t  play a part of complete recourse in the formation of saving potential. Main ways to solve this problem are following: realization of inter imputation for financing fixed and circulating capitals, reduction the price of credit resources and security of plural debts.

For increasing the regulation effectiveness of money circulation and expel the activation possibilities of such emissive mechanisms, which are not accompanied with the expansion of goods delivery, it is necessary to strengthen the control and currency regulation.

Formation of effective infrastructure of financial market.

A) The influence on the investments activity of banks.

Looking through the previous system of regulation (in accordance with the selective priorities of economic politics) requires changings of the forms and methods in the banking sector and restructurization of banking system in economy, by meant realization of investment functions of the banks. Restructurized banking system must comply the requirements of armful investing  through high trustworthiness and guidance. It must also ensure the appropriate level of credit delivery resources by means of available interest rates for manufacturing fields.

In the growth of investment activity of banking system, it is essentially important to create the system of investment encouragement and insurance. State guarantees existence is one of the condition just for this. Cutting down the normatives of reserve assignments and preferential taxation are also belonged to these activities.

B) Creation of the system of deposit guarantees.

World experience shows that, the establishment of deposit guarantees is the inevitable component for vast mobilization of the population savings. It potentially increases separate institutes as well as the liquidity of the whole system and is the reliable means against taking deposits unexpectedly and frequently out of the banks.

One of the first systems for deposit insurance was formed in the USA in 1933-34, as a result of additional stabilizers investigation in marketing economy. Nowadays, these systems operate in the range of developing countries (Argentina, Colombia and so on).  Herewith in Great Britain, in the USA and in Canada, they are performed with independent state corporations, but in France and Sweden and private banking links. In Austria, Great  Britain and the Netherlands in the case of broken credit organizations, private deposits are given; In Germany deposit delivery of credit institutes are addressed to, while in Canada – deposit delivery, managing the property of bank and giving crediting guarantees are addressed to.

                                                          Economic Dr of Science,

                                                          professor Lamara Qoqiauri

lamara qoqiauri
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