Overview

In 2021, according to the Statistical Office of the Republic of Serbia, 81.4 percent of households in the country had an internet connection, and 76.7 percent had a computer. The percentage of computers in households varies depending on the territory with approximately 92.9 percent of households in Belgrade having a computer. Serbian businesses have been relatively slow in integrating digital technology. The use of cloud technologies is still low (estimated at 40 percent) for companies with more than 250 employees. The use of e-invoices is growing slowly but will become mandatory as of January 1, 2023.

Serbia now generates 10 percent of its GDP from the ICT sector,  among the top four export sectors, along with steel, cars, and agriculture. According to Serbia’s Statistics Office, there were over 3,354 firms in Serbia’s tech sector in Q1 2022 employing 47,609 people. Major employers in this sector include prominent U.S. companies and their affiliates. Serbian tech companies produce software for industries ranging from agriculture to medicine, as well as tracking and cloud applications, online games, and testing. They also run call centers and customer helplines, ranging from low-skilled to very high-tech.

The startup scene is present and gaining attention, with many firms successfully relocating to Western Europe or pitching themselves to be bought by foreign firms. Among the most successful are Nordeus, the Belgrade-based developer of the “Top Eleven Football Manager” game that has topped app store charts and was purchased in June 2021 by U.S. company Take-Two Interactive, and FishingBooker, which has been described as “the Airbnb of fishing trip charters.” Serbia’s Strawberry Energy is a crowd-funded startup that produces solar-powered smart benches, providing Wi-Fi access, mobile-phone charging facilities, and information services in public venues, already present in 23 countries.

Human Capital

Serbia has high-quality ICT specialists with competitive wages that are attractive for foreign companies looking to outsource. Serbia is attractive in the tech space due to its low-wage but qualified workforce, with excellent English-language and tech skills, as well as its investment incentives of up to €10,000 per employee. Major companies such as Microsoft, IBM, Intel, NCR, and Seven Bridges have either established development centers and campuses in Serbia or have outsourced work to local firms, offering wages that are more than three times higher than the country’s monthly average take-home pay of €520 / $616 (2021), but still lower than those offered in EU countries. While still lower than competing tech labor markets in Europe, the cost of developers is rapidly rising.

Although Serbia’s tech sector is expected to continue to grow by more than 20 percent a year, expansion is hampered by a lack of skilled people—largely with foreign firms hiring as quickly as the educational system can produce them. Universities are graduating new  engineers, but it is estimated that the country needs at least 15,000 more to meet rising demand. In 2019, the Serbian government also made more university places available in tech-related subjects and invested around €70 million in technical infrastructure to nurture start-ups, including free workspace for young firms. It has also made software programming courses mandatory in elementary schools.

However, Serbia needs to tackle several challenges: reverse the “brain drain” that has cost the country tens of thousands of highly educated young workers annually in recent years; spur innovation; adjust its regulatory framework; and improve digital skills and the outdated primary education system. The Connected Schools Project, started in 2019 and completed in 2021, and funded by a European Investment Bank loan, aimed to increase information technology use and integration in primary and secondary schools throughout Serbia. This project also included the development of curricula, teaching and learning models, and professional training for teachers and school management personnel.

Leading Sub-Sectors

Broadband Connectivity

According to the International Telecommunication Union (ITU), in March 2019, Serbia ranked 29th in the world for mobile speeds and 55th for fixed broadband speeds. There are 212 internet service providers (ISPs). Of those, 91 provide wireless access, 37 provide cable access, 24 provide fiber-optic access to homes and businesses, 15 provide digital subscriber line (xDSL) access, 13 provide Ethernet/LAN access, and three provide mobile access. At the end of 2020, the number of fixed broadband subscribers in Serbia stood at 1.7 million, while the number of mobile broadband users reached 6.48 million. More than half of users of fixed broadband use a speed of 10 Mbps to 30 Mbps. (Source: National Telecommunications Agency RATEL)

According to the Government Strategy for Information Society Development, high-quality internet with speed above 100 Mbps should be available for all citizens of Serbia by the end of 2023.

eGovernment Service

Digitization of state administration and improved provision of services to citizens are among the government’s key priorities. In 2017, the government established the Office for Information Technologies and e-Government to centralize administration bodies, communication infrastructure, and government websites into one digital structure. The Office also coordinates the work of the National Center for Security of the ICT System (national CERT).

In December 2018, the Office for Information Technologies and e-Government created the National Open Data Portal, a central portal for government data/information available to the public. This National Open Data Portal is directly linked to the Open Data Portal of the European Union. The project is being implemented in cooperation with the UN Development Program in Serbia (UNDP), the World Bank, the UK Government’s Good Governance Fund (GGF), and the Swedish International Development Cooperation Agency (SIDA).

Smart Cities

The development of a Smart City infrastructure in Serbia is in the initial stages but is progressing fast. The National Association of Local Authorities promotes the development of Smart City concepts. In some solutions, Belgrade and some other major cities were far ahead of the curve—Belgrade already had mobile payment for street parking in the early 2000s as well as bus information by text for each bus stop.

Wi-Fi was recently introduced in Belgrade public transportation systems. National airline Air Serbia has also rolled out wireless internet access on its fleet. Public transportation systems in Belgrade are beginning to utilize systems that provide riders with real time arrival information through GPS systems. There is a demand to extend this system.

The city of Pancevo is in the forefront of the deployment of smart transit. It employs “Bus-Tracker”, which shows the exact location and arrival time of the next bus, as well as the “Eco-Bus” service that provides information about air quality, temperature or humidity in real time on an interactive map.

Blockchain

In the 2020 U.S. Startup Genome Report, Belgrade and Novi Sad ranked together in the top 10 of the Emerging Ecosystem ranking. Likewise, Serbia ranked in the top five in the world for blockchain developers.

The Serbian government is also looking into implementing blockchain technology in healthcare, urban planning, and other areas, but has yet to move forward with any specific projects. However, the government is introducing tax incentives for technology startups. The tax rate is only 3 percent (half of the regular corporate tax). The Serbian Blockchain Initiative (SBI), established in 2018, is the main market developer, with three main goals: to increase local capacities in this area, provide regulatory support, and promote Serbia on the global blockchain market.

Cybersecurity

Serbia is in the process of incorporating into its national legislation the EU Directive on the Security of Network and Information Systems (NIS Directive), which is expected to boost demand for cybersecurity solutions. The Ministry of Interior is developing cybersecurity capabilities with a government-wide plan to establish a cybersecurity intelligence center in Belgrade in the near future.

Gaming

Serbia’s gaming industry is one of Serbia’s quickest growing sectors. According to the Serbian Games Association, Serbia is home to an estimated 70+ studios and companies employing more than 1,500 professionals. Leading local gaming companies recognized in the above report are Nordeus and 3Lateral, as well as GameCredits and OriginTrail.

Opportunities

The government is using its strong fiscal position to make much needed investments into digitization across every sector. Increasingly government platforms are moving online as Serbia adopts e-government solutions with a leadership dedicated also to digitizing the already strong school system and helping to rear a new digital workforce.

Serbia will continue to invest in ultrafast broadband connections with new fiber access and increase network availability for all users, thus providing broadband with speeds of at least 100 Mbps. The strategy also calls for the development of a New Generation Network in rural areas and other regions in Serbia that are not economical for private operators.