Serbia - Country Commercial Guide
Information and Communications Technology Market

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-03-08

Overview

The government is using its strong fiscal position to make much needed investments into digitization across every sector, including the whole of government as well as the country’s digital infrastructure. Increasingly government platforms are moving online as Serbia adopts e-government solutions with a leadership dedicated also to digitizing the schools and helping to rear a new digital workforce. Serbia has inherited former Yugoslavia’s strong STEM education, making for a talented digital workforce and a business and consumer base whose tech-adoption is limited only by financial resources.

In 2019, according to the Statistical Office of the Republic of Serbia, some 75 percent of Serbia’s population used the Internet and 60 percent owned a computer. The use of internet services in Serbia is well above the EU average. Forty percent of Serbian businesses place orders online. However, Serbian businesses have been relatively slow in the integration of digital technology. Namely, the use of cloud technologies is still low (estimated at 35 percent) for the large companies (more than 250 employees). The use of e-invoices is growing slowly.

Serbia now generates 10 percent of its GDP from the ICT sector, now among the top four export sectors, along with steel, cars, and agriculture. According to the government’s Commission for Protection of Competition, there were over 2,500 firms in Serbia’s tech sector in 2019, employing more than 28,000 people. Major employers in this sector include prominent U.S. companies and their affiliates.

Despite some challenges, there are a number of high-tech companies in Serbia. Serbian companies produce software for industries ranging from agriculture to medicine, as well as Uber-type trucking 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.

Nordeus is a self-funded, Belgrade-based developer of the “Top Eleven Football Manager” game that has topped app store charts. Meanwhile, FishingBooker 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 17 countries.

Serbia is currently vying with other nations to attract a share of investments by foreign tech companies. Serbia is attractive in this space with its low-wage but qualified workforce with excellent English-language and tech skills, as well as its investment incentives of up to EUR 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 EUR 470 / USD 550 (2019), 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.

Human CapitalSerbia has high-quality ICT specialists with competitive wages that are attractive for foreign companies looking to outsource. Although Serbia’s tech sector is expected to continue to grow by more than 20 percent a year, expansion is being hampered by a lack of skilled people—largely with foreign firms hiring as quickly as the educational system can produce them. Universities are churning out engineers, but it is estimated that the country needs at least 15,000 more to meet rising demand. To remedy the problem, the government has allocated 65 million euros for science and technology centers and plans to invest 70 million euros in new computers and improved internet connections in schools. It has also made software programming courses mandatory in elementary schools. In 2019, the Serbian government also made more university places available in tech-related subjects and invested around 70 million euros in technical infrastructure to nurture start-ups, including free workspace for young firms.

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 education system. The Connected Schools Project, started in 2019 and due to be completed in 2020, is funded by a European Investment Bank loan and aims to increase information technology use and integration in primary and secondary schools throughout Serbia. This project will also include the development of curricula, teaching and learning models, and professional training for teachers and school management personnel.

Broadband Connectivity

According to 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 3 provide mobile access. As of 2019, the number of fixed broadband subscribers in Serbia stood at 1.56 million, while the number of mobile broadband users reached 5.8 million. More than half of users of fixed broadband use a speed of 10Mbit/s to 30 Mbit/s. (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 2021. 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.

eGovernment Service

Digitization of state administration and improved provision of services to citizens is one of the government’s key priorities. In June 2017, the government established the Office for IT and eGovernment 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 IT and eGov 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 in Serbia (http://www.skgo.org/) 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 pay for street parking in the early 2000s as well as bus information by text for each bus stop.

Wi-Fi was recently introduced in public transportation systems in Belgrade. 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 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 5 in the world for blockchain developers.

Leading local companies in the area of gaming and blockchain, recognized in the above report in Serbia are: Nordeus and 3Lateral, as well as GameCredits, OriginTrail, Blinking, and MVP Workshop.

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 transposing 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 by 2021.

Resources

Report on Use of ICT, Republic of Serbia - 2019 (English)

Ministry of Trade, Tourism, & Telecommunications

Office for Information Technology and eGovernment

eGovernment Portal

A Framework for e-Government for the Republic of Serbia - Naled: https://naled.rs/en/images/preuzmite/Framework_for_E-Government_Serbia.pdf

UN Development Program in Serbia

National Open Data Portal

City of Belgrade

Telecommunications regulatory agency – RATEL

Serbian Blockchain Initiative (SBI)