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Serbia as a nearshoring hub for ICT R&D and high-tech manufacturing

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Serbia has positioned itself as an attractive destination for ICT research and development (R&D) and high-tech manufacturing, drawing significant interest from global companies seeking to optimize their production and R&D processes closer to the European Union (EU) market. The country’s strategic initiatives, strong investment in innovation, and growing presence of multinational technology companies have solidified its status as a hub for high-tech activities.

1. ICT sector growth and R&D capabilities

The Information and Communication Technology (ICT) sector in Serbia has experienced rapid growth, becoming one of the country’s most promising industries. In the first eight months of 2019, Serbia’s ICT exports reached €913 million, double the amount in the same period of 2016. The sector’s robust growth is further supported by government initiatives aimed at improving education, infrastructure, and the regulatory framework to enhance the development of ICT services and products .

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The Serbian government has prioritized the ICT sector as a key driver of economic growth, with plans to support further development through investments in innovation and digital transformation. This includes the establishment of specialized R&D centers, such as the Institute for Artificial Intelligence Research and Development of Serbia, which focuses on cutting-edge technologies like deep learning, natural language processing, and real-time data-driven decision-making.

2. High-tech manufacturing and strategic investments

High-tech manufacturing is another area where Serbia has gained traction. Notable investments include the establishment of production plants and R&D centers by global companies such as Continental AG and Bosch. For example, Continental has opened a state-of-the-art production plant in Novi Sad, dedicated to developing innovative automotive electronics and Human Machine Interface (HMI) systems. This €140 million investment will employ over 500 workers and represents a significant expansion of Continental’s R&D operations in Serbia .

Serbia’s growing focus on high-tech manufacturing is supported by the government’s commitment to creating a favorable business environment through financial incentives, tax holidays, and support for investment in key sectors. This strategic approach has attracted leading technology companies that leverage Serbia’s skilled workforce and competitive costs to establish R&D and production facilities.

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3. Smart Specialization Strategy and innovation ecosystem

The Serbian government has adopted the Smart Specialization Strategy (4S) to enhance the country’s innovation capabilities and align its economic growth with global market demands. This strategy focuses on areas with the highest competition and innovation potential, including sustainable high-technology production, sophisticated software solutions, and industrial innovations based on inter-sectoral cooperation.

The 4S strategy aims to position Serbia as a global player in advanced manufacturing and R&D by fostering partnerships between the academic community, the private sector, and government institutions. It supports the development of knowledge-based innovations, promotes structural diversification of the Serbian economy, and encourages the creation of high-value-added products and services.

4. Integration into global supply chains and market access

Serbia’s integration into global supply chains is facilitated by its extensive network of free trade agreements, providing duty-free or preferential access to over 1.3 billion consumers, including the EU, CEFTA, EFTA, and the Eurasian Economic Union. This strategic positioning allows companies operating in Serbia to serve both European and global markets effectively.

The country’s infrastructure, including well-developed transport networks and Free Zones, further supports its role as a logistics and manufacturing hub. Companies benefit from reduced logistics costs and streamlined customs procedures, making Serbia an ideal nearshoring location for businesses looking to optimize supply chains and respond more efficiently to market demands.

Serbia’s strong ICT sector growth, coupled with its focus on high-tech manufacturing and R&D, positions it as a key hub for global companies looking to nearshore operations closer to the EU. Strategic investments in innovation, supportive government policies, and integration into global value chains provide a solid foundation for Serbia’s continued development as a center for technology and high-value manufacturing.

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