Serbia IT Market

2022: WSJ: Serbia has become a "magnet" for IT specialists from Russia

On October 26, 2022, it became known that Serbia has become the most popular direction for moving, which is chosen by employees of IT companies and highly qualified specialists leaving Russia in the current geopolitical situation.

According to The Wall Street Journal, up to a million citizens have left the Russian Federation since February 23. Moreover, recently this flow has intensified, which is associated with partial mobilization. Many Russians leaving the country take their own business with them. In the current situation, Serbia, as noted, has literally become a "magnet" for representatives of the Russian IT sphere.

Serbia has become a "magnet" for IT specialists

In recent months, tens of thousands of Russian engineers, programmers, entrepreneurs and scientists have moved to Serbia. According to official figures, since the beginning of 2022, approximately 700 firms associated with Russia have opened branches in Serbia, in which thousands of Russians work. About 1,500 more citizens of the Russian Federation have created new companies in this country on the Balkan Peninsula. Many also use a visa-free regime and remain in Serbia, working remotely for foreign employers.

The exact data on the number of Russians who have entered Serbia since February 2022 is not given: according to estimates, it can range from 50 thousand to 100 thousand people. Other popular migration destinations for citizens of the Russian Federation are Kazakhstan, Georgia and Finland.

Russians who moved to Serbia say that this country is the best choice in terms of language, taxation, health care and. formations However, due to the large number of migrants, housing prices began to rise. Thus, the cost of rent in some parts Belgrade jumped almost twice. It is also reported that companies registered abroad with a large number of employees from, Russia such as a developer software Luxoft and a game designer, Wargaming transferred part of the staff to Serbia.^[1]

2020: European tech companies attracting the most investment in 5 years

The European technology companies that attracted the most investments from 2015 to February 2, 2020

2018:10% of the IT industry in GDP is small for Serbia. The country is preparing a new breakthrough

Serbia sees information technology as a way out of the years-long economic stagnation the country has been in since the Balkan wars in the 1990s. This is stated in an article published by Reuters on August 16, 2018.

Serbia is a small country and the IT industry here accounts for about 10% of the national gross domestic product. For comparison: according to the Institute for Statistical Research and Knowledge Economics of the Higher School of Economics, in 2016 the contribution of the information industry to Russian GDP amounted to 3.3%, in Japan, Sweden and the United States - about 6-7%. The figure in South Korea was about 11%.

A programmer works at a computer in Belgrade (Serbia), Reuters photo

According to Serbian Finance Minister Sinishi Mali (Siniša Mali), IT exports to Serbia reached about 900 million euros in 2017, and in 2018 the volume will increase to 1 billion euros. This allows the technology industry to be among the top three export sectors in the country along with agriculture and automotive.

Serbian software companies produce software for various enterprises and institutions: from agriculture to medicine, develop cloud applications like Uber services and online games, and test products. Call centers and customer support services also operate.

Under Prime Minister Ana Brnabić, Serbia began to actively promote entrepreneurship, support startups and attract international companies to develop business in the country.

IT giants such as Microsoft, IBM and Intel have either deployed their development centers in Serbia or hired local companies under an outsourcing model, offering specialists salaries three times higher than the national average (420 euros). True, in the countries of the European Union earn more.

The information and high technologies and digital program are the future of our economy. The Serbian IT sector is a product of our own intellectual development. We must continue to train as many people as possible to work in this market, Serbian President Aleksandar Vucic said in an interview with Reuters.

According to analysts PricewaterhouseCoopers (PwC), in order to develop the IT industry in Serbia, it is necessary to solve the problem of leakage of highly qualified labor personnel abroad, stimulate the development of innovation, as well as improve the legislative framework, digital education and the outdated education system.

After the removal of Slobodan Milosevic from governing the country, hundreds of thousands of educated young people have left it since 2000. In 2015 alone, migration covered about 60 thousand people, most of whom moved to the EU.

According to  forecasts of the World Bank, GDP growth in Serbia in 2018 will be 3%. Serbia's central bank expects the country's economy to grow by 4% against 2% in 2017. Net exports of all services in the first half of 2018 increased by 23.2%, largely due to information and communication technologies and business services.

Saša Jogović, an economist at the Market Research Institute, believes that the Serbian IT market is able to make a significant contribution to economic growth not only independently, but also through indirect links with other industries.

According to the estimates of the government Commission for the Protection of Competition, in 2017 there were more than 2 thousand in Serbia. IT firms, while in 2006 there were only 700 of them. Their revenue doubled and reached 1.5 billion euros.

PwC predicts that the Serbian IT market will continue to grow by more than 20%. However, the state lacks at least 15 thousand specialists to implement its plans to turn from a center of cheap outsourcing services into a country with a competitive technology sector.^[2]

Notes