By Miroslav Jovanović
Lecturer in International Economics at the University of Geneva and a full member of Matica Srpska
The 2025 Nobel Prize in Economics was awarded to Joel Mokyr and Peter Howitt from the United States and Philippe Aghion from France. It was deservedly awarded for explaining how innovations stimulate and sustain economic growth. For such growth to occur and be maintained, continuous innovations are necessary, transforming new and useful ideas through technology into something needed, sought after, useful and profitable.
This requires investment in education, research and development, as well as an openness of society to steps and changes that often disrupt the existing state of affairs. In other words, this is merely a continuation of Schumpeter’s ideas of “creative destruction”.
Almost every government has a certain growth strategy. That is a good thing. The problem is that such a strategy is often wrong and misguided. In Serbia, it consists of large projects: enormous motorways, a new and large fairground, or high-speed railway lines. These are things that can be seen and touched. Construction employs both operational staff and workers, domestic and foreign.
Another question is the justification and cost of such projects. Can six lanes on the Morava Corridor be justified by traffic frequency? Can loans, interest and maintenance be repaid from collected tolls? Would, for example, four lanes instead of six be more cost-effective? That overly expensive corridor is being patched up daily even though it was opened only a year ago. Serbia is rapidly losing population. Who will use and maintain that motorway or the future fairground?
This is why the United States and China are so far ahead of the rest of the world technologically
Instead of focusing on construction, which admittedly cannot harm the economy if it is based on sound assessments, the new Nobel laureates draw attention to another, far more important source of long-term economic growth. Instead of the material side, they turn to the immaterial side: new ideas, innovations and ingenuity in technology. That is why the United States, and China as well, have left the rest of the world far behind them, especially since the beginning of this millennium. Both Americans and Chinese built houses and flats, the Chinese even more than they needed, but above all they invested in education, research and development, innovation and new technologies.
The situation in the countries of the European Union is bleak, with everything moving in the wrong direction, starting with monetary policy and sanctions against Russia, through the relocation of energy-intensive factories such as the automotive and chemical industries and aluminium production to the United States and China, because energy in Europe became more expensive due to sanctions, to political crises in almost all, and especially the major, EU countries. This has led to near-total paralysis, where governing has become impossible not only at the EU level, but also within its member states. France is constantly changing governments due to deep divisions within the country, while the EU continues to live beyond its means.
What are economic superpowers such as the United States and China doing at the same time? These two countries are investing in new knowledge and research. China educates the largest number of PhD graduates in the world every year. Some may question the quality of such hyperproduction with a degree of scepticism. Even if that is true, it is also true that quantity turns into quality.
China is increasing its investment in new technologies, especially after the US embargo on the export of the latest technologies to China. Pressured by embargoes and sanctions, China has innovated and created chips that consume less energy and operate faster than American ones. Thus, sanctions have not succeeded in this case, as in others. Moreover, China has demonstrated ingenuity within “old” industries as well: super-fast trains, train brakes, steel production using new chemical reactions that accelerate the melting of iron to just six seconds, which not only saves time but also reduces carbon dioxide emissions. And all of this has been achieved solely with the help of the domestic workforce.
Although China is facing demographic problems due to a declining natural increase, there are fewer foreign workers in the whole of China than there are in Berlin alone. Domestic talent is the main lever of economic growth. Robots, automation and artificial intelligence have made major advances in China. In addition, they do not go on strike and do not demand pay rises.
Singapore and China are at the top of the 2025 PISA rankings, which is visibly above EU countries, the United States and Canada. Investment in education and talent pays off, as reflected in innovation and economic success.
Why Serbia doesn’t look to Singapore or Switzerland for inspiration
And where is Serbia in all of this, a country that supposedly cares the most about the future of its children? Without continuous and increased investment in education, research and development, new ideas and discoveries cannot emerge that not only stimulate but also sustain economic growth. Small countries such as Singapore, Switzerland and others can find their successful place in a specific scientific and technological niche in which they can develop the talents of their pupils and students and be at the top of their fields of specialisation.
What are the authorities in Serbia doing? By decree, meaning by imposition rather than by a law passed through Parliament, the Government on 24 March last year reduced the quota for university lecturers’ research work from 20 hours to just five hours, while teaching hours were increased from 20 to 35 per week. This is insufficient not only for new research, but even for keeping up with new literature, which is growing daily on a global level. How, in this way, can students be introduced to new achievements, and how can they be guided onto the paths of new research and innovation?
Such an arrogant, unilateral economic and political move, without any prior consultations with those concerned in educational institutions, is not surprising coming from officials who likely hold purchased degrees or have completed some “instant” courses, and whose doctoral degrees are also suspected of plagiarism, so that their understanding of genuine scientific research and work is completely absent. Perhaps they even mean well, but the vague foundations on which they stand do not give them the vision that true, rather than fake, education provides.
For the economic progress of a country, one of the most important levers is top-quality education. Look at small Switzerland. Nature has been stingy in the Alpine mountains. Apart from drinking water, Switzerland has no natural resources. It has compensated for this lack by investing in top-quality education, especially in engineering sciences. With few material resources, medicines or watches are produced. There are also various services in healthcare, banking, tourism and engineering.
In material production, little raw material is used, but a large amount of knowledge is embedded, which is the product of vast, expensive, uncertain and continuous scientific research work. It is no surprise, therefore, that Switzerland is a country at the top of the Global Innovation Index 2025.
This is a top lesson for small Serbia as well, which has an enormous reservoir of young, talented and ingenious students. Unfortunately, we see that the authorities do not understand this. For now!
(Radar, 09.01.2026)
https://radar.nova.rs/ekonomija/umesto-u-znanje-vlast-ulaze-u-veliki-vasar/