Serbia’s SME Competitiveness Index – ICT sector in the lead

The latest SME Competitiveness and Development Index (IKR-MSP) was presented at the just-finished Kopaonik Business Forum, which contains the key determinants of the competitiveness and development of SMEs in Serbia.

The preliminary results of the index place the Serbian SME sector at a medium-low level of competitiveness and development (40.5 out of 100). The most developed branches of the Serbian SME sector include ICT (46.1/100), high-tech production (45.7) and medium-tech production (43.2). On the other hand, personal services (37) and construction (38.1) are the least developed.

Regarding the business environment, companies generally have a neutral attitude (44.8). As limiting factors last year, small and medium-sized companies mentioned price changes (26.4) and high tax rates (36.1), while they showed the highest degree of satisfaction with the traffic infrastructure (53.9). It is interesting to note that there is a negative correlation (-0.28) between the company’s success and its attitude towards the business environment in which the company operates.

The key structural problem is the lack of manpower, present in all sectors and throughout Serbia. The problem is particularly pronounced in sectors where lower paid jobs prevail and outside big cities. It is almost equally difficult for companies to retain existing employees (26.4) and to find new ones (24.3). On the other hand, the aspects of assessing the quality of workers and their willingness to learn are at a relatively high level (scores around 70).

The share of SME exporters is on average twice as high in Serbia (39%) than in almost all EU countries, with Slovenia, Latvia and Estonia being the most similar to Serbia in this aspect. The three most competitive sectors have the highest orientation towards exports which account for 57% of the income of medium-tech production, 49% of ICT, and 48% of high-tech production.

Another problem is that SMEs in Serbia do not invest enough in new equipment, processes, capacities, machines and technologies. The main reason is the difficult access or lack of external financing (40.2), i.e. the fact that companies are predominantly financed from personal sources (only a third of companies rely on banks, while alternative sources of financing are rare), which further indicates weak financial management.

Innovation, acquisition and use of new technologies and green transformation, in addition to significant financial resources, also require technical and legal knowledge, as well as mutual cooperation between companies. In all these areas, and especially in cooperation, management of intellectual property and preparation of companies for the application of regulations in the field of environmental protection, there is great room for progress.

The position of women in the SME sector is significantly less favourable than men (gender equality index value in Serbia is only 31.3), mostly in terms of ownership (20.1), while women’s participation in employment and in management positions is slightly better (34.9 and 37.8 respectively).

(Biznis i Finansije, 09.03.2023)

This post is also available in: Italiano

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