The digital sector remains the fastest-growing part of Serbia's economy, with big movements in battery, components, and electric vehicle production as well as technology and media, according to Gecic Law Founding Partner Bogdan Gecic.
"The energy crisis accelerated the diversification of energy sources, in parallel with the Green agenda, which is similar to the EU Green Deal but applies to Western Balkan countries," Gecic begins. "The Serbian government just announced a EUR 35 billion national investment plan for renewables. We see increased interest in hydro, wind, and solar energy."
There is also a big shift of focus in the region toward the electric vehicle supply chain, Gecic adds. "As a significant source of lithium, Serbia aims to develop battery, components, and electric vehicle production. An agreement worth EUR 200 million was signed between the Stellantis Group and the Government of Serbia to produce electric vehicles in the Fiat plant in Kragujevac. Other large projects in the production of lithium-based batteries have been announced," he says.
"Another major topic is the Open Balkan initiative, which aims to create a single market for Albania, North Macedonia, and Serbia until they join the EU," Gecic points out. "A number of framework agreements are already in place, allowing for the free movement of goods, capital, and labor. This may benefit everyone, as nowadays we have labor shortages, even when it comes to ‘blue-collar’ work." Gecic says that, because of it, "many clients struggle to find software developers, engineers, etc., and the Open Balkan project will likely lead to better access and circulation of the labor force."
According to Gecic, the technology and media sectors have seen big movements as well. "Over-the-top media services are extremely popular in the region, with all major telecom players being involved. This is related to a big diaspora from the region living abroad, who are now keen on streaming domestic content," he notes. "We call it a ‘renaissance’ of domestic content production, and this is also helping develop other industries. We expect that this will keep booming for at least the next five years," Gecic says.
In addition, Gecic reports that Serbia has more than tripled its digital sector exports in the past five years. "This is the fastest-growing side of the economy by far, while the only thing slowing it down is the lack of developers," he says. "On a weekly basis, we have companies looking for opportunities to open up some form of operations, to further expand in the region."
Finally, Gecic notes "the EU’s Carbon Border Adjustment Mechanism should become a reality soon, however, none of the Western Balkan countries have adopted any measures to address the challenges. The CBAM will initially target cement, steel, petroleum, aluminum, electricity, etc., but will have a spillover effect on the costs of any finished goods that use these in their production processes." Gecic says that, to address it, multi-layered work is required from many companies and governments.