February 28, 2020

The Economist: “An Unexpected Tech Boom in Serbia”

During January 2020, a journalist from the British newspaper The Economist visited Belgrade (capital of Serbia) and monitored development of Serbian IT industry. He had an interesting insight about the next possible boom in Serbia. It may not even be about IT. 

During his stay, the journalist had several interviews with key figures in Serbian digital economy, hence providing relevant information to readers “from the horse’s mouth”. 

“Tech accounts for at least 6% of Serbia’s GDP. It employs some 45,000 people. Foreign firms have spent more than $500 million on Serbian startups in the past six years, says Zoja Kukic of the Digital Serbia Initiative (dsi), which champions the sector’s interests. Last year’s exports are expected to have reached $1.5 billion (€1.4 billion), an increase of 55% from 2017. The real figure could be much higher, says Nebojsa Djurdjevic, head of the DSI. Foreign-exchange rules mean that payments are often sent to companies set up abroad, and no one can keep track of an estimated 10,000 freelancers who often operate alone.”

Some of these journalists’ findings coincide with Tesla Nation’s assumptions: Talent sometimes has to leave its place of origin in order to come back stronger and help bring knowledge from more advanced economies, fertilizing the market with know-how. Many of Serbian, now world wide success startups, have been founded by people who spent some time abroad.

“Educated Serbs are leaving in droves—but not if they work in tech. It is one of the few sectors that draws skilled people back home. Many industry heads, including Dragan Tomic, who runs Microsoft’s Belgrade Development Centre, are diaspora Serbs who have returned with skills, contacts and capital. Mr Djurdjevic graduated in electronics in 1990. From his class of about 70, around 40 left. Ten are now back.”

He also covered some investments the Government made, and progress in introducing programming to the elementary school system.

“…But another part has invested $79 million in digital infrastructure, reforming regulatory frameworks and creating tax breaks to woo investment. Primary schools now teach coding. The country’s education system is churning out 5,000 graduates a year primed for tech jobs.”

Bringing the point back home, according to this journalist, Serbia’s biggest potential may not be in IT at all. It may be deep underground. 

“While digital tech is Serbia’s current boom industry, lithium may be the next. Rio Tinto has invested $200 million to explore a site near Loznica. Marnie Finlayson, its general manager for Serbia, says that the ore would be processed on the spot; it would be Europe’s biggest supplier. Unlike many other lithium mines, this one would be close to where it is needed. Fiat cars are Serbia’s second biggest export. Ms Finlayson says that by 2035 Rio Tinto expects 50% of cars to be electric. If Rio Tinto’s board gives the go-ahead, production would begin in 2025. With all the ancillary industries, she says that might add “a couple of percentage points to GDP”. “

To conclude, funnily enough, Serbia as Tesla’s Nation may have been in fact, all along, sitting on the key resource to produce electric cars of the future, maybe even for an American company of the same name, Tesla Inc. 

Read the cited article in full here

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