Serbian Exports & Technological Change

Clear & Unequivocal Change For The Better

Serbian exports of high and medium technological complexity products are growing at an above-average rate. This is particularly true for high-tech products, with the value of exports having grown almost 15- fold over the course of 15 years. The accelerated process of closing the gap with other countries of the region suggests that Serbia, as a country that used to be home to industries with low value-added activities, will be able to reposition itself.

Ivan Nikolić, editor of the journal Macroeconomic Analyses and Trends, recently published analysis showing that the technological intensiveness of Serbian exports is changing in the desired direction, and that the pace of technological convergence has been very favourable over past years.

The methodological framework of this analysis relies on the method of comparing classified exports with the commodity groups of the Standard International Trade Classification – SITC, rev. 4, as well as the degree of technological complexity applied by UN foreign trade statistics. For EU countries, the values of exports in the observed years were taken from the database of EUROSTAT, while for Serbian exports this analysis used the database of the Statistical Office of the Republic of Serbia.

The major findings are as follows:

• Serbia’s chronically unfavourable export structure, following the rapid deterioration of the 1990s, as well as the stagnation and modest progress achieved after the year 2000, finally improved considerably over the course of the past year. The improved quality of industrial output ensures exports of commodities that are more competitive, technologically more advanced and increasingly valuable.

• Serbia’s commodity exports at year’s end 2020 were worth 17,051.9 million euros, which is 13,443.6 million euros higher, or 4.73 times more, than in 2005. No other country encompassed by this survey was more successful (Table 1) in this regard. For example, Poland registered 3.3-fold growth of exports and Bulgaria 3.03-fold. Bulgaria experienced a ‘rebirth’ in the same period, increasing its exports by 2.8 times.

• In Serbia, exports of products of high and medium technological complexity are growing at an above-average rate. Within this group, this refers in particular to exports of high-tech products, where the value of exports grew almost 15-fold in fifteen years (from a value of 77.4 million euros in 2005, exports of these products reached a value of 1,159.5 million euros last year).

• The accelerated process of closing the gap with other countries of the region is, in this sense, clear and unequivocal (Table 2). The extent of this process is such that it even enables a light projection of Serbia’s repositioning in the near future, with our country having even surpassed some others in terms of the value of commodity exports. For example, Serbia today exports around 15% more products of a high and medium technological value than Croatia, while this neighbouring country’s exports of these products were five times higher just fifteen years ago.

The authors of this analysis emphasise that convergence is the primary goal of the EU’s cohesive policy, which is achieved through an accelerated process of catching up with the economies of the least developed countries and regions, as well as the improving of conditions for growth and employment.

• The aforementioned dynamics (Table 3) are reflected directly in the technological restructuring of Serbian exports. Exports of high and medium technological complexity products today accounts for exactly a third of Serbia’s total exports. Just fifteen years ago, these exports accounted for a mere 13.5%, with which Serbia could not match any European economy. It should be noted that the most successful countries in transition (Hungary, Slovenia, Czechia, Poland) already had a very favourable technological structure of exports at the turn of the millennium, with that structure having continued to exist over the subsequent two decades.

• Serbia has a high degree of production concentration in exports of the high-tech group, while it could be said that concentration in exports of products of medium technological complexity is close to the average in the observed countries (Table 4). Three out of the 18 products that form the high-tech group generate 72.2% of this group’s exports.

These products have generated as much as three quarters of the growth of this group’s total value since 2005.

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