The new government should do well to ease the level of tax liabilities, including reducing contributions to employees’ salaries, and encourage banks to address support for the economy more substantially. Alongside that, with the further development of provided digital services, the state would significantly support the business operations of small and medium-sized enterprises. Finally, cybersecurity should not be seen as an option, but rather an obligatory part of the digital transformation process
The state of increased health security as a result of the COVID-19 pandemic has pushed companies operating in Serbia towards digitalisation, but the road from digitalisation to digital operations is an extended one, says Majo Mićović, president of the Swiss-Serbian Chamber of Commerce, investor and CEO of Sky Express, one of the leading companies in the field of cybersecurity in Serbia and the region. We spoke with Mićović about doing business in Serbia, the work of the Chamber and government measures that could help companies more easily overcome the challenges that lie ahead.
How deeply has digitalisation been taken on by different business segments of companies in Serbia?
I would like to stress the distinction: it is important to understand that digitalisation, as a process, and digital business operations are not synonymous. Digitalisation, as a modern response to the tendencies of developing human communication, is generally an all-encompassing process that extends beyond narrow fields such as business, health or education. The transformation of all types of mass and individual communication into “bits & bytes” has been going on for decades already, since the beginnings of the mass use of personal computers and the internet.
Digital business operations, on the other hand, which is the topic of your question, relates to the digitalisation of business communication, but not only communication as a form of mutually informing participants in the process, but rather beyond communication it also encompasses the complete line of business processes, from production to distribution, and alongside that all documentation, sales and marketing processes, analytics, data mining etc. If we look at your question from this perspective, the digitalisation of operations hasn’t been nearly as far-reaching as general digitalisation, and the COVID-19 pandemic and all measures, from the state of emergency to the post-Covid period, have confirmed the extreme importance of digitalisation. Many companies have “awoken” from their analogue dream, finding themselves facing extreme challenges such as compulsory work from home, web business orientation, facing market demands for digital communication and business operations in general.
In your opinion, how prepared was Serbia for this type of challenge, in terms of infrastructure and in the domain of e-government?
With the information at my disposal, and I would say that no one has the most accurate insight into the preparedness of any country in the world when it comes to entering a pandemic crisis, Serbia was in a similar situation to most other countries in the region, with slightly better communication and IT infrastructure. What is actually a surprise, and an unpleasant one, happened in countries with much higher standards, such as Italy, France, the U.S. and Spain, and shows only that the strength of infrastructure isn’t the only response to emergency situations. I believe that the behavioural aspects of the individual citizen, and then the collective consciousness, is a much more important factor for successfully overcoming these kinds of situations. We have all witnessed that this same test was failed by much more developed economies and societies that are more advanced in terms of civilization. When it comes to the success and capacity of e-government of Serbia, I have different indications.
When the Swiss economy adapts to the new conditions for doing business, it is to be expected that a healthy cycle of quality investments will be restarted, because the Serbian market offers good opportunities, especially in the fields of IT and services
Initiatives such as Digital Solidarity were to be commended wholeheartedly, then a couple of good portal projects such as COVID-19, as well as the efforts of the Chamber of Commerce & Industry of Serbia to use frequent webinars in order to raise the ability of businesses to cope with the newly emerged situation. On the other hand, I think The Office for IT and E-government had the opportunity to do somewhat more in the area of supporting the economy and citizens in this period, considering the exceptional support of its founder, the Government of Serbia, or rather the Prime Minister’s Office. I said this while bearing in mind that the Cabinet and the Government have really done a lot for the IT industry in the past few years; as a result, it is a well-known fact that Serbia’s IT industry is becoming one of the main engines of Serbia’s export economy.
Do you think that the current level of cybersecurity protection has been sufficient when it comes to operations that have been relocated to the internet, and in which areas is strengthening needed here?
The aspect of cybersecurity shouldn’t be considered an option, but rather an essential part of the digital transformation plan, which is defined by the positive legal regulations of the Republic of Serbia, as well as the acts of the European Union. Of course, every transformation carries with it some risks, and the risks of applying digital transformation are precisely the type of risks that must be addressed with a high degree of priority, considering the huge scales of potential compromises and the relatively simple way in which systems can be compromised when converted from paper to digital resources.
The protection measures you take will not by themselves deter an attacker from their intentions, rather carefully selected and applied correctly with other measures are those that contribute significantly to reducing and eliminating the risk of an attack being successful. This is actually the major task of our IT security branch, to help the user to understand the adequacy of technology and mutual harmonisation of protection resources, to avoid wasting budget resources in procuring incompatible systems.
Cybersecurity is a field of high, narrowly specialised IT technology, primarily in an application sense, because it has been shown that only application solutions can quickly, efficiently and flexibly deal with organised cybercrime. Here I would point to the fact that although cybersecurity is the fastest growing branch of the IT industry and the fastest growing industry in the world, the need for digital data and communications increased by the pandemic and crisis made it all even more obvious in the global business circles. In Serbia, we have several companies that have really succeeded in evolving into serious subjects in this area, not only in our country but also in the Region, such as the company for whose business I am personally responsible, Sky Express, which is a leader in the area of the distribution and implementation of highly complex solutions in the field of cybersecurity.
To what extent will working from home, but also transferring part of operations online, be able to contribute to the preserving of production processes? What is the situation among your member companies in this regard?
It is certain that in the initial phase of becoming accustomed to the new system of work, working from home will not contribute greatly to the preservation of production processes, especially in non-digital operations, in classic industries such as metal processing, wood and agricultural production. In the end, working from home isn’t a method of contribution but a necessary measure to improve employee safety, so like any necessary measure, it should be observed as temporary. The transition to online operations certainly goes hand in hand with services, and when it comes to the manufacturing business, part of the business – such as sales and logistics, as well as supplies – will certainly gain strength through the digitalisation of operations.
Many companies have “awoken” from their analogue dream, finding themselves facing extreme challenges such as compulsory work from home, web business orientation, market demands for digital communication and business
Members of SSCC, in accordance with the aforementioned theses, they apply both the measure of working from home and strengthening online operations quite differently: software and general IT companies, and companies with digital services, have very easily and efficiently adapted to the new conditions of doing business, with a possible tendency to keep part of employees on remote working even after the waning of the pandemic, while the other hand, the classical businesses of Swiss companies in Serbia certainly suffer the same pressure on the efficiency of production processes as all other companies of that provenance, and that through the enforced measures like deploying more working shifts, shorter working days, more frequent holidays, the reorganisation of business premises and production lines etc.
We understand that there probably won’t be a second package of assistance to the economy from the Government of Serbia. What are your suggestions for the new government when it comes to improving the business climate?
It wouldn’t be responsible if I were to comment in advance the measures that should be adopted by a government that has not yet even been selected, because we must accept that it will probably differ quite a lot from the current one, both in terms of composition and in the strategic goals of the state, so measures for economic recovery will depend significantly on the political and economic circumstances in which it will be formed. Judging by the topics the state is currently engaged in, primarily the issue of Kosovo, then international relations with neighbouring countries, which unfortunately aren’t progressing due to pandemic complications, general regional tensions and the complexity of relations with the EU, I believe that economic issues will be resolved following their importance rather than strategically, at least in the period until the end of the year.
In nutshell, the new government should ease the level of tax liabilities, including reducing contributions to employees’ salaries and encourage banks to address support for the economy more substantially. Alongside that, with the further development of provided digital services, the state would significantly support the business operations of small and medium-sized enterprises. Finally, cybersecurity should not be seen as an option, but rather an obligatory part of the digital transformation process.
Immediately prior to and during the health crisis, Swiss companies arrived on the Serbian market. What are your expectations with regard to new FDI, considering the situation on the global market?
Compared to some other international economies, Swiss companies don’t rank high in numbers and investments, so I believe this crisis will even further slow down the arrival of Swiss investors, except in a few industries like IT and services. On the other hand, the world economy, including the Swiss economy, is adapting to new conditions for doing business, so it is to be expected that, after getting used to the new way of doing business, a healthy cycle of quality investments will be restarted, because the Serbian market provides good opportunities for that, which we have also been convinced of at the Evolution Equity Fund from Zurich, a fund that has invested in Serbia with Sky Express, which is an SSCC member company as well.
What do you consider as the most important tasks of the Chamber in the period ahead?
The SSCC, like most of the bilateral chambers, is an active factor in the international cooperation between Switzerland and Serbia, as well as being a careful analyst of the economic situation in the country. Add to that the integrative moment for our membership, actively connecting all members who express an interest in connecting with various economic organisations, government agencies and other chambers, then you will get a picture of the scope of activities that the Chamber has.
In the coming period, until the end of the year, analysing the pandemic situation and how it reflects on the economies of Serbia and Switzerland will certainly be our primary activity, both in an advisory sense as well as through acting as a centre for information on administrative and economic measures and changes in the economic lives of the two countries. Alongside that, we are also continuing with all our daily activities, amongst which I would really like to single out the outstanding contributions of some of our member companies, such as Adecco, Confida Consulting, Sky Express, Smart Point and TSG Law Office, whose webinars on topics relevant to overcoming crises difficulties to operations are attracting ever more attention from both our membership and among the members of other Chambers.