Jelena Begovic, Serbian Minister of Science, Technological Development and Innovation

“We aim to facilitate and accelerate exchanges of knowledge and resources, as well as the transfer of technologies between academia, industry and start-ups, in order to establish solid foundations for our continued economic and social development” ~ Jelena Begovic

According to a recent study, AI-based tools are used, to varying degrees, by only 15% of companies analysed in Serbia.

In contrast, 36% of companies neither use AI nor consider it necessary, while 49% of managers view AI as an innovation and are actively gathering information and exploring potential applications.

In this interview with Serbian Science, Technological Development and Innovation Minister Jelena Begović, we discuss the gap between traditional industries and startups in their adoption of digital technologies and Serbia’s advancements in artificial intelligence.

How would you interpret the fact that few domestic companies rely on artificial intelligence in their operations, even though we, as a country, aspire to transition to a knowledge-based economy?

— This study’s findings aren’t surprising when we consider the phase of the digital transformation process that we are in as a society and globally. That 15% of companies are already using AI isn’t insignificant, as it shows that initial steps have been taken and that some segments of our economy recognise the potential of AI to enhance business operations.

On the other hand, the fact that 36% of companies see no need for AI points to a gap in digital literacy, as well as a lack of knowledge or information about the opportunities this technology offers. This is quite normal, given that we are discussing a technology that is still in the infancy of its broader adoption. However, the term “artificial intelligence” is often used without basis, as AI has become a buzzword and companies frequently use it to draw attention.

A study by London-based investment firm MMC Ventures analysed 2,830 European companies claiming to use AI. It found that as many as 40% of these companies did not utilise machine learning—an area of AI that has seen significant development over recent years, in both academia and commerce. According to Eurostat, only 8% of companies in the EU currently use AI technology.

It is crucial to understand that transitioning to a knowledge-based economy is not solely a technological issue but also a matter of changing mindsets, acquiring new skills, and adapting to global trends. On the other hand, the question arises as to whether everyone is aware of how present artificial intelligence is, how its applications are expanding, and how, in one way or another, we might even be using it on a daily basis.

On a positive note, nearly half of managers recognise AI’s potential and are actively exploring its applications. This is promising, as AI can serve as a powerful tool and aid in business and many other activities. Serbia is experiencing growth in the number of startup companies focusing on various applications of AI, from medicine to agriculture. I am confident that this trend will continue and likely accelerate.

AI has the potential to contribute significantly to the transformation of the economy through the optimisation of business processes, enhanced efficiency, and competitiveness—priorities that Serbia has already recognised in its ongoing development.

The very fact that we adopted the Artificial Intelligence Development Strategy back in 2019 demonstrates Serbia’s commitment to being aboard the train that is driving technology into the future.

Why does Serbia still lack detailed and comprehensive statistical data on the application of new technologies, which would provide a clearer picture of digital transition within the economy?

— This question touches on a broader issue related to tracking technological trends. To obtain a precise picture of digital transition in the economy, complex and extensive mechanisms for data collection and analysis need to be established, requiring collaboration between government institutions, academia and the private sector.

The challenge currently lies in system fragmentation—many companies, especially SMEs, don’t report data on their use of new technologies or lack the capability to map their digital transformation processes accurately.

The 2019 adoption of the artificial intelligence development strategy demonstrated Serbia’s commitment to being part of the technological future

In collaboration with relevant institutions, we should establish standardised methods for gathering data on the implementation of new technologies in the economy. This will not only provide a clearer understanding of the current situation but will also serve as a key tool for strategic decision-making, identifying potential weaknesses and developing targeted support for companies.

At the same time, we have a relatively significant number of start-ups developing AI-based applications.

How well-supported are such companies within government structures and the innovation system to ensure their growth and development?

— Support for start-ups that are developing AI-based applications is substantial. However, we view the entire start-up ecosystem as a future driver of innovation and economic transformation. Serbia has invested significant resources in developing its innovation ecosystem over recent years, including establishing science and technology parks in Belgrade, Niš, Novi Sad and Čačak, with new facilities like the industrial technology park in Kruševac currently under construction.

These parks provide start-ups with infrastructure and mentoring support, as well as access to specific financial mechanisms critical for growth and development. Additionally, the Innovation Fund offers financial and mentoring support for existing start-ups and scientists to turn their innovative ideas into reality and establish their companies.

Serbia’s start-up ecosystem comprises over 800 companies valued at approximately €1 billion. It’s worth noting that the number of start-ups in Serbia grows annually by about 25%. Our current focus as a country is on increasing the value of our start-ups.

For instance, around 25% of our startups are valued at nearly $1 million. We must now find the most effective way to attract venture capital (VC) and other investors to recognise Serbia as a prime destination for investing in these high-risk companies.

Moreover, it is essential for our start-ups to gain international experience and connections to prepare to enter global markets. In collaboration with the Chamber of Commerce & Industry of Serbia, 24 Serbian start-ups were showcased on the “Serbian Island” during this year’s prestigious Web Summit in Lisbon, where they drew significant attention from global visitors.

It is crucial to understand that transitioning to a knowledge-based economy is not solely a technological issue, but also one of changing mindsets, acquiring new skills and adapting to global trends

This event allowed them to present their products and network with the 70,000 members of the global start-up ecosystem.

One of our key goals is to encourage the academic community at universities and institutes to establish their own start-ups. Additionally, we must strengthen research, development and innovation activities within the domestic private sector, as this enhances its competitiveness and resilience to challenges.

In this context, introducing tax incentives for research and development, as well as for investments in start-ups, plays a significant role in accelerating the growth of these companies.

What do you see as the strengths of the infrastructure provided by the government to foster innovation, and where do you think new steps are needed?

Our science and technology parks, as well as 24 regional innovation start-up and smart city centres, offer companies the opportunity to connect with mentors, access infrastructure and develop new technologies. We have also significantly improved the regulatory framework to support innovation, including tax incentives, financing programmes and incentives for our innovative individuals through programmes run by the Innovation Fund.

Additionally, Serbia is establishing its first venture capital funds to boost investments in startups. However, there is room for further development, especially in networking all stakeholders within the innovation ecosystem and providing additional support to regions not yet fully integrated into innovative processes.

We aim to reach every innovator in Serbia, which requires continued investment in both infrastructure and people—talented and entrepreneurial young individuals for whom start-up companies are becoming a new business reality.