Nebojša Đurđević, CEO, Digital Serbia Initiative

Start-ups Drive the Digital Revolution

“There is evidence in numerous reports that innovation comes mainly from startups, because they are small, flexible and unconstrained by large numbers of customers, legacy processes and rigid procedures”

Nebojša Đurđević, CEO, Digital Serbia Initiative

The Digital Serbia Initiative will focus in the period ahead on even more intensive support and strengthening of the start-up ecosystem,” announces Nebojša Đurđević, CEO of the Digital Serbia Initiative. Your organisation claims that Serbia could become one of the leaders in the digital economy of the 21st century.

That sounds like an amazing but almost unobtainable goal. Is it realistic to aim so high?

– To start a digital business – meaning to create, distribute and sell digital products and services – expensive manufacturing facilities and infrastructure are not required, nor are expensive distribution channels. All you need is an idea, knowledge and a few laptops. You can reach global markets by distributing your products and services via the internet. Accordingly, Serbia and other smaller countries that have an innovative and highly skilled IT workforce can compete and become leaders in global markets.

What does Serbia have now as our best assets for the Industrial revolution 4.0? How can we best use them to benefit society as a whole?

– We have highly skilled and experienced people working in the IT sector, as well as big players with strong domain knowledge in the various industries in which they specialise – including financial services, artificial intelligence and insurance. Some of our global leaders would certainly provide evidence of our ability to produce world-class digital companies – we have Seven Bridges, Nordeus, Execom, Vega IT Sourcing, 3Lateral, HTEC and FishingBooker, to name just a few.

When we look at the exports generated by the Serbian IT sector – reaching almost 1.2 billion euros in 2018, with annual growth of 26% – we should understand that we are mainly talking about business generated by companies that provide IT services to international clients. We also have another, a smaller pool of IT companies that are developing and selling their own products and services. Both of these groups create great value for the economy – and we want them both to grow. However, we would like to have a better balance and increase the proportion of companies that own products and services.

Why is that important? Well, if you mainly provide IT services to clients, the majority of your employees are likely to be IT professionals. On the other hand, if you’re developing your own digital products and services, you need other professions and disciplines to a larger extent – you need more employees with backgrounds in business management, marketing, design and finance. So, there is a broader social impact with many more people included in the digital economy that brings high value-added jobs.

Moreover, it is very important to start applying digital technologies to improve business processes and models in traditional industries. For example, in agriculture, the automotive sector or food processing, you can identify specific segments of the business model or processes that can be transformed using innovative digital solutions. For this to take place, you need domain experts – an agricultural engineer or a biologist that can identify the “pain point” that can be improved through digital technologies. Domain experts who understand the digital world can provide requirements and guidance to programmers to develop digital solutions. Extending digital technology into traditional sectors will have a further positive social impact.

Nebojša Đurđević, CEO, Digital Serbia Initiative

The Digital Serbia Initiative will focus on programmes for improving business skills and the knowledge needed to have a fundable start-up. Start-ups sometimes have a brilliant technical idea, but lack a good business model or go-to-market strategy

You view start-ups as the “main driving engine of the digital revolution in Serbia”. Why is that?

– Global reports have shown us that, in both developed and developing countries, more than 50% of new jobs are created by start-ups. There is also evidence in numerous reports showing that innovations come mainly from start-ups, because they are small, flexible and unconstrained by large numbers of customers, legacy processes and the rigid procedures that large corporations need in order to ensure the consistent quality of products and services – especially when they have a mature product and large customer base. That’s why start-ups are important; they come up with innovative ideas and, through cooperation with corporations that provide deep domain expertise and experience, can bring new solutions, products and services to the market. This benefits both sides.

To make the digital economy functional, we need experts that must be educated. You claim that coding skills are important for everyone, and not only those who will actually choose it as their profession?

– When it comes to coding, you need to start with the kind of algorithmic thinking that forms part of broader digital literacy. So, if you have a problem to be solved, you break it down into a finite number of steps that need to be executed. It is essential for all students to acquire that ability, that skill of algorithmic thinking, because – regardless of whether they’re going to become chemists, biologists, medical doctors or mechanical engineers – as domain experts they will need an understanding of this way of thinking in order to be able to identify opportunities to apply digital technology. We also need to improve business knowledge and develop skills that will help us shape digital products that are competitive in the global market.

What are the future priorities of the Digital Serbia Initiative and what will be your main point of focus in the next few months?

– Our priorities are quite closely tied to the development of the start-up ecosystem, as start-ups are recognised as the engine driving the development of the entire digital economy. We need to improve early stage start-up funding, including venture capital, business angels and crowd-investing platforms, as mechanisms. We have also identified the necessity of introducing tax breaks for both individuals and companies investing in start-ups.

We will also be focusing on programmes for improving business skills and the knowledge needed to have a fundable start-up. Start-ups sometimes have a brilliant technical idea but lack a good business model or the kind of go-to-market strategy that is crucial for success on the global market.

By simultaneously strengthening both early stage funding options and the business knowledge and maturity of start-ups, we will enable strong growth in terms of the number of start-ups in the ecosystem and overall investment.