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In the autumn of each year, the European Commission adopts its “Enlargement package” – providing a detailed assessment of the state of play and the progress made by the enlargement countries on their respective paths towards the European Union, with a particular focus on implementing fundamental reforms, as well as clear guidance on the reform priorities ahead.
Separate chapters are developed for the knowledge economy, i.e. the areas that the Western Balkans Info Hub focuses: “Science and Research” (chapter 25) and “Education and Culture” (chapter 26 which includes also a focus on higher education) as well as the chapter “Enterprise and Industrial Policy” (chapter 20 which includes a focus on innovation in the business sector) are referenced below. Further chapters address topics including fundamentals such as the functioning of democratic institutions, rule of law, economic criteria, etc., intellectual property law, digital transformation, enterprise and industrial policy, green agenda and sustainable connectivity, agriculture, external relations and many more.
For the full report on Serbia see the Report and Country factsheet.
Chapter 25: Science and research
Serbia has a good level of preparation in science and research. Some progress was made, in particular with the adoption of the new action plans for the smart specialisation strategy and the strategy for the development of a start-up ecosystem.
The Commission’s recommendations from last year were partially implemented and remain valid. In the coming year, Serbia should in particular:
→ increase its national funding for research and innovation;
→ align its legislation with the European Research Infrastructure Consortium Regulation;
→ follow up the actions relating to the new European Research Area.
The EU provides significant support to research and innovation. All Member States can participate in the EU’s research and innovation programmes and benefit from them, especially where there is scientific excellence and solid investment in research and innovation.
The legal framework is in place and partially in line with the EU acquis while the institutional framework is functional.
On research and innovation policy, Serbia has been implementing its 2021-2025 strategy for development of a start-up ecosystem and its new action plan for 2024. The Science Fund is fully operational as a funding mechanism with an increasing number of funded programmes (from 8 to 11) and of the budget (from EUR 74.5 million to EUR 107.5 million).
The national level of investment in research remains low at 0.97% of GDP in 2022 (0.99% in 2021). Serbia is in the fifth year of implementing its smart specialisation strategy, with the second action plan extending to 2025. With over 70% of the activities from the first action plan successfully implemented, Serbia shows tangible progress in implementing strategic goals.
Serbia takes part in Horizon Europe as an associated country, having received EUR 38.7 million in 2023. Serbia is also successfully participating in EUREKA and the European Cooperation in Science and Technology.
Concerning innovation measures, the Innovation Fund, four science and technology parks and 14 new incubators continue to be active with increasing financial contributions. The Innovation Fund’s Katapult accelerator and Serbia Ventures Programme have significant impact on the innovation ecosystem. Further integration into the new European Innovation Agenda and activities of the European Innovation Council is strongly encouraged.
Serbia is an emerging innovator in the European Innovation Scoreboard, with a score of 62.8% in 2024 – above the average of the emerging innovators group. The performance gap with the EU is nonetheless increasing. Private sector research and innovation expenditure remain low.
Chapter 26: Education and culture
Serbia has a good level of preparation in education and culture. Limited progress was made, in particular by further consolidating the national qualifications framework (NQF) system and taking further steps to ensure compliance of the quality assurance system in higher education with the recommendations of the European Association for Quality Assurance in Higher Education (ENQA), and by adopting a new action plan for the education strategy.
The Commission’s recommendations from last year were partially implemented and remain largely valid. In the coming year, Serbia should in particular:
→ increase the number of children participating in early childhood education and care, in particular those from disadvantaged backgrounds;
→ continue with the operationalisation of the NQF system, focusing more on the quality and scope of non-formal education and higher education;
→ ensure that the policy and institutional framework for quality assurance in higher education fully complies with the ENQA recommendations.
The EU supports cooperation in education and culture through funding programmes and the coordination of Member State policies through the ‘open method of coordination’. The EU and the Member States must also prevent discrimination and ensure quality education for children of migrant workers, including those from disadvantaged backgrounds.
In the area of education and training, the policy framework and the institutional framework are in place. There is a certain vulnerability for corruption in the sector as a whole and for higher education in particular.
Serbia continues to implement its 2030 education strategy and has started the implementation of the new action plan for 2023-2026, which was adopted in October 2023.
The level of public spending on education in Serbia in 2023 was 3.2%, which is below the EU average. The student population continue to decrease due to negative demographic trends and emigration. The coverage of children with early childhood education and care education (ECEC) is slowly increasing (6.2 % in 2023 for age 6 months to 6.5 years). However, further efforts are needed to increase participation in preschool education, including through ensuring equitable ECEC for the most disadvantaged children. The enrolment rate in mandatory ECEC has been broadly stable over the past years oscillating at around 97%, but picked up to 97.9% in 2023. The rate of early school leavers is on a downward path for the past years and reached 5.8% in 2023. Lifelong learning participation is slowly increasing and reached 6.1% in 2023.
Serbia’s digital transformation of the education system is ongoing including developing infrastructure and teacher digital competencies. The pre-university level curricula include mandatory subjects to develop digital skills and competencies, including computer science. However, development of the education management information system requires further consolidation. Further efforts are needed to align digital education with the EU Digital Education Action Plan 2021- 2027. Serbia has yet to incorporate green and environmental topics into its curricula. The Programme for International Student Assessment (PISA) 2022 results published end 2023 were about the same as in 2018 in mathematics, reading and science. The results show higher proportion of students of 15-year-olds failing to demonstrate basic proficiency (level 2) in reading (36%), in maths (43%) and in science (35%) as compared to the OECD average. The relative underperformance of Serbian students in reading is confirmed also by the findings of the latest Progress in International Reading Literacy Study (PIRLS 2021), which show that Serbia’s performance in reading is below the international median.
Serbia should commit adequate funding and human resources for sustained participation in international assessments such as the Teaching and Learning International Survey (TALIS) and PISA 2025.
As of the 2023/2024 school year, most VET curricula offered in upper secondary education are based on qualification standards. However, Serbia should continue to modernise the curricula to improve VET relevance and further develop the national work-based learning model for VET. The employment rate of VET graduates (aged 20-34) is low and dropped further to 65.6% in 2023. The lack of opportunities for reskilling and upskilling in Serbia is a structural barrier to youth and adult employment which should be addressed. Work on the recognition of informal and non-formal training is progressing only slowly and is yet to be scaled up systematically.
On quality assurance in higher education, the National Accreditation Body (NAB) is funded also from the state budget since September 2023. This is in line with the European Association for Quality Assurance in Higher Education (ENQA) recommendations. The NAB’s membership of ENQA was suspended in 2020, and an application for renewed membership has yet to be submitted. Furthermore, qualification standards for higher education have yet to be developed and linked with quality assurance procedures. The attainment of tertiary level qualifications for persons aged 25-34 reached 34.7% in 2023, which is significantly below the 2030 EU target of 45%. Serbia is a member of the European Higher Education Area (Bologna process).
Measures to reduce drop-out rates and segregation needs to be enforced focusing also on the inclusion of women and girls in education and training. Children with disabilities do not have access to teaching assistants. Free textbooks are provided for an extended number of vulnerable categories of students. The education system has demonstrated flexibility in integrating migrants. The assistive technology resource centres need to become functional to provide the relevant additional support services to ensure inclusive education. Mechanisms for prevention of, and protection against, violence and discrimination need to be fully implemented.
Serbia has been successfully participating in the Erasmus+ programme as an associated country since 2019. In 2023, Serbian organisations participated as applicant or partner in 738 Erasmus+ projects for total contracted grant of EUR 13.85 million.
Regarding youth, Serbia is implementing the action plan on the implementation of the youth strategy until 2025, and the Youth Guarantee implementation plan by 2026. Adoption of the revised or new legislation on youth, volunteering and internship is still pending. The national youth council is not regularly convening. Despite increased efforts in the past years, youth policy and support mechanisms are unevenly developed at local level.
On sports, Serbia is successfully implementing the second call for proposals for mobility projects in the area of sport, and continued to participate in the European Week of Sport.
Concerning culture, Serbia has been implementing its strategic priorities for the development of culture from 2021 to 2025. The strategy for cultural development is pending adoption since 2022. Serbia continues to implement the 2005 UNESCO Convention at national and local levels, and participates fully in the Creative Europe Programme. It actively provides information and conducts capacity building across the country, relying on the partnership with numerous national, local and non-governmental stakeholders. A “Creative Europe Festival” concept has been developed, giving additional promotion and awareness about the programme.
Chapter 20: Enterprise and industrial policy
Serbia is moderately prepared in enterprise and industrial policy and made some progress, in particular with the adoption of a new law on the governance of state-owned enterprises (SOEs), a new SME development strategy and new action plans to implement the Industrial Strategy and the SOE strategy.
The Commission’s recommendations from last year were partially implemented and remain largely valid. In the coming year, Serbia should in particular:
→ further improve the predictability of the business environment, in particular by substantially increasing the proportion of legislative acts opened for public consultation;
→ adopt outstanding implementing legislation to ensure proper implementation of the new SOE law;
→ further increase resources for financial and technical support to SMEs.
EU industrial policy strengthens competitiveness, facilitates structural change and encourages a business-friendly environment that stimulates small and medium-sized enterprises (SMEs).
Concerning industrial policy principles, Serbia’s institutional and policy framework is largely in place. Serbia continues to implement its strategy for industrial development 2021-2030 and has started the implementation of the new action plan for 2024-2025, adopted in April 2024.
Regarding enterprise policy, reforms concerning the ownership and management of SOEs are advancing but at a too slow pace. Serbia continues to implement its SOE strategy and has started the implementation of the new action plan for 2024-2025 adopted in April 2024. Serbia’s new SOE law entered into force in September 2024. However, its proper implementation is dependent on several by-laws, some of which, in line with the new law, have yet to be adopted. Serbia continues to make progress on its privatisation and restructuring process of SOEs. More than 500 companies in the privatisation portfolio have been resolved, whereas 49 companies remain.
Serbia’s new SME development strategy for 2023-2027, and the related action plan are being implemented since the end of 2023.
Serbia has been participating in the SME Pillar of the Single Market Programme after having signed the Association Agreement in September 2023.
On combating late payments in commercial transactions, Serbia’s legislation is largely aligned with the EU acquis. Serbia needs to align its rules on payments, indemnity interest rates, expedited recovery procedures and compensation with the EU Directive on combating late payments in commercial transactions to reach full alignment.
Serbia should continue to improve the predictability of the business environment, with an emphasis on ensuring that all relevant legislation undergoes timely and comprehensive public consultations, including through effective communication of the e-consultation portal.
Serbia has a range of enterprise and industrial policy instruments in place to support enterprise and industry, including grants, subsidies, tax exemptions and guarantee schemes. The budget for measures supporting SMEs and entrepreneurship is growing but remains modest. Serbia continues to use budgetary subsidies for newly created jobs as an incentive for foreign direct investments. This approach is not consistent with its industrial policy goal of privileging value added over labour cost, and with the continued need to better integrate SMEs into domestic and international supply chains.
On sectoral policies, Serbia has a number of sector-specific strategies including in the areas of energy, transport, education, media, artificial intelligence and tourism. In addition, Serbia is implementing its smart specialisation strategy (see also Chapter 25 on Science and research).
For more information on other chapters see the Report and Country factsheet.