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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 Albania see the Report and Country factsheet.
Chapter 25: Science and research
Albania has some level of preparation in the area of science and research. Some progress was made by strengthening innovation support measures, such as ensuring funding to the start-up fund, adopting the 2023-2030 national strategy on scientific research and innovation and finalising the entrepreneurial discovery process of the smart specialisation strategy. The Commission’s recommendations from last year were partially implemented and remain mostly valid. In the coming year, Albania should in particular:
→ increase investment in research, in line with its own commitments and the new European Research Area priorities, and adopt the new Law on scientific research;
→ adopt and implement the smart specialisation strategy;
→ produce reliable statistics and data on innovation, science and technology.
The EU provides significant support for research and innovation. All EU 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.
On research and innovation policy, in September 2023, the National Strategy on Scientific Research, Technology and Innovation 2023 – 2030 was adopted, but the interinstitutional working group monitoring its implementation is yet to be established. Albania needs to adopt the new law on scientific research.
Albania increased funding for scientific research to 0.08% of GDP in 2023, up from 0.05% in 2022. However, this is still far below the target 1% of GDP by 2030. Research funding as a percentage of public expenditure amounted to 0.17 % of GDP in 2022, which is far less than the 2.24% EU average.
The Institute of Statistics (INSTAT) needs to produce a complete data set on scientific research and innovation. Further and sustainable efforts are needed in increasing public funding of research and development, incentives for businesses to increase their R&D expenditure and to cooperate with universities and to facilitate access to research publications.
In January 2024, the Ministry of Education and Sports allocated funding (approximately EUR 200 000) for organisations collaborating on international research projects within the framework of the 2024 EUREKA Western Balkans call for projects. In the framework of the Academy and Industry cooperation programme, a new call for Technology and Innovation Projects was launched by the National Agency for Science Research and Innovation in February 2024. In total, Albanian Higher Education Institutions submitted 21 project proposals in the fields of medical sciences, ICT, agricultural and energy.
In October 2023, the entrepreneurial discovery process was completed as planned in the roadmap for the smart specialisation strategy (S3). The Deputy Prime Minister’s Office is responsible for coordinating the development of the strategy and the S3 interministerial team is working on drafting the Strategy and its action plan. The S3 strategy needs to be adopted.
Albania was included for a second consecutive year in the European Innovation Scoreboard as an emerging innovator. However, its score only increased from 41.1% of the EU average in 2023 to 41.7% in 2024.
On the EU framework programmes, Albania is fully associated to Horizon Europe. Its participation in the programme in 2023 continued to improve reaching eleven projects with a total funding of EUR 2.1 million. The authorities need to further encourage participation of the private sector in Horizon Europe. National innovation efforts need to be aligned with the new European innovation agenda. In April 2024, Albania launched the regional centre of the European Institute of Innovations and Technology Raw Materials hub in Albania (Elbasan).
Regarding transparency, the electronic register for inquiries in the Ministry of Education and Science recorded 45 exchanges in the first quarter of 2023. Albania needs to make further efforts to produce reliable data on research and innovation.
Chapter 26: Education and culture
Albania is moderately prepared in the field of education and culture. Some progress was made with the implementation of the National Strategy for Education 2021-2026 and the adoption of legislative acts to reform higher education. Albania still needs to strengthen the quality and inclusiveness of education. The implementing legislation of the Law on cultural heritage and museums is yet to be finalised. The Commission’s recommendations from last year were partially implemented and remain mostly valid. In the coming year, Albania should in particular:
→ optimise further the Vocational Education and Training (VET) system further in line with the labour market needs;
→ further improve the professional development and training of teachers and trainers, with a focus on pedagogical skills for the implementation of the competence-based inclusive approach and digitalisation from pre-primary to university levels, including VET education;
→ adopt the implementing legislation for the Law on cultural heritage and museums.
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.
On education and training, authorities started updating core curricula in pre-university education to link it with the labour market needs. in January 2024 the National Programme for the Professional Development of Teachers aiming to improve student learning outcomes.
Greater efforts are still needed to efficiently manage the funding resources. During 2023, the second grade information and communication technologycurricula were designed, and the teachers and school principals were trained. Authorities need to enhance their efforts towards effective, coherent and inclusive digital transformation of the education and training systems, including the capacity of the systems to develop digital skills in line with the EU Digital Education Action Plan 2021-2027.
The PISA 2022 results published end 2023 show declining results for Albanian students in all areas (mathematics, reading and science). Findings point to a serious need to address teaching and learning quality and inclusion in the education system ensuring that young people are equipped with the right skillset for the job market.
The Ministry of Education and Science (MoES) reported that public spending on education represented 3.33% of GDP in 2023, while the forecast for 2024 and 2025 is 2.41% and 2.68% respectively (considerably lower than the EU average 5%).
According to INSTAT data in academic year 2023-2024, 533 711 pupils and students were enrolled in formal education, with a decrease of 3.7 % compared to the previous year. In the same period, 416 538 pupils and children were enrolled in pre-university education (up to upper secondary education), marking a decrease of 3.8 % compared to the previous year. 66 711 children were enrolled in preschool education, 4.4 % less compared to the previous school year.
In the basic education, 258 072 pupils were enrolled, 47.9% of which were girls, 3.4% less than the previous academic year, 54.7% in primary education and 45.3% in lower secondary education. 91 755 pupils were enrolled in upper secondary education, a decrease of 4.3% compared to the previous school year. Regarding early childhood education, 66 711 pupils enrolled in 2023-2024, less than the 69 750 who enrolled the previous academic year. In 2023-24, the number of teachers of basic education was 24 109 of which 78% were women. The ratio of primary education pupils for a teacher in public education was 15.1 and in private education it was 15.2. The number of teachers in upper secondary education is 8 307, of whom 69.6% were women. Regarding the net enrolment rates: On inclusive education, in the 2023-2024 school year, in the pre-university education system, 5 025 students with special needs were attending classes including preschool. 4 507 students with disabilities registered in regular schools for the year 2023-2024, or 9% more compared to 2022-2023. 1 950 assistant teachers were employed in the public pre-university education system, or about 13% more compared to the previous year. The participation of Roma and Egyptian children decreased in pre-university education (12 508 in 2023-2024 against 13 499 in 2022-2023) and remained stable in early childhood education (2 147 in 2022-2023 against 2 150 for 2022-2023).
Implementation of the 2022-2029 national strategy for youth continued. Over the reporting period Local Youth Councils were established in all 61 municipalities across the country. In October 2023 the Second National Youth Council was constituted.
On vocational education and training (VET), over the reporting period public VET was offered in 29 Vocational Education schools and 10 public vocational training centres (VET). Implementation of the VET optimisation plan started but lacked the necessary resources for its efficient roll-out. The legal basis for the Recognition of prior non-formal and informal learning is yet to be completed. Authorities need to take action to address the skills mismatch and to intensify efforts to make VET more relevant to the needs of the labour market. The share of pupils registered in VET courses (public and private) has increased from 17.54% (2022-2023) to 17.88% (2023-2024) The National Agency for Vocational Education and Training and Qualifications (NAVETQ) is yet to be fully staffed.
Albania is a member of the European Higher Education Area (Bologna process). Albania continued to participate in the European Solidarity Corps while the country still benefits from the international dimension of the 2021-2027 Erasmus+ programme. The number of higher education capacity-building projects selected for funding in 2023 is 16 from which five projects are coordinated by Albanian Higher Education Institutions. Albania is participating in the European Education Area working groups 2021-2025.
Albania continued to participate in the European Week of Sport.
Regarding the culture sector, the 2019-2025 national strategy is being implemented. Several culture heritage sites were restored. In November 2023, Albania adopted implementing legislation regarding the assessment and identification of assess and update of database regarding stolen cultural assets. The authorities need to adopt the remaining implementing legislation to the Law on cultural heritage and museums to make the law fully operational.
Albania continued to participate in the EU 2021-2027 Creative Europe programme. During the reporting period Albania has carried out several activities such as information sessions, training and workshops to promote the programme and increase the participation
Chapter 20: Enterprise and industrial policy
Albania has between a moderate and a good level of preparation in the area of enterprise and industrial policy and made some progress, in particular in the implementation of a support programme for innovation start-ups. The Commission’s recommendations from last year were partially implemented and remain mostly valid. In the coming year, Albania should, in particular:
→ continue addressing the main challenges to the business environment by reducing the regulatory burden through fiscalisation measures, increasing the participation of businesses in funding programmes, reducing the informal economy and corruption, and increasing business support services by reviewing the Business and Investment Development Strategy;
→ accelerate the full alignment of national legislation with the EU acquis on late payments;
→ draft and adopt a unified investment law.
EU industrial policy strengthens competitiveness, facilitates structural change and encourages a business-friendly environment that stimulates small and medium-sized enterprises (SMEs).
On enterprise and industrial policy principles, Albania continued to implement the 2021-2027 National Business and Investment Development Strategy (BIDS) and its 2020-2024 sustainable industrial development programme. It amended its Law on start-ups in innovation to set up a start-up agency and to ensure it covers digital nomads. Adoption of the Smart Specialisation Strategy is foreseen by end of 2024 (see chapter 25 – Science and research), and in March 2024 Albania launched its circular economy roadmap (see chapter 27 – Environment and climate change). There has been no progress with the drafting of a framework law on investment and Albania extended the expiry date of the Strategic Investment Law until the end of 2024. The newly established Ministry of Economy, Culture and Innovation and the Minister for Entrepreneurship and Business Environment have intensified dialogue with private actors through the regular meetings of the Investment Council and have resumed meetings of the National Economic Council. In January, the government established a “‘Business House’, to be a facilitator for dialogue between the Minister for Entrepreneurship and other line ministries
with private stakeholders.
Despite improvements on stakeholder consultation during the reporting period, business representatives continue to have serious concerns about the level of public consultation by government. A government proposal to move from a voluntary membership to mandatory membership of the national chamber of commerce is questioned by business and investor associations, inter alia as introducing additional cost to doing business for a more cumbersome organisation and less services. The main business challenges remain corruption and informality, property title issues, non-transparent public procurement procedures (particularly public-private partnerships) and the granting of strategic investor status, finding skilled workers, access to finance, and the need to diversify in the context of digital and green transition. Businesses welcome that there has been some progress on justice reform and anti-corruption, problems remain due lengthy court procedures.
On enterprise and industrial policy instruments, better coordination between the state institutions which provide financial incentives to businesses and AIDA is needed, in order to ensure better access to information for the beneficiaries. During the first trimester of 2024, the Agency for Start-Ups and the Minister for Entrepreneurship launched the first call for financing of the start-ups in innovation. Further alignment with the EU’s late payment Directive needs be ensured, especially to address issues related to proof of property ownership property (titles), and recovery procedures for unchallenged claims. Albania’s definition of SMEs is partly aligned with the EU one, on the number of employees, but the national capacity to support SMEs remains limited.
Albania participates in the SME pillar of the Single Market Programme, having signed the Association Agreement in December 2023. Further efforts on the Digital Economy and Society Index (see chapter 10 – Digital transformation and media) would improve the coverage of the key performance indicators on digitalisation for the long-term competitiveness used in EU industry policy Albania has increased funds for enhancing cooperation between universities and businesses, and was positively assessed in the 2023 OECD competitiveness outlook, in which it made progress in 13 out of 15 dimensions.
On sectoral policies, in April 2024 Albania established a European Institute of Innovation and Technology on raw materials in Elbasan, staffed and equipped from the state budget. A technology park was inaugurated in April 2024 in Durres, aiming to attract investments in the automotive, information and communication technology and electronic equipment industries.
Albania continued to implement the 2022-2026 cross-sectoral strategy and action plan on the digital agenda. In 2024, the government continued the measures introduced in June 2023 to provide fiscal relief measures for export-oriented businesses which faced high costs due to local currency’s (ALL) appreciation against the Euro.
For information on more chapters, see the Report and Country factsheet.