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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 Kosovo see the Report and Country factsheet.
Chapter 25 – Science and research
Kosovo is at an early stage of preparation. Kosovo made limited progress by taking further steps towards a strategic approach to research, for instance by approving the National Science Programme for 2023-2028. Kosovo could not maintain its performance in the EU’s framework programme on research and innovation. The Commission’s recommendations from last year were partially implemented and remain largely valid. In the coming year, Kosovo should, in particular:
→ devise and implement a gender strategy for research at national level, as well as for full integration and promotion of women and girls in research and in science, technology, engineering and mathematics;
→ intensify measures to establish a positive trend in the Horizon Europe participation and advance in developing a Smart Specialisation Strategy;
→ establish a system to reliably provide research, science and technology, and innovation statistics.
The EU provides significant support for 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 main policy document for research and innovation, besides the 2023-2025 ERP, is the National Science Programme for 2023-2028, approved by the government in July 2023. The programme calls for a substantial increase of public funding in the research sector, which remained considerably underfunded as part of the government budget allocation for research and development.
The financing of scientific research is not clearly identified; it is part of a general budget for higher education institutions, which is funding scientific research and innovation, as well as universities. The quality of programmes preparing postgraduates for research careers remains unsatisfactory. Funding of innovation support measures is urgently needed. Kosovo is encouraged to make use of the opportunities made available by the European Institute of Innovation and Technology. The research information system supplies data related to EU research initiatives such as European Cooperation in Science and Technology (COST).
As regards Horizon Europe, Kosovo dramatically decreased its performance during the reporting period, (a drop by some 75%), with three projects with a total funding of EUR 237 125 in 2023.
Although there is no clear plan to adopt a gender strategy, the Ministry of Education, Science, Technology, and Innovation continues supporting female students wishing to study science, technology, engineering and mathematics with a scholarship programme.
Chapter 26 – Education and culture
Kosovo has some level of preparation in the field of education and culture. There was limited progress during the reporting period. The implementation of the new Law on early childhood education commenced with the piloting of new curricula for the 2023/2024 academic year. A reform on the recruitment of staff in the education sector, including inspectors, was approved.
Despite these measures, results are not yet visible, and the quality of education still needs major improvement. Kosovo’s participation in Erasmus+ is improving, confirming the positive trend of the past year. While the Law on art and culture was adopted, a culture strategy is still pending. The Commission’s recommendations from last year were partially implemented and remain largely valid. In the coming year, Kosovo should, in particular:
→ implement the roadmap outlined in Kosovo’s education strategy for 2022–2026; and continue to follow up on the recommendations under the European Training Foundation Rapid Education Diagnosis, such as on VET governance and quality assessment of teachers and schools;
→ finalise the implementation of the new curricular framework for basic education; complete the revision of current textbooks and provide sustainable training to teachers; and systematically apply quality assurance mechanisms at all education levels;
→ continue work to strengthen VET governance and increase the quality of VET for professions in demand in view of the Youth Guarantee.
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.
Kosovo’s public spending on education in 2023 was forecasted to be EUR 385 million. The provisional estimates show that the share of the budget allocation for the education sector in 2023 dropped as a percentage of GDP (3%, while it was 4.1 % in 2022).
In terms of the registration and attendance of pupils and student population, a general declining trend in gross enrolment rate is registered in earlier levels of education (pre-school, pre-primary and primary), while the trend is slightly increasing in lower secondary.
The area of early childhood education and care saw some progress with the development of secondary legislation of the Law on early childhood education and the piloting of the new curricula for the academic year 2023/2024.
Although Kosovo is making some efforts to improve the quality of education, there is still little advancement in the implementation of Kosovo’s education strategy for 2022-2026. Progress is not yet tangible in terms of students’ performance as the impact of the steps taken will be visible only longer term. As reported by the OECD in December 2023, the average results of the Programme for International Student Assessment (PISA) tests taken in 2022 show a decline in the performance of Kosovo students in mathematics, reading and science, compared with the average results of the 2018 PISA results and a high proportion of students of 15-year-olds failing to demonstrate basic proficiency (level 2) in reading (83%), in maths (85%) and in science (79%). The latest Progress in International Reading Literacy Study (PIRLS 2021) shows that Kosovo’s performance in reading is significantly below the international median.
Kosovo made good progress with regards to the recognition of prior learning. The service of validation of non-formal and informal learning has been operationalised and is now being offered to citizens, including via public employment services. Digitalisation and digital skills form a core element of the 2022-2025 education strategy.
Staff recruitment reforms in the education sector have progressed with the adoption of an implementing act on selection procedures and appointments in pre-university education. This reform is particularly relevant for improving the quality assessment of teachers. It is estimated that only 3% of teachers have undergone formal performance evaluation over the past decade. In 2023, two administrative instructions were passed regarding teacher assessment and licensing. Currently, there are about 21 education inspectors with expertise on pedagogy assessment, which is insufficient to conduct performance evaluation of over 23 000 teachers, among other roles and responsibilities. This is a key factor contributing to delays in the implementation of quality assurance mechanisms, consequently undermining the effective implementation of other policies/reforms.
The draft law on textbooks, presented in 2022, is still pending final adoption in the Assembly. Technical improvements of the draft law are still needed to meet quality standards and ensure effective implementation.
Dual education in VET has expanded with the piloting of eight additional profiles in 2023/2024. A total of 12 dual education profiles are now being applied to improve the employability of young boys and girls. In October 2023, the Prime Minister launched an awareness campaign to support the implementation of dual VET in Kosovo. A concept document for a new VET law still needs to be finalised.
In terms of inclusion, despite some improvement, children from vulnerable groups and minorities continue to be marginalised when it comes to education opportunities. In particular, children from the Roma, Ashkali and Egyptian communities are at a higher risk of dropout of compulsory education. Learning centres are not yet institutionalised. Moreover, some centres relying on external financial support and offering supplementary educational and psychosocial support to children from the Roma, Ashkali and Egyptian children, have closed. The Ministry of Education, Science and Technology (MESTI), in coordination with municipal education directorates, needs to secure the necessary human and financial resources to support these centres. Additional efforts should also be made to improve access to public spaces and transport to children with disabilities and physical impairment.
Following the 2024 census, the data on children in schools should be used by MESTI to rationalise the school network and address the need for reorganising overcrowded schools as well as underpopulated schools in rural areas.
Kosovo benefits from the international dimension of the 2021-2027 Erasmus+ programme. In 2023, Kosovo registered the highest number of students and staff in outward mobility (going to the EU) and the highest number of projects in higher education compared with previous years. In capacity building in higher education, 2023 saw the highest number of successful projects: 13 projects in total with 27 higher education institutions as beneficiaries and five Kosovo higher education institutions being coordinators of projects. Kosovo is not taking part in the European Education Area (Bologna Process) working groups 2021-2025. As part of the enhanced partnership with the region, Kosovo can apply for the European Universities Initiative calls, but no Kosovar universities have been selected as partners in funded alliances so far.
On sports, Kosovo continued to participate in the European Week of Sport.
Kosovo still needs to develop a culture strategy. The Law on art and culture was adopted, setting out the general principles of cultural policies and regulating conditions for their implementation. It regulates the scope of art and culture and lays down the basic rules for the establishment, organisation, financing, administration and functioning of public institutions of art and culture. Kosovo cannot participate in the MEDIA strand of the Creative Europe programme until Kosovo aligns the Law on the Independent Media Commission with the EU’s Audiovisual Media Services Directive.
Chapter 20 – Enterprise and industrial policy
Kosovo is moderately prepared in the area, and the government made some progress by continuing to implement the 2030 strategy for industrial development and business support. The Commission’s recommendations from last year were partially implemented and remain largely valid. In the coming period, Kosovo should, in particular:
→ move forward with the implementation of the strategy for industrial development and business support for 2030, and the sustainable economic growth pillar of the national development strategy for 2021-2030;
→ urgently improve the capacity of the Ministry of Industry, Entrepreneurship and Trade;
→ complete the establishment of the two separate investment promotion and SME support agencies; and ensure that both are sufficiently resourced.
EU industrial policy strengthens competitiveness, facilitates structural change and encourages a business-friendly environment that stimulates small and medium-sized enterprises (SMEs).
As regards enterprise and industrial policy, the strategy for industrial development and business support, adopted in June 2023, is ambitious, aiming to improve the business environment, promote industrial development, address the trade deficit, create jobs and ensure both resource efficiency and a more circular economy. However, the first monitoring report of the strategy showed that planned activities were only partially implemented. Kosovo needs to dedicate additional resources and close financing gaps for its successful implementation. Four comprehensive studies of the main subsectors in the manufacturing sector were published in 2023, which government plans to use to refine its policies and actions.
Concerning policy instruments, the Law on sustainable investment, adopted by the Assembly in 2023, sets up two new agencies: the Agency for Support to Enterprises within the Ministry of Industry, Entrepreneurship and Trade, and the Agency for Investment and Export under the remit of the Prime Minister’s Office. The two agencies will play an important role in assisting companies and attracting FDI, addressing the long-term recommendation to restructure the Kosovo Investment and Export Support Agency (KIESA). The Constitutional Court ruled that the Law on sustainable investments does not violate the Constitution, opening the way for the creation of the agencies. The government also took steps towards improving the dialogue with the private sector by launching a formal platform for public-private dialogue.
KIESA continued organising business fairs, facilitating participation of Kosovo businesses in international trade fairs and managing grants in support of the implementation of the strategy for industrial development and business support 2030. Around EUR 3 million in grants was allocated to businesses from non-majority communities. The agency still had difficulties fulfilling its objectives, in particular enabling the implementation of before- and after-care services and programmes and promoting links between multinational enterprises and SMEs.
Weak institutions and the lack of timely and professional responses to legitimate requests by businesses remain a major challenge. Inadequate capacities and resources, prolonged administrative procedures and a lack of inter-ministerial coordination perpetuate the lack of a functioning filing system/institutional memory within Kosovo’s authorities. Fragmented and inefficient flow of information between institutions remain an issue. This presents obstacles for SMEs to access business support services and obtain permits and licences. Excessive paperwork requirements when applying for government support extends the application time.
There were notable developments in dispute settlements. The Commercial Court reached its intended roster of 18 appointed judges. Upon its operationalisation, a total of 6 754 cases were relocated to the first-instance chambers of the Commercial Court, while 1 342 cases were transferred to the second-instance chamber. During the reporting period, the commercial court has resolved 6 945 cases in the first instance and 1 702 in the second instance. The court services have received a generally positive evaluation from users but there is room for improvement in the efficiency of proceedings as, with the increase of the number of cases, it is challenging for the court to finish cases within a reasonable timeframe. 30 cases were transferred to mediation by Commercial Court in 2023. No new cases were transferred in 2024. Online mediation introduced in response to the COVID-19 pandemic remained a viable tool for dispute resolution.
Kosovo continued to extend services available on its e-government platform. Self-employed workers face a low tax burden and incorporated SMEs benefit from corporate income tax incentives. The simplification and digitalisation of services reduced tax compliance costs for SMEs.
Access to finance remains a barrier for the growth of micro, small and medium-sized enterprises (MSMEs) despite expansion and portfolio diversification of the Kosovo Credit Guarantee Fund. By September 2024, the fund had expanded enabling loans worth EUR 731.8 million to MSMEs in the sectors of production, service agriculture and trade, including start-up firms and women-owned businesses. The government should continue efforts to diversify financing sources.
Kosovo participates in the SME Pillar of the Single Market Programme.
Kosovo has committed to align relevant primary and secondary legislation with the EU Late Payment Directive in commercial transactions by June 2025.
For more information on other chapters see the Report and Country factsheet.