Serbia has become a strategic location for R&D and nearshoring in science-based industries, attracting significant investments from international companies due to its skilled workforce, robust infrastructure and supportive government policies. The country’s alignment with European Union standards and its focus on developing science and technology sectors make it an ideal destination for high-tech companies looking to establish R&D centers, particularly in areas such as automotive electronics, advanced manufacturing and digital technologies.
1. Key sectors for R&D and nearshoring in Serbia
Serbia has identified several priority sectors for R&D and nearshoring, focusing on industries where it has strong competitive advantages. These include:
• Automotive and electronics: Serbia has seen major investments from companies such as Continental, which established an R&D center in Novi Sad in 2018 and later expanded it into a production plant for innovative automotive electronics. The center specializes in Human-Machine Interface (HMI) technologies and advanced automotive control systems, becoming one of Continental’s largest R&D hubs in Europe, alongside those in Germany and Romania. The new facility will support the production of smart control systems and other high-tech automotive components, positioning Serbia as a leader in automotive R&D in the region.
• ICT and digital economy: The ICT sector is one of the fastest-growing industries in Serbia. The country’s highly educated workforce, especially in software development and digital engineering, has attracted major global companies such as Microsoft, Cisco, and Oracle to establish R&D and support centers. The Serbian government’s investments in digital infrastructure and innovation further enhance the country’s appeal as a destination for ICT-based research and development.
• Advanced manufacturing and special-purpose machinery: Serbia’s expertise in metal and machinery industries, coupled with its capabilities in special-purpose machinery production, supports the development of advanced manufacturing R&D. The sector benefits from a network of local suppliers and specialized educational institutions that collaborate with industry partners on R&D projects .
• Pharmaceutical and chemical industries: The pharmaceutical and chemical sectors are emerging fields for R&D in Serbia, with the government focusing on developing innovative biopharmaceuticals and specialty chemicals. The sector’s growth is supported by a strong research base, including institutions like the Mihajlo Pupin Institute and the University of Belgrade, which conduct cutting-edge research in these fields.
2. Strategic advantages for R&D and nearshoring in Serbia
1. Highly qualified workforce:
Serbia’s education system produces a steady supply of graduates in engineering, ICT and life sciences, providing companies with access to a highly skilled and multilingual workforce. The country’s strong focus on technical education and vocational training aligns with the needs of the science-based industries, making it easier for companies to find the talent they need for their R&D activities.
2. Supportive government policies and incentives:
The Serbian government offers a variety of incentives for companies engaged in R&D, including grants, subsidies, and tax incentives. These benefits are designed to encourage investments in high-tech industries and support innovation-driven growth. Additionally, the government’s strategic documents, such as the Strategy of Scientific and Technological Development, emphasize the importance of innovation and technology transfer, facilitating collaborations between research institutions and industry partners.
3. Smart specialization strategy:
Serbia’s smart specialization strategy focuses on leveraging local scientific and technological strengths to enhance economic competitiveness. This approach includes supporting the development of high-tech clusters in sectors like advanced manufacturing, automotive and ICT. The strategy aims to foster innovation and increase the value-added production in traditional industries, making Serbia a dynamic location for R&D and technology-based investments.
4. Integration into EU frameworks:
Serbia’s alignment with EU standards and its participation in EU-funded projects enable companies operating in the country to integrate seamlessly into European value chains. The country’s inclusion in initiatives like the EU Single Market Programme provides access to funding and collaboration opportunities with EU partners, further strengthening its role as an R&D and innovation hub.
3. Success stories and strategic investments
• Continental’s R&D expansion: The German automotive giant has made substantial investments in Serbia, establishing its third-largest R&D center in Europe in Novi Sad. This facility focuses on developing cutting-edge automotive electronics and control systems, reinforcing Serbia’s position as a key location for automotive R&D.
• Xingyu automotive lighting systems: The Chinese automotive supplier is building a €60 million facility in the city of Niš to produce advanced lighting systems for the European market. This investment underscores the growing interest of high-tech Asian companies in Serbia as a nearshoring destination for accessing the EU market.
Serbia’s strategic focus on R&D in science-based industries, supported by government incentives, skilled human capital, and integration into EU frameworks, makes it an ideal hub for companies looking to establish or expand their R&D activities in Europe. The country’s strengths in automotive, ICT, advanced manufacturing and pharmaceuticals provide a solid foundation for innovation and growth, positioning Serbia as a leading nearshoring destination in Southeast Europe.
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