MULTIMEDIA AND CREATIVE SERVICES WORKERS LEAD THE REGION

strong technology platforms that demonstrate digital maturity across a broad range of processes and functions.

We can also clearly see the correlation between a company’s success, productivity and employment, on the one side, and digitalisation, on the other. For example, in Finland, where the digital adoption rate is an exceptionally high 76%, labour productivity in digital firms is 37% higher than in non-digital ones.

EUROPE TAKES THE LEAD IN

CLIMATE INVESTMENT

Digital companies are driving the market forward. Rather than replacing existing buildings and equipment, digital companies invest in the development of new products, processes and services, as well as data and software. At the same time, they are more active in innovation, which is crucial for the development of new business, energy and communication models. They are expected to contribute to the pressing issues confronting the world, such as social disparities, climate change and urban vs. rural development. The EU is lagging behind the U.S. in digital innovation, in terms of patent applications for industry 4.0 technologies, and this gap has been gradually widening. While some Chinese firms are becoming serious digital players, the GAFAM (Google, Amazon, Facebook, Apple and Microsoft) are all U.S. firms, which confirms the country’s supremacy in this area.

On the positive side, Europe is a leader in green investments and climate change mitigation, embracing the combination of climate and digital solutions. Compared to the United States, the European Union excels in terms of the share of firms investing in both climate and digital (32% vs. 28%). The share of EU firms that are investing only in climate is also nearly three times higher than in the U.S. (14% vs. 5%).

CREATING CONDITIONS FOR

FASTER GROWTH

Building infrastructure to enable download speeds faster than 1 Gbps is a number one priority in addressing the obstacles impeding more efficient digitalisation across all sectors. There are companies and countries that have the potential to unlock investments in digital projects, but they require faster broadband speeds. The other underlying issues include a lack of digital skills and the absence of a central educational platform that would provide expertise and training, particularly to SMEs.

Finally, these processes should be accompanied by an enabling legislative framework and new financial opportunities, especially in the areas of innovation and emerging technologies that are reshaping the future. This is the case with artificial intelligence and blockchain technologies, where Europe is currently facing an annual investment gap of up to €10 billion. The EIB report shows that the highest number of SMEs involved in these

The report shows that countries (such as Belgium, Finland, Denmark and the Netherlands) that are the highest-ranked according to Digital Transformation Enabler’s Index are also EU leaders when it comes to digitalisation, managing to outperform U.S companies in 2020

two technologies can be found in the U.S. (2,995), followed by China (1,418) and the EU27 (1,232). In other words, China and the U.S. account for 80 per cent of annual equity investments in both technologies and failure to address this issue could result in the EU losing the global race in these areas.

FINANCING OPPORTUNITIES

Accessing funds for digital projects remains one of the main obstacles on the market. The reason for this is that many countries lack a structured approach to digitalisation, which should entail all relevant sectors and available funds. At the same time, although banks are still among the main sources of external funding for companies, they are often unable to provide adequate lending products and expertise for digital projects. EIB data show that firms in traditional sectors use the same funding channels as they use for any other project, while digital natives tend to use more innovative and alternative funding instruments, such as hybrid financing and crowdfunding.

In an effort to address the existing investment gap, the EIB Group has developed dedicated financial instruments for digital projects. In cooperation with the European Commission, it has launched two pilot initiatives: a guarantee facility under Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) and early-stage equity investments in artificial intelligence and blockchain technologies. Both financial schemes aim to support companies of different sizes in scaling up their digital capacities.

In 2020, the first agreement under the COSME programme was signed for Serbia, where the EIB Group allocated €60 million to its partner commercial bank. These funds are available to local companies wishing to improve their digital skills or acquire IT equipment and software, enabling them to adapt to new market demand.

THE EIB STANDS READY TO DO MORE

The other major initiative from the European Commission is support for the establishment of digital innovation hubs — networks for full-scale support for companies. In Serbia, such an ecosystem can be found in the Science-Technology parks in Niš, Novi Sad and Belgrade, which the EIB supported under its loan to the research & development sector. At these innovation hubs, start-ups can benefit from expertise to help them develop and promote their advanced products and services that often combine digital solutions.

In Serbia and across the Western Balkans region, the EIB is already seeking new financing opportunities to provide better digital infrastructure and foster the adoption of digital models in businesses. At the same time, we intend to support the development of smart, technology-based societies and skills across all demographics. In that respect, the EIB plans to roll out the Connected Schools project, providing financing in Serbia and across other countries of the region. These kinds of initiatives can offer schoolchildren and teachers the digital skills they need to meet future industry requirements and stimulate economic development and innovation.

GIG WORKERS IN SOUTHEAST EUROPE MULTIMEDIA AND CREATIVE SERVICES WORKERS LEAD THE REGION

Southeast Europe’s online labour market is becoming increasingly attractive to those with a less sophisticated skillset. The negative aspect of such a development is that these professions are paid less, and thus the total market value – measured by total generated income – is lower. On the positive side, however, is a convergence of (average) earnings between countries and between men and women

The region’s gig workers market is now stagnating, following strong expansion recorded over previous years. The leading global freelance platforms in Southeast Europe, measured by number of registered gig workers, are currently Upwork, Freelancer and Guru, where the latest measurement registered 104,988 freelancers across the region’s nine countries. This is shown by the latest report of the Public Policy Research Centre (CENTER), a Belgradebased think tank covering changes to the online labour market in the region.

Upwork is the most influential global platform in the region – representing the leading platform in seven of the nine observed countries (Serbia, Bosnia-Herzegovina, North Macedonia, Montenegro, Albania, Croatia and Bulgaria). Upwork added almost 3,000 new freelancers over the previous six months, far exceeding any employer in the region’s real economy. Upwork now has an almost 43 per cent market share, while Freelancer has fallen to a 25 per cent share and Guru represents the second dominant player on the platform market, with 32.3%.

In order for the comparison in the development of gig market to be as accurate as possible, and to counterbalance the difference in country size, the relative number of gig workers is compared to

the size of the country i.e., the number of inhabitants. North Macedonia continues to lead the way, with 249 gig workers per 100,000 inhabitants, or 87 more than Serbia, which comes second with 162 gig workers. The fact is that North Macedonia represents a “hotspot” economy for gig work – with the number of gig workers comparatively almost ten times higher than in the lowest ranking Hungary, which has only 25 gig workers per 100,000 inhabitants. A significantly higher share is enjoyed by Albania and Montenegro, although a relatively small number of gig workers are engaged in those countries.

The latest measurement brought changes related to the distribution of freelancers by certain professions. The relative share of gig workers in the two dominant sectors (creative services and multimedia and software development) fell by almost four percentage points, so they now account for just below 58 per cent of the total number of gig workers in these two professions. In addition to the drop in these two professions, a decline was also recorded in sales and marketing. On the other hand, there was a slight increase in the share of gig workers in professional services, administrative services, data entry and writing and translation.

Though relatively small, the scope of the changes is not insignificant. Specifically, these trends indicate that Southeast Europe’s online labour market is becoming increasingly attractive to those with a less sophisticated skillset. The negative aspect of such a development is that these professions are paid less, and thus the total market value – measured by total generated income – is lower. The latest measurement showed significant changes regarding the comparative advantages of the countries in terms of professions.

Albania has the highest values in two areas relative to the regional average, and to all the other countries in the region. These are professional services – a new area – and sales and marketing, as was the case in the previous measurement. It is uniquely assessed against this characteristic, as no other country has two areas of pronounced advantage relative to the other countries. Furthermore, Albania also has a more significant advantage in software development.

Looking at all professions, BosniaHerzegovina, Bulgaria, Montenegro and Croatia show the lowest level of specialiasation, as there are no professions with the highest share in any of those countries relative to the other countries of the region, or that deviate significantly relative to the regional average.

The dominant occupation among gig workers in all other countries is multimedia and creative services, with the exception of workers from Hungary, where writing and translation lead the way.

Romania, with the second largest population of gig workers in the region (after Serbia), became a regional leader in software development. In North Mac-

WHAT IS GIGMETAR?

Gigmetar looks at developments in the gig communities of Serbia and Southeast Europe: Hungary, Romania, Bulgaria, North Macedonia, Albania, Montenegro, Bosnia-Herzegovina and Croatia. This index seeks to identify the structural aspects of the gig labour market and the similarities and differences between gig workers in the region, as well as identifying trends and evolving changes.

edonia there is a pronounced comparative advantage in data entry and administrative services.

Serbian gig workers continue to dominate in multimedia and creative services – the highest number of freelancers is concentrated in this area and their share exceeds the regional average by 5.2 percentage point.

Our sample is dominated by men in platform work: 635 of the 1,000 sampled. Nevertheless, the latest regional measurement shows a 2.1 percentage point increase in the share of women, primarily thanks to a higher number of women among new freelancers. The share of women increased in all of the region’s countries except Croatia. Considering gender structure by country, significant changes are noticeable. Namely, although men constitute more than half of the gig population in each of the countries of the region, the percentage of female gig workers in two countries (Albania and Montenegro) still exceeds 40 per cent. A higher share of women relative to the regional average can also be found in Bulgaria, Hungary and North Macedonia. The latest measurement again shows the most unfavourable gender structure in Bosnia-Herzegovina.

The demanded average hourly rate remained practically unchanged relative to the previous measurement. One may conclude that the labour market has stabilised, at least with respect to hourly rates. Croatia remains the country with the most expensive workforce ($24.04/h), and North Macedonia remains the country with the cheapest workforce ($16.05/h). Hypothetically speaking, if a Croatian freelancer worked 176 hours (the maximum number of possible work hours in regular employment) in August and earned an average gig worker income, he would have earned $1,406.24 more than a colleague in North Macedonia who had the same level of engagement and earned the average hourly rate applicable in his country.

Differences among countries are also evident with respect to the demanded average hourly rate. It only exceeds $20 in the countries that are EU member states. However, all of them – along with Albania and Montenegro – recorded a decrease in the average hourly rate. This was most pronounced in Croatia – 72 cents per hour – and least pronounced in Montenegro – only 0.02 cents per hour. On the other hand, the other three countries that have significantly lower average hourly rates recorded increases: from 0.81 cents in Bosnia-Herzegovina, to more modest increases in North Macedonia (0.26 cents) and Serbia (0.19 cents).

The positive consequence of the pandemic identified in the previous period (convergence of (average) earnings between men and women) was also confirmed by the most recent measurement. The average hourly rate of women increased by 2.4%, meaning that they earned 83.54% of the average hourly rate of men in August. The initial negative impact of the pandemic on the convergence of income (recorded in May and October 2020) seems to have definitely disappeared.