SHAPING THE DIGITAL ECONOMY
From Growth to Scale
FROM GROWTH TO SCALE
Serbia’s digital economy has entered a new and more demanding phase of development. After more than a decade of rapid expansion, driven primarily by IT services and strong export growth, the focus is gradually shifting from volume to value — and from potential to performance.
The country has built a solid technological base, with ICT exports reaching record levels and a startup ecosystem that continues to evolve. However, this growth has been largely service-oriented, while the number of companies capable of developing globally competitive products remains limited. The challenge ahead is therefore not one of capacity, but of transformation: moving from outsourcing to ownership, from engineering excellence to market relevance.
This transition is further complicated by structural constraints. Limited go-to-market capabilities, a shortage of growth-stage capital and an insufficient level of collaboration between startups and large domestic companies continue to slow down the scaling process. At the same time, the rapid emergence of artificial intelligence is introducing a new layer of urgency, requiring faster adaptation, stronger infrastructure and more decisive strategic alignment.
Tanja Kuzman
Danilo Savić
In parallel, digital infrastructure is becoming a central pillar of competitiveness. The development of the State Data Centre, the expansion of national AI capacities and the broader concept of digital sovereignty are positioning Serbia to play a more prominent role in the regional digital landscape. In this context, infrastructure is no longer a supporting element, but a strategic asset — one that shapes not only technological capabilities, but also economic resilience and investment attractiveness.
What emerges from these perspectives is a clear shift in the understanding of the digital economy itself. It can no longer be seen as a single high-performing sector, but rather as a system that depends on the interaction of multiple components: business, government, education and regulatory frameworks. Progress in one area, without corresponding development in others, produces limited and often unsustainable results.
The next phase will therefore depend on alignment — on the ability to connect infrastructure with innovation, talent with capital and policy with execution. Serbia has already demonstrated that it can grow. The question now is whether it can scale, compete and sustain that growth in an increasingly demanding global environment.
SERBIA’S DIGITAL ECONOMY STANDS AT A TURNING POINT – FUTURE GROWTH WILL DEPEND NOT ON CAPACITY, BUT ON THE ABILITY TO SCALE INNOVATION, STRENGTHEN INFRASTRUCTURE AND ALIGN STRATEGY WITH EXECUTION
INTERVIEW
CLOSING THE GAP BETWEEN AMBITION AND EXECUTION
Serbia’s digital ecosystem has grown rapidly, yet structural challenges continue to limit its global reach and long-term competitiveness
As the country’s ICT sector records impressive export growth, the key question is no longer potential, but performance – and whether Serbia can translate technical strength into globally scalable innovation.
In the last decade, Serbia has built a relatively developed digital and startup ecosystem. How would you assess its maturity today, and what will determine whether the next phase brings globally competitive companies?
— ICT exports have grown from €375 million in 2012 to €4.55 billion in 2025
– a twelvefold increase that has made this the country’s largest net exporting industry. These figures demonstrate strong potential, but also a clear limitation: growth remains largely service-driven, while product exports are still marginal.
The startup ecosystem is also undergoing a structural shift. The total number of startups is declining, as many transition into innovative SMEs, often with limited global ambition and slower growth. Only 3.4% exceeded €1 million in annual revenue last year, highlighting a bottleneck in the innovation pipeline.
The next phase will depend on two factors: the ability to respond to
AI-driven competition and shift from selling engineering hours to building products, and the need to increase both the number of startups and the share achieving global commercial traction.
The key question is whether we can build go-to-market capabilities and a culture of serial entrepreneurship at a pace comparable to leading global markets.
The IT sector continues to record stable export growth, yet only a limited number of startups manage to position themselves globally.
In your view, what are the main obstacles to scaling internationally?
— For most startups, Serbia remains the primary market, which is a significant constraint. The focus on the local market Focusing on the local market is the most frequent trap for founders. It is a small and specific market, and local success rarely translates globally.
Three challenges stand out. First, a gap in international sales and marketing capabilities – we still lack sufficient experience in scaling companies to millions in revenue within short time frames. Second, the pace of execution: only 44.4% of founders work full-time on their startups, limiting growth and investor confidence. This is reflected in performance metrics, with only a small share achieving
TANJA KUZMAN
CEO, Digital Serbia Initiative
Photo by DSI Branislav Nenin
over 10% month-on-month growth, compared to more than 30% in mature ecosystems. Third, there is a disconnect between ambition and reality. While 18% of startups plan to raise Series A or B funding in 2026, more than half currently generate no revenue.
At Digital Serbia Initiative, we focus on closing the go-to-market knowledge gap, as it is the most direct lever for international growth. The upcoming Soonicorn programme reflects this approach, combining global mentorship with tailored support.
Access to growth-stage capital is often highlighted as a major issue. Does Serbia need more funds, stronger corporate involvement, or regulatory changes to support innovation investment?
— All three are important. On the surface, we do not have enough VCs that are capable of supporting later-stage growth. This sounds like a primary challenge, but the reality is more nuanced. Founders will rarely seek to raise Series A or B from a locally based fund as their lead investor. The goal is to secure a term sheet from established international VC to gain validation, access and strategic support.
Currently, 61.9% of startups have never accessed smart capital – whether from angels, VCs or accelerators. The ecosystem entered a grant trap: startups relying on non-repayable funding without building scalable business models.
At the same time, companies need to recognise that collaboration with startups is no longer optional; it is essential for maintaining competitiveness. Regulatory frameworks should also evolve, aligning more closely with developed ecosystems and initiatives such as EU Inc.
Artificial intelligence is reshaping business models worldwide. Where do you see the greatest opportunities for Serbia, and does the ecosystem have the capacity to develop globally relevant AI solutions?
— AI development depends on strong data infrastructure, processing ca-
pacity and secure pipelines. While user-facing elements evolve quickly, long-term advantage is built in the back end.
Serbia has the talent and technical expertise, but lacks the urgency and speed required in this cycle. Domestic companies use advanced AI tools 40% less than their EU counterparts, a gap that will increasingly affect competitiveness.
Encouragingly, startups are moving towards AI-native products. However, global relevance will depend on the ability to solve high-impact problems and to build for international markets from the outset.
What changes are most needed in education and talent development to ensure long-term competitiveness?
— The market is evolving faster than formal education can follow. Research by Digital Serbia Initiative, supported by UNDP, shows that 91% of companies see AI as a key technical skill for all employees over the next five years. At the same time, 82% highlight adaptability, flexibility and continuous learning as critical competencies – areas where candidates most often fall short. Employers also point to a lack of practical skills, experience with specific technologies and underdeveloped soft skills.
Although improvements are visible, education still does not fully meet market needs. In an environment where skills quickly become outdated, continuous learning is no longer an advantage, but a requirement. Multidisciplinary programmes and adaptable curricula are therefore essential.
In developed economies, startups increasingly drive the transformation of traditional industries. How strong is the connection between Serbia’s tech sector and the wider economy?
— It remains limited. Although B2B dominates the startup ecosystem, collaboration with large domestic companies is still insufficient. Startups need structured opportunities to validate their products in
real business environments and use those references to scale internationally. In practice, cooperation is often slowed by complex procedures and lack of agility.
The paradox is that Serbian startups frequently succeed in engaging international corporations, while facing obstacles at home. This reflects a broader lack of urgency in the domestic market. Until collaboration with startups becomes a strategic priority, this gap will persist.
Looking ahead to the next decade, what would signal that Serbia has truly advanced towards a digital economy?
— Progress should be visible in three areas. First, ICT exports need to shift towards a higher share of product-based revenue. Services dominate
SOONICORN PROGRAMME – A SPECIALISED INITIATIVE SUPPORTING HIGH-POTENTIAL STARTUPS IN SCALING TOWARDS UNICORN STATUS THROUGH MENTORSHIP, TAILORED GUIDANCE AND ACCESS TO GLOBAL MARKETS
today. Within five years, that balance should look fundamentally different - with a substantially larger number of companies generating tens of millions of dollars in annual revenue from their own products.
Second, the ecosystem must produce more serial entrepreneurs who reinvest knowledge and capital, creating a stronger growth cycle. Third, education must evolve towards continuous, market-aligned learning.
At Digital Serbia Initiative, our ambition is to achieve a tenfold positive impact on the ecosystem. Progress in the abovementioned areas is at the core of our activities.
Resolution of a structural break will require stronger alignment between business, government and education. The opportunity remains open – but not indefinitely.
DANILO SAVIĆ
CEO, Data Cloud Technology (DCT)
INFRASTRUCTURE AS THE FOUNDATION OF DIGITAL SOVEREIGNTY
The Government Data Centre stands as a central pillar of Serbia’s development as a regional hub for artificial intelligence, providing the infrastructure required to advance innovation, safeguard data and reinforce digital sovereignty
n an era when data and artificial intelligence are becoming key resources of global competitiveness, the development of reliable digital infrastructure and domestic capacities is increasingly emerging as a matter of strategic stability and longterm growth. In this context, the Government Data Centre and Data Cloud Technology play an ever more important role in positioning Serbia as a regional digital hub.
IHow do you see the role of the Government Data Centre and DCT in shaping the digital economy of Serbia and the region over the next five years — particularly in the context of global competition for data, artificial intelligence and digital sovereignty?
— Over the next five years, the role of the Government Data Centre and DCT, as a state-owned company, will extend beyond infrastructure support. They will become one of the
key pillars of Serbia’s digital economy, as competitiveness is no longer measured solely by the number of IT companies, but by the ability of the state and the economy to provide a reliable, secure and accessible environment for the development of artificial intelligence and digital services.
In this regard, the Government Data Centre represents strategic infrastructure, while DCT contributes operational knowledge, technological expertise and the capacity to apply high global standards in practice. This combination enables Serbia to position itself not only as a user of advanced technologies, but also as a regional hub for the development, hosting and protection of critical digital systems.
It is also worth noting that the expansion of the Government Data Centre’s capacity in Kragujevac is in its final phase, alongside the upgrade of the National AI Platform, which in its second phase will be seven times more powerful than the current system, while in its third phase the new supercomputer will have 20 times more superchips and nearly 30 times more data storage capacity than the existing one.
This is particularly important at a time when data and artificial intelligence are becoming strategic resources, and digital sovereignty is increasingly linked to economic stability, institutional resilience and international competitiveness. Countries with reliable and sovereign infrastructure, clear standards and partners capable of meeting enterprise-level requirements will have a significant advantage in attracting investment, technological partnerships and new digital projects.
As Vice President of NALED’s eGovernment Alliance, where do you see the main regulatory or institutional challenges in accelerating the digital transformation of the public sector — and what should be prioritised for change? — The challenges include the pace of capacity development within pub-
lic administration, overlapping registries, issues of interoperability, as well as the incomplete digitalisation of procedures. The business and administrative environment remains characterised by a significant level of administrative burden and frequent regulatory changes.
The eGovernment Alliance recognises these challenges and actively contributes to addressing them. The Action Plan for 2025–2026 includes 55 activities across 11 objectives, aimed at improving electronic services and user experience on the eGovernment Portal and other state platforms, as well as supporting capacity-building among civil servants and users of eServices through training and promotional activities. Particular attention is also given to supporting line ministries in legislative drafting through suggestions and comments from Alliance members.
In this context, the Programme for the Simplification of Administrative Procedures and Regulation – ePAPER – and the accompanying Action Plan for 2026–2030 are in preparation. This is complemented by amendments to the Law on eGovernment and the Law on Electronic Documents, aimed at strengthening interoperability, promoting open data and enhancing legal certainty. At the same time, a Law on Artificial Intelligence is also in preparation, contributing to the systemic application of AI solutions in public administration, while the development of large language models for the Serbian language and improved data governance represent an additional step forward.
To what extent do you believe that the development of domestic human capital — from primary education to top-level AI experts — can represent a competitive advantage for Serbia in the digital economy, and how can this potential be best activated? — Infrastructure is essential, but without expertise there can be neither sustainable digital transformation nor long-term advantage.
It is therefore crucial to strengthen the entire development chain — from modern education and digital literacy to specialised knowledge in artificial intelligence, cybersecurity and data management. Competitive advantage does not arise solely from individual talent, but from the system’s ability to continuously educate, guide and retain high-quality professionals.
This potential is best activated through stronger links between education, science and the economy. When cooperation exists between academic institutions, the research sector and companies working on real IT projects, conditions are created for knowledge to remain in the country, develop further and directly contribute to the economy. The Innovation District in Kragujevac is intended to serve as the foundation of such an ecosystem — a space where infrastructure, knowledge, research and application converge, enabling the development of talent, new technologies and competitive domestic solutions.
Artificial intelligence is becoming central to competitiveness; how do you view the responsibility of companies, institutions and the state in building AI infrastructure that is at once innovative, ethical and aligned with the principles of digital sovereignty?
— Responsibility for building AI infrastructure should be based on synergy, while shared among companies, institutions and the state. Companies have an obligation to develop and implement AI solutions that are technically reliable, secure and aligned with applicable regulations and ethical standards. Institutions should provide rules, oversight and standards that enable innovation while protecting the public interest and reducing risks of misuse or non-transparent application. The state, for its part, bears a particular responsibility to develop infrastructural and institutional capacities for AI, ensuring that data, systems and strategic resources remain within national frameworks. The key
point is that AI competitiveness today can no longer rely solely on technological efficiency, but on the combination of innovation, regulatory certainty and digital sovereignty. Advantage will lie with those systems that succeed in establishing this balance. Notably, in 2023 the OECD recognised the National AI Platform as one of the nine best innovative public sector projects among 1,048 projects from 94 countries worldwide.
How can the need for data protection and digital resilience (sovereignty) be balanced with openness to investment, partnerships and interoperable solutions?
— Data, critical infrastructure and systems of strategic importance must maintain a high lev-
DIGITAL COMPETITIVENESS TODAY IS BUILT NOT ONLY ON TECHNOLOGY, BUT ON THE SYNERGY OF INFRASTRUCTURE, KNOWLEDGE AND REGULATORY CERTAINTY
el of protection and reliability, but this does not imply closing off to partnerships and investment. This is the essence of a sustainable approach: an open investment ecosystem within clearly defined technical, security and regulatory frameworks. Where such frameworks exist, partnerships do not undermine digital resilience, but strengthen it. Serbia has demonstrated openness to investment and cooperation through the development of modern digital infrastructure, as evidenced by the Government Data Centre in Kragujevac and the National AI Platform. Furthermore, the fact that DCT’s clients include major global IT companies shows that it is possible to build an open digital investment environment while maintaining reliance on domestic core infrastructure and control over strategically important digital resources.
SCALING THE DIGITAL ECONOMY
Serbia’s next phase of digital development will depend on its ability to move beyond growth and build scalable, globally competitive business models
Serbia’s digital economy is entering a phase where growth alone is no longer sufficient. After years of rapid expansion, the focus is shifting towards scale — and the ability to translate technical strength into sustainable, globally competitive business models.
While the country has built a strong foundation in terms of talent and export performance, structural challenges continue to limit progress. Many companies remain service-oriented, while only a small number of startups manage to scale beyond local or regional markets. This gap between capacity and outcome is becoming the defining issue of the ecosystem.
At the same time, the broader digital environment is evolving. The development of advanced
infrastructure, increasing investment in artificial intelligence and the strengthening of regulatory frameworks are creating new conditions for growth. However, these elements only generate impact when aligned with market needs and business capabilities.
The central question is therefore no longer whether Serbia can grow, but whether it can scale. This requires a more integrated approach — one that connects innovation with market access, talent with capital and strategy with execution.
The direction is clear. The pace of change will determine the outcome.