Egzakta - innovations

Marko Marković

Partner

As the world strides into the artificial intelligence (AI) era, poised to transform the global economy, smaller countries like Serbia face immense development opportunities. While it's logical that we currently lag behind technological AI leaders such as the USA, China, and India, which invest billions in AI, there are specific key areas where Serbia can position itself as a leader in Southeast Europe, and potentially beyond.

Our advantage lies in combining skilled IT professionals, mathematicians, engineers, and an entrepreneurial spirit. Instead of merely consuming foreign solutions without a clear business vision, we can develop innovative AI business solutions tailored to local needs, leveraging globally accessible infrastructure, and exporting these solutions worldwide.

Where does Serbia have the most potential?

The experiences of smaller successful nations like Finland, Denmark, and Ireland show that focusing on specific niches is crucial. Serbia has a realistic chance to become a recognized center for AI applications in the following fields:

Agriculture and food industry - With precise digital analytics for climate conditions, crop health, and input optimization, Serbian agriculture could boost yields and quality by up to 30%. This opens the door to exporting organic and healthy food globally and AI solutions for agriculture.
Industrial manufacturing - By applying IoT, predictive maintenance, collaborative robotics, and 3D printing, Serbia's manufacturing industry can enhance productivity and compete with Asian countries that rely on cheaper labor.
Banking and finance - Automated investment advisory, algorithmic trading, chatbots, regulatory technologies, and fraud detection are areas where Serbia's fintech companies can emerge as regional leaders.
Digital transformation of governance - From e-government to telemedicine, AI offers numerous opportunities to improve public services, reduce bureaucracy, and raise living standards.
Development of autonomous systems - Designing fully autonomous drones, vehicles, and robots for military and police applications represents a growing market where Serbia has significant research potential, considering its historic capabilities in defense industries.

How to leverage this historic opportunity?

o truly harness AI's potential, Serbia needs to take immediate systemic actions, such as:

Improving STEM Education by introducing mandatory courses on programming, data management, and AI basics starting in elementary schools.
Establishing at least five university programs in AI and computing, with the goal of training over 5,000 engineers annually by 2030.
Launching a national reskilling initiative for workers whose jobs are at risk of automation.
Creating a regulatory framework for ethical algorithm usage, intellectual property protection for local innovators, and certification of AI systems before commercialization.
Establishing AI business zones with tax and customs incentives for companies in AI research, development, and production.
Launching a government fund with €500 million in grants for digitalization projects targeting micro, small, and medium enterprises by 2027.
Building digital infrastructure such as 5G networks, cloud platforms, data centers, quantum computing, and big data analytics hubs.
Developing "4+2" study programs and AI research at universities in Belgrade, Novi Sad, Niš, and Kragujevac, alongside research institutes affiliated with the Serbian Academy of Sciences and the Chamber of Commerce.

Without such profound reforms, Serbia risks missing its historic opportunity to become a regional hub for the Fourth Industrial Revolution.

The race for AI dominance

While Serbia currently lags, the global race for AI leadership is in full swing. According to the World Economic Forum, AI investments will reach $370 billion by 2029, with the total AI market value expected to hit $13 trillion.

Countries like China and the USA lead in absolute investments, while smaller nations like the UAE, Turkey, and Vietnam are implementing comprehensive strategies to develop their AI industries. The EU is also investing heavily in introducing major AI regulations, and member states like Germany, France, and Finland are allocating additional funds for research and commercialization.

To survive in such a competitive and dynamic environment, Serbia must begin building its capacities in artificial intelligence immediately. The speed of implementing new technologies is becoming a decisive success factor for companies, startups, and entire economies.

This is why it is crucial to act proactively rather than reactively and belatedly—as we have often done in the past. In the field of AI, things change on a weekly basis. Finland serves as an example of how, even from modest beginnings, a focus on research, development, and commercialization of innovations can, in just 20 years, create a high-tech economy now valued at over $250 billion.

Technological breakthrough as an opportunity for economic revival

There is no doubt that artificial intelligence will be one of the key technologies of the 21st century, potentially transforming nearly every human activity. Serbia now has a rare opportunity to jump on the train of scientific and technological progress and leverage it for its benefit. AI is accessible to everyone; tech giants like Microsoft, Oracle, and Amazon offer fully available platforms for developing AI solutions. The funds required to use these technological platforms are not excessive and are entirely justified by the first developed business solution.

Specifically, there is a realistic chance for Serbia to become a regional hub for applying artificial intelligence in agriculture, the food industry, banking, public administration, telecommunications, transport, and other fields. To assume a leading role in the Balkans, we must promptly make bold and daring digital reforms in education, research, and technological entrepreneurship. Only then can we attract the talent and know-how needed for our country to take full advantage of the AI era.

Conversely, slow and indecisive action will result in continued stagnation and lagging behind even neighboring countries like Slovenia, Croatia, Romania, Bulgaria, or Greece. Artificial intelligence offers Serbia a unique chance to finally break free from the trap of mediocre performance, sluggish growth, and the constant brain drain. Investing in new technology can ignite a significant shift toward an economy of high-added value, production, and innovation that attracts minds worldwide.

The technological race is already underway, and we must choose—either we will lead with even more ambitious digital reforms and enter the future through the grand doors, or we risk our children living forever in a country with poorer economic prospects than the ones they often migrate to after graduation. Serbia's destiny is in our hands, and we must find the courage to secure prosperity through necessary reforms. Are we finally ready to take responsibility for future generations?

What is holding us back?

Despite the enormous potential for technological and economic transformation through artificial intelligence, there are serious obstacles slowing us down. Here are the major bottlenecks hindering Serbia's progress in the era of the Fourth Industrial Revolution:

Outdated Educational System: It produces insufficient STEM graduates and largely ignores fields like programming and data science. Additionally, lifelong learning and adult retraining programs are nonexistent.
Inadequate State Strategy: There is no clear strategy for AI development with defined goals, deadlines, and funding sources for specific initiatives. Responsibilities are fragmented across multiple ministries, and initiatives are mostly uncoordinated and limited to government offices or the national AI institute.
Limited University and Industry Involvement: Universities and institutes are underutilized, and an economy dominated by foreign companies shows little interest in investing in this field. These companies often develop AI initiatives at the group level outside Serbia. Thus, the focus should be on the startup community, SMEs, and local investments. The Chamber of Commerce must be far more proactive in launching AI industry initiatives.
Innovation Suffocated by Bureaucracy: A lack of state incentives for startups to develop commercial AI solutions forces young people without prospects to either move abroad or work remotely for foreign companies.
Unfavorable Business Environment: Inefficient public administration, a lack of financial and non-financial incentives for businesses to digitally transform, and restrictive regulations—such as the infamous Foreign Exchange Act—pose significant barriers to the development of innovative solutions and the global presence of local companies.
Brain Drain: Tens of thousands of IT professionals leave Serbia for better salaries and working conditions abroad instead of finding opportunities in the local economy.

As with any major transformation, entrenched interest groups, a focus on narrow individual goals, and organizational inertia hinder the necessary shift toward a society maximizing the potential of new technologies. Serbia needs a vision at the state level to recognize the immense potential of artificial intelligence and the courage to implement necessary systemic and, for some, perhaps unpopular changes.

What we need is will and desire

At the end of the day, Serbia's fate is in our hands. We have all the necessary resources—bright young people, skilled programmers, and the potential for rapid economic growth on the wave of new technology.

What we lack most is the determination to tackle structural reforms in education, science, infrastructure, and the business and innovation ecosystem—without compromises, without "sacred cows," without excuses, and without delay.

Otherwise, we will also miss this train and remain condemned to import others' innovations. The choice is ours. We face a decision: either we recognize the immense potential of new technologies in time and respond adequately to the challenges they bring, or we continue the historic pattern of making excuses, lamenting missed opportunities, and embodying the syndrome of perpetual talent that never realizes its potential, while others surpass us. The time for action is now. AI offers us a chance, but we must act swiftly. Will we seize it? This time, it depends entirely on us.

AI – A chance to recognize the "signs along the road" this time