First and foremost, it is our companies that need to understand that the mentality is such that the Italian market requires a long-term approach and acceptance of the economic cycles that prevail on it.
We spoke with Mihailo Vesović, Director of Strategic Analyses, Services and Internationalisation Division at the Chamber of Commerce and Industry of Serbia (CCIS), about economic cooperation and Italian-Serbian relations.
How important is it to build a common market with Italy, which is one of the largest foreign investors in Serbia?
Italian companies recognize Serbia as a country that has political stability and developed infrastructure, easier and faster bureaucracy, stable state finances, as well as a place from which it is easier to conquer new markets. Another very important thing that investors are particularly interested in is a competitive, trained and qualified workforce. Serbia builds its investment performance and rating in the international business community on the back of maximum support from the Serbian government, state institutions and the Chamber of Commerce and Industry of Serbia that Serbia gives foreign companies during the period of deciding to invest, prepare and implement the investment, but also later when doing business in our market. According to the National Bank of Serbia, the total investments of Italian residents in Serbia in the period from 2010 to late 2021 amounted to 1,029.2 billion euros, which ranks Italy 8th biggest investor in Serbia among non-residents. According to the data collated by the Italian Embassy in Serbia, the total net investments of Italian residents in Serbia amounted to over 3 billion euros.
“Serbia is the largest producer of raspberries, the second-largest producer of plums and the third-largest exporter of maize in the world”
As of May 6, 2022, 1,188 active companies are operating in Serbia, the majority owners of which are legal and/or natural persons from the Republic of Italy. Most of the Italian companies in Serbia are engaged in wholesale and retail trade and repair of motor vehicles (302), manufacturing (270), expert, scientific, innovative and technical activities (220), and administrative and support service activities (108). Serbia is the largest producer of raspberries, the second-largest producer of plums and the third-largest exporter of maize in the world, as well as the third-largest producer of soybeans in Europe, and the largest exporter of apples to the Russian Federation.
How can Serbian companies position themselves in Italy?
We have incentives for the application of new methodological approaches to the internationalization of our companies in Italy, investment positioning in certain areas, primarily in the south of Italy and the establishment of a Serbian business hub in the north of Italy. First and foremost, it is our companies that need to understand that the mentality is such that the Italian market requires a long-term approach and acceptance of the economic cycles that prevail on it. Through joint work with the Italian regions, we have embarked on the internationalization processes in line with our model, which suits our companies best in order to find a better way to reach the Italian market with as little investment as possible, and have joint performance with Italian companies in third markets and the EU. Our companies from the SME segment see Italian companies as strategic partners for long-term development and market placement. Everything that has been achieved so far binds us to invest even more in the positioning of our companies in such a sophisticated and competitive market.
What should be done so that the Serbian products are not so burdened with high customs duties in Italy?
Exports of Serbian products to the EU (Italy) are not burdened by high customs rates. In terms of Serbian exports outside the EU, not counting those countries with which Serbia has signed free trade agreements, we do face certain customs obstacles (depending on the product group), as well as the markets to which they are exported to. Given that high customs duties on certain product groups are an instrument by which a country protects domestic industry, initiating negotiations that would ultimately result in a free trade agreement, provided there is the mutual consent of the signatory states, is often the only way to liberalize our export to countries that apply high customs duties. This is because Serbia is still not a member of the World Trade Organization, but is in the process of joining both this organization and the EU, which is why it has to adhere to their rules and principles that apply when we’re concluding trade agreements.
How can Serbia achieve greater cooperation with Italian companies and educational institutions?
Cooperation between Italian and Serbian companies and educational institutions covers several areas.
If we talk about cooperation in formal education, then we are primarily referring to the implementation of a dual education model, where learning takes place in two places – in an educational institution and in a real work environment. In Serbia, this model is applied in both high schools and universities, following the relevant legislative framework. Pupils and students in Serbia can extremely benefit from the inclusion of Italian companies in Serbia in dual education because, in that way, young people would be able to experience working in successful companies that operate in line with global standards.
“I would also like to mention an extremely useful event held by Italian companies in Serbia, called “Open Doors Day of Italian Businesses””
Furthermore, Italian companies in Serbia can be more involved in the work of the Council for Cooperation with Science, which operates under the CCIS’s auspices, which task is to involve students and young scientists in specific project activities, which can certainly bring mutual benefits.
I would also like to mention an extremely useful event held by Italian companies in Serbia, called “Open Doors Day of Italian Businesses”, which took place several times already and which goal is to gather a significant number of small and medium-sized companies that open their doors for one day to students, professors and local communities and thus, contribute to the harmonization of school curricula with the real needs of businesses, but also boost the creation of new jobs in Serbia.
Also, I would like to mention the European Commission project called INTERVET WB, which the Chamber of Commerce and Industry of Serbia is implementing in partnership with the Italian organization Uniser, which specializes in international exchange programmes. Under the auspices of this project, teachers and principals of high and vocational schools in the Western Balkans (but also secondary school students) are invited to participate in an exchange programme to boost their professional development, during which they can exchange experiences and information on vocational training systems in educational systems of their respective countries and thus improve the knowledge that candidate countries and EU member states have about each other, acquire new knowledge on the integration of mobility into the curriculum, as well as on the methodologies of learning through work that they apply, but also other important aspects, such as the use of technology in teaching, entrepreneurship education and transversal aspects such as school management and facilitating the process of planning ancillary projects within the new European programme 2021-2027.
Projects such as this one can be launched on a bilateral basis and thus significantly contribute to the improvement of Italian-Serbian cooperation.
You also pointed out that young people should be encouraged to stay in the country after finishing school, thus improving the possibility of employment in their chosen profession. In which way can this incentive be realized?
Given the significant brain drain in recent years, we need to continue working hard to eliminate the factors that cause this brain drain. By these factors, we mean improving the working environment for young people and opportunities for their progress, such as improving living and working infrastructure (which includes not only road and telecommunications networks, but also social upgrades, better health and education services, etc.) and helping young people to develop their ideas. Various researches show that our students, when choosing a job, usually choose an employer that will help them develop their skills. Their next criterion is the possibility of working on interesting projects, and then the possibility of career advancement, and the salary. We usually considered the latter the top priority, but, as it turns out, it’s only in fourth place on this list.
“Experiences in the implementation of the dual education model in high schools have helped to implement the same model at the higher educational level”
There are also prejudices towards jobs that young people prefer. The research (which we conduct in everyday communication with both students and companies) is that young people want to do the jobs they were trained for and that they want to be experts rather than managers. They value permanent employment the most, i.e. having a permanent job contract with one employer, which makes them loyal employees and they are in favour of flexible working hours and remote work.
The CCIS is engaged in the development of a dual education model precisely because of these opportunities to connect companies and students as early as possible and the opportunity for young people to become independent and start working as soon as possible. Students who study for some of the dual educational profiles know that dual education increases their employment opportunities after graduation in the company they worked for while studying, but also that they are given the opportunity to start their own business.
o far, slightly more than 3,000 students have completed dual education, and research on a selected sample showed that about 50% of these students after graduation were employed in the job they were studying for and that close to 25% of them remained to work in companies where they also worked while studying. Experiences in the implementation of the dual education model in high schools have helped to implement the same model at the higher educational level.
Furthermore, the Serbian government has launched the My First Salary project, to help young people gain their first work experience and encourage employers to hire those young people later.
What is your view of the economic relations between Italy and Serbia since the beginning of the war in Ukraine?
Since the beginning of the war in Ukraine, economic relations with Italy have certainly gained an additional dimension, which on the one hand, can be an incentive for both of our companies, but certainly requires a much greater analysis of each sector and a deeper understanding of the diversity of the Italian economy. In any case, in addition to energy aspects, our economic relations must become part of the process whereby only their problems are solved, but we need to impose a position where we can be a bigger strategic point, but in a systemic and long-term approach. In my opinion, we must not allow ourselves to become a lever for some ad hoc solutions in this situation. The CCIS will continue to provide all necessary support to our companies, to strengthen our economic positions in the Italian market and our strategic partnership with Italy while being faced with a scenario burdened by the uncertainty of the outcome of the war in Ukraine.