BELGRADE — Serbia invested 0.93% of GDP in research and development in 2024, compared with the EU average of 2.24%, the European Commission said in its Serbia 2026 Report, dated 4 November 2026. The shortfall leaves the country facing a productivity challenge as labour costs rise.
The report put Serbia’s research intensity below 1% of GDP and its innovation performance at 60.4% of the EU average in 2026. It said the gap with the bloc was widening. Private-sector research and innovation spending accounted for about 45% of total financing and remained stable.
The Commission’s assessment highlights the need for productivity growth to offset higher labour costs, as Serbia cannot rely indefinitely on cheap labour. It says higher wages need to be matched by more automation, better products, proprietary engineering and stronger links between companies and research institutions.
Public funding and EU programmes can support a shift towards higher research and development investment, but a larger share will ultimately need to come from companies. The policy challenge is to make research commercially relevant so firms see it as an investment rather than a grant-funded activity.
