The technology landscape in Serbia is undergoing significant transformation, evolving from a regional outsourcing center into a pivotal digital economy within Southeast Europe. This evolution is marked by substantial growth in ICT exports, increased startup funding, and advancements driven by artificial intelligence (AI), which are reshaping the country’s economic framework.
Recent assessments indicate that Serbia’s ICT export revenues are projected to reach approximately $4.31 billion in 2024, reflecting an impressive annual growth rate of about 20%. This figure represents a nearly tenfold increase since 2012 and accounts for roughly 5% of the nation’s GDP attributed solely to ICT exports. The total value added by the ICT sector is estimated at around 8.5% of GDP, positioning Serbia among the leaders in Southeast Europe.
The transformation is particularly evident in urban centers like Belgrade and Novi Sad, which are becoming key hubs for technology and innovation. The Startup Genome’s 2025 ecosystem assessment highlights the Belgrade–Novi Sad area as one of the fastest-growing startup ecosystems, especially in fields such as AI, biotechnology, and advanced software engineering.
Currently, the technology sector employs about 115,000 individuals across more than 4,000 companies, which include startups, outsourcing firms, international development centers, and deep-tech ventures. This growth is altering Serbia’s export structure, which traditionally relied on automotive manufacturing, metals, agriculture, and industrial production. ICT services are now emerging as one of the largest net-export categories for the country.
The economic dynamics of technology exports differ significantly from those of traditional industrial manufacturing. Digital services demand less physical infrastructure, yield higher profit margins, and are less affected by logistical challenges or environmental regulations like the Carbon Border Adjustment Mechanism (CBAM).
AI is becoming a crucial component of growth within this sector. Serbia was among the first nations in Southeast Europe to implement a national AI strategy. Government initiatives supporting digitalization and establishing science-technology parks are fostering stronger ties between universities, startups, and international investors.
After experiencing a downturn in funding during 2023, Serbian startups saw a strong rebound in investment during 2024. Reportedly, funding volumes increased by approximately 89% year-on-year to around €22.4 million, according to Garaža’s latest ecosystem report. Analysts note that while the number of deals remains relatively low, larger financing rounds suggest a shift towards more scalable and internationally focused enterprises.
The structure of Serbia’s tech industry is also evolving. While earlier phases were dominated by outsourcing and software development for foreign clients, current trends indicate a greater emphasis on proprietary technologies across various sectors including AI tools, gaming, biotechnology, fintech, and enterprise software with exportable intellectual property. This shift signifies a transition from labor-based cost advantages to ownership of products and scalable digital infrastructure.
Government policies have played a supportive role in this transition through initiatives aimed at expanding the startup ecosystem to encompass between 800 and 1,200 startups. These efforts are backed by innovation funds, tax incentives, science-technology parks, and partnerships with international financial institutions.
Belgrade continues to be the primary technology center in Serbia, hosting approximately 71% of the country’s startup activities. Novi Sad is increasingly recognized for its focus on engineering talent and gaming development while Niš is emerging as a secondary hub for deep-tech and electronics.
The growth of Serbia’s digital economy is also influencing its geopolitical stance. As Europe accelerates its industrial digitalization efforts alongside investments in cybersecurity and AI deployment, Serbia is being recognized as a competitive regional hub for engineering and development due to its favorable labor costs and robust technical education.
This strategic positioning has attracted investment interest from both Western and Asian markets. International tech companies are expanding their operations in Serbia while local firms are increasingly targeting European and U.S. markets beyond regional demands.
Despite these advancements, significant structural challenges persist within the ecosystem. Issues such as shortages of senior engineering talent, reliance on foreign outsourcing demand, limited domestic venture capital availability, and founder migration toward larger European or U.S. markets remain prominent concerns. Additionally, while Belgrade and Novi Sad thrive, many other regions in Serbia struggle to integrate into the growing digital economy.
The macroeconomic implications of these developments are becoming increasingly apparent. ICT exports have emerged as a vital source of hard-currency inflows for Serbia at a time when Europe faces challenges related to carbon-transition costs and supply chain disruptions. Unlike traditional export industries that are susceptible to energy intensity and transport issues, software exports offer greater resilience against such pressures.
This evolution creates a dual-speed economy within Serbia: one segment remains closely linked to industrial manufacturing while another rapidly expands around digital services and technology products capable of global scalability. The rise of ICT exports signifies not merely sectoral growth but also an ongoing transformation of Serbia’s economic identity from a manufacturing-centric model towards a hybrid industrial-digital framework that aligns more closely with Europe’s knowledge-driven economy.
