The Serbian innovation ecosystem is in the midst of an impressive growth phase, marked by the emergence of over 300 new startups in the past two years alone. While this surge signifies the Balkan nation’s entrepreneurial spirit and potential, a recent report shows that this also comes with challenges that must be addressed to ensure sustained progress and maturity within the ecosystem.
According to the Startup Scanner 2024, made by the Digital Serbia Initiative, one of the primary concerns stemming from rapid growth is the reduction in ecosystem maturity. As the number of startups increases, the need intensifies for robust support programs and frameworks to nurture these ventures effectively. Without adequate support structures, startups may struggle to navigate obstacles and reach their full potential.
Key challenges for Serbian startups
Serbian startups face three key challenges: access to finance, customer acquisition, and recruitment of skilled personnel, particularly in the sales sector. The scarcity of funding avenues hampers the ability of startups to scale their operations and innovate.
Moreover, acquiring initial customers and establishing product-market fit become pivotal amidst heightened competition. However, perhaps the most pressing challenge lies in the recruitment of sales personnel. Despite intentions to bolster sales teams, a significant gap exists between plans and execution, hindering growth prospects.
“We must understand that the dynamic startup ecosystem that has developed in Serbia over the past few years is still in the early stages of development and is very delicate. The development of the ecosystem goes hand in hand with numerous initiatives to create favorable conditions for startups, providing developmental support, and easier access to financing. Looking at the biggest challenges for startups in Serbia (access to finance, customer acquisition, and hiring) and their most important goals (sales growth, product development, and user base growth) help us better understand how the ecosystem develops, what its needs are, and how to create new and improve existing support programs that will best support its further growth,” said, Nebojša Bjelotomić, director of the “Digital Serbia” Initiative and Director of the “Venture an Idea” project.
Employment trends and industry focus
In 2024, Serbian startups are laser-focused on achieving sales growth, advancing product development, and expanding their user base. These objectives underscore the pivotal role of revenue generation, innovation, and market penetration in driving sustainable growth within the ecosystem.
The Serbian startup ecosystem has witnessed a substantial increase in employment, with over 6,000 individuals currently employed – a notable rise from two years ago. This uptrend reflects growing optimism and highlights the pivotal role of startups in generating employment opportunities.
In terms of industry focus, startups are increasingly gravitating towards cutting-edge domains such as applied artificial intelligence and data processing.
This aligns with global trends and underscores Serbia’s potential as a hub for technological innovation. Additionally, sectors like AgriTech, FoodTech, Biotech, and Medtech are witnessing significant traction, showcasing Serbia’s prowess in niche areas ripe for innovation.
The importance of “smart money”
Despite the promising growth trajectory, the absence of “’smart money” poses a significant challenge. To keep up pace in the fields of innovation and growth, there is a critical need for stronger support mechanisms, including incentives for business angels and the development of alternative funding avenues.
By attracting strategic investments, startups can fuel their expansion and drive ecosystem-wide progress, the report notes.
Global connections and knowledge transfer
The return of 17% of survey participants who previously lived abroad is a testament to Serbia’s allure for entrepreneurial talent. These individuals bring invaluable experience and expertise, enriching the domestic ecosystem and bolstering its competitiveness on the global stage.
Their contributions extend beyond mere connections, encompassing knowledge transfer and the infusion of fresh perspectives vital for sustained innovation, the research points out.
Looking ahead to 2024, the research forecasts that startups are gearing up to onboard 3,000 fresh team members. This robust hiring plan underscores the widespread optimism pervading the innovation ecosystem, signaling not only the potential for job creation but also broader economic advancement.
“The success of the Serbian innovation ecosystem depends not only on the individual successes of startups but also on the ability of the entire community to create a sustainable and dynamic ecosystem that promotes innovation, entrepreneurship, and competitiveness on the global market. Through the synergy of the academic community, the private sector, state institutions, and international partners, the startup ecosystem in Serbia has the opportunity to position itself as a driver of economic development and innovation in the region.” said Tadej Kurepa, program director of the “Venture an Idea” project.
He also notes that the future should also “include strengthening the international visibility and connectivity of the Serbian startup ecosystem to facilitate the internationalization of Serbian startups”.
