As AI continues to reshape industries worldwide, Southeast Europe (SEE) has an opportunity to leverage this technology to boost its economic competitiveness. By focusing on collaboration, infrastructure development, and targeted investments in AI-driven solutions, regional countries can overcome existing challenges and unlock new opportunities for growth, experts pointed out during the latest Butterfly Innovation Forum, held in Podgorica, Montenegro.
Collaborative investment
Ravik Mima, CEO of the Keiretsu Forum, stressed the importance of regional collaboration to attract investors. He explains, “If we look at the region as one entity, we can offer a more compelling proposition to global investors. Local investors already tend to co-invest, which can attract additional venture capital.”
Mima highlights an innovative approach in Montenegro, where companies can direct 10% of their corporate tax toward startup investments.
“In Montenegro, a unique initiative has been established where corporations can invest up to 10% of their corporate tax into startups. This kind of program, which is not commonly found in other countries, could play a significant role in encouraging more investors, including angel investors and venture capitalists, to come from the region and invest in AI companies. This initiative has the potential to greatly support the growth of the local startup ecosystem,” Mima stressed.
Furthermore, this is also an example for other countries to follow, adding that other countries have different advantages. Albania has its renewable energy capabilities as a unique asset, for instance. “Renewable energy can be an incentive for establishing data centers, a key infrastructure for supporting AI development.” he adds.
Strengthening research and development ecosystems
Lejla Gurbeta Pokvic, from the Verlab Institute in Bosnia and Herzegovina, emphasizes the importance of building strong research and development foundations. Her institute is leading efforts to establish a national supercomputer center, providing a sandbox environment for experimentation. “A sandbox allows researchers and professionals to test ideas in a safe, cost-effective way,” she explains.
Gurbeta Pokvic believes regional collaboration is essential, saying, “We need to consolidate existing research infrastructure and create partnerships. This way, we can use available technologies more effectively before making new investments.”
She shares an inspiring example of turning academic research into a successful AI-based startup. “One of our PhD projects became a health tech startup, now representing Bosnia and Herzegovina in a United Nations competition,” she says, underscoring the potential of investing in long-term innovation.
However, she acknowledges challenges in the region, such as fragmented data and legacy systems. “Even in the digital age, many companies lack proper data management. We are working closely with them to mine and organize data, which is essential for building reliable and trustworthy AI solutions,” she adds.
The role of supercomputing in AI
Dejan Mircetic, a researcher at Serbia’s Institute for Artificial Intelligence Research and Development, highlighted the critical role of supercomputing in AI development.
“Without this access, each institution or individual working on AI would have to independently find ways to optimize their models, which is often costly. For young startups, relying on global supercomputing resources is not feasible due to the high expenses. Additionally, much time is spent experimenting with models without knowing if they will work, leading to wasted resources,” Mircetic explained.
Serbia’s supercomputing infrastructure provides a significant advantage by reducing costs and enabling experimentation.
Mircetic elaborates, “Having this resource allows us to test ideas and fine-tune models without worrying about the expense. It’s a game-changer for researchers and young startups.” He emphasizes the need for broader access to such facilities, which would empower more innovators to pursue AI projects.
Pathways to regional competitiveness
Clear strategies for enhancing regional competitiveness through AI include fostering collaborative ecosystems across borders to amplify the region’s strengths, implementing incentive programs like Montenegro’s corporate tax initiative to attract startup investments, and developing advanced infrastructure such as supercomputing facilities and renewable-energy-powered data centers.
Additionally, creating innovation pipelines to transform academic research into market-ready products and addressing fragmented data management are key steps to ensure reliable AI solutions and build investor confidence.
Thus, Southeast Europe has the potential to become a significant player in the global AI landscape, but only if it invests in infrastructure, and addresses the pertaining challenges. As Gurbeta Pokvic puts it, “Building a strong foundation for AI not only addresses immediate challenges but also positions the region for long-term success in the global market.”
