Switzerland, which has been ranked world champion according to the Global Innovation Index for 12 consecutive years and which tops the list of the world’s most competitive countries, represents the best role model for Serbia and the best example that the most innovative economies are also the most competitive, and that investment in research & development, knowledge and innovation, and linking those investments to the economy, represents one of the main pillars of market success and sustainable development
There are ever-more high-tech Swiss companies operating on the Serbian market and ever-more Swiss investments in Serbia, which have now exceeded a value of two billion euros. A significant output has been achieved in the fast-growing mutual trade in services, along with significantly more modest results in the goods exchange. Great opportunities exist to strengthen both investment and trade cooperation, but also to exploit Switzerland’s huge experience – that’s invaluable to Serbia – as the world’s most innovative economy in almost all areas – from high-tech production and research & development, via sustainable tourism, to education.
These few exhaustively listed statements could contain the most succinct assessment of the state and potential of Serbian-Swiss bilateral economic cooperation.
According to the statistics of the Business Registers Agency for July 2023, there are 542 companies with majority Swiss capital operating in Serbia, while the latest estimates are that they employ more than 12,000 people. Firms are established in Serbia by major Swiss multinational companies, but increasingly also by smaller companies, which serves to confirm the attractiveness, reliability and predictability of conditions for investing and doing business on the Serbian market, but also the mature nature of bilateral cooperation and relations.
We are seeing year-on-year growth in the investments of companies that have been operating here successfully for years and are expanding their capacities, as well as among new investors. According to the National Bank of Serbia, the country has received almost 800 million euros of Swiss investment over the past two years alone (€664 million in 2021 and €130 million in 2022), and thus today Switzerland ranks 6th on the list of the largest investments in Serbia by country, with total net investments between 2010 and 2022 exceeding 2.1 billion euros.
Serbia last year exported services to Switzerland worth 687.4 million euros, while revenue generated from the export of services to Switzerland in the first four months of this year totalled €378.5 million
Swiss companies have invested and operate in a wide range of economic areas – from manufacturing to various service sectors. The Development Agency of Serbia’s list of the largest Swiss investors in Serbia is topped by companies from the food industry: Nestle, with its two factories in Surčin, and Barry Callebaut, which opened a chocolate factory in Novi Sad in late 2021. Also investing in this industry in Serbia is Kelvin’s Potato/Kelvin Flex… Investments in the chemicals and construction industries have been made by Holcim, followed by Sika AG, Emilio Stecher and Bionex. Regent Lighting has invested in production of industrial lighting and, interestingly, is also the largest exporter from Serbia to Switzerland, while ESB Pellets and Daccomet AG (the parent company of Standard Furniture Serbia) have invested in the wood and furniture industry. Waste management company Yunirisk has invested its capital in waste collection and recycling, while Tara GRP has entered the plastics and rubber industry and company Etampa has invested in the metal processing industry, i.e., in the production of auto parts.
The Swiss companies that have been operating successfully in Serbia’s pharmaceutical industry for years are Roche, Novartis and Pharma Swiss. Roche has even become a partner of the future BIO4 campus and will participate in the development of so-called ‘precision medicine’ for the treatment of oncology patients. Company MET Renewables is operating in the energy sector, dealing with electricity generation and trade. Major investments in the real estate sector are being announced by Swiss company Serbia Prime Site One AG. Apart from traditional manufacturing sectors, over recent years ever more Swiss companies have been establishing firms and investing in various segments of the service sector: from transport and logistics, via tourism and hospitality, to media, communications and consulting. They’ve mostly been in the IT sector and related high technologies in recent years. With the digital transformation of business, an area in which Serbia is the regional leader, and with the growing potential and results of the Serbian ICT sector, the greatest strength of which is represented by people – top engineers and IT experts with industry specific knowledge in the areas of energy, healthcare, biotechnology, telecommunications etc. – and with the strengthening of scientific and technological infrastructure and the introduction of a research & development incentive package, Serbia is becoming one of the most attractive destinations for Swiss IT companies and other high-tech corporations. As many as a 100 IT companies with majority Swiss capital are already operating in Serbia’s IT sector.
New opportunities for Swiss investors and Serbian suppliers are arising with the emergence of nearshoring processes that are seeing European companies relocate operations closer to home
These facts also serve to explain the great increase in the trade in services between Serbia and Switzerland, which reached almost 1.2 billion euros last year, positioning Switzerland as Serbia’s 4th country partner in the overall exchange of services and the 4th most popular destination for the export of Serbian services. Serbia last year exported services to Switzerland worth 687.4 million euros, while revenue generated from the export of services to Switzerland in the first four months of this year (totalling €378.5 million) exceeded the value of goods exported to the Swiss market throughout the whole of last year.
In stark contrast to the fast-growing trade in services that is seeing Serbia record a surplus, the goods exchange – which is objectively modest on both sides and has a deficit on the Serbian side despite the close proximity of the market and the Free Trade Agreement that Serbia has signed with the EFTA countries, among which Switzerland is Serbia’s most important partner – has not yet managed to reach the billion-euro mark.
Despite the past decade having seen the tripling of trade between Serbia and Switzerland, and Serbian exports to the Swiss market, and imports to Serbia from Switzerland having increased 3.5-fold, and despite the exchange increasing 46.6 per cent compared to the previous year (Serbian exports to Switzerland by 20% and imports from Switzerland by 60%), the two economies ended 2022 with a rather weak performance given the potential: ending the year with 786.3 million euros in mutual trade, including just 217.9 million euros worth of goods exported to the Swiss market and goods with a value of 568.4 million euros imported from Switzerland to Serbia. These figures ranked Switzerland as Serbia’s 26th trade partner – in terms of total exchange and Serbian exports – and as the 21st import destination for Serbian goods worldwide. If we excluded the procurements of Serbian railways from the Stadler company, the volume of exchange and percentage increase would be even lower.
The Swiss market, unfortunately, remains one of the Western European markets that Serbian exporters have yet to penetrate seriously, though plenty of room exists to improve their performance. Analyses indicate that the greatest opportunities to increase sales on the Swiss market are enjoyed by manufacturers of food, pharmaceutical and cosmetic products that are made from natural ingredients, textiles and furniture, or the wood industry as a whole (their export potential is also strengthened through the support of Swiss development assistance programmes), but also plastic and rubber products, non-ferrous metals, aluminium and copper products, machine parts and accessories.
Swiss development assistance is particularly important to Serbia, and includes massive support in establishing and developing dual vocational education, which is continuing with a new project that’s being launched this year
It has been assessed mutually that the economies of the two countries possess all the prerequisites to advance their cooperation: thanks to the complementarity of possibilities and needs, mutual trade could be higher and more balanced, while investment activities and overall economic relations could be more successful and of a higher quality. Apart from the service sector, primarily in the areas of ICT and tourism, the greatest room to improve trade and investment cooperation – through new investments, joint ventures and production cooperation – is also enjoyed by companies operating in the food, pharmaceuticals, mechanical engineering, furniture, plastics and textile sectors. Significant opportunities for cooperation also exist in the energy sector, particularly in the segment of renewable energy sources and environmental protection, infrastructure, transport, construction etc. New opportunities for Swiss investors and Serbian suppliers are arising with the emergence of nearshoring processes that are seeing European companies relocate operations closer to home.
Although the volume and advancement of economic cooperation is ultimately measured in terms of numbers – the level of exchange, volume of investment, company profits – Swiss development assistance is particularly important to Serbia, and includes massive support in establishing and developing dual vocational education, which is continuing with a new project that’s being launched this year. Swiss experience in the areas of innovation, research & development, and new technologies, such as biotechnology, is precious to Serbia. Switzerland, which has been ranked as the world champion according to the Global Innovation Index for 12 consecutive years and which tops the list of the world’s most competitive countries, is the best role model for Serbia and the best example that the economies that are the most innovative are also the most competitive, and that investment in research & development, knowledge and innovation, and linking them to the economy, represents one of the main pillars of the national economy and the competitiveness of individual companies, in terms of market success and sustainable development.