NADA KNEŽEVIĆ, Director of Vienna’s office of Chamber of Commerce and Industry of Serbia: WE HAVE A GREAT POTENTIAL FOR BOLSTERING COOPERATION

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Serbian business people, especially those who are already successful in the domestic and ex-Yugoslav markets, are taking a determined step forward in the EU market, mostly the Austrian one, because of the potential for expanding
their business to Germany and Switzerland, or the entire German-speaking region. Apart from their products, Serbian companies also offer services, which turned out to be particularly profitable.

Serbia has recently presented its tourism potential in Vienna. What are your impressions of Serbia’s ability to establish itself as an attractive destination for Austrian tourists?

– This year’s international tourism fair in Vienna, Ferien Messe Wien, took place in January. The Fair is the biggest exhibition of this type in Austria, with 155,322 visitors. The booth at which Serbia presented it tourist potential this year, was jointly organized by the Chamber of Commerce and Industry of Serbia and the Chamber of Commerce of Vojvodina. A group performance of nearly 30 exhibitors entailed the presentation of destinations, tourist centres, organizations and locations in different parts of Serbia. The exhibition area was too small to take everyone who showed interested in the tourist potential of Serbia. Serbia’s tourist offer of Serbia is already known in the Austrian market, as are weekend visits and city tours of Belgrade, cruising the Danube from Belgrade to the Iron Gate, hunting tourism in Vojvodina, the EXIT Festival or Kopaonik ski resort. However, there are many things that the Austrian tourists are yet to discover. Great potential lies in wine routes, rural tourism, spa tourism, etc. On average, the Austrians go on vacation three times a year, enjoy food and drink, are interested in cultural heritage and in special, thematic festivals. Most often, they decide to stay in neighbouring countries and the EU, with all other destinations lagging behind in terms of representation. Serbia should use its proximity and good transport connectivity, but it has to do much more in terms of market presence and promotion because the competition in the Austrian market is stiff. This is not without reason, because the Austrians are among the biggest tourist consumers. In 2016, they spent more than 15 billion euro on vacation, of which nearly 11 billion was spent overseas. If there is understanding for positive impressions that the Serbian exhibitors took from the fair in Vienna this year, I expect that their performance will be even better and more impressive next year.

Serbian business people are becoming increasingly active in the Austrian market. Where do they most often search for their niche in this demanding market?

– I can tell you from my experience that those Serbian companies, which came to the Austrian market with high quality, well-designed and price competitive products, have managed to accomplish their goals. It takes persistence, time and money to get to know the market and the competition and to establish contacts with potential customers. Success does not come overnight, although it may sometimes look so. There are various success stories
– from very small enterprises, such as producers of wicker products or wooden objects for everyday use like wooden cooking spoons or chopping boards to the manufacturers of metal parts and machine tools, chemical products, construction components and systems, and prefabricated houses. In regard to services, Serbian businesses mostly provide services in latest and high-tech IT and design. Serbian companies are developing software for Austrian companies, and they maintain information systems not only in Austria but also in other EU countries. Thus, Serbian Telekom operates in Austria through its M:tel company, while Roaming Networks is working on modernizing the network of Austria’s largest mobile operator, Telekom Austria A1.

Considering your good knowledge of the Austrian market and domestic capacities, which opportunities would you particularly highlight for Serbian products?

– Digitization is a major topic in Austria and all important factors are subjected to it. The Austrian economy, as well as the political establishment, are aware of the extent to which digitization will change not only the production processes and business methods but also all other aspects of society. There is a great opportunity for our IT companies in this segment since they are absolutely competitive, and also due to the fact that the resources that the state of Austria allocates in this segment are extremely high. Food processing and machine building industry also have great potential here. Investments and transfer of technology and knowledge are needed as well since these two large sectors can hardly be built on the basis of their own capacity. There is a big difference in exporting wheat, raw and frozen fruit and sugar to Austria, and attracting Austrian processing companies to produce biscuits and toast bread in Serbia, which will then be exported to the region and beyond. Serbian construction companies are very interested in the Austrian market, but in this area, the problem is the work permits that are necessary for sending workers abroad.

Austrian companies are withdrawing from the Austrian market, and moving production to parts of the world with more competitive labour costs. How effective can Serbia be in utilizing this opportunity?

– Austrian companies are relocating not only production facilities from their own country but also the facilities that they have abroad. Thus, production facilities from China are being moved to the locations that are closer to the Austrian market, or from central European countries to destinations where there is sufficient workforce. Serbia has utilized this opportunity, and we have companies that relocated from Austria, as well as from China, the Czech Republic and Slovakia. Companies rarely publicly announce relocation in order to avoid negative publicity that comes with taking jobs outside Austria. Relocation is revealed only after negotiations have ended and agreement has been signed.

Since small and medium-sized Austrian companies are increasingly interested in Serbia, and these are the companies that are more careful with their investments, can you tell us what can we do to encourage them to view Serbia as a secure and safe investment destination?

– There is a big difference between small and medium-sized enterprises in Austria and Serbia, primarily in terms of categorization. Austrian SMEs have fewer than 250 employees, an annual turnover of up to 50 million euro and a balance sheet worth up to 43 million euro. It should be noted that 99.6% of the Austrian economy is made up of SMEs, and that, at the moment, there are 328,900 registered SMEs that employ around 1.96 million people in total. The turnover generated by these companies last year amounted to about 455 billion euro, and the preliminary value of exports realized by these companies is estimated at approximately 70 billion euro. Investment decisions are made at the company level, in the family, because most of these companies are family-owned through generations. It is true that these companies are more careful in terms of investing, primarily because they invest from their own funds. In this respect, their personal impression of Serbia is very important, as is political and economic stability, the way in which institutions function and the rule of law. Positive experiences of foreign businesses in Serbia are also very important. For this reason, it is necessary that the media and other platforms show good examples from practice as much as possible. This should not only apply to Austrian companies operating in Serbia. It is also very important to popularize information about the success of Serbian companies in Austria so someone can come up with a good business idea regarding products or services that could be offered in the Austrian market.

What is the current situation in the Austrian economy like, and do you expect that a decline in economic growth in Europe and in Austria could affect the external trade between Serbia and Austria?

– Although current indicators predict a slowdown in the economic growth for Austria and Germany, I think that the trade between Austria and Serbia should continue to grow. According to the latest forecasts of the Vienna Institute for International Economic Studies (WIIW), a 4.4% growth for Serbia is forecast, while in 2019, it could reach 3.4% (2.9% in 2020 and 2021). Therefore, the expectations are that Serbia will experience a decline in economic growth in the following period, but the values will continue to be significantly higher than what is predicted for Austria and Germany. Although the statistical data concerning the external trade between Serbia and Austria differ, it is certain that its value has exceeded one billion euro, and that the growth trend from recent years is continuing. It is also important for us that our deficit in trading with Austria has been decreasing over the past few years.

In terms of the countries that Serbia exports to the most, Austria is not even among the top 10 countries. What can we do to increase our export and achieve better export to import ratio?

– Yes, Austria is not even in the top 10 countries that Serbia exports to the most in terms of the value of trading in goods and services. Still, I would like to underline that, in the last two years, Serbia has made it to the top 30 countries that Austria trades with the most. This is important information, particularly bearing in mind that Austria trades with over 200 countries. The Austrian market is demanding and competition is stiff, but Serbia has picked up the pace in recent years. Our progress in this market will mostly depend on how fast our private sector will develop and advance since it has great potential.

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