Business in Serbia has been quite satisfying for Austrian companies over the past years. Now we need to think about innovation partnerships, a cooperation of start-ups or common projects in third markets
Trade volume between Serbia and Austria has been steadily growing regularly reaching 1.1 bln euro. We asked Erika Teoman Brener, what is next? What should be our ambition in economic cooperation? Her response is nuanced as the cooperation between the two countries has many facets and promising avenues. The service sector evolved from financial to other services and advanced cooperation in the IT field for example. A considerable number of our companies are looking forward to expanding creating new jobs and broadening their presence in the market.
“We are convinced that there is still a huge potential in our bilateral trade and we should aim at exploring all possible business opportunities, diversify our export structures and forge even closer relations. These could be partnerships that go beyond simple trade. I am thinking of innovation partnerships, the cooperation of start-ups or common projects in third markets”, says Teoman Brener. “The important thing is to realize what makes a potential business partner strong and how to unite knowledge and skills for a common goal. In order to do so, we should all aim at supporting new networks, particularly among the young and upcoming generations.”
We are pleased to note that a considerable share of our companies here plan to expand their investments here, both by employing more people or by increasing their capital expenditure.
Austrian firms have over 400 subsidiaries in Serbia. On what pace the new companies are arriving? Are there any patterns you would like to outline?
A company´s decision to invest in Serbia or any other country is a very individual one and depends on factors that vary from company to company. That´s why there is no pattern to it.
Sometimes a company´s plan to expand to Serbia is linked to the need to be close to a specific customer or to have access to certain skills and know-how available here. However, in a globalized world like ours, one should never underestimate the role of external factors. The current crisis in the automotive industry, for example, or rising trade uncertainty in general, forces many companies to re-think their investment plans.
To what extent is the structure of investments changing? What is the ratio between financial companies which arrived first and manufacturing which came afterward?
We cannot give an accurate estimate of the ratio, but there is, indeed, a focus on service-oriented companies. They don´t operate only in the financial sector, but also in logistics and trade. There is also quite a considerable presence of Austrian companies in software development, benefitting from the excellent quality of Serbian IT-experts. We are also pleased to note that a considerable share of our companies here plan to expand their investments here, both by employing more people or by increasing their capital expenditure.
Difficulties in finding suitable candidates for their vacancies is one of the most pressing issues in the medium-term, both for domestic and foreign companies.
How Austrian companies evaluate their perspectives in Serbia in the latest survey? Which factors are affecting their expectations the most, those at the domestic market, or the slowdown of German and other large industries?
Business in Serbia has been quite satisfying for Austrian companies over the past years. However, when it comes to assess the overall economic situation of the country, there has not been much of a change in the respondents’ sentiments over the past years. As in most surveys of this kind, however, the respondents assess their own business outlook more optimistic than the general economic climate. The fact that for 2020 more Austrian companies expect economic conditions to stay the same, relegating optimists to second place, might be a reflection of a perceived deterioration in the European economic climate.
The Austrian companies repeatedly say that the biggest problems they were facing in their operations in Serbia had to do with legal certainty and the fight against corruption and bureaucracy. However, do you see any changes in their attitudes as the reforms are progressing?
Austrian companies have identified several areas, which continue to pose a significant challenge and in their view need to be improved or reformed. As in previous years, these issues relate for the most part to the rule of law, lack of transparency and red tape. While our companies acknowledge improvements in this area, they also point out that certain market-related issues, such as long payment terms, affect them at least as much as regulatory matters. Recently, our companies are faced more and more with difficulties in finding suitable candidates for their vacancies. We see this as one of the most pressing issues in the medium-term, both for domestic and foreign companies. In order to ease the lack of skilled workforce for them, the Austrian Federal Economic Chamber (WKO) together with the Austrian Development Agency (ADA), the Serbian Chamber of Commerce (PKS) and other international and Serbian institutions started in 2016 the project „DualVET Serbia“. More than 3.000 students are currently receiving or have already received vocational education in schools and companies across Serbia. This project opens new opportunities for young people in Serbia while at the same time benefitting Serbia as an interesting place to invest.