Udo Eichlinger, President of the German-Serbian Chamber of Commerce in Serbia: Serbia continues to be in high demand among foreign partners

We are and will remain a stable partner of the Serbian business community, with the aim of improving the business climate in the country and supporting economic reforms as well as the efforts of the Serbian government to implement these reforms

 This year, the German-Serbian Chamber of Commerce (AHK Serbia) marks 5 years of its official establishment, while German investors, represented by the then Delegation of the German Businesses in Serbia and the German-Serbian Business Association, are celebrating 20 years of their activities in Serbia. In this year’s edition of InFocus Germany, AHK Serbia’s president, Udo Eichlinger, talks about German investments, business environment, dual education project, workforce supply, digitalization, and predictions for 2021.

Udo Eichlinger, President of the German-Serbian Chamber of Commerce in Serbia (AHK Serbia) and CEO of Siemens d.o.o. Beograd and Siemens Mobility

You have been a member of AHK’s Managing Board for a long time. How would you rate relations between Germany and Serbia today?

Germany has been one of Serbia’s most important economic partners for years. On the other side, the reaction of the German business community in Serbia confirms the continuous positive development of German-Serbian economic relations. German investors have been present in Serbia for two decades and currently about 400 German companies employ about 67,000 workers. Germany has so far invested around 2 billion euros in Serbia, is the country’s largest bilateral trade partner, and the total trade exchange until November 2020 amounted to 4.8 billion euros. Even besides the current situation with Corona virus, Serbia continues to be in high demand among foreign partners. According to many forecasts, Serbia continues to be the economic engine of the Western Balkans.

As President of the German-Serbian Chamber of Commerce, the largest bilateral chamber in Serbia, I will continue to focus on strong and efficient representation of member companies’ interests vis-à-vis state institutions as well as in the public sphere.

We have positioned Serbia as a supplier market for Germany, as part of the Western Balkans Purchasing Initiative

What were the consequences of the pandemic in 2020 on the operations of German companies in Serbia and on companies in general in Germany?

Due to the challenges surrounding the coronavirus, the world has changed significantly. Our habits, plans and freedom of movement have been restricted or rearranged over the past year. The Coronavirus crisis has shown how sensitive our supply chains are. Asia, for example, was considered a major risk factor. Due to disrupted supply chains, interest grew in industrialized countries such as Serbia, Northern Macedonia, Bosnia & Herzegovina, Romania.

In the past years, we have observed that German companies are specifically looking for suppliers from Serbia. We as Chamber have positioned Serbia as a supplier market for Germany as part of the Western Balkans Purchasing Initiative. Serbian companies are reliable, flexible and deliver high-quality goods and services at competitive prices. Serbia has a large number of IT and software developers working on innovative solutions. German and Serbian companies can benefit from this.

In order for Serbia to win over investors, what does the country need to do in terms of improving its business environment and making it even more attractive for investors?

The Serbian government restructured the area of vocational education in 2018. Here, it has oriented itself to the model of dual training. However, there is still work to be done – in particular, the acceptance of general training needs to be increased and more qualification offers are needed in companies, or further training offers for experienced employees.

Ever since have been living in Serbia, I have met great experts almost in every segment of the Industry

It is noteworthy that the latest investments are not so much in personnel-intensive areas, but rather in technically demanding processes. In addition to medium-sized companies, investors also include global corporations with strict compliance requirements. Here, a regular exchange between the private and public sectors can certainly contribute to a sustainable improvement in the areas of legal security and the environment.

Considering your experience from the industry you come from and as a CEO of Siemens, how would you assess the progress of digitalization in Serbia?

With the fourth industrial revolution, digitalization became a major catalyst for innovation, modernization, economic growth, competitiveness, and socioeconomic progress and development in total. Digitalization and automation are now more urgent and important than ever for companies, as well as for the countries. The world of today needs technology which transforms everyday life, and Siemens as a company focused on industry, infrastructure and transport, has set a digitalization as a pylon of subsistence for the benefit of customers and society, as well for further development, because no industrial company in the world, no matter its size, will be able to sidestep digitalization.

Serbian Government has recognized the importance of digitalization which has contributed to significant development in this area in the past few years, and has acknowledged the importance of investing in this as a great capital of economic stability and growth in the future. Digitalization, as one of the priorities, transforms the everyday work in public sector and raises its economy, transparency, and quality of work. In order to keep up with digitalization, large systems, small and medium enterprises, experts are needed to guide through the whole process, step by step, experts that Serbia already has in enough quantity to use the potential and benefits of digitalization for society and economy.

Does Serbia have appropriate workforce to meet the expectations of German investors, both in terms of high school and university graduates?

Absolutely! Even though we have been witnessing in the past so called “brain drain”, we see that the Government of Serbia has applied measures to increase output of all relevant technical schools and Universities. Both companies and countries are aware that the race for talents has started, and in my opinion the Government of Serbia does the right steps and “walk the talk” in this regard.

Ever since I hawe bin living in Serbia, I have met great experts almost in every segment of the Industry. From CEOs to factory workers. This is the topic I have thought a lot, being a Manager in the company myself. Serbian education system gives an amazing breadth and sense of responsibility and dedication trough schooling. What sets apart an average Serbian employer from the ones from other countries I have worked in is this ability of thinking outside the box, being flexible and finding the solution which may not be obvious at the first glance.

The key is how employer is going to establish the business bond. With the good compensation package, life/work balance, and respect towards the knowledge these people have and are willing to show, you have a winning combination for thriving. I am witnessing that every day trough work and would for sure advocate for every German company to come and see for itself.

How important is it to complete the process of implementing the dual education system in Serbia and how much do German companies and AHK members support and participate in this process?

An important step towards reducing the unemployment rate, especially among younger people, is the introduction of dual vocational training based on the German, Austrian and Swiss models. The law on dual vocational training was passed in the Serbian parliament in November 2017 and has been successfully implemented since the 2019/2020 school year. The German-Serbian Chamber of Commerce has accompanied this process with the aim of supporting the local economy with the qualification of young people.

Germany is also one of the main consumers of Serbian products

Now, about 4,500 students are taught in 80 schools, in 52 cities and municipalities, in about 600 companies, so that today dual education is represented in 10% of the total secondary vocational education with an increasing trend. In 2014, Siemens recognized the importance of dual education and initiated the introduction of this type of schooling at the Ivan Sarić Technical School in Subotica. We see dual education as a very important area in which we have been investing and promoting for years with the intention of providing our own contribution to the education of young people and of course, a channel for finding our employees.

What are your predictions in 2021 when it comes to economic cooperation between our two countries? How can this cooperation expand further?

As I have already mentioned, the Federal Republic of Germany ranks first among Serbia’s most important supplier countries. The main import products from Germany are machinery, cars and car parts, electrical engineering and plastics. However, Germany is also one of the main consumer countries of Serbian products, with the most important role also played by products from the mechanical engineering and electrical engineering sectors, as well as from the chemical sector.

Apart from the consequences of the Corona pandemic, the growth forecasts for 2021 are not bad at all. Economists and economic institutions predict positive growth in Serbia’s GDP in 2021, which should at least match the successes achieved in 2018 and 2019 with growth of around 4.4 percent. In 2019, the trade volume between Germany and Serbia was 5.2 billion euros; the 2020 figures are not yet available. However, we expect Germany to remain the most important trading partner for Serbia in terms of imports and exports.

Germany will continue to invest

Can Serbia achieve the same results as in 2020 regarding GDP growth?

In this year, Serbia is expected to return to its pre-crisis level. The decisive factor will be how the Balkan state masters all coronavirus waves, efficiency of vaccination, as well as the way in which the Serbian Government will manage to overcome them. The ramp-up of international supply relations will also be important and these depend on the economic situation in the EU. However, it is certain that German companies will continue to invest in Serbia.


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