7. Boosting education and competencies in Serbia
Serbia has made a great progress in boosting domestic competencies over the last decades. Nearly all children participate in compulsory education. Serbia also has a very high proportion of students who go into upper-secondary vocational education and training (VET). Participation in adult learning, both formal and informal, is among the highest in the region. To sustain progress in building key competencies of citizens and unleash their full potential, this chapter puts forward policy priorities for formal education and beyond. Critical foundational skills of children can be developed by providing better access to early childhood education and care (ECEC), especially in rural areas. While VET is the most popular education track in Serbia, it requires more equipment and better financing to leverage its full potential. At all education levels, Serbia should further improve the quality of teaching by strengthening initial teacher education and offering more opportunities for continued professional development. Setting higher standards for entry into the profession and having clear performance and competency components for teacher compensation and career progression would also improve teaching quality. Finally, Serbia has attracted significant foreign direct investment, which can serve as a springboard for increased linkages for knowledge transfer.
The Initial Assessment of this Multi-dimensional Review of the Western Balkans identified education and competencies for economic transformation as the top priorities for Serbia and for all economies across the region (OECD, 2021[1]). While economic structures vary significantly from one economy to another, finding new sources of productivity growth and engines for future transformation is an urgent task for all the regional economies. Good jobs are scarce and young people continue to leave. Boosting youth and workforce competencies can unlock new opportunities to overcome these trends. The more unfavourable an economy’s current wage-to-productivity ratio, the more urgent it becomes to find new and more productive activities to build a strong economy.
High-quality education also tops the list of aspirations for the future in Serbia and in the region. Quality education is an essential element of quality of life for all; young people in school; families; those who want opportunities for their own children; those who want to have children in the future; and those who depend on younger generations to shape the future of their societies. Beyond innovation and economic opportunity, education also matters for civic engagement and respect for diversity and for the rule of law. With impressive unanimity, quality education ranked topmost in all four aspirational foresight workshops held in Belgrade and other capitals of the region as part of the Initial Assessment of this review (OECD, 2021[1]).1 The foresight workshops gathered a range of participants from various ministries and agencies, the private sector, academia and civil society, who developed vision statements based on narratives of the lives of future citizens.
This report builds on an extensive peer-learning process with practitioners in the region and expert assessment to provide suggestions for strengthening education and competencies in Serbia and in the region. Building on the Governmental Learning Spiral methodology (Blindenbacher and Nashat, 2010[2]), two peer-learning workshops brought together experts and practitioners from across the region and beyond to prioritise among challenges and solutions, develop ideas for action, and learn from each other (Box 2.1 of Chapter 2). The peer-learning workshops on education and competencies served three complementary aims: to identify of outcome-level challenges hampering the build-up of competencies; to identify key policy challenges; and to put forward key policy priorities for Serbia and for the region (Figure 7.1).
Over the past decade, Serbia has taken important steps to boost the quality and relevance of education across all levels. Nearly all children participate in compulsory education and participation rates at other levels (including technical training) are also very high.2 Participation at the upper-secondary level has increased significantly in recent years and is now about 87% – higher than the Western Balkan, OECD and EU averages. Serbia also has a very high proportion of students who go into upper-secondary vocational education and training (VET): about 74% of upper-secondary students enter VET rather than general education, compared to an OECD average of 47%. Two VET tracks are offered in Serbia: three-year and four-year, with the latter offering opportunity to transition to tertiary education. Student demand for four-year VET programmes has increased in recent years. In turn, vocational programmes have multiplied and been updated, some becoming very reputable (Reyes and Nguyen, 2020[3]). At 67.2%, participation in tertiary education is close to the OECD average. Participation in adult learning, both formal and informal, is among the highest in the region. Finally, Serbia made an important step forward in attracting significant foreign direct investment (FDI), which can serve as a springboard for increased linkages for knowledge transfer.
To sustain progress in building key competencies of student and adults, Serbia must now tackle a set of important outcome-level challenges that remain (Figure 7.1). Serbia also has a very high proportion of students who go into upper-secondary vocational education and training (VET): about 74% of upper-secondary students enter VET rather than general education, compared to an OECD average of 47%. Limited availability of early childhood education and care (ECEC), especially in rural areas, hampers acquisition of foundational skills needed to acquire key competencies. While it is encouraging to see a large share of Serbian students enrol in VET programmes, many schools lack the infrastructure and resources necessary to provide students with competencies needed to thrive in the labour market. At the same time not all groups have the same possibilities to attend and obtain quality education, especially persons in living in rural areas and Roma communities. In turn, lack of transport and weak learning resources – including poor teaching – are key obstacles. Many adults lack the skills necessary to thrive in the labour market. A large share of long-term unemployed demonstrates inadequate opportunities to up-skill, re-skill or acquire new competencies based on labour market needs.
Eleven priority actions are suggested to strengthen education and competencies in Serbia, combining peer-learning results and OECD expertise, with improving teaching quality being the key peer-learning priority for Serbia (Figure 7.1).
Strengthen governance of education policy and systematically engage with stakeholders
Improve the quality and relevance of vocational education and training
This chapter is divided into three sections. Sections 7.1 and 7.2 provide policy implications for Serbia across the eleven policy actions through a prism of challenges specific to Serbia. Section 7.3 provides indicators against which policy progress can be measured in implementing all the policy priorities for Serbia. This chapter is complemented by the regional chapter, which provides more specific policy options for the eleven policy actions based on international practices, which may be applied, albeit to different degrees, also to Serbia.
7.1.1. Improving teaching quality is a key peer-learning priority in Serbia to improve learning outcomes
Peer-learning participants from Serbia selected improving teaching quality as a key priority. Teachers and educators should not only be able to convey relevant knowledge, but also possess pedagogical skills, creativity, empathy and other relevant skills to support and guide students on their educational journey (Schleicher, 2015[4]). The best-performing education systems in the world are able to attract individuals of high ability into the teaching profession, and effectively prepare, motivate and develop those individuals throughout their teaching career. Considering the evolving economic trends and changing needs for competencies, teachers and educators should be able to acquire high quality initial teacher education (ITE) and have an opportunity for regular continuous professional development (CPD). To improve teaching quality, the peer-learning participants from Serbia stressed the importance of two key actions: improve the quality of ITE for teachers and educators, and of the CPD system for teachers, principals and administrative staff (Box 7.1).
Strengthening ITE of teachers to ensure that all future teachers, irrespective of their level of specialisation, also obtain core teaching skills would be important. Teachers coming from the Teacher Education Faculty (which includes most teachers in grades 1-4 of primary school) have completed coursework in important teaching subjects including pedagogy, development psychology, teaching methods and didactics. Their education also includes practical training in teaching (Uciteljski Fakultet Univerzitet u Beogradu, 2021[5]). Middle (from 5th grade onwards) and high school teachers, however, specialise in particular subjects and can come from university programmes that do not necessarily specialise in training teachers. As a result, many of these teachers start their jobs with limited knowledge or practice. In the case of future teachers and educators, initial education should therefore be combined with practical training. The peer-learning participants thus put forward the need to improve the concept of trainee apprenticeship and career guidance of teachers and educators.
Ensuring and improving CPD for teachers, principals and administrative staff is key for a continued build-up of school competencies. In combination with inadequate ITE, the gap in competencies among teachers can persist when there is limited offer, quality and uptake of teachers’ in-service training (Maghnouj et al., 2019[6]). In Serbia, teachers are required to complete 100 credit points of CPD (one hour of training equals 1 point) over five years. In 2017, less than half of teachers had achieved 80 credit points over the reference period (Politika, 2016[7]). A survey of teachers found that lack of financial resources and support is the primary obstacle to fulfilment of teachers’ required CPD credits, followed by dissatisfaction with the training offer. Some areas where teachers see the highest need for CPD include special needs education and teaching for new technologies in the workplace (OECD, 2014[8]). However, there is no evident link between available training programmes (which are centrally determined) and this demand (OECD, 2012[9]). Peer-learning participants stressed the need for a CPD system for teachers, educators and professional associates, through certified institutions and trainers. To improve school leadership – and thus ensure high-quality and equitable education that adapts to the needs of society – it is also important to develop the CPD system of continuous professional training of principals and secretaries of educational institutions.
Serbia should set higher standards for entry into the profession, providing adequate incentives and promoting merit-based hiring to improve the quality of teaching. Requirements for entering the teaching profession in Serbia are not as high as in OECD countries (even though Master’s level education is a requirement for new entrants) – but neither are teacher salaries. Currently, the salaries of teachers with a university degree are 22% lower than the national average and 25% below the standard public administration salary (World Bank, 2019[10]). Also, it is not clear that hiring in the school system is merit-based. Schools normally have significant responsibility and autonomy in hiring and dismissing teachers. In recent years, however, the obligation to prioritise hiring unemployed licensed teachers over new teachers has infringed upon schools’ autonomy and negatively impacted the meritocracy and competitiveness of the hiring process. The lack of clear guidelines for hiring and firing teachers has also led to the perception (among many stakeholders) that the appointment and promotion of teachers and school staff are based on political affiliation or favours, not (only) on competency (Maghnouj et al., 2019[6]).
Teachers’ compensation and career progression should have a performance and competency component. Teachers’ salaries are mainly centrally determined and linked to years of experience. Thus it is currently difficult to reward strong teacher performance with higher pay within the school system. This limits the incentives for teachers to improve their performance and to invest in their continued professional development (Maghnouj et al., 2019[6]).
To improve teaching quality and teachers’ professional development in Serbia, participants of the peer-learning workshops suggested an action plan to complement current policy efforts in Serbia. Representing the Ministry of European Integration, the Ministry of Education, Science and Technological Development (MoESTD), the Institute for Education Quality and Evaluation (IEQE), and the Centre for Education Policies, participants more specifically suggested two major goals, with corresponding measures and indicators (Table 7.1).
To ensure successful implementation of the proposed measures, peer-learning participants stressed the importance of a broad-based collaboration between different stakeholders. As the leading institution responsible for boosting education and competencies in Serbia, the MoESTD should ensure systematic involvement of all stakeholders in the process of creating the best conditions for ITE and CPD.
Source: OECD peer-learning workshops.
7.1.2. Increasing access to early childhood education and care is critical for building foundational skills for work and for life
Boosting access to early childhood education and care (ECEC), especially for children from disadvantaged backgrounds is a critical challenge that needs to be addressed in Serbia. Only 65.3% of children aged 3 to 6.5 years are enrolled in a pre-school programme (in 2020), which is lower than some regional and global peers (e.g. 81.7% in OECD and 99.9% in EU countries) (Figure 2.15 of Chapter 2). Low-income families are particularly impacted by the limited access. Among children aged 3 to 5.5 years, ECEC attendance was less than 10% for the poorest families and only 6% for Roma (World Bank, 2018[11]). Only 63% of Roma children participate in the 9-month preparatory pre-school programme (mandatory since 2007 for children aged 6 years) compared to 98% of non-Roma children (Maghnouj et al., 2019[6]). Gaps in ECEC enrolment can also be noted between urban and rural areas, with urban children of pre-school age being more than twice as likely to attend an ECEC programme as their rural peers (UNICEF, 2015[12]).
Serbia should continue improving the infrastructure for ECEC, targeting particularly rural areas and municipalities with no ECEC facilities. Investments in hard infrastructure can be complemented with additional services focused on the poorest communities. While many new private institutions have opened to fulfil some of the unmet demand, a significant share of children still cannot attend ECEC and many institutions operate at excess capacity (Garvis, Phillipson and Harju-Luukkainen, 2018[13]). This is particularly problematic in rural areas and poor municipalities that lack resources to finance expansion of their network of facilities or to provide transportation services for children who live far from the nearest pre-school. On average, children in rural areas live about twice as far from their pre-school as urban children. Extra costs associated with transporting children to their school is an additional disincentive for pre-school enrolment in these municipalities and rural areas (Pešikan and Ivić, 2016[14]). In recent years, greater strategic focus has been placed on improving ECEC in Serbia, particularly for the most vulnerable families. With private and donor support, the government has been expanding the network of pre-schools and their capacities, while also providing financial support for children and families in need (World Bank, 2018[11]).
7.1.3. Fostering an equitable education at all levels is essential for boosting the size and quality of the Serbian workforce
Serbia should improve access to education for children living in rural areas by providing better school transport alternatives and investing more in school resources. Young people living in rural areas have substantially lower education levels. While primary school completion was almost universal, only 8% graduated from university, compared with 19% in urban settlements (Mojić, Petrović and Backović, 2021[15]). In the latest OECD Programme for International Student Assessment (PISA), on average, rural students scored 122 points lower on reading than their urban peers (OECD, 2019[16]). Lack of available transport options – and limited financial resources in many municipalities to develop adequate transport infrastructure – affect access to education. Likewise, conditions in schools are often worse in rural areas compared with urban zones due to lack of equipment and limited availability of qualified teachers (Pešikan and Ivić, 2016[14]). Understanding transportation needs and supporting municipalities in providing adequate transport options would be important steps to achieve equity between rural and urban areas. All schools in Serbia, no matter the location, should have available learning resources and quality teachers. To improve education outcomes in rural areas, the government should increase learning resources, especially among the most disadvantaged schools, and consider introducing incentives for attracting high-quality teachers to rural areas.
Increasing options for transport and raising awareness of the importance of compulsory education among Roma parents could boost access to education and improve education outcomes among Roma children. Roma enrolment lags behind that of Serbian students. Only 37% of Roma students complete compulsory education, only 20% attend upper-secondary education and less than 1% have a higher education degree (compared to 89% and 16%, respectively, for Serbian students). Notably, these outcomes are worse among girls than boys (UNICEF, 2015[12]). Distance to educational facilities is an even bigger issue for Roma children; they often live double the distance from schools in comparison to their rural neighbours, implying the need to provide more transport alternatives for these communities. Finally, many Roma parents were found to be unaware of the mandatory nature of the pre-school preparatory programme (Pešikan and Ivić, 2016[14]).
7.1.4. Strengthening the governance of education policy
Education in Serbia has been governed by a comprehensive and ambitious strategy since 2015, but limited prioritisation of challenges and a weak performance indicator framework have made it difficult to measure progress. The Strategy for Education Development in Serbia 2020 was developed with significant stakeholder engagement and is rooted in a diagnostic of the education system, which targets the critical challenges that the country faces in improving the quality of education and its outcomes. Beyond the critical high-level objectives, however, there is limited prioritisation of issues that can drive the biggest impact. Quantitative performance indicators in the Action Plan for implementing the strategy are not always aligned with those in the strategy and some indicators are vague, making it difficult to measure the strategy implementation progress (Maghnouj et al., 2019[6]).
Institutional capacities for monitoring and evaluation (M&E) also need to be improved, especially by improving data collection for monitoring and boosting institutional capacities for conducting comprehensive evaluation. In Serbia, MoESTD, which is responsible for designing education policy at all levels, would benefit by increasing its capacity to conduct system evaluation. Having experienced staff that conduct comprehensive evaluations, would improve the implementation of Serbia’s education strategy. Collection of data at the national level has also posed challenges and delayed significantly efforts to conduct national assessments (Maghnouj et al., 2019[6]).
Specialised institutes that provide technical expertise and policy development support to the MoESTD are understaffed and underfunded which limits the extent of their support. These institutions, which include the Institute for Education Quality and Evaluation (IEQE) and the Institute for Improvement of Education (IIE), have a very important role to play in the education system in Serbia due to their considerable technical expertise. However, their lack of resources and staff is a critical challenge. More funding and staff should be allocated for IEQE to improve the quality of education institutions, the process of external evaluation and self-evaluation of schools, and to ensure the quality of final exams and upcoming state exams. Moreover, more personnel is needed with skills in quantitative research, statistical, psychometric and survey design experience (Maghnouj et al., 2019[6]).
7.1.5. Ensure adequate financing to improve learning outcomes at all levels
Serbia should increase financing for education, especially secondary education. At 3.6% of GDP in 2019, Serbia’s spending on education is in line with regional peers, albeit low compared with more advanced economies (Figure 2.13 – Panel A of Chapter 2). Overall public expenditure on secondary education is relatively low compared with neighbouring and EU economies (Figure 2.14 – Panel B of Chapter 2), despite similarly high enrolment rates at the secondary level. In Serbia in 2017, 92.3% of students enrolled in secondary education, above averages for the EU (91.4%) and the OECD (89.3%) (World Bank, 2021[17]). Low spending on secondary education strongly impacts VET in particular, which has a high share of Serbian students and is much more demanding in resources than general education (Section 7.1.7). Lack of funding for VET also explains the highly theoretical nature of VET in Serbia compared with more advanced economies.
Spending on primary education shows significant room for improvement and efficiency gains. Spending on primary education in Serbia is high compared with some OECD economies with similar education systems (Figure 2.14 – Panel A of Chapter 2). High spending largely reflects high teaching staff costs (90% of total budget) and the high number of teachers relative to the student population (Figure 2.13 – Panel B of Chapter 2). Capital spending is relatively low in Serbia (5.7%) compared to the OECD average (8%) (OECD, 2018[18]).
Despite past efforts to introduce a per-capita financing formula, financing of Serbian schools remains based on inputs such as number of classes and teachers. Introduction of this funding model was included in the 2009 Framework Law on Education. It was never implemented, however, and the current Law on Education no longer includes this funding model (OECD, 2018[18]). As a result, inefficiencies in education spending persist, as reflected, for example, in the growing number of teachers despite a declining student population. The high number of teachers also reflects other structural challenges such as a large number of subjects and electives starting from upper-primary school (13 subjects starting from 5th grade and more going forward) as well as a large network of small schools that requires more teaching staff (World Bank, 2019[10]). In 2014, only 7% of students accounted for 64% of all school buildings in Serbia, with 105 primary schools and 7 primary special schools having only 1 enrolled student (World Bank, 2019[10]). The large network of schools also has a negative impact on teaching quality: many teachers have to work in multiple schools to fulfil their teaching quota, which limits their time spent on preparation and other activities. Recently, efforts were introduced to consolidate school networks in line with demographic trends; it remains to be seen if and how these changes will be implemented.
7.1.6. Updating and modernising curricula to impart relevant knowledge and skills
Serbia has advanced curricula reforms, but more efforts are needed to support teachers and schools in adapting these curricula to their specific needs. Serbia has introduced a national qualification framework that encompasses adoption of new competency-based curricula across all levels of education. Compared to practices in OECD countries, however, the new curriculum is overloaded and very prescriptive. This severely limits teachers’ options to adapt their practices to the specific learning needs of students. This challenge is compounded by the limited guidance from the central government as well as limited capacities of schools to adapt the curricula to their own needs (Maghnouj et al., 2019[6]). In addition, no guidelines exist to describe students’ learning progression in a cycle. Based on external school evaluation results, the use of assessment to inform learning and adapt teaching to student needs is weak in almost half of basic education schools and two-thirds of upper-secondary schools (Petrović, Nedeljković and Nikolić, 2017[19]).
Choice of studies could be better aligned with labour market needs, and curricula of vocational schools and tertiary education focused more on practical skills. It is encouraging to see that close to 30% (28% in 2019) of all recent tertiary education graduates in Serbia studied science, technology, engineering and mathematics (STEM) subjects, compared with 15% (on average) in OECD countries in 2015 (UNESCO, 2020[20]; OECD, 2018[21]).3 However, higher education institutions have traditional methods of teaching that do not necessarily encourage creative and critical thinking and collaboration (Maghnouj et al., 2019[6]) and little opportunity exists to gain practical experience (e.g. through internships while studying) (European Commission, 2020[22]). In 2017, 29.3% of companies indicated problems with finding new workers, mostly due to skills shortages, which extend across most sectors of the economy. Significant shares of companies cited the problem across the following sectors: manufacturing (38.6%); construction (37.7%); mining (33.3%); accommodation and food production (32.2%); information and communications (32.1%); and transport and storage (29.4%) (Reyes and Nguyen, 2020[3]). Interestingly, apart from the information and communications sector, which gives highest value to technical skills of employees, all sectors interviewed in the Skills Measurement Employer Survey (part of Serbia’s Skills Toward Employment and Productivity [STEP] programme) placed a higher value on socio-emotional skills, such as reliability and resilience. The establishment of the Agency for Qualifications and Sector Skills Councils in 2018 was a positive step towards reducing the mismatch between skills required in the labour market and education outcomes (European Commission, 2020[23]).
7.1.7. Improving the quality and relevance of VET is necessary to build a qualified workforce
As the most popular education track in Serbia, VET needs to be better equipped and financed. With over 70% of secondary school students choosing this path, VET plays a significant role in the overall education system in Serbia. However, many VET profiles are outdated and most programmes are found to be marginally relevant to labour market needs due to the largely theoretical nature of VET in Serbia and limited practical training (World Bank, 2019[10]). This reflects financing constraints: relatively low spending per student on secondary education in Serbia (Section 7.1.5) has particularly strong impacts on VET, which in OECD economies tends to be more resource-intensive due to higher spending requirements on technology and learning equipment.
Improving the subject skills of teachers and scaling up dual VET programmes could improve alignment between VET outcomes and labour market needs. More than 20% of VET teachers in Serbia have no work experience in the occupations they teach, a factor that contributes to low outcomes (ETF, 2018[24]). However, this is an area where some progress has been made. Thanks to donor support, dual VET has been introduced in a number of VET profiles, accompanied by measures to boost capacities of schools and relevant partner companies to provide necessary training for students in these VET programmes. Preliminary results from rigorous impact evaluations indicate that students who attended such programmes rated more highly the education they obtained and were able to obtain better jobs than comparable peers within 6 months after graduation. However about 2% of the student population (5.3% of all VET students) attended a dual VET programme and about one-quarter of all schools offered at least one dual profile.
7.1.8. Systematically employing digital technologies in the classroom can significantly boost education outcomes
Improving access to digital technologies in the classroom would be an important step forward in boosting the digital skills of students in Serbia. According to data from PISA, there are just over 0.3 computers per pupil in Serbian schools compared with over 0.8 in OECD countries (Figure 2.10 – Panel A of Chapter 2). Internet access is also an issue: 84% of school computers in Serbia are connected against nearly all in OECD countries (Figure 2.10 – Panel B of Chapter 2). Based on surveys of school principals, only about 40-50% of students in Serbia have adequate access to digital technology (e.g. devices, software, online learning support platform) in the classroom (OECD, 2020[25]).
Addressing digital skills among teachers should complement the efforts. In Serbia about 56% of teachers report having a need for professional development in ICT-related fields (ETF, 2018[26]; ETF, 2018[27]; ETF, 2017[28]). Even in the European Union, only one-quarter or less of students are taught by teachers who feel confident using digital technology (World Bank, 2020[29]). Serbia has taken an important action by including a specific element of digital competencies in the ITE curriculum (World Bank, 2020[29]).
7.2.1. Increasing access to and the quality of adult education will be essential for creating a nimble workforce that can adapt to changes in the labour market
Low educational attainments in the Serbian adult population show the need to equip them with competencies by scaling up adult learning. While Serbia has the highest share of adults who participate in adult learning among the regional economies, it still lags behind the EU benchmarks (Figure 2.16 of Chapter 2). In 2016, 21% of adults aged 25-64 years participated in some form of formal and/or non-formal education against 48.5% of adults in the European Union. Access to adult learning is particularly limited for low-skilled individuals (only 0.5% of whom attended training) and the unemployed (9.5% of whom attended training) (ETF, 2020[30]).
Adult education and training activities need a co-ordinated strategy. In contrast to initial vocational education, continuing vocational training (CVT) lacks a strategic framework and priorities. As such, it has been recommended that Serbia integrates lifelong learning into its Serbia Education Strategy 2030. At present, data on CVT and adult education participation and effectiveness evaluations are limited (ETF, 2020[30]). On a positive note, the Law on Adult Education 2013 and the Law on National Qualifications Framework 2018 regulate the accreditation of non-formal courses and validation of competencies acquired in informal learning.
7.2.2. Leveraging on foreign direct investment can help to boost the competencies of the workforce
Over the years, Serbia has made considerable efforts to attract foreign direct investment (FDI), showing a great scope for spillovers of knowledge and competencies to local businesses and communities. Serbia currently hosts the greatest number of large enterprises in the Western Balkan region and has been a global leader in greenfield FDI attraction in recent years – most of which went into export-oriented manufacturing, including the automotive industry, food and beverage processing, textiles and electronics (Development Agency of Serbia, 2020[31]). Next to North Macedonia, Serbia was among the first countries in the region to establish special economic zones, which have managed to attract significant new investment in manufacturing, particularly in the automotive sector. A notable investor was Fiat Chrysler Automobiles with a USD 1 billion investment in 2012 (OECD, 2017[32]). The FDI stock in Serbia reached USD 48.2 billion in 2019, almost equal to the size of its economy (UNCTAD, 2021[33]).
Mixed evidence of spillovers on domestic enterprises shows a need for targeted support for small and low-tech enterprises to leverage more on foreign investors. Firms in high-tech industries benefit more from backward FDI spillovers; there was no such effect for small firms in low-tech industries. Firms in the transport manufacturing industry, which have attracted significant FDI, also did not report any significant FDI spillovers from foreign firms in their industry (Brussevich and Tan, 2018[34]). In the case of FAS in Kragujevac, for example, Fiat-Chrysler brought 21 suppliers to Serbia, 7 of which are located within identified special economic zones (SEZs). None of the previous local suppliers of Zastava (the former Serbian car manufacturer) met the quality standards needed to supply parts to FAS, with the exception of a car-jack producer (OECD, 2017[32]). This points to a need to support especially domestic small and medium low-tech firms, including through entrepreneurship and innovation programmes that can boost their competencies and capacities (Brussevich and Tan, 2018[34]).
Co-operation on training exists between some companies (located mainly in the SEZs) and educational institutions, but could be further expanded given the relatively high presence of foreign investors in Serbia. The steel chain producer Rosa Catena (located in the SEZ of Smederevo) started sending their employees to trainings abroad. Other companies, such as Fiat-Chrysler, have built their own training facilities. Continental and Calzedonia (both located in the SEZ of Subotica) and one secondary vocational school signed a co-operation agreement to establish permanent work-based learning components in the local VET school. A similar co-operation (in the SEZ of Pirot) led to a new training programme on freight forwarding. The government should support and facilitate these early-stage co-operation efforts (Bartlett, Krasniqi and Ahmetbašić, 2019[35]).
7.2.3. Fostering closer linkages with the diaspora can also be a source of new competencies
The diaspora and its members can be an important source of knowledge transfer for Serbia. Serbia has one the biggest diasporas in the Western Balkans: as many as 4-5 million Serbians could be living abroad (World Bank, 2019[36]). Based on the OECD DIOC database (OECD, 2016[37]), among 258 000 persons born in Serbia and living and working in the OECD countries, 68.9% are employed in medium and highly qualified professions such as: plant and machine operators and assemblers; technicians and associate professionals; professionals; services and sales workers; and craft and related trades workers (Figure 2.18 of Chapter 2). This indicates a great potential for knowledge transfer from the diaspora. Serbian diaspora also tend to maintain familial connections to their home country, visible through the large volumes of remittances. Although the share of remittances in GDP has dropped to 7.3% (likely due to the COVID-19 pandemic), the inflow of remittances over the last ten years was about 8% of GDP, without major fluctuations (World Bank, 2021[17]).
Better leveraging knowledge and competencies accumulated abroad requires innovative programmes. Estimates of the former Ministry of Religion and Diaspora (2012) show that, before the 2008 economic crisis, the Serbian diaspora invested about EUR 550 million in Serbia, employing about 25 000 people. Following the crisis, these figures dropped, reflecting an unfavourable investment climate, a relatively unstable economic situation and complicated administrative procedures in Serbia (Grecic, 2016[38]). Some recent projects and initiatives aim to create better links between Serbia and its diaspora. The World Bank currently has a project, Accelerating Innovation and Growth Entrepreneurship Project for Serbia, with a diaspora facility subcomponent, aiming to support establishment of a Serbian Diaspora Facility (SDF) to finance technical assistance and provision of grants to scientists, researchers, entrepreneurs and Serbian diaspora to transfer knowledge and skills from the diaspora community back to Serbia (World Bank, 2021[39]). In collaboration with the Government of Serbia and other stakeholders, the International Centre for Migration Policy Development is implementing a project (Link Up! Serbia II) to support transnational entrepreneurial activities with and through the Serbian diaspora in Austria, Switzerland and Germany (International Centre for Migration Policy Development, 2021[40]).
To monitor policy progress in implementing teacher training and other policy priorities in Serbia, the OECD suggests a set of key indicators, including values for Serbia and benchmark countries (either the OECD or the EU average, based on data availability). Table 7.2 provides the differences between the benchmark value and the value for Serbia.
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Notes
← 1. Due to the outbreak of the COVID-19 pandemic, the foresight workshop was not held in Bosnia and Herzegovina.
← 2. The total duration of compulsory education in Serbia is nine years. Children enter compulsory education at age 5.5 and leave it at age 14.5.
← 3. Some 43% of Serbian STEM graduates are women.