Western Balkans Ranking on Global Innovation Index 2023

Three Western Balkans economies moved up the rankings out of 39 European economies covered in the Global Innovation Index (GII) 2023. Serbia and North Macedonia are frontrunners, while Albania advanced too. 

North Macedonia is the only Western Balkan economy performing above expectations relative to its GDP. In total, North Macedonia has been an innovation overperformer three times. 

The GII 2023 ranks this year’s 132 most innovative economies in the world and presents the top 100 science and technology innovation clusters. 

Western Balkans innovation landscape 

Albania, Bosnia and Herzegovina and Serbia perform as expected for their level of development, while Montenegro's performance is below expectations. The Index does not feature Kosovo*. 

All Western Balkan economies produce fewer innovation outputs relative to their level of innovation investments. 

The most advanced Western Balkan economies among the 132 economies featured in the GII 2023 are Serbia (ranked 53rd) and North Macedonia (54th). Compared to the GII 2022, North Macedonia recorded a notable comeback from the 66th position. 

Montenegro lags at the 75th place, sliding back 15 positions from 2022. Bosnia and Herzegovina backslided from 70th in 2022 to 77th in 2023, while Albania slightly improved its rank from 84th to 83rd. 

Although Albania, North Macedonia and Serbia have increased innovation inputs compared to the last year,  only North Macedonia managed to increase innovation outputs.

Essentially, North Macedonia is the only region's economy which effectively translated its costly innovation investments into more and higher-quality outputs.

Among the leading two economies in the region, North Macedonia scores much higher regarding innovation input/output ratio (49th - 58th) compared to Serbia's 41st - 64th. 

Despite scoring fourth overall in the Western Balkans, Bosnia and Herzegovina's ratio is the most balanced (75th - 80th), way ahead of Montenegro (62nd - 83rd) and Albania (73rd - 94th). 

The region's strengths and weaknesses  

The strongest areas for Western Balkan economies are those that rank above the GII average and the weakest are those that rank below. 

Almost all economies with the highest scoring pillars rank in the 1st quartile (best performers, between ranks 1st to 33rd) and 2nd quartile (ranks 34th to 66th). 

Benchmark of Western Balkan economies 

All the region's economies rank as the upper-middle-income group economies. The following table indicates each of the seven areas of the GII Index which the Western Balkan economies rank below their income group average and European average. 

As a guide, Albania ranks below in four pillars compared to its income group and all pillars in Europe (Inc/Eur).  

It is worth noting that the overall ranking might have differed if all economies were to provide full and up-to-date data for all indicators. 

Albania has missing data for twelve indicators, Bosnia and Herzegovina nine, Montenegro thirteen, North Macedonia eleven and Serbia for seven indicators. 

Similarly, Albania has outdated data for eight indicators, Bosnia and Herzegovina for six, Montenegro sixteen, North Macedonia seven and Serbia four. 

Although the GII and European Innovation Scoreboard employ slightly different indices, the pictures they portrayed are similar. 

Key lessons for designing effective innovation policies

There are several important lessons the GII 2023 offers to the Western Balkans' policymakers. 

Embed Innovation as a Priority: To drive development and progress, it's crucial to prioritise innovation. This can be achieved by formulating a clear innovation policy that outlines the economy's commitment to fostering innovation.

Establish a Cross-Ministerial Task Force: Create a dedicated task force that operates with a "whole of government approach." This task force should ideally report directly to the highest levels of government, such as the Prime Minister's Office. This ensures that innovation remains a top-tier agenda item.

Engage Diverse Stakeholders: Consultation with a wide range of innovation actors is essential. This includes representatives from both the private and public sectors, encompassing start-ups, research universities, and innovation clusters. Encouraging participation from various sectors, such as manufacturing, services, and traditional industries, as well as diverse entrepreneurial segments, enhances innovation efforts.

Integrate Intellectual Property (IP) Policy: Align the internal intellectual property (IP) policy with the innovation policy. Integration ensures that IP regulations support and complement the goals of fostering innovation.

Set Measurable Targets: For effective implementation, ensure that targets and actions outlined in the innovation policy are quantifiable and can be evaluated. This allows for monitoring progress and making data-driven adjustments to achieve innovation goals.

Things to be careful about 

Governments should be careful about the following to ensure GII adds measurable impact. 

Realistic GII Ranking Targets: Avoid setting overly ambitious and unrealistic GII ranking targets. The GII rankings tend to evolve gradually, especially at the top tier. Rapid leaps in rankings from year to year are uncommon.

Patience in Expecting Results: Understand that policy changes do not immediately translate into improved GII indicator performance. There is a time lag between the formulation of innovation policy and its execution and impact. Additionally, innovation data is often not up-to-date and may lag by several years.

Avoid Treating GII as a Sole Metric: Do not view the GII as merely a mathematical exercise aimed at collecting specific indicators to boost rankings. The GII ranking is only a partial reflection of its national innovation ecosystem. Furthermore, the GII framework undergoes regular changes. Therefore, avoid excessive focus on year-on-year ranking changes, as they are influenced by relative performance compared to other countries and methodological adjustments.

Set Long-Term Objectives: Instead of fixating on short-term gains, consider setting objectives for a more extended period, such as three to five years. Reviewing combined progress over several years offers a more appropriate approach to utilizing the GII effectively. This approach recognizes the evolving nature of innovation ecosystems and the time required to implement and observe policy impacts.

About Global Innovation Indicator 

The GII ranks world economies according to their innovation capabilities and aims to capture the multi-dimensional facets of innovation. The index provides an innovation ranking and rich analysis referencing around 130 economies. 

It consists of around 80 indicators, grouped into innovation inputs and outputs. The GII is published by the World Intellectual Property Organization (WIPO), a specialised agency of the United Nations.

The index measures innovation based on criteria that include institutions, human capital and research, infrastructure, credit, investment, linkages; the creation, absorption and diffusion of knowledge; and creative outputs. 

The GII has two sub-indices: the Innovation Input Sub-Index and the Innovation Output Sub-Index, and seven pillars, each consisting of three sub-pillars.