European Innovation Scoreboard 2023: Western Balkans Innovation Performance

All Western Balkan economies are considered modest or Emerging Innovators according to the European Innovation Scoreboard 2023 (EIS). 

The EIS classifies economies into four performance groups: Innovation leaders, Strong innovators, Moderate innovators and Emerging innovators. 

It captures 12 innovation dimensions and distinguishes between four main types of activities – Framework conditions, Investments, Innovation activities, and Impacts. Overall, it measures innovation performance with 32 indicators.

The EIS is designed to inform policy makers about implementing adequate policies which aim to address key societal challenges. 

On average, innovation performance in Europe has increased by about 8.5% between 2016 and 2023. Although the innovation performance of most EU Member States has improved, an innovation divide remains between more and less affluent EU Member States. 

How about the Western Balkans' Innovation Performance?  

Out of five Western Balkan economies covered by the EIS, only Serbia’s performance is above the average of the Emerging Innovators. 

Despite this, Serbia’s performance is at two-thirds of the EU average (63.2%). Other economies are below a half of the EU average, ranging from 47% in Montenegro, 46.3% in North Macedonia, 41.1% in Albania and 36.2% in Bosnia and Herzegovina. 

As table below illustrates, the region performs exceptionally well - and above the EU average in 2023 - in product and business process innovators indices. In addition, it performs reasonably well in employment impacts and environmental sustainability. 

On the other side of the spectrum, key obstacles are finance and support (R&D expenditure in the public sector, venture capital expenditures and direct government funding and government tax
support for business R&D) and intellectual assets. 

As one could expect, the region is suffering from limited human resources measured in new doctorate graduates (in STEM fields), population aged 25-34 with tertiary education and lifelong learning. 

Similarly, the region has to step up efforts in both, digitalisation (broadband penetration and % of population with adequate digital skills) and firm investment (R&D expenditure in the business sector, non-R&D innovation expenditures and innovation expenditures per person employed in innovation-active enterprises).

Innovation gap

North Macedonia and Serbia are closing performance gap compared to the EU, whereas this gap is becoming larger for the remaining economies in the region.

For North Macedonia and Serbia, performance between 2016 and 2023 has increased at a rate above that of the EU (14.5 and 15.1 respectively, compared to EU's 8.5%). 

Montenegro is at a rate just below the EU average, while Albania is slightly behind. 

Bosnia and Herzegovina’s performance has decreased at a lower rate (-0.4). 

Note that results for Albania are less reliable due to limited data availability, while Kosovo* is not included in the EIS. 

This year's European Innovation Scoreboard portrays a similar picture to  the Global Innovation Index (GII) 2023. As an illustration, three Western Balkan economies moved up the rankings out of 39 European economies covered in the GII 2023. 

Undoubtedly, more has to be done to close the innovation gap between our region and the EU. 

Strengths and weaknesses of Western Balkan innovation systems

The EIS provides a comparative assessment of the research and innovation performance of each economy, including the relative strengths and weaknesses of their research and innovation systems. It assists policy makers assess areas in which they need to concentrate efforts to boost their innovation performance. 

The following table shows strong and weak points in the region's innovation ecosystems. 

European innovation performance

The new top innovator with the best performance in the EU is Denmark, overtaking Sweden after a few years in leading position. 

Other Innovation Leaders are Sweden, Finland, the Netherlands, and Belgium. 

Austria, Germany, Luxembourg, Ireland, Cyprus, and France are Strong innovators, performing above the EU average.

The Moderate European innovators group is lead by Estonia, Slovenia, Czechia, Italy, Spain, Malta, Portugal, Lithuania, Greece and Hungary.

All Emerging Innovators are former Eastern European economies: Croatia, Slovakia, Poland, Latvia, Bulgaria and Romania.