Electronics Industry

Sector Highlights

• Significant investment track record - previous investors include Siemens, Panasonic, Gorenje, Elrad, ATB, Gruner and Eaton
• Manufacturing tradition and skillset in place
• Sector of high priority - investors are entitled to more favorable investment incentive packages.

Sector Overview

Serbia is home to a rich tradition in the electronics industry that dates back to the days of Nikola Tesla, one of the greatest pioneers and inventors in the field of electricity. This industry had its peak in the 1980s, when Yugoslavia's electronics industry was a $1 billion sector that employed around 100,000 people. Although the sector today is still only a fraction of what it was back then, recent foreign direct investment into the industry and various state-driven initiatives suggest that this sector has strong potential for future growth.

The Serbian electronics industry presents over 1,700 innovative companies working in the sector, it also has the lowest total annual labor costs. Further, Serbia represents home to highly experienced and skilled workers. Technical education in Serbia is particularly strong with approximately 33% of university graduates coming from technical schools. For the reasons above, Serbia has a highly competitive electronics sector. It offers foreign investors not only the possibility to employ a highly skilled workforce but also to hire them at the most competitive prices in the South Eastern European region.

From 2001 onwards, this industry has witnessed a steady revival primarily driven by a continual inflow of foreign direct investment, totaling roughly €168 million. This, coupled with the upcoming opening of several IT-electronics parks, illustrates that the best is yet to come for companies in Serbia's electronics sector. Some key investments already in place are those of Austrian giant ATB Gruppe, Slovenian home appliance company Gorenje (which has invested a total of €50 million in three separate locations), Siemens and Panasonic's €13 million facility in central Serbia.

The Serbian electronics industry is a thriving, export-oriented sector that only figures to grow with the recent influx of foreign direct investment. Relative to 2008 and 2009, exports from the industry in 2010 grew by 15% and 44%, respectively. The 2009 economic crisis gap was surpassed swiftly in 2010 and, with new export-oriented projects such as the first Panasonic factory in Serbia, exports are expected to flourish further. Between 15 and 20 electronics companies each export more than €1 million per year.

The government of Serbia is actively promoting the growth of this sector: Along with the automotive and ICT industries, the electronics sector has been designated as one of the priority sectors in Serbia's National Development Strategy. This allows investors in this sector to receive more favorable investment incentive packages. Companies in this industry have taken advantage of this fact: investments in the electronics industry are third when it comes to the number of projects which have been approved for funding and the fourth highest in terms of all investments in Serbia since 2000.

Numerous initiatives, including the promotion of IT and Research and Development parks throughout the country and the founding of an electronic systems cluster, will propel the sector even further.

The largest foreign investors in the electronics industry