Serbian Economy vol. 4 by CorD Magazine

COMMENT

Smart Enough, But Not Yet

FAST ENOUGH

Over the last five years, we’ve seen coordinated efforts among different state bodies aimed at supporting the national innovation ecosystem and building stronger ties between start-ups and traditional companies and academia, supported by the EU and bilateral resources

erbia has recently sped up its efforts to transition to the knowledge-based economy, guided by the idea that lower middle-income countries may leapfrog others by building up their human capital and the more advanced parts of their economy. During previous years, some of the pillars of this policy shift have been incorporated into the Smart Specialisation Strategy (4S), 2020 to 2027, Industrial Policy Strategy, 2021 to 2030, Artificial Intelligence Development Strategy, 2020 to 2025, Scientific and Technological Development Strategy, 2021 to 2025 and Digital Skills Development Strategy, 2020 to 2024, as well as being supported by the Strategy for Education Development, 2030, and a series of amendments to tax law and others, aimed at providing an alternative source of capital that’s important for supporting innovative companies. In this endeavour, the roles are more equally distributed between market forces and the private sector, on one side, and the state on the

Serbian Economy 2021

To summarise, there are opportunities, but also a lot of work to do to fulfil the promise of Serbia leapfrogging to a knowledge-based economy other – through its strategic support to digitalisation and technological development. On the top of that, other sources are also providing financial support, predominantly in the form of EU resources from IPA funds and the Horizon programme, and bilateral support like, for example, Chinese funding for artificial intelligence and biotechnology, and U.S. funding for digital transformation processes. Many other international actors are also supporting these trends. Research, development and innovation activities are financed primarily by two state funds: the Innovation Fund and the Science Fund. They rely on a combination of state funds and the aforementioned forms of EU support.

The Innovation Fund strictly adheres to the criteria stipulated in the Smart Specialisation Strategy and supports both very young start-ups (expanded as of recently to include those in the very early stages of development) and SMMS that cooperate with academia to transform innovations into commercial products, services and processes. Since its inception, the Fund has poured about €31 million into these programmes. The Science Fund, on the other hand, supports a broad range of R&D activities, only some of which are closely connected with business purposes. It has to date invested some €32.8 million. Taken as a whole, Serbia’s public and private sectors allocate about 0.89% of GDP to R&D activities, which is far less than the EU average, where such investments equate to between two and 3.2% of GDP. The impressive rise of export-orientated, high andmediumtechnologicallyadvancedcompanies in Serbia is a sign that things are looking up, but the level of cooperation and exchanges of knowledge between academia and innovative and traditional companies has yet to improve. This is clearly demonstrated by some of the indicators. For example, measured according to its overall innovation capacity, Serbia was ranked 83rd out of 141 countries by the 2019 Global Competitiveness Report. On the other hand, in the globally novel area of artificial intelligence (AI), Serbia is ranked 10th among the 20 countries of the Central and Eastern European region, while it occupies 46th place globally among the 172 nations that are measured by the AI Readiness Index. As you will see pointed out in interviews published throughout this edition, it may be possible for AI to find its applications in the growing automation of the automotive sector and industry.

Serbian Economy 2021

INTERVIEW ANĐELKA ATANASKOVIĆ, ECONOMY MINISTER OF THE REPUBLIC OF SERBIA

We’ll Encourage The Modernisation Of

PRODUCTION PROCESSES Today’s market is ever more demanding and competitive, and companies that miss out on transforming digitally and don’t encourage innovation face the possibility of becoming technologically obsolete and thus losing their position on the market. Through coordinated policies of the Government of Serbia, we will encourage our companies to introduce a wide range of innovations, which will result in increased economic growth and higher exports.

ccording to analyses conducted by economic experts, the technological intensity of Serbian exports and the speed of technological convergence have been becoming increasingly favourable in recent years. This is also confirmed by data presented to CorD by Serbian Economy Minister Anđelka Atanasković. “In the 2014-2020 period, the structure of exports shifted to favour industrial areas of high technology and medium to high intensity. The areas of high technological intensity that have been recording mild growth include the

Serbian Economy 2021

production of basic pharmaceutical products and preparations and the production of computers, electronics and optical products. The average participation of these two areas stands at 3.5%,” says our interlocutor. “In the same period, the area of medium-high technological intensity had the largest share and amounted to 36.9%. Within the scope of this technological group, the best results were achieved in the production of electrical equipment, motor vehicles, trailers and semi-trailers, regardless of the fact that they experienced a slight downward trend in the

share of chemicals and chemical products.” Similarly, according to Minister Atanaskovic, the area of medium-low technological intensity also had a high share amounting to 27.9%, with the standout products being those made of rubber and plastics, as well as base metals. Serbia adopted a new Industrial Policy Strategy recently, which is synchronised with the Smart Specialisation Strategy. In the development of these complex policies, which areas included the participation of your ministry?

INVESTMENTS

INNOVATORS

EDUCATION

The Ministry of Economy will continue working on Serbia’s further development and modernisation as an investment location, but also on enticing more technologically developed companies

The leading industries in digital transformation are trade, the metal and electrical industries, expert, scientific and technical activities, as well as the sectors of food, construction and the creative industries

Our focus includes the harmonising of digital education with the needs of industry and activities aimed at strengthening the digital skills of employees in industry, through the system of non-formal education

- Alongside the expert working groups that were engaged on the drafting of the Industrial Policy Strategy and the Smart Specialisation Strategy, an inter-ministerial working group was formed and its work was coordinated from the Prime Minister’s Office. The drafting of these strategies was carefully coordinated, bearing in mind that they have very similar goals – to raise the competitiveness of industry, i.e., the economy – and that these two strategies practically complement one another. Additionally, within the scope of the specific objectives of the Industrial Policy Strategy that are dedicated to digitalisation, innovation and export restructuring, there are a number of activities that are supported by the findings of the smart specialisation process. Through the work of the aforementioned inter-ministerial working group, industrial policy is coordinated with all other relevant policies, as well as being harmonised with projections of future economic trends, including in the monetary and fiscal sphere.

- I would remind your readers that the Industrial Policy Strategy of the Republic of Serbia from 2021-2030, as well as the action plan for its implementation, contains two special goals, which should – alongside other special goals – contribute to raising the competitiveness of

The Digital Transformation Programme is envisaged as additional support and will, among other things, provide subsidies of up to 6,000 euros in dinar equivalent to all enterprises that receive verification of having undergone the digital transformation process. Alongside this, plans also include activities aimed at raising the level of digital security for industry, harmonising digital education with the needs of industry and activities intended to strengthen the digital skills of employees in industry, through the system of non-formal education. Within the framework of the second specific goal (Development of industry based on innovation and development of higher stages of technological production), support activities are envisaged for the development of innovative solutions for businesses that form part of institutional infrastructure, such as clusters and business incubators, as well as support for the development of their production processes and organisational capacities.

Which mechanisms does the ministry use to influence the creation of policies in the field of education, which is in the process of gaining a strategy of its own that will run until 2030? What is your response to the growing shortage of labour? - The Ministry of Economy, in cooperation with the Ministry of Education, Science and Technological Development and the Agency for Qualifications, strives - through the activities of the Sector Skills Council for Industrial Development - to determine the qualification needs of the labour market in the Republic of Serbia, through analysis of existing qualifications and determining the required qualifications in this sector, identifying qualifications that need to be modernised, but also qualifications that no longer meet the needs of the sector, as well as promoting dialogue and collaboration between the worlds of labour and education. Which measures does your ministry use to encourage innovation and digital transformation?

We support companies that devote attention to modern technologies and form departments to conduct research and development within the scope of their capacities, as that will make our economy even more competitive and result in increased exports and growth as a whole our country’s industry, dedicated to innovations and digital transformation. Specifically, within the framework of the first specific goal (Improved digitalisation of industrial production business models), a series of promotional activities are envisaged to raise awareness of the need for digital transformation, as well as a series of educational activities that will help the economy to apply these solutions practically.

To what extent are favourable technological changes a result of the arrival of increasingly sophisticated foreign investors, and to what extent are they the creation of domestic medium-sized companies that are ready to apply new technologies? - A stable business environment, with a recognisable and attractive investment environment, is one of the reasons that companies are interested in investing in Serbia. The Ministry of Economy will continue working on Serbia’s further development and modernisation as an investment location, and the aim will certainly be to bring more technologically developed companies, as has been the aim to date. We mustn’t forget that new investments drive entire chains of domestic suppliers and manufacturers, as well as the introduction of new technologies and new employment. I must note that we are considering further directions for the development of the Serbian economy through those economic branches

Serbian Economy 2021

INTERVIEW are based on, or related to, associated scientific and technological achievements. Within the scope of this programme, scientists use artificial intelligence to develop a software system for agriculture, create tools for saving electricity, develop a versatile and intelligent production system for Industry 4.0, improve algorithms for increased safety at work and conduct research that will yield results that will be applicable in other sectors of industry. There is noticeable interest in these projects in the economy, but also among researchers who possess or are developing the skills required to develop algorithms or systems based on artificial intelligence. Some of the project teams have already established cooperation with the economy, both with domestic and foreign companies. and areas in which we already have growth, but also through those areas that need additional stimulation to achieve better results. In this context, in the period ahead we will consider the possibilities of greater incentives for advanced technological solutions in the manufacturing sector and modernisation of production processes. We need to devote more attention to the possibilities of introducing and more broadly applying modern technologies, as well as to research and development, which in combination can have a positive impact on reducing operational costs, but also creating new value. By providing new opportunities to export companies, but also those companies that devote attention to modern technologies, and accordingly forming departments to conduct research and development within their capacities, our economy will be even more competitive on foreign markets, which will result in increased exports and growth as a whole. Otherwise, with the aim of attracting both domestic and foreign investors, the Investment Department of the Ministry of Economy applies four regulations in its work that govern the criteria for granting incentives to attract direct investment, as well as attracting direct investment in the food production sector, the automation of existing capacities in the domain of the food industry and the sector of hotel accommodation services. With the applying of these regulations, through direct investments, we have also en-

Serbian Economy 2021

There is noticeable interest in the economy for projects in the area of artificial intelligence, but also among researchers who possess or are developing the skills required to develop algorithms or systems based on artificial intelligence abled, among other things, the automation of existing capacities aimed at improving the productivity of recipients of incentive funding. Which of the innovations supported by the Innovation Fund and the Science Fund would you single out as being particularly important for providing an impetus to certain smaller or larger sectors of industry? - The Innovation Fund provides financial support for the implementation of development and innovation projects. The Fund has to date supported more than 220 projects, through which more than 300 new, innovative products have been developed. When observing the industrial areas to which they belong, half of all innovations supported by the Fund are in ICT domain, followed by the food industry, agriculture and mechanical engineering. Within the framework of the Programme for the Development of Artificial Intelligence, the Science Fund finances 12 scientific projects that use innovative artificial intelligence methods that

In which sectors do you see the leaders of digital transformation? Are those some of the classic sectors, or some newly created industrial sectors? - On the basis of cooperation between the Ministry of Economy and the Serbian Chamber of Commerce & Industry’s Centre for Digital Transformation, half of all companies plan to advance operational processes through automation and the connecting of their systems and processes in a single solution that will enable all-encompassing review and control. Despite the fact that this represents an opportunity for companies to reduce costs, it simultaneously also includes challenges. In almost all cases, it is essential to initially reengineer existing processes and optimise them prior to proceeding with digitalisation. The most common advances in digital transformation for companies that have implemented solutions with the support of the Centre for Digital Transformation relate to improvements to business processes (74%), improvements to the business model (15%), improvements to services (8%) and improvements to products (3%). On the basis of the results of the joint work of the Centre for Digital Transformation and the Ministry of Economy, the leading industries, or the sectors that have the greatest need and strive for digital transformation the most, are trade, the metal and electrical industries, expert, scientific and technical activities, as well as the sectors of food, construction and the creative industries.

Serbian Economy 2021

INTERVIEW MARKO ČADEŽ, PRESIDENT OF THE CHAMBER OF COMMERCE & INDUSTRY OF SERBIA

We Connect Science And

THE ECONOMY

If we wish to raise the technological level of our economy, it is important to secure favourable conditions to raise credit for the procurement of modern machinery and equipment, as well as support programmes for the digital transformation of traditional industry and the automation of their processes, to adapt our education systems to the needs of the labour market and encourage the use and production of green energy and transferring to the business models of the circular economy.

he structure of the economy can’t change overnight, nor even over the course of a year or two. But testifying to the progress achieved is the fact that that Serbia hasn’t only increased its sales fivefold on the international market in the last fifteen years, but has also significantly changed the structure of its export offer. While our lists of export commodities used to be dominated by raw materials and primary agricultural products, in the previous period we’ve seen a significant increase in the share of the processing industry and higher value-added goods, primarily in the form of motor vehicles, auto parts and electrical devices. “The latest analyses of the editorial team of magazine Macroeconomic Economic Analysis and Trends are encouraging, as they indicate above-average growth in exports of high and medium technology products, and particularly exports of high-tech products,” says Marko Čadež, president of the Chamber of Commerce & Industry of Serbia. Sales of high-tech products on the international market have increased almost 15-fold over the past decade and a half - from 77.4 million euros in 2005, to 1.16 billion euros last year. Exports of high and medium technological complexity products, which amounted to only 13.5% 15 years ago, today account for a third of Serbia’s total goods exports, according to these analyses. Simultaneously, we are seeing constant increases in exports of Serbian services, and the surplus in exchanges of services with the outside world. Last year’s value of exported

Serbian Economy 2021

POTENTIAL

INCENTIVES

INNOVATIONS

Serbia has huge potential in the science and research sector, but that potential is not sufficiently utilised in the creating of new higher added value products and services

We have two key assets when it comes to attracting high-tech companies that open their own R&D centres in our country: capable people and a serious package of tax incentives.

Our objective is to connect companies that have capital and require innovative solutions with the innovative technological and scientific research community.

services was 2.5 times higher than it was ten years ago, while the surplus was 8 times higher. The largest share and greatest contribution to that growth has been provided by IT services, the export performance of which – according to these data - increased from 171 million euros in 2011 to 1.3 billion euros in 2020, with average annual growth of 26 per cent. Who instigated that change: was it exclusively foreign investors, or also innovative domestic companies? - Foreign investors have, without a shadow of a doubt, provided a great contribution to reducing unemployment, increasing exports, changing the structure of exports and accelerating economic growth in the previous period. For example, thanks to the investments of German companies, about 70,000 people have gained employment in Serbia, and today almost 90 per cent of our goods that are exported to the German market are industrial products, more than 80 per cent are goods with a higher degree of processing, and more than half are represented by machinery and devices. Foreign investments are also important because of the technologies, standards and business models that they transfer to our economy from the developed world. With the arrival of foreign investors, local companies receive market competition that encourages them to improve themselves, to strengthen their capacities. In striving to emulate foreign corporations, domestic firms adopt their technologies, standards and business management principles, becoming more capable of inclusion in global supply chains. The structure of Serbia’s economy is also improved thanks to the contributions of large domestic business systems, some of which have dozens of companies in their structures and engage hundreds of local suppliers in their chain. The impact of their investments, as well as their influence on the development of the domestic economy, shouldn’t be undermined. Serbia’s largest business systems have announced individual investments of 50-plus million euros for this year alone.

One important step in strengthening links between the economy and science is the introduction of dual education to colleges, which will start this autumn However, it is equally important for the recovery and further growth of the economy as a whole to support healthy small and medium-sized companies as they continue investing in the expansion and development of their operations, to improve productivity and strengthen their companies and the competitiveness of their products. Sticking to foreign investors, when we observe the structure of foreign investments made in Serbia over the last two to three years, how many of them could we classify as being made by

companies that bring medium- and higher-level technologies to our country? - The vast majority are precisely those kinds of companies. The decrease in unemployment to a level below 10 per cent has enabled us to instigate a turnaround in the policy of incentivising foreign investments in recent years, for us to shift towards focusing more on attracting companies which, apart from creating new jobs, bring the latest technologies to Serbia and contribute to raising the technological level of our economy, creating products with added value and employing a highly educated workforce. When it comes to attracting high-tech companies that increasingly decide to not only open factories in Serbia, but also to create their own research and development centres in our country, we have two key assets: people who are competitive, trained, skilled workers, top experts and world-renowned engineers; and a serious package of tax incentives for investing in research, development and innovation. Thanks to all of this, Serbia is on route to becoming one of Europe’s leading hubs for high-tech companies. Apart from Microsoft, which has had its regional development centre in Serbia for years, and NCR, which is finalising the largest technological campus in Europe here, there are companies like Continental, Draexlmaier, ZF Friedrichshafen, Brose, Nidec etc. that already have, or are set to establish, their own R&D centres in our country. Serbia has also been chosen as an investment and business destination in recent years by other leaders in their fields, such as Zumtobel, Toyo Tires, Fischer Automotive Systems, Barry Callebaut, MTU Aero Engines, Bizerba, Stadler etc. What is suggested by the Smart Specialisation Strategy? When it comes to Serbia’s comparative advantages, were you surprised by the research that preceded this strategy? - The industries marked as having the greatest development and export potential, in which we will direct future investments, are: the food industry (food for future); the manufacturing of technologically advanced machines and devices, including the automotive industry; and the ICT

Serbian Economy 2021

INTERVIEW and creative industries. And there really were no surprises in that. This was also confirmed by domestic analyses and recognised by foreign investors. For instance, the production of food products, together with the beverage and tobacco industries, attracted the most foreign direct investment over recent decades – representing 20 per cent of total FDI in the processing industry. The lion’s share of foreign investments over the last few years – viewed both on the basis of value and the number of realised projects – have been in the automotive and auto parts industry, which is particularly important when we consider the technologically intensive nature of producing cars, machinery and equipment, which carry greater added value and bring the possibility of greater industrial sophistication, and thus help improve the structure of exports by increasing the share of products with higher technological complexity. When it comes to IT, this isn’t only the Serbian economy’s fastest-growing sector and one of its four leading industries, with growth of revenue and employment exceeding the economy’s standard level and annual export growth averaging 26 per cent, with top experts, software solutions and products that are recognised and used around the world. Rather it is also a sector that is an important asset when it comes to attracting high-tech companies from other sectors, but also a pillar of support for the domestic economy in the processes of transforming and advancing production and operational processes. By relying increasingly on the IT sector and young, highly educated creative people, Serbia’s creative industries have been recording the continuous growth of added value and exports of newly registered companies and entrepreneurs over the last five or six years, to now exceed a GDP share of seven per cent. Apart from the production of video games and interactive media, the Serbian creative sector’s greatest potential lies in the field of audiovisual production, supported by state incentives for the shooting of foreign and domestic films and television series. How does the Chamber of Commerce & Industry of Serbia contribute to strengthening the Serbian economy’s innovation potential? - Apart from participating in the drafting of advanced business regulations, we also provide

Serbian Economy 2021

world. Our objective is to connect companies that have capital and require innovative solutions to improve their production and operational processes with the innovative technological and scientific research community, which has ideas and solutions for the business challenges confronting the economy.

We are delighted that the Ministry of Economy has recognised our Centre for the Digital Transformation of the Economy as one of the partners for implementing measures to advance the digitalisation of industrial production assistance to companies in applying innovations and strengthening their innovation potential and their ability to create their own innovations. And, perhaps most importantly, we help in securing better access to financing from corporate, state and European funds. Apart from being the nexus in connecting science and the economy, we also work on the mutual networking of companies: connecting the technological, innovative start-up community with major companies; connecting the ICTsector with traditional industries; and connecting our high-tech companies with others around the

How do you envisage future cooperation between science and the economy? - It is essential for science and research to be put in the function of economic and technological development by establishing stronger ties between the economy, R&D activities and investment capital. As such, it is important to change the attitude of science towards the economy and vice versa, and to establish a system that will ensure better communication, greater understanding and better coordination of all actors in the chain: from the state, via academia and individual innovators, to the business community. Serbia has huge potential in the science and research sector, but that potential is not sufficiently utilised in the creating of new higher added value products and services. A large number of projects that have been implemented at local universities and scientific institutes are only known to academic circles, i.e., they are rarely applied in domestic practises. Scientific research organisations are mainly financed from budgetary sources, only generating around a quarter of their total funding on the market, which is significantly below the EU average. In conjunction with that, the share of domestic private sector investment in R&D remains many times lower than is the case in the developed world. The solution lies in a strategic partnership between science and the economy that would be established and led by scientists and professors who understand business and by businesspeople who understand the importance of science and research. The economy expects the academic community to focus more on finding solutions to specific economic problems, while the university expects to receive information from the economy that will help direct it towards educational programmes and techniques that are aligned with the needs of companies. One important step in the strengthening of these links is the introduction of dual education to colleges, which will start this autumn.

BOJANA VESIĆ ANTIĆ, HR DIRECTOR AT G4S SECURE SOLUTIONS

INTERVIEW

BUSINESS

Living The Values, Protecting

LIVES AND PROPERTY Over the course of around a hundred years, G4S has evolved from a company specialising in manned security to a company providing efficient and effective integrated security solutions with people at their essence Academy experts is passionate about securing your world, by offering the latest solutions and utilising industry knowhow to address future security needs, as well as sharing that knowhow with our clients. How would you describe the organisational culture of your company, which is among the world’s largest private employers?

More than a third of our employees are colleagues who’ve been with the company for 10 or more years. People connect with people and work for people, which is what characterises this team

ur values are core to shaping the culture of our organisation, helping to guide, unite, differentiate and sustain us. They are integral to everything we do.

G4S is an international company that has several hundred thousand employees. What do they all have in common? Is it their goal, vision and mission? - This year American Allied Universal acquired and became the owner of G4S, a global leader in the security field. Our mission is to preserve the values, lives and property of the clients who place their trust in us. More than 800,000 employees, 3,500 of which are in Serbia, are connected by our corporate values being integrity and respect, safety and service excellence, teamwork and innovation. Our global community of G4S

- One of the biggest projects we’re planning for this year is the adapting and changing of our organisational culture, in accordance with the needs of employees and the ever-increasing challenges that we face in the business world, both at the global and local levels. G4S in Serbia is composed of three cultures of the companies that have laid foundations we use today to successfully build our recognisable and unique position in this industry. We protect your world - but our mission doesn’t end there. We live diversity through our employees who hail from different regions and cultures of Serbia. We promote and support women in security through intensive employment and education. We support various activities within the scope of our CSR programme - our employees participate with their personal donations and by devoting their private time to educating vulnerable groups.

This is all us and our values that form part of the culture we want to preserve and upgrade, and that makes us very proud. G4S has many employees that have been part of the team for more than 20 years. How would you explain such loyalty? Is it the result of business relationships built on trust, good organisation, respect...? - More than a third of our employees are colleagues who’ve been with the company for 10 or more years. People connect with people and work for people, which is what characterises this team. We have a large number of employees who know their job well and maintain excellent relations with clients, recognising all the risks and reacting in a timely manner to prevent them. Considering the fact that anti-competitive practices exist in this industry and that many employees have previously had negative experiences, G4S is a company that provides its staff with the kind of security that they had not had with their previous employers. This is the most common statement of all colleagues in the surveys that we’ve conducted. A significant number of employees also point out the good organisation which distinguished itself during the pandemic and the state of emergency, when we showed that we care equally for everyone. That said, we transported colleagues to and from work, organised testing and sent out “health packages” to all those who fell ill. The most important element is that everyone kept their job. All of the aforementioned activities represent a sign of mutual trust and respect that people recognise and know how to reward.

Serbian Economy 2021

BUSINESS

YEAR THAT CHANGED EUROPE’S HEALTH PICTURE Europeans have confirmed the clear impact of the pandemic on the mental state of citizens: one in four people feels restless, while even more of them are suffering from anxiety and 15 per cent of respondents say they have trouble sleeping

he burnout syndrome is most pronounced among Serbian citizens – as shown by the results of a new international research study conducted by the Stada Group, to which Serbia’s Hemofarm belongs, on how Europeans have coped with the COVID-19 pandemic and the extent to which their lives have changed during the previous period. Under the scope of this research, Stada examined the thoughts of people in 15 European countries (including Serbia) regarding the impact of the ongoing COVID-19 pandemic on their physical and mental health, their habits related to health and hygiene,andalsotheextenttowhichtheytrusthealth workers, but also so-called influencers in this area. Lockdowns and other restrictions imposed during the pandemic had a significant impact on Europeans: almost one in three residents (29 per cent) suffered from elevated anxiety levels, while one in four had problems with stress and internal unrest. Another 15 per cent of Europeans reported sleeping disorders. These symptoms more often affected young Europeans than those aged over 35. When it comes to the impact of the pandemic on the mental health of citizens in Serbia, a third of respondents (31%) admit that it caused them

Serbian Economy 2021

When it comes to the impact of the pandemic on the mental health of citizens in Serbia, a third of respondents (31%) admit that it caused them stress leading to internal unrest, while at the same time almost as many respondents (29%) said that they didn’t experience any mental health issues as a consequence of the pandemic stress leading to internal unrest, while at the same time almost as many respondents (29%) said that they didn’t experience any mental health issues as a consequence of the pandemic. The possibility of contracting COVID-19 is not the main cause of concern: most Europeans were harder hit by the lack of personal contact with family and friends (52 per cent). Fear of infection is ranked second, with 42 per cent, while almost a third of respondents are concerned about the financial and business consequences of the pandemic. Feelings are similar among citizens of Serbia: 51 per cent of them were most concerned about the lack of contact with their nearest and

dearest, while fear of infection was confirmed as the greatest concern by 39 per cent of respondents in the country. Fear related to finances and future business was also confirmed by 39 per cent of Serbian citizens surveyed. When it comes to prevention and a healthy lifestyle, the vast majority of Europeans (70%) are willing to invest more in their own health. Specifically, 45% of respondents now eat a healthier and more varied diet, while they are also willing to pay extra for that. Approximately a third of Europeans have recently added some form of physical activity to their leisure activities. In Serbia, more than half of respondents (54%) confirmed that they’ve bought healthier and better-quality food during the previous period, and almost a third (mostly among the younger population) have dedicated themselves to sports. Hygiene measures have played an unprecedented role in our lives to date. However, Europeans don’t want to collectively abandon them any time soon: 45 per cent of respondents said that they will continue regularly washing their hands, a third plan to maintain the recommended minimum safe distance from others, while a fifth even want to continue wearing facemasks in public. Generally speaking, 74% of Europeans are satisfied with their healthcare system. Compared with the previous year, this number was down three per cent. Swiss citizens feel like they receive the best care (91%), while Ukrainians are most dissatisfied with their healthcare system (25%). For 73 per cent of Europeans, doctors are the first point of contact for all health issues, while pharmacists and scientists also enjoy great trust (60 per cent each). As many as 81 per cent of respondents are convinced that pharmacists and scientists, together with medical personnel, are the most deserving of our gratitude for their work in the struggle against COVID.

DRAGANA SIMOVIĆ, SALES & MARKETING MANAGER, M&M (MILITZER & MÜNCH) SERBIA

BUSINESS

M&M CONNECTING WORLDS Militzer & Münch Serbia has quickly become a serious competitor on the transport and logistics market of the Republic of Serbia, with increased demand having prompted it to invest eight million euros in a new logistics centre in Dobanovci man business leaders with the kind of service they have in their home country. Considering the situation caused by the pandemic, our company’s management reorganised operations, i.e. the provision of services, in such a way that we immediately offered our clients the possibility of transferring operations to digital platforms. In accordance with that, our further development is based on digitalisation and reducing manual work. Since the outbreak of the pandemic, the entire transport and logistics sector has turned towards innovative digital solutions,

“M&M Connecting Worlds” is our company motto, which fully describes M&M’s aspirations to connect countries on all continents

and this trend is set to continue in the coming years. Our sector is undoubtedly moving towards the B2C business model, with the optimisation of business processes, because many supply chains ground to a halt during the previous year, and globalisation is itself changing course.

Militzer & Münch Serbia was recognised as a serious market competitor very quickly after arriving in the country. How would you assess the development potential of the transport and logistics sector? Thanks to an aggressive “brand & awareness” campaign, we managed to distinguish ourselves from the competition and bring the German business model closer to all interested parties, as well as providing Ger-

How much has M&M contributed to better connecting Serbia and the building of more successful relations between the country and the rest of the world? “M&MConnectingWorlds”isourcompany motto, which fully describes M&M’s aspirations to connect countries on all continents. M&M Serbia has placed its focus in 2021 on, among other things, the development of the Air & Sea sector, which should connect the most remote parts of the world. Within the scope of the Air sector, we offer all types of services – from Door-to-Door, Consolidated

hanks to a densely developed network of M&M branches in 27 countries, and partner companies, we enable expeditious, tailor-made logistics solutions, as well as other services from our portfolio - reveals M&M Serbia Sales & Marketing Manager Dragana Simović, speaking in this interview for CorD.

Multimodal transport and Charter service, all the way to the On Board Courier service. On the other hand, within the scope of Sea transport services, we offer FCL, LCL, Split and full charter solutions. Our portfolio also includes a Rail service, which we perform using our own train that travels from China to Central Europe. Your new logistics centre in Dobanovci meets your current needs, but is it true that you’ll have to additionally expand the centre if you continue to grow at the current rate? We are extremely proud of the fact that, in less than two years, we’ve made an investment in our logistics centre that’s worth eight million euros. The growth that we’re facing requires additional investments, both in terms of warehouse space and process automation, but also in terms of personnel. In the coming months, we expect to reach agreement on additional investments, or the approval of funds for further investments, with the Board of Directors of M&M International Holding AG and Invictus System. You’ve revealed some of your plans and upcoming projects in Serbia, but have you considered expanding your regional presence and opening branches in Montenegro, B-H, Albania etc.? As we announced, we officially opened branches in Podgorica and Sarajevo recently, which was our plan for the first half of 2021, while we are in the process of opening branches in Tirana and Priština. We expect to welcome the first employees as early as 1st July, as well as the start of the first jobs. This move will enable us to partially cover the region of the Western Balkans by year’s end, while the plan for 2022 is to cover North Macedonia with a branch in Skopje.

Serbian Economy 2021

BUSINESS

MINISTRY OF MINING AND LEADING MINING COMPANIES PARTICIPATE IN NSTLAW AND CANSEE

PANEL DISCUSSION

On 15th June 2021, a panel discussion on the recent Mining Law Amendments was organised by NSTLAW in cooperation with CANSEEthe Canadian-Serbian Business Association at the Hilton Hotel.

ttendees were addressed by H.E. Mr. Giles Norman, Ambassador of Canada, who emphasised that Serbia has become one of the most interesting mining markets in Europe, and the Mining Law Amendments presented a positive step forward. Nenad Stanković, Founder and Managing Partner of Stanković and Partners (NTSLAW), moderated the discussion with participants H.E. Mr. Giles Norman – Ambassador of Canada, Ms. Mirjana Doncic–Beaton, CANSEE Canadian-Serbian Business Association, Ms. Dragana Jelisavac Erdeljan, Ministry of Mining and Energy, Mr. Nenad Rakić, Balkan Gold, Mr. Dušan Simić, Jantar Group, and Mr. Marijanti Babić, Rio Sava Exploration. Along with the Ministry of Mining and the panelists, representatives of Rio Tinto, Zijin Mining, Dundee Precious Metals, Balkan Gold, Adria Minerals, Mundoro Capital and others took an active part in the discussion. The Government of the Republic of Serbia outlined the main amendments and new investment opportunities in the sector. Dragana Jelisavac Erdeljan stated that she expected the amendments to result in the modernisation of the mining sector, and that the aim of the Law wastoremoveinadequaciesobservedinpractice duringimplementationofthepreviouslegislation. When asked about the new possibility for investors and the Republic of Serbia to conclude investment agreements, Marijanti Babić said that such an opportunity had also existed before, albeit in a different format, and that investment agreements have been available for many years in Australia, Portugal, Romania and Greece. Such agreements will be regulated in more detail through additional

Serbian Economy 2021

bylaws that will be passed in due course. Babić also noted that the novelty in terms of bank and corporate guarantees was important and was favourable and stimulating for investors. The newly introduced amendments envisage the introduction of E-mining. As explained by Dragana Jelisavac Erdeljan, this new feature will simplify procedures and overall efficiency. Simić stated that the amendments to the Law that introduced classification of (solid) mineral resources and the classification of reserves of mineral resources based on the Pan European Reserves and Resources Reporting Committee (PERC) Code were international standards that would reduce costs for stakeholders and more efficient research activities. Nenad Rakić noted that the amendment to the Law that referred to authorisations of the inspections regarding professional supervision was a significant change. The

new Law stipulates that the professional supervision cannot be done by a legal entity that is also the researching entity. The panel concluded that the amendments to the Law on Mining and Geological Research provide opportunities for improvement in that sector, but that there were certain ambiguities and that there were expectations with respect to responsible development given the controversy over this topic. We would like to express our gratitude to the Embassy of Canada and Ambassador Norman for their support in this panel and look forward to working together to secure the most optimal framework in this dynamic sector. Further thanks to all the panelists, our guests and our long-term partner CANSEE – Canadian – Serbian Business Association for their active participation and contribution to the organisation of this panel discussion.

Humane banking: Mobi Banka employees collect 305 thousand dinars during marathon In the "Kilometer of messages" action, 1,527 SMS messages were sent to the Budi Human Foundation

n the humanitarian action named “Kilometre of messages”, the employees of Mobi Banka collected 305 thousand dinars of aid for the Budi Human Foundation, which helps finance the treatment of rare and serious diseases. Mobi Banka employees who participated in the marathon, half-marathon, or pleasure walk sent one SMS to the number 3030 for each kilometre covered. “I thank my colleagues who participated in this action. Actions like this are an example of humane banking that we advocate. I am most proud of the marathoners of our bank who designed this action and encouraged my colleagues to participate in the marathon and help those who need it the most,” said Marija Popović, President of the Executive Board of Mobi Banka. 491 marathon runners participated in this year’s Belgrade Marathon, with Telenor as their exclusive partner, along with 3,043 half-marathon runners who finished the race. For the first time in the marathon’s history, instead of a fun run, a pleasure walk was held in the spirit of supporting people with disabilities under the slogan “Without Barriers”. “We take care of employees and their health, so we decided to design this action and give colleagues an additional reason to participate in the marathon, and at the same time give at least a small contribution and help those who need our help the most”, said Nenad Joksimović of Mobi Banka Human Resources, who completed the race in 2:22:37.

Serbian Economy 2021