Developing a Knowledge-Based Economy as a Factor to Raise The Competitiveness of The Serbian Economy

The most developed and most competitive countries today (including the leading countries of the European Union) are so-called “knowledge-based economies”, where knowledge, information and highly sophisticated skills play an important role in the development of the business and public sector. Knowledge and technology are becoming ever more complex, participation in knowledge-based economic activities is significantly increased (high-tech production and knowledge-based services), and connecting companies in these areas with private and public institutions facilitates development and the successful application of new innovations, thus raising the level of competitiveness of companies, industries and the country as a whole. In the last few years, rapid growth in the international trade of high-tech products and knowledge-based services has significantly changed a large number of countries’ international competitiveness. These trends show that creating, implementing and commercializing new technology and knowledge facilitates the development of high-tech products and knowledge-based services, which have become an important source of increasing productivity and manufacturing and export competitiveness. Thus high-tech sectors have become an important source of high added value and well-paid jobs, plus sustainable economic growth and global competitiveness. According to the World Economic Forum’s competitiveness rankings, Serbia is 95th out of 144 countries and is in the group of the 33 countries whose competitiveness is efficiency-driven. The achieved level of competitiveness of the domestic economy and the achieved level of economic development (Serbia is 75th in the world for GDP per capita in dollars) points to low productivity in the use of available (human, capital, financial, etc.) resources accompanied by high current spending, which is not a situation that is sustainable in the long-term. The research starts from the assumption that the development of high-tech- and knowledge-based activities plays a significant role in strengthening the competitiveness of the economy. A comparative analysis examines the link between the lagging Serbian economy in terms of competitiveness and the slower development of a knowledge-based economy, compared to the most highly developed European countries and selected countries in the region. A structural analysis and comparison of the most important business indicators (employment, productivity and added value) of high technology and knowledge-based companies shows the development and basic characteristics of the knowledge-based economy in Serbia and the macro-competitive position of Serbia compared to the leading and neighboring European Union countries. The paper also identifies the most important factors of developing a knowledge-based economy in Serbia, which needs to be improved to facilitate significant development of high-tech and knowledge-based activities as the basis for the future competitiveness of the domestic economy. The final objective of the paper is to point out the need for more substantial and faster development of a knowledge-based economy as a prerequisite for achieving long-term international competitiveness and sustainable development of the Serbian economy.