Innovation and creative industries as a basis for Serbian reindustrialization

Abstract

A deep economic crisis affecting all the economies of South-Eastern Europe (SEE), including Serbia, has reignited the debate concerning the need for a new type of industrialization. While many other authors call for strong state intervention in select economic sectors, we strongly maintain that the best way to avoid the middle-income trap is to support the development of clusters and creative industries, buttressing innovation processes and the overall competitiveness of the economy. In this article, building upon the ongoing research on the importance of innovation and creative industries as key forces in the process of economic development, we analyze and shape policy recommendations, aiming to restore the growth of GDPpc and gradually reduce the development gap in SEE region relative to developed countries. Serbia, specifically, needs to shift from the investment-driven stage of competitiveness to innovation-driven stage, by completing outstanding tasks from the factor-driven stage, especially relating to institutions and infrastructure development, and by focusing on innovation infrastructure. A favorable circumstance for Serbia and the SEE lies in their success in improving Global Innovation Rankings during the crisis; nonetheless, analyzed global reports also show weaknesses that need to be managed. In addition to supporting innovation policy and clusters, more comprehensive measures should be undertaken in improving the business-enabling environment, education (especially multidisciplinary approach) and access to finance.

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