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In the latest of a series of articles drawing on the original analysis and data collected by Emerging Europe as part of our Future of IT report, we look at Kosovo. With strategic policies and the energy of its entrepreneurial ecosystem, the country is transforming itself from a small player into a formidable contender.
Kosovo’s IT sector is carving out a reputation as a dynamic and rapidly evolving part of the regional digital economy.
Its stock is undoubtedly rising: the country is now ranked 11th (of 23 countries) in the latest, 2024, edition of the IT Competitiveness Index, part of Emerging Europe’s Future of IT report.
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Indeed, while Kosovo may be one of the smaller players in the Central and Eastern European (CEE) tech scene, its ambitions are anything but modest. Through targeted investments in talent, infrastructure, and entrepreneurial ecosystems, the country is steadily building a strong foundation for growth in IT services, startups, and innovation.
While challenges remain, Kosovo’s IT landscape is transforming, driven by a combination of government support, international partnerships, and the energy of a young and motivated workforce.
Talent development: The bedrock of digital innovation
Kosovo has made substantial progress in developing its digital workforce. Ranked seventh in the Talent subcategory of the IT Competitiveness Index with a score of 18.17, the country’s emphasis on IT education is evident.
Universities and vocational institutions are increasingly offering specialised courses in computer science, coding, and other digital skills, aimed at preparing students for the demands of the tech industry.
Recognising that education is only part of the equation, the government has launched several initiatives to enhance digital literacy from a young age. Programmes that integrate IT skills into school curriculums and extracurricular activities are designed to inspire the next generation of tech professionals.
However, talent retention remains a pressing challenge. Many skilled professionals leave Kosovo for opportunities abroad, drawn by higher wages and more established tech ecosystems.
To combat this, the government has partnered with international organisations to provide upskilling programs that make local talent competitive on a global scale.
Collaborations with companies in Germany, Switzerland, and other EU countries allow Kosovar developers and engineers to work remotely, creating opportunities without necessitating a physical move.
IT infrastructure: Building Kosovo’s digital backbone
A robust digital infrastructure is the backbone of any successful IT sector, and Kosovo has taken significant steps to expand connectivity. Ranked 11th in IT infrastructure with a score of 9.74, the country has prioritised increasing access to high-speed internet and mobile networks, particularly in underserved rural areas.
Government-led digital transformation initiatives have modernised public services, making them more accessible to citizens and businesses. The e-Kosova platform, for example, has digitised numerous administrative processes, reducing bureaucracy and promoting efficiency.
These efforts are crucial for fostering a digital culture that extends beyond the IT sector.
Kosovo is also investing in data centres and cloud services to support the growing demand for secure and scalable IT solutions.
The government’s commitment to infrastructure development is evident in its plans to roll out 5G networks in urban centers by 2025, a move that will further enhance the country’s digital competitiveness.
Economic impact: A small but growing contributor
Kosovo’s IT sector may still be in its infancy, but its economic contributions are increasingly significant. Ranked seventh in the Economic Impact subcategory with a score of 10.48, the sector is gradually becoming a cornerstone of the national economy.
Export-oriented IT services, including software development and outsourcing, are driving much of this growth. The ratio of ICT exports to GDP has steadily increased from 0.84 per cent in 2018 to 2.36 per cent in 2022.
Foreign companies are increasingly recognising Kosovo as a cost-effective destination for high-quality IT solutions. Outsourcing firms in Kosovo are particularly attractive to companies in Western Europe, thanks to the country’s favourable time zone, competitive labour costs, and growing talent pool.
Additionally, Kosovar IT companies have begun to carve niches in areas like fintech, artificial intelligence, and blockchain, attracting international clients and investment.
Business environment: Supporting start-ups and innovation
Kosovo ranks 15th in the Business Environment category with a score of 11.21, reflecting ongoing efforts to create a supportive ecosystem for IT start-ups and entrepreneurs. The government has introduced tax incentives, grants, and streamlined registration processes to encourage the establishment of new tech ventures.
One standout initiative is the Innovation Centre Kosovo (ICK), which has played a pivotal role in nurturing the country’s startup ecosystem.
Since its establishment in 2012, ICK has supported over 450 start-ups, providing them with funding, training, and access to state-of-the-art facilities. Notable success stories include Gjirafa, a regional e-commerce and digital marketing platform, and Appbites, a software development company with a growing international clientele.
Kosovo’s co-working spaces and technology hubs further bolster the entrepreneurial environment, fostering collaboration and innovation among start-ups.
These spaces serve as incubators for ideas, enabling young entrepreneurs to access mentorship, networking opportunities, and resources to bring their concepts to life.
Government support: A strategic vision for IT
The government has made the IT sector a priority since 2013, creating a long-term strategic framework aimed at enhancing Kosovo’s digital competitiveness. This strategy focuses on attracting foreign investment, encouraging public-private partnerships, and fostering collaboration between academia and industry.
One recent initiative is the establishment of digital innovation funds, which provide seed capital to early-stage startups. Additionally, government-backed coding academies and hackathons aim to cultivate a culture of innovation and problem-solving among young people.
Kosovo’s international partnerships also play a crucial role. The country works closely with the European Union and other international organisations to align its IT policies with global standards. These collaborations have facilitated the transfer of knowledge and technology, accelerating the growth of Kosovo’s IT sector.
A bright future
Kosovo’s IT sector is on the cusp of great things. With investments in talent development, infrastructure, and entrepreneurship, the country is laying the groundwork for sustained growth.
While challenges such as talent retention and the need for greater infrastructure investment remain, the progress achieved so far is a testament to Kosovo’s potential.
As the country continues to innovate and adapt, its IT sector is well-positioned to play a more prominent role in the regional digital economy.
With strategic policies and the energy of its entrepreneurial ecosystem, Kosovo is transforming itself from a small player into a formidable contender in the world of IT.
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