The Western Balkans IT sector has turned a difficult history into a key selling point, and clients are increasingly willing to pay for it.
Three World Bank economists, Sanja Madzarevic-Sujster, Richard Record, and Natasha Rovo, called their 2023 report looking at the six economies of the Western Balkans region (Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia) Testing Resilience. The title was a good fit. Few countries in Europe have seen their resilience tested (by both external and internal challenges) over the past three decades as the Western Balkans Six (WB6). Yet growth across the region remains relatively strong, outpacing in both 2024 and 2025 the 11 countries of Central and Eastern Europe that are European Union member states. The pattern is likely to continue for the foreseeable future, according to the Vienna Institute for International Economic Studies (wiiw), a think tank.
Since 2003, GDP per capita (adjusted for purchasing power parity, or PPP) in the Western Balkans grew by approximately 120 per cent, rising from 9,725 US dollars in 2003 to 21,305 US dollars in 2023, according to the Organisation for Economic Co-operation and Development (OECD), a club of mostly rich countries.
The growth of ICT
Despite this positive convergence trend, however, the Western Balkan economies have made only modest headway in narrowing the gap with their EU counterparts. One area where convergence has been impressive is in the information and communication technology (ICT) sector, which has emerged as a key driver of economic growth. The Association of Business Service Leaders (ABSL) has called the region Europe’s next nearshoring growth engine. ICT exports in the Western Balkans now stand at nearly 90 per cent of the EU average, thanks to a combination of targeted incentives to attract investment, improved infrastructure for start-ups and a skilled youth workforce.
And, it should be added, resilience. On June 21, 2024, a massive power outage hit much of the Adriatic coast of the Western Balkans, affecting large parts of Bosnia and Herzegovina, Montenegro and Albania, as well as Croatia. In Albania, which generates nearly 100 per cent of its domestic electricity from renewable sources, with hydropower as the dominant driver, power was restored within half an hour, while in Montenegro and Bosnia and Herzegovina the lights were out for three hours. The region’s IT firms, many of which have built resilience systems including power generators and satellite internet connections, barely registered the outage. Few of their clients, be they in Germany, Italy or the United States, will have noticed it, and no deadline moved.
By the end of last year, Serbia, the region’s IT powerhouse, had seen exports of ICT reach 4.55 billion euros, twelve times the 2012 figure and the country’s largest net exporting industry. Some of the country’s talent has itself arrived under stress: thousands of Russian and Belarusian engineers moved to Belgrade after Vladimir Putin launched his war on Ukraine in February 2022, and most have stayed. The government joined the EU’s Digital Europe Programme in 2023, tying its rules to the bloc it hopes one day to enter. According to the World Bank, Serbia is now among the world’s top 10 digital government performers, up from 51st in 2020. Serbia pulled this off, the Bank says, “by making sustained, strategic investment in infrastructure that most citizens never see.”
In Kosovo, whose status as an independent country remains controversial in some parts, Vjollca Çavolli took charge of STIKK, the country’s ICT association, in 2008 and steered its members away from government tenders towards clients abroad, a bet on what she called “a bigger pie”. It has paid off handsomely. The association’s barometer, published in November 2025, found 85 per cent of Kosovo’s tech firms exporting, with more than one-third focused exclusively on international markets. So successful has Kosovo’s tech sector been, that it is now cited as a key driver in reducing youth unemployment from 61 per cent to 10 per cent in a decade. On the GAP Institute’s count, the sector’s ICT exports reached 398.2 million euros in 2025. It is no surprise that a Prishtina BPO firm, SPEEEX, is tipped to become the country’s first technology unicorn.
North Macedonia’s industry has lately changed hands. Ilija Gospodinov, an executive at the software firm Endava, was elected president of the assembly of the Chamber of Commerce for Information and Communication Technologies (MASIT) in May 2025; a week later Jordan Dimitrovski, who has built the software house Aitonix over 25 years, took over its management board. Between them they speak for some 15,000 engineers serving clients in 37 countries from a population of 1.8 million. Sweden’s Seavus and Switzerland’s Netcetera have run development teams in Skopje for years, much of their output bound for Scandinavian and North American buyers. Stefan Andonovski, the digital-transformation minister, put the country’s ICT exports at 676 million euros in 2025, up seven per cent on the year.
Reliability under pressure
Albania has leaned on its public sector to set the pace. The World Bank reported in November 2025 that the country’s e-Albania portal handles 95 per cent of public services online, with requests up 40 per cent in two years. Its software firms, some 40,000 strong across IT and back-office work, exported 260 million euros of ICT services in 2025, up a healthy 17 per cent on 2024, much of it business process work for Italian and German clients who value the shared time zone. The government wants a fifth of those exports to come from firms’ own products, rather than outsourced labour, by the end of this year.
Bosnia’s software houses grew up with little help from the state. The IT Manifesto of the Bit Alliance, the country’s main industry lobby, argues that the sector grew on private initiative and the contacts of the diaspora, rather than the government strategy seen in Romania or Bulgaria. Damir Maglajlić, who runs the alliance, signed its 58th member, a Sarajevo firm called Tacta, in April. Among the oldest of its kind is Atlantbh, founded in Sarajevo in 2000, four years after the siege of the city lifted, and now writes code for some of the world’s largest firms. The country’s ICT-service exports reached 461 million euros in 2025, modest by Serbian standards but growing fast.
Montenegro, the smallest country of the six, is moving the same way. On figures from its investment agency, computer-services exports have climbed from roughly seven per cent of total exports to as much as 21 per cent in four years. The ten largest IT firms booked 64.3 million euros between them in 2025, and because Montenegro (like Kosovo) uses the euro, clients are spared the currency swings that can complicate billing elsewhere. Total ICT exports in 2025 were 171 million euros. Maja Laušević Odalović, who directs the ICT Cortex cluster, has pushed to gather the country’s scattered firms around a common goal; profitability slipped last year as wages rose, but year-round export earnings make a useful counterweight to seasonal tourism, on which the country’s economy remains over-reliant.
The common thread of all six countries is proven reliability under pressure. The WB6 have spent three decades learning to deliver through disruption (note the age of some of the region’s firms mentioned above: neither they, nor their resilience, is anything new). Serbia’s engineers have kept exporting through the sporadic but concerted student protests that have filled Belgrade since November 2024, while Albania’s and Montenegro’s firms shrugged off the 2024 blackout. Bosnia and Herzegovina’s tech firms have learnt to operate in a country that often appears to be drowning in bureaucracy created by its several layers of government. (A boon, it could be said, for dealing with clients in Europe’s more bureaucratic countries). Kosovo operates in a world in which half the planet’s nations do not recognise it. It’s this resilience, competing and delivering against the odds, for which their international clients are increasingly willing to pay.
Photo: Dreamstime.