Western Balkans Competitiveness Outlook 2024: Kosovo

10. Science, technology and innovation

Abstract

An effective institutional and policy context for science, technology and innovation (STI) is essential to boost the knowledge economy. This chapter, along three sub-dimensions, analyses the overall STI trends and performance in the region, the development of sustainable and impactful STI policies and processes. The first sub-dimension, STI system, assesses the STI regulatory framework and strategies, including smart specialisation strategies and the institutional framework for STI policy. The second sub‑dimension, public research systems, analyses the governance of the public scientific research sector, funding approaches and human resource capacity to foster academic research excellence. The third sub-dimension, knowledge exchange and co-creation, assesses policies that support integration between scientific research and the private sector, which is critical for technology transfer, as well as policies and initiatives to promote European and regional collaboration in STI.

Key findings

Kosovo has improved its performance in the science, technology and innovation (STI) policy dimension, albeit from a low level (Table 10.1). Some progress has been made, notably in strengthening the public research system, but Kosovo continues to perform below the regional average. With an overall score of 1.7, Kosovo remains the second-lowest ranked economy in the Western Balkans, performing only slightly better than Bosnia and Herzegovina. Kosovo’s performance in this dimension has been constrained by a limited policy framework, which to date has prevented the economy from developing impactful STI policy measures.

Table 10.1. Kosovo’s scores for science, technology and innovation

Dimension	Sub-dimension	2018 score	2021 score	2024 score	2024 WB6 average
Science, technology and innovation	9.1: STI system			1.7	2.9
	9.2: Public research system			2.0	2.5
	9.3: Knowledge exchange and co-creation			1.3	2.0
Kosovo’s overall score		1.1	1.3	1.7	2.5

The key findings are:

• Kosovo’s policy framework for STI remains in its early stages, limiting the development of a coherent and holistic policy approach. However, efforts are being made to complete the Smart Specialisation Strategy (S3) in 2024. Additionally, the launch of a National Science Programme in 2022 provides strategic guidance for scientific research activities, but falls short of a providing a comprehensive and holistic framework for STI policy.

• Some progress has been made in streamlining STI policy design and co-ordination. A new ministry bundles education, science, innovation and technology under a single structure, while a new National Science Council was established in 2022. However, implementation capacity remains low amid the lack of a dedicated agency to translate policy into concrete actions.

• The limited availability of STI-related statistics, including data on investments into research and innovation, continues to be a challenge for evidence-based policy making. Due to its underdeveloped data collection on STI policy indicators, Kosovo is the only WB6 economy that does not participate in the European Innovation Scoreboard (EIS). The ongoing establishment of a digital platform (KRIS) collecting STI-relevant data, however, is an important step to improve available statistics.

• Kosovo’s public research system is underdeveloped and lacks adequate budgetary, administrative and strategic support. As a result, human resources for scientific research remain limited, and few incentives exist to stimulate scientific research and collaboration with the private sector. While some small-scale support to strengthen research capacity is available, it remains heavily reliant on donor funding.

• Since 2021, Kosovo has become fully associated with Horizon Europe, the EU’s research and innovation funding programme. Participation in the programme has accelerated, with 11 projects having benefited since 2021 by receiving EUR 1.24 million, compared to EUR 2.5 million under the entire Horizon 2020 budget for 2014-20. Despite this positive trend, additional efforts are needed to enhance performance in accessing grants.

• In 2022, Kosovo developed a new Research Infrastructure Roadmap but has yet to adopt an accompanying action plan. Since the last assessment, the Innovation and Training Park (ITP) in Prizren has become operational, providing not only incubation and business development support, but also opportunities for businesses to engage with the research sector.

State of play and key developments

Sub-dimension 9.1: STI system

Kosovo has made only limited progress in establishing an STI policy framework since the last Competitiveness Outlook (CO) report. The economy’s strategic framework for science, technology and innovation remains nascent, lacking a defined STI strategy, which prevents policy makers from identifying, prioritising and formulating clear policy objectives. The strategy for Innovation and Entrepreneurship, which covered some aspects of innovation, expired in 2023. However, for the first time since 2010, a new National Science Programme (2023-28) was launched which outlines a number of STI-related objectives and serves as the guiding document governing scientific research activities. Among others, the programme focuses on developing an effective scientific research and innovation system, strengthening human resources, and promoting the internationalisation of research activity and research excellence. While the establishment of this programme is an important step, it falls short of a comprehensive approach that addresses innovation and scientific research in a holistic way, with clear accountabilities and a roadmap.

The development of Kosovo’s Smart Specialisation Strategy (S3) has been ongoing since 2018 and is expected to be finalised in 2024. With the support of the European Commission’s Joint Research Centre (JRC), Kosovo has completed the quantitative and qualitative mapping of S3 priority domains, as well as the Entrepreneurial Discovery Process (EDP), and is currently in the process of drafting its S3 strategy. Through the mapping and EDP process, priority sectors such as information communication and technology (ICT), green energy, wood and food processing, and the creative industry have been identified. If supported by effective policy measures and long-term adequate budget allocations, these sectors can significantly advance Kosovo’s transition to a greener and digital economy. As part of developing the S3, the government also launched the digital platform “KRIS” to systematically collect STI-related data, connect the domestic research community with Kosovo’s diaspora, and raise awareness about the S3 process among relevant stakeholders. Once fully operational, this platform can serve as an important tool for monitoring the implementation of the S3 and National Science Programme, enabling evidence-based analysis and informing decisions about STI policy design.

Kosovo has taken steps to streamline its institutional framework for STI policy since the last assessment cycle. In 2021, science and innovation competencies were consolidated under a new ministry, the Ministry of Education, Science, Technology and Innovation (MESTI), whereas previously these two areas fell under different ministries. This reorganisation is expected to increase efficiency, co-ordination and implementation capacity, which will be particularly crucial once the S3 is adopted. In addition, a Scientific Research Council was established in 2022 with the mandate to lead, co-ordinate and oversee the development of an STI framework, and to advance the quality and capacity of scientific research in the economy, including the implementation of the aforementioned National Science Programme. Despite these advancements, Kosovo faces challenges given a lack of implementation capacity for STI activities. Although plans to establish a fund for research and innovation are outlined in Kosovo’s Government Programme 2021-25 and new National Science Programme, progress on this initiative remains stalled.

Moreover, Kosovo is the only economy in the WB6 region that is not yet participating in the European Innovation Scoreboard (EIS). This contributes to the lack of reliable statistics on STI-related indicators, such as gross domestic expenditure on research and development (GERD) or the number of active researchers. The systematic collection of data through the KRIS platform could improve available statistics going forward and pave the way for Kosovo’s inclusion in the EIS in the future.

Sub-dimension 9.2: Public research system

While initiatives to promote research excellence in Kosovo remain limited, given the lack of adequate budgetary, administrative and strategic support for the economy’s public research system, the new National Science Programme constitutes a positive development. In 2023, public funding for research and development (R&D) activities remained at 0.1% of gross domestic product (GDP), falling short of the legal requirement to allocate at least 0.7% of GDP and leaving the economy far behind EU average levels of above 2% of GDP (European Commission, 2023[1]). In an effort to encourage research excellence, the National Science Programme developed in 2022 lays out an ambitious plan to advance research activity in Kosovo, including through a ten-fold increase in public spending on research and innovation activities over the next six years. To achieve this, the National Science Council proposed a budget of EUR 10 million for 2023; yet, only EUR 1.25 million has been allocated so far. This discrepancy raises concerns about the government’s commitment to improving public research outputs and casts doubt on the feasibility of achieving the objectives set forth in the National Science Programme.

Since the last CO, efforts have also been made to improve academic integrity. In 2022, the Kosovo Accreditation Agency became a member of the European Association for Quality Assurance in Higher Education and the European Quality Assurance Register. In addition, the government took a decision regarding the alignment of scientific works and publications with research ethics, and efforts were made to complete and harmonise relevant legislation that specify the responsibilities of academic staff at universities and scientific employees in scientific research institutes. Public higher education institutions (HEIs), with the exception of the University of Pristina, rely entirely on national budget allocations that do not specifically prioritise funding for research over teaching, and often operate with outdated equipment. The National Science Programme envisages the development of a new performance-based funding model which could, if designed well, increase the strategic focus on scientific research with high-impact potential. Kosovo also receives donor support to strengthen its research capacity (Box 10.1); however, overall academic quality remains low reflected in brain drain and low levels of graduates entering this sector.

Human resources for research and innovation in Kosovo continue to be limited, with HEIs prioritising teaching over scientific research. The situation is further aggravated by unclear criteria for promoting scientific research, including via non-targeted funding. While doctoral programmes are available for post‑graduates aiming to pursue a scientific research career, their quality is low, requiring a consolidated and co-ordinated approach by all stakeholders to enhance their development. Moreover, Kosovo’s engagement in Marie Skłodowska-Curie Actions (MSCA), the EU’s research and innovation fellowship programme, remains marginal. In an effort to promote the economy’s human research capacity, the National Science Programme provides assistance to doctoral students in under-represented fields of research, both in Kosovo and abroad, and offers co-financing for participation in international conferences and publication in open-access journals. The Programme also aims to create financial support structures for post-doctoral researchers, with some competitive short-term mobility grants for participation in international research activities already existing. However, the uptake and scale of available support remains unclear amid a lack of monitoring and evaluation activities.

Notable progress has been made with regard to Kosovo’s international and regional co-operation. Since the previous CO assessment in 2021, the economy has become fully associated with the Horizon Europe framework. As a result, a new National Contact Point (NCP) and Horizon Europe platform have been established and the economy now has access to all the benefits of the European research programme (Horizon Europe, 2023[2]). MESTI actively supports projects for Horizon applications, and the economy has seen increased participation levels in recent years, albeit from very low levels. Under Horizon Europe, 11 projects have already benefitted since 2021 by receiving EUR 1.24 million, compared to EUR 2.5 million under the entire Horizon 2020 budget between 2014 and 2020 (Horizon Dashboard, 2023[3]). While this is a welcoming trend, efforts are needed to maintain momentum and continue supporting Kosovo’s participation levels through strategic and targeted policy actions and investments. Kosovo also participates in the European Cooperation for Science and Technology (COST) platform; however, its status as a Near Neighbourhood has not changed with full COST membership still not granted. The National Science Programme also envisages a set of measures to actively draw from Kosovo’s diaspora for research activities, while under the auspice of the KRIS digital platform, efforts are underway to map and engage Kosovo’s research diaspora.

Box 10.1. International donors work to strenghten Kosovo’s research capacity

There have been two internationally-funded projects in recent years aimed at assisting Kosovo in boosting its research capacity and infrastructure:

• HERAS+ project: The Higher Education Research and Applied Science Plus (HERAS+) project, implemented between 2020 and 2023, is aimed at supporting a more competitive and diversified public higher education and research sector in Kosovo. The project was funded by the Austrian Development Agency (ADA) and co-financed by the Ministry of Education, Science, Technology and Innovation (MESTI – formerly the Ministry of Education, Science and Technology). It focuses on three levels:

  • • Policy level - The project sought to enable MESTI to effectively develop and implement policies for higher education and research institutions in line with European standards.

    • University level - The project aimed to review and develop the strategic plans of public universities and to base decision-making processes on these strategies in order to better contribute to a competitive higher education sector as well as to the economic, social and cultural development of Kosovo.

    • Research level - The project aimed at improving the quality of Kosovo’s research capacities and promoting the internationalisation of its higher education and research institutions.

  • KODE project: The World Bank-supported Kosovo Digital Economy Project (KODE), under implementation since 2019 and with a total budget of EUR 20.7 million, aims to expand access to high-speed and better-quality broadband infrastructure and promote growth of Kosovo’s digital economy. As a result, over 4,000 households in 147 different villages now have access to high-speed broadband Internet. In addition, public institutions including schools, healthcare institutions and civil registry offices located in these areas are now connected to this infrastructure and can use its services free of charge for five years. By investing in improved broadband services for students and researchers, the KODE project aims to generate online job opportunities and enhance access to knowledge sharing through the provision of better public-private collaboration opportunities.

Sources: HERAS+ Project (2020[4]); World Bank (2024[5]).

Sub-dimension 9.3: Knowledge exchange and co-creation

Public-private knowledge exchange and co-creation in Kosovo are currently below their potential, but feature prominently in the economy’s new National Science Programme. There are limited financial incentives for business-academia collaboration, with existing initiatives dependent on international donor support. In 2022, with support of the EU and Germany, the Innovation and Training Park (ITP) in Prizren (see further below) launched a EUR 200,000 grant programme under its #Digital4Business project to promote research partnerships between R&D institutes and small and medium-sized enterprises (SMEs). In addition, a project supported by the U.S. Agency for International Development (USAID) was launched in 2023 with the aim of establishing closer linkages between HEIs and the private sector, in particular in the areas of agriculture and ICT. The authorities also reported plans to introduce a scheme for innovation vouchers to facilitate small-scale engagement in areas such as laboratory testing or prototyping. The timeline and scope of such a measure remain unclear, but could be re-addressed if and when an Innovation Fund is established.

Non-financial measures to stimulate business-academia collaboration are also limited and there is no incentive structure in place to prioritise research in strategically important areas such as digitalisation, sustainability and emerging technologies. Researchers continue to be evaluated based on conventional performance criteria, including citations and number of publications, rather than impact. Moreover, Kosovo’s legal framework for intellectual property (IP) does not encourage collaboration and the economy’s weak track record in enforcing IP rights further hinders engagement in research with high commercialisation potential. While an Intellectual Property Strategy has been developed, its adoption has been pending since 2022.

In 2022, Kosovo adopted a Research Infrastructure Roadmap with support of the Regional Coordination Council (RCC), which identified the limited research system and R&I infrastructure for business-academia collaboration as barriers to the economy’s integration into the European Research Area (ERA). While the creation of the roadmap was an important milestone, the absence of an accompanying action plan has impeded its implementation. Some progress has been made in expanding institutional support structures for R&D; however, an overall lack of research infrastructure, including physical spaces, research tools, instruments, equipment and labs remains evident. Since the previous CO, Kosovo has established with the support of the German Government the Innovation and Training Park (ITP) in Prizren which is located at the premises of a former military camp. In total, both Kosovo and the German Government committed EUR 12.5 million for the ITP’s establishment. Designed as a collaborative space to create linkages between businesses, the public sector, academia and civil society, the ITP offers a large number of services including a digital transformation centre and co-working space as well as incubation, start-up and business development services. By the end of 2023, it hosted 40 businesses, focusing on priority areas such as ICT and green energy in line with the forthcoming S3. Beyond the ITP, an institutional infrastructure in support of business-academia collaboration is largely absent. However, the new Science Programme envisages the establishment of an interdisciplinary institute for science and technology along with a number of centres of scientific excellence which could contribute to strengthening the existing R&I infrastructure.

While open access to science remains at a nascent stage, the economy has made some efforts to promote open science. The key principles of open science are embedded in the new National Science Programme and there are plans to establish a number of open access e-journal platforms. In addition, once fully operational, the KRIS digital platform is expected to facilitate open access to research publications. In 2020, one HEI from Kosovo participated in the RCC’s regional Open Access Research Infrastructure under the Western Balkans Support Programme, which provided training and capacity building for university staff on open science. However, overall awareness and demand for open access research remains low, suggesting further efforts are required to promote and implement open science principles.

Overview of implementation of Competitiveness Outlook 2021 recommendations

The recommendations of the previous CO have only been moderately addressed (Table 10.2). While the new National Science Programme provides some strategic guidance to strengthen the scientific research system, the lack of a comprehensive and overarching strategic STI framework, coupled with limited investments into R&D, significantly impede the development of a knowledge economy in Kosovo.

Table 10.2. Kosovo’s progress on past recommendations for science, technology and innovation

Competitiveness Outlook 2021 recommendations	Progress status	Level of progress
Establish an overarching strategic view and develop mechanisms to co-ordinate policies across the whole of government	Limited progress has been made to enhance the STI policy framework, but a new National Science Programme provides some strategic guidance for research activities. The development of the Smart Specialisation Strategy is still ongoing. STI design, oversight and co-ordination has been consolidated under the Ministry of Education, Science, Technology and Innovation and a National Science Council was established.	Moderate
Identify and map the research and development infrastructure to gather economy-wide data on labs and researchers	In 2022, a new Research Infrastructure Roadmap was launched, but an action plan to support its implementation is pending.	Moderate
Increase investment in public sector research and encourage research excellence	Public sector research remains chronically underfunded and data collection on R&D expenditure (GERD) remains limited. Recommendations made under the National Science Programme to increase budget allocation in 2023 have not been met.	None
Maintain momentum and continue to improve participation in international STI collaboration	In 2022, Kosovo became a fully associated member in Horizon Europe and a new National Contact Point (NCP) platform has been launched. Horizon Europe participation has increased, but overall participation in international research programmes remains below capacity.	Moderate

The way forward for science, technology and innovation

Kosovo’s performance in STI policy remains below capacity and only a few improvements have been achieved since the last CO. The economy needs to start formulating and designing concrete, realistic and holistic STI policy objectives and measures, and strengthen implementation capacity. Going forward, Kosovo should focus on the following:

• Accelerate the adoption of the Smart Specialisation Strategy to create a guiding strategic framework for science, technology and innovation. Swift completion and adoption of the Smart Specialisation Strategy, supported by an action plan and sufficient budgetary support, will enable Kosovo to develop tailored and targeted STI policy measures. Efforts should be made to strengthen implementation capacities, for instance through the creation of a professional team or agency, and synergies must be sought with the National Science Programme to ensure policy instruments are co-ordinated and designed in a holistic way to maximise impact.

• Strengthen the performance and image of public scientific research. Kosovo must make significant efforts to improve the quality and quantity of scientific research outputs. The economy should accelerate performance-based funding and investments into public research systems to support strategically relevant research fields and upgrade outdated equipment. Implementing stringent quality assurance measures will also enhance the quality and credibility of research outputs. In addition, targeted incentives for academic staff can help shift the focus from teaching towards research in HEIs. In the medium to long term, these actions can help boost the image of the public scientific research system, attract skilled professionals to the field, and ultimately position the research sector as a valuable partner for the private sector, notably in areas supporting Kosovo’s green and digital transition.

• Improve the quality and availability of statistical data related to STI. The lack of reliable data on STI poses a challenge to the baseline assessment, monitoring and evaluation of policy measures which could hinder the effective implementation of the S3 (once adopted) as well as the National Science Programme. As an imminent priority, Kosovo’s authorities should increase efforts and enhance capacity building to collect data on GERD and fully operationalise the KRIS platform to collect more comprehensive information on scientific research activities. Participation in the OECD’s STI Compass database can provide further assistance, and Kosovo should work towards participating in the EIS.

• Increase investments into R&I activities through an effective funding methodology. To align with the recommendations outlined in the National Science Programme, it is crucial to enhance funding for science and innovation activities. This will not only showcase Kosovo’s credibility regarding its commitment to research excellence, but also provide the foundation for improving research outputs and outcomes. Key measures in this regard include a review of Kosovo’s existing approach to funding public scientific research. Implementing a stronger focus on merit-based funding can provide incentives for R&D institutes to increase their attention to research and prioritise strategically important research fields.

• Upgrade the economy’s research infrastructure. Kosovo’s research infrastructure requires improvements in all areas. Following the launch of an R&I Infrastructure Roadmap, the adoption of an action plan would help identify priority areas and set concrete timelines for implementation. As a first step, investments should be directed towards modernising the research equipment of HEIs and R&D institutes, along with establishing a technology transfer facility. Additionally, developing an e-infrastructure will be a crucial cross-cutting objective to facilitate open access to scientific research and promote open science. Sweden’s experience can serve as a useful example of good practice in the key factors for developing a robust STI ecosystem (Box 10.2).

Box 10.2. The Science, Technology and Innovation Ecosystem in Sweden

Sweden has a long-standing reputation for excellence in science, technology and innovation. With a strong emphasis on R&D, collaborative partnerships and a supportive STI policy framework, Sweden has established itself as a global leader in fostering scientific advancements and technological innovations. The following key good practices and initiatives have contributed to Sweden’s success in the field of science and technology:

1. Strategic investment in R&D

Sweden consistently ranks among the top countries in the world regarding R&D investment as a percentage of GDP. The Swedish Government's strategic investment in R&D supports basic and applied research across various sectors, including ICT, the life sciences, clean energy and advanced manufacturing.

2. Strong research ecosystem

Sweden is home to several renowned universities, research institutes, and innovation hubs that foster collaboration, interdisciplinary research, and knowledge exchange. Institutions such as KTH Royal Institute of Technology, Lund University, and Chalmers University of Technology are globally recognized for their contributions to science and technology.

3. Collaborative partnerships

Public-private partnerships, industry-academia collaborations, and international research collaborations are integral to Sweden's science and technology landscape. Collaborative initiatives such as the Swedish Research Institutes (RISE) and innovation clusters bring together researchers, industry stakeholders, and policy makers to address complex challenges, drive innovation, and commercialise research outcomes.

4. Innovation-friendly policies

Sweden's innovation-friendly policies - including tax incentives for R&D, grants for startups and SMEs, and a supportive regulatory environment - encourage entrepreneurship, technology transfer, and commercialisation of research findings. The Swedish Innovation Agency (Vinnova) promotes innovation by providing funding, support, and networking opportunities to innovative projects and initiatives.

5. Focus on sustainability and green technology

Lastly, Sweden strongly emphasises sustainability, clean technologies, and green innovations. Initiatives such as the Swedish Energy Agency's research and development programmes, investments in renewable energy technologies, and sustainable urban development projects demonstrate Sweden's commitment to addressing climate change and promoting sustainable development through science and technology.

Sources: RI.SE (2024[6]); Swedish Energy Agency (2024[7]); Vinnova (2024[8]).

References

[1] European Commission (2023), EU Progress Report for Kosovo, European Commission, https://neighbourhood-enlargement.ec.europa.eu/document/download/760aacca-4e88-4667-8792-3ed08cdd65c3_en?filename=SWD_2023_692%20Kosovo%20report_0.pdf.

[4] HERAS+ Project (2020), HERAS Plus - About Project, https://www.heraskosovo.org/ (accessed on 13 June 2024).

[3] Horizon Dashboard (2023), Horizon 2020 - Country Profile, European Union, https://dashboard.tech.ec.europa.eu/qs_digit_dashboard_mt/public/sense/app/1213b8cd-3ebe-4730-b0f5-fa4e326df2e2/sheet/d1435e56-cdee-4f5f-8b0d-f49d41ffbd6c/state/analysis.

[2] Horizon Europe (2023), Horizon 2020 - Country Profile: Kosovo, https://dashboard.tech.ec.europa.eu/qs_digit_dashboard_mt/public/extensions/RTD_BI_public_Country_Profile/RTD_BI_public_Country_Profile.html?Country=XK (accessed on 13 June 2024).

[6] RI.SE (2024), “The research institute of Sweden: about page”, https://www.ri.se/en/about-rise (accessed on 30 May 2024).

[7] Swedish Energy Agency (2024), Innovations, Research and Development: Swedish Energy Agency, https://www.energimyndigheten.se/en/innovations-r--d/ (accessed on 30 May 2024).

[8] Vinnova (2024), “We are Sweden’s Innovation Agency”, https://www.vinnova.se/en/ (accessed on 30 May 2024).

[5] World Bank (2024), Remittances Prices Worldwide, http://remittanceprices.worldbank.org/ (accessed on 17 January 2024).