This chapter aims to evaluate and quantify the progress of the WB6 economies in strengthening skills through the overlapping lenses of education, employment and innovation policies. Specifically, it examines how the economies seek to build strong foundational skills, develop skills for the green and digital transitions, and attract and utilise migrant and diaspora talent. The region’s policy framework for putting these skills to effective use is then examined, emphasising efforts to improve the school-to-work transition, match skills with labour market needs, activate unused skills and leverage skills for innovation. Finally, recommendations outline how the region can more effectively build and leverage skills to increase inclusion, productivity and innovation – and consequently reinforce economic competitiveness and EU convergence efforts.
Western Balkans Competitiveness Outlook 2024: Regional Profile
3. Skills cluster
Abstract
Key findings
The WB6 economies have made some progress on skills policies in recent years and are increasingly (albeit slowly) converging towards European Union (EU) levels. Some key achievements are:
All the WB6 economies have made considerable strides in implementing their respective Youth Guarantee schemes, which aim to improve the school-to-work transition and reduce youth inactivity and unemployment rates. Specifically, five of the six economies have adopted implementation plans, with most either planning or already rolling out pilot programmes.
All the WB6 economies have made progress towards modernising their vocational education and training (VET) systems, primarily through the enhanced promotion of work-based learning (WBL). This serves as a key step towards strengthening the labour market relevance of VET programmes and improving the employment outcomes of participants.
The region’s widespread adoption of common digital competence frameworks and the inclusion of information and communication technology (ICT) courses in primary and secondary school curricula have advanced how students’ acquisition of digital skills is supported. These strengthened policy measures reflect a concerted push to give students the skills demanded by current and future labour markets.
To expand the region’s skills pool, recent measures have sought to open labour markets and increase the recruitment of regional and international talent. The 2023 memorandum of understanding for the mutual recognition of professional qualifications among the WB6 economies serves to increase intra-regional mobility, while ongoing strategies and initiatives seek to better engage and attract migrants and diaspora communities.
Despite these positive regional trends there is still significant scope to strengthen policies and improve outcomes related to education, employment and innovation. As such, some of key challenges facing the region are as follows:
The WB6 economies continue to struggle with delivering quality education, which impacts the development of students’ foundational skills. In the 2022 Programme for International Student Assessment (PISA), most 15-year-olds (79%) in the region were low performers in at least one of the three tested subjects (mathematics, reading, science), compared to an OECD average of 45%.
Education spending in the region is both insufficient, standing at 20% lower than the EU average, and inefficient. Over 80% of WB6 economies’ education budget is allocated to salaries for teachers, despite a relatively higher student-to-teacher ratio than the EU (nearly 16 students to 1 teacher in the WB6 vs. 13 to 1 in the EU). Despite donor funding, there is limited room for investment in essential areas such as updated technologies or infrastructure, which could constrain students’ learning and academic achievement.
Skills intelligence systems in the WB6 economies are notably underdeveloped. Irregular analyses, decentralised data collection and the overarching lack of predictive tools limit the efficacy of intelligence systems to inform policy makers and the public about current and future skills needs.
Despite a shrinking labour force due to an ageing population and declining birth rates, The WB6 economies have made limited efforts to better engage adults in the labour force. The participation of adults in lifelong learning in the region is half that of in the EU, and activation policies only marginally address the needs of older unemployed individuals. These factors significantly limit opportunities for adults to adapt to constantly evolving skills demands, hindering them from maintaining relevant, up-to-date knowledge and competences.
Investment in research and development (R&D) is critically low. In five out of six economies, R&D expenditure (as a percentage of gross domestic product, GDP) does not surpass 20% of EU levels, posing a serious barrier to the region’s innovation capacity and the development of skilled researchers.
Introduction
Skills play a pivotal role in enhancing competitiveness. Systemic issues such as large-scale emigration, gaps in education and training infrastructure, and limited innovation capacity can constrain labour productivity growth: in 2023, the WB6 had an average labour productivity level that was only 36% of that of the EU.1 A highly skilled population not only boosts the region’s productivity, but also ensures an innovative, resilient workforce that can adapt to the constantly evolving needs of the labour market. Ensuring the development and effective use of skills is particularly important as the region advances on its EU accession journey: through harmonising their employment and training systems with EU standards and requirements, the WB6 economies will enhance their ability to integrate and compete in the European market.
This chapter discusses the issues related to skills policy in the WB6, drawing upon the policy areas of education, employment, and science, technology and innovation (STI). Specifically, it will examine how the WB6 economies are (i) Developing relevant skills and (ii) Putting skills to effective use.
Developing relevant skills
Building strong foundational skills
Quality basic education for all students, irrespective of their personal background or schools’ characteristics, is central to ensure the acquisition of strong foundational skills and competencies. This focus on ensuring strong and inclusive education is important in the Western Balkan context, particularly as the region moves to align with EU education standards.
A large majority of 15-year-olds in the Western Balkans fall below baseline proficiency levels in learning outcomes
Results from the 2022 cycle of PISA reveal that learning outcomes in the five participating Western Balkan economies saw a sharp decline between 2018 and 2022, with the exception of Serbia (Figure 3.1). Of note, Bosnia and Herzegovina is the only WB6 economy that did not take part in PISA 2022, nor does it plan to join the upcoming 2025 assessment.2
The drop in the region’s performance in PISA 2022 was shared across most PISA participants, although the declines in Albania3 and North Macedonia were particularly acute. However, despite this drop in the last PISA cycle, the performance of the five participating Western Balkan economies improved significantly between their first participation in PISA4 and the 2018 assessment. Learning outcomes in the Western Balkans are still considerably lower than those seen across EU member states, reflecting shortcomings in the quality of education. The Western Balkans’ average in mathematics, the main domain assessed in PISA 2022, was 391 score points, compared with an EU average of 472. Achievement within the region also varies greatly, with Serbia scoring 440 in mathematics and Kosovo just 355 (OECD, 2023[1]).
Figure 3.1. Short- and long-term changes to the WB6 economies’ performance in PISA: mathematics, reading and science scores
Score point difference
The large majority of 15-year-olds in the participating Western Balkan economies did not meet baseline proficiency levels, with an average of 79% of 15-year-old students across the region not attaining the baseline proficiency level (Level 2)5 in at least one subject, compared to an EU average of 44%.6 This percentage has grown significantly since the last PISA cycle. However, there are large differences across economies in the region. In Serbia, 59% of students did not reach Level 2 in at least one subject, compared to 92% in Kosovo (Figure 3.2). Similarly, the share of high achievers in the region (Level 5 and 6) in at least one subject was far lower than the EU average: 2% versus 14%. An important dimension of evaluating these baselines is examining the gender gap in learning outcomes. In most Western Balkan economies the gender gap in favour of girls was larger than the OECD average. For example, whereas girls outperformed boys by 3 points in mathematics in the region, this trend was reversed among OECD countries, where boys outperformed girls by 9 points on average. Moreover, girls in the Western Balkans outperformed boys by 30 points in reading (versus 24 points in OECD countries) and 12 points in science (versus 0 points in OECD countries).
Figure 3.2. Students below PISA Level 2 in the WB6 economies, the EU and the OECD (2022)
Notes: 15-year-olds not covered by the PISA sample are 15-year-olds who are not enrolled in school; or who are in school but in grade 6 or below, or who were excluded from the PISA sample due to student or school-level exclusions. Ranked in ascending order of the total percentage of students who are low performers in at least one subject.
Source: OECD (2022[3]).
Insufficient resources affect the quality of education systems in the Western Balkans
Low baseline proficiency levels among most students can be attributed to several notable obstacles that hinder education systems in the region from meeting international learning standards. These challenges exacerbate disparities in educational outcomes and hinder students’ abilities to develop strong foundational skills.
Insufficient public spending on education represents a substantial issue, and has been shown to contribute to relatively lower outcomes of students at all levels of education (OECD/UNICEF, 2022[4]; OECD, 2023[1]). The average for government spending on education (as a percentage of GDP) in the Western Balkans is approximately 3.9%7 – more than 20% lower than the average spending seen in the OECD and the EU, both of which devote an average of 5% of GDP to education (Eurostat, 2023[5]; UIS, 2024[6]). The WB6 governments remain heavily reliant on donor funding to support educational initiatives.
Moreover, the modest level of funding is then allocated inefficiently and inequitably, for several reasons. First, most economies in the region allocate funding based on the number of teachers or the student-to-teacher ratio rather than the number of students, which can better align expenditure with student needs (OECD, 2022[7]). The average student-to-teacher ratio in the region is 15.6:1 at the level of primary education – slightly above the EU average of 13:1.8 Second, the WB6 economies spend a disproportionately large amount on teacher salaries: the percentage of staff compensation (compared to total expenditure in public institutions) exceeded 80% for all economies with data available,9 reaching 90% (World Bank, 2019[8]) in Bosnia and Herzegovina. Given that teacher salaries in the Western Balkans are among the lowest in Europe,10 this high expenditure indicates that there is little room for investment in areas beyond personnel compensation. As such, there is little financing available for other necessary materials such as textbooks, classroom supplies, technology or infrastructure improvements, resulting in relatively high levels of education material shortage compared to OECD countries (OECD, 2023[1]). This limited margin for investment restricts the ability of educational systems to adapt to changing needs and continuously innovate.
Learning standards and standardised assessments are used across the region, although there is still room for improvement
Ensuring a high quality of learning through well-aligned learning standards and student assessments is essential for improving overall learning outcomes – which can then translate into strong foundational skills for students. In the Western Balkans, all economies have learning standards in place that express what students should know and be able to do at different levels of education. Moreover, all have developed or are in the process of developing competency-based (as opposed to traditional content-based) curricula, which align with learning outcomes that promote the cultivation of important skills, although implementation remains sluggish due to inadequate materials and the insufficient training of teachers.
Most economies in the region conduct regular standardised examinations to certify achievement, with a formal consequence on students’ progression through school. The most common examination is a state matura, or a matriculation examination that certifies the completion of secondary education. A matura is in place in Albania, Kosovo, Montenegro and North Macedonia, and Serbia plans to introduce one in the 2024/25 school year. Bosnia and Herzegovina does not have a centralised state matura, but they exist in the entities: Republika Srpska (RS) has an entity-level matura, but only two of the ten cantons11 in the Federation of Bosnia and Herzegovina (FBiH) have implemented an external matura. Additionally, Albania, Kosovo, Montenegro and Serbia all have a national examination between grades 8 and 9.12
All the WB6 economies participate in international assessments of student learning, although Bosnia and Herzegovina's involvement is less consistent than the other economies. The most popular examinations are PISA, the Trends in International Mathematics and Science Study (TIMSS), and the Progress in International Reading Literacy Study (PIRLS). Participation in these assessments is crucial for allowing the region’s policy makers to benchmark how each economy’s students are performing compared to the other WB6 economies, as well as OECD and EU counterparts. This comparable benchmarking can help evaluate the efficacy of existing learning standards, curricula and other education policies.
While there are initiatives for boosting the equity and inclusiveness of education systems in place, access – particularly for early childhood education and care – remains inequitable
Increasing equity and inclusiveness is a priority in numerous strategies and policy frameworks for education across the Western Balkans (Table 3.1). However, there is a significant gap between the policy emphasis placed on equity and inclusiveness and the outcomes achieved in practice.
Early childhood education and care (ECEC), which encompasses both early childhood educational development and pre-primary education,13 is crucial for building strong foundational skills due to its positive effect on improved learning and employment outcomes later in life. All the WB6 economies have recognised the importance of ensuring the provision of ECEC and have strategic and legal frameworks in place. However, in terms of legal obligations, there is significant variation across the region. For example, Bosnia and Herzegovina14 and Serbia have legislation stipulating that pre-primary education is mandatory from ages 5 and 5.5 years, respectively. Kosovo recently adopted a law that makes pre-primary education mandatory starting in the 2024/25 school year. The remaining economies do not mandate participation in ECEC programmes and only require attendance for primary school (which typically begins when children are between the ages of 6 and 6.5 years).
In the region, ECEC is typically not provided free of charge. However, there are partial exceptions in Serbia and Bosnia and Herzegovina. In Serbia, the mandatory preschool preparatory programme for children aged 5.5 to 6.5 years is free (although nurseries and kindergartens are not). Similarly, in Bosnia and Herzegovina, a preschool programme for children aged 5 is free in RS and free for up to five hours a week in FBiH. To alleviate the financial burden of ECEC, all economies have put some support mechanisms in place for children from socio-economically disadvantaged families or from marginalised groups. In Albania, Kosovo, Montenegro and North Macedonia, children from such groups can enrol in public preschools for free, and in Serbia and RS it is available at a reduced cost. Other ways of promoting equity and accessibility include adjusting opening hours (FBiH, Kosovo and Montenegro) and raising awareness about the importance of ECEC to academic success and lifelong learning (FBiH, RS, Kosovo, Montenegro and North Macedonia).
Table 3.1. Policy and legal frameworks with objectives for increasing inclusivity in early childhood education and care (ECEC), primary and secondary education
Source: Ministries of education of the WB6 economies.
These different approaches have likely contributed to the discrepancies observed in actual enrolment rates. When looking at just the pre-primary education component of ECEC,15 enrolment rates range from 28.5% in Bosnia and Herzegovina to 82.9% in Albania (Table 3.2). The regional average of 50.9% was far below the EU average of 91.8% in 2021 (Eurostat, 2023[9]). Moreover, in terms of early childhood educational development programmes (those that target children aged 0 to 2 years), the region’s average enrolment rate falls to 34.6%, with only Serbia and Montenegro reporting rates above 50%.
Table 3.2. Enrolment in pre-primary education, WB6 economies vs. EU (2022)
Percentage of students from age 3 to the starting age of compulsory education enrolled in pre-primary education
Notes: Data from ALB, BIH and MKD are from 2022, while data from KOS, MNE and SRB are from 2021.
Sources: Data provided by the National Statistical Offices (WB6); Eurostat (2023[10]) (EU).
This disparity in access partly reflects the existing inequity and limited inclusiveness among disadvantaged groups. For example, while participation rates are low in Kosovo across the board – with only 15% of children aged 3-4 years attending ECEC – these rates are even lower among the most vulnerable groups, dropping to 8% for children from Roma and Egyptian communities (UNICEF, 2024[11]). In Albania, the enrolment rate of Roma children aged 3-5 years is 33%, which is nearly 50 percentage points lower than the economy’s average pre-primary enrolment rate (Qejvanaj, 2021[12]). Even Serbia, which offers free and compulsory ECEC for children aged 5.5 and above, sees stark disparities in access: more than 80% of children from advantaged socio-economic backgrounds participate in ECEC programmes, compared to less than 10% of those from disadvantaged backgrounds (World Bank, 2017[13]). Thus, access to ECEC is far from universal, revealing an important area in which equity and inclusiveness could be improved. Table 3.1 demonstrates that most WB6 economies have strategies that aim to address inequities in participation among diverse groups; while these policies generally look at all levels of education, the largest emphasis tends to be on ECEC.
Accessibility issues are less evident at the level of primary education, which is compulsory and free in all WB6 economies. The region’s average net enrolment rate in primary education in 2022 was 91.1% – 6.5 percentage points lower than the EU average (UIS, 2024[14]). However, dropout rates notably rise during the transition from lower to upper secondary education. In most economies, compulsory education only includes primary and lower secondary education.16 The regional average for net enrolment rates in upper secondary education is 83.2% – 10 percentage points lower than the EU average.17
Developing skills for the future
As the WB6 economies embark on the green and digital transitions, their skills systems must anticipate future skills needs. This includes establishing proper education and training infrastructure for developing and adapting skills that enable and sustain these transitions.
Digital skills are uneven across the region, but universally below EU levels
Currently, the development of digital skills in the region shows limited convergence towards EU levels, with the proportion of individuals in WB6 economies possessing at least basic digital skills nearly 20 percentage points lower than in the EU (see Chapter 5). However, while all economies fall below the EU average, there is significant variation: Montenegro is the region’s best performer, within 7 percentage points of EU levels, whereas Albania and Kosovo reported rates of less than 30% – essentially half of EU levels (Figure 3.3). This reveals the universal need to continue improving and developing these skills among students and the labour force in the region, while taking into account each economy’s unique standing.
Figure 3.3. Individuals with basic or above basic digital skills in the WB6 economies and the EU (2021)
Percentage of individuals
Note: Data for Kosovo are from the latest available year (2019).
Sources: Eurostat (2020[15]; 2024[16]).
Policies and initiatives increasingly prioritise the promotion of skills in schools, but there is a “policy-practice” gap
The current state of digital skills development in schools across the Western Balkans reveals notable regional trends. There is a general and growing emphasis on digital skills within the education sector across the region, although approaches and frameworks differ. Several economies have established relatively comprehensive frameworks or strategies prioritising digital skills development. Serbia is the only economy to have a dedicated Digital Skills Development Strategy (see Serbia economy profile),18 with Montenegro and North Macedonia currently working to elaborate such a strategy. The other economies do not have a dedicated framework, but instead have incorporated explicit objectives or sections of strategies related to digital skills and competence acquisition within broader frameworks, particularly education or digitalisation strategies. However, almost all WB6 economies have adopted a common digital competence framework for students covering several key areas – including data literacy, communication and collaboration, digital content creation, and safety skills – which align with the competence areas outlined in the EU Digital Competence Framework (DigComp). The sole exception is Kosovo, which is in the process of adapting DigComp to better suit its own context.
ICT and digital skills development courses are largely incorporated into the curricula in both primary and secondary education across the region. Most economies have made it compulsory for students to complete relevant ICT classes, ranging from computer science in Serbia and coding in Albania to informatics in both Montenegro and North Macedonia. Beyond these dedicated subjects, Albania, Montenegro and Serbia have all integrated the development of digital skills across various subjects in their curricula. This approach not only increases students’ exposure to these skills, facilitating their acquisition, but also underscores the transversal nature and application of digital competencies. Conversely, in Kosovo and Bosnia and Herzegovina, the inclusion of ICT into other school subjects is encouraged but not formalised.
To translate this policy priority to concrete outcomes (i.e. improved digital skills among students) there must be adequate and up-to-date ICT infrastructure in educational institutions, which continues to be a challenge across the region. For example, 30% of primary and secondary schools in Bosnia and Herzegovina do not have Internet connection. Furthermore, although some economies boast a relatively low computer-to-student ratio, such as 1:2 in Serbia and Montenegro, this ratio surpasses 1:20 in Bosnia and Herzegovina and Kosovo.19 Even in the economies where Internet connectivity and computer availability are sufficient, issues persist due to slow Internet speeds and outdated computer equipment.
Beyond infrastructure, teachers with strong digital skills, as well as access to continuous professional support, are necessary to educate their students. There are some burgeoning efforts to strengthen digital competencies among teachers in several WB6 economies. For example, Albania has introduced new professional teacher standards that describes the use of digital skills, and North Macedonia offers training to teachers on new technologies under the framework of its education strategy. However, teacher capacities remain overall underdeveloped and serve as another limiting factor for increasing the use of digital technologies – which in turn limits the development of students’ skills.
The development of skills in schools for the green transition remains very limited due to a lack of supporting policies and programmes
The development of students’ skills for the green transition in the Western Balkans is even more limited than for digital skills, and represents a significant gap in education policies across the region. This restricts the ability of WB6 economies to educate a skilled workforce for the green transition. Currently, no WB6 economy has a national framework that outlines skills for the green transition for students, although one is being developed in both Kosovo and Montenegro. Most economies have made efforts to include competences related to the green transition in school curricula, such as environmental protection and sustainability, adaptability, climate change, and biodiversity. However, the WB6 economies have not yet aligned their curricula for skills for the green transition with internationally recognised frameworks, namely the European Competence Framework on Sustainability (GreenComp) or the European Entrepreneurship Competence Framework (EntreComp). The exceptions are Albania (which has already aligned its curricula with GreenComp) and Kosovo (which has planned but not yet released the aim of such alignment). Moreover, while green skills are integrated into broader curriculum assessments, they are not separately assessed. This restricts the ability of governments and schools to gauge whether students are effectively acquiring these competencies, especially considering the relatively recent introduction of many educational initiatives.
Strategies and adult learning programmes for workforce adaptation to sustain the green and digital transitions are still largely in the early stages
Upskilling and reskilling the workforce through adult learning programmes is crucial for ensuring that workers have relevant, up-to-date knowledge and skills. However, participation in adult learning is generally low in the WB6 economies, with the regional average significantly below that of the EU (Table 3.3). The exceptions are Albania and Kosovo, both of which have nearly converged to EU levels.
Table 3.3. Participation in lifelong learning in the WB6 economies (2018-22)
(% of population aged 25-64 years)
Sources: European Commission (2023[17]); Eurostat (2024[18]).
Although participation in education and training activities is generally low, it further decreases when focusing on programmes aimed at skills for the digital and green transitions. This limited engagement is partly due to the lack of relevant opportunities given the early stage of development of such programmes in the region. The importance of cultivating digital skills among workers was highlighted by the Western Balkan Digital Skills Multistakeholder Working Group, which sought to kick off regional dialogue on digital skills development and catalyse efforts to develop strategies explicitly governing these skills. However, despite this recognised need, almost all WB6 economies lack a dedicated policy framework guiding the development of adults’ digital competencies (apart from Serbia, as previously mentioned), although certain economies, such as Montenegro and Albania, have policy documents that emphasise their commitment to ensuring that their workforces acquire in-demand digital skills.
In the absence of well-defined policy frameworks, most WB6 economies have opted to promote the digital skills of adults through ad hoc programmes or donor-funded initiatives supporting adult learning. For example, some training activities for the development of digital skills for employed individuals and jobseekers have been implemented by economies’ public employment services (PES), such as programmes in Albania and Kosovo that seek to equip jobseekers with programming and/or coding skills by financing their participation in training. The aim of these programmes is to increase individuals’ employability by helping them acquire digital skills that are in demand in the labour market. Other economies, such as FBiH and North Macedonia, offer less targeted services but still provide programmes to equip unemployed individuals with digital skills training. However, most of these programmes primarily focus on upskilling jobseekers rather than the current workforce; only Albania, North Macedonia and Serbia have programmes that encourage employers to upgrade their employees’ digital skills. This reveals a significant gap in approaches for developing digital competences among adults.
Additionally, some WB6 economies have advanced in identifying the digital skills needs of employers. This is generally performed either through consultations with key stakeholders, such as in Albania and RS, or through sector studies on the current and future development of employment in the IT sector, such as in North Macedonia and RS in Bosnia and Herzegovina. However, these consultations and studies are only useful if their results are used to revise or shape training policies and programmes, but there is no available evidence that these economies have used their findings in this way.
There is significant scope to strengthen adult learning programmes in relation to the region’s green transition, which is expected to significantly impact the labour market across numerous sectors and occupations. One expected change is the generation of new opportunities in sectors such as renewable energy and the concurrent reduction of roles in fossil fuel industries. Specifically, as the WB6 economies move to reduce or phase out their coal use (see Chapter 6), such efforts will directly impact the estimated 138 000 jobs tied to coal production in the region (Ruiz Castello et al., 2021[19]). Consequently, as the labour market evolves in response to these changes there will likely be shifts in skill requirements and job transitions – creating demand for new and expanded education and training opportunities for workers.
Programmes and initiatives related to green jobs in the Western Balkans are still in their infancy, with economies progressing at different rates. Most WB6 economies lack an overarching policy framework to equip their workforces for the green transition. Additionally, their existing employment and environmental strategies do not adequately address employability or skills development for the evolving landscape of green jobs. The exceptions are Albania, FBiH and Montenegro – but even in these cases, where the significance of skills for the green transition is acknowledged, these references are not accompanied by concrete measures. Tailored adult learning programmes, VET training courses, employment incentives and entrepreneurship programmes that promote employment in the green economy are largely non‑existent or are in the early phases of implementation.
A crucial aspect of supporting the greening of the labour market involves conducting studies that identify the skills and jobs most relevant for the green transition. Such assessments can not only identify new occupational profiles as new jobs appear, but can also determine which types of skills might be transferable from one sector or occupation to another. However, only Albania and Montenegro have embarked on such studies: Albania’s employment agencies20 are developing a study on green jobs, while Montenegro’s Chamber of Commerce has begun forecasting the impact of the green transition on employment and identifying and categorising related occupations. No WB6 economy currently has programmes for training and adapting skills among either employed or unemployed individuals to meet the demands of the green transition.
Insufficient financial incentives limits workers’ participation in training on skills for the digital and green transitions
Beyond the nascent status of policies and programmes on skills for the digital and green transitions, the region’s low rate of participation in adult learning is partly due to the lack of financial incentives (including tax breaks, grants or vouchers) to encourage individuals to participate in continuous training. By reducing cost barriers to participation, and thus facilitating movement between education, training and employment, such incentives have proved effective in supporting flexible adult learning pathways (OECD, 2023[20]). However, while little has been done to address this lack of financial resources, most economies have strategies or initiatives that aim to promote adult participation in learning, and thus expand available employment opportunities. The notable exception is North Macedonia, which currently lacks a framework but is in the process of adopting its new Adult Education Act. However, only Albania, Montenegro and Serbia implement policies that specifically aim to address skills mismatches in adult learning. This reveals a gap between the presence of broad, overarching frameworks guiding adult learning and the presence and utility of specific, well-targeted policies.
Expanding the skills pool
Over the past decade, the emigration rate from the WB6 economies has accelerated, resulting in approximately one-fifth of the population residing abroad (OECD, 2022[21]). Such significant outflows, compounded by contracting birth rates, have led to a shrinking labour force, underscoring the importance of retaining and attracting talent. These trends have had a significant impact on the region, with the availability of labour and the impacts of emigration jointly identified as the second most significant concern for businesses (surpassed only by concerns of macroeconomic instability) (RCC, 2023[22]). Thus, given the pace and intensity of brain drain, as well as chronic labour shortages, making the most of foreign and diaspora skills is an important consideration in supplying relevant skills to the labour market.
Migration policies in the region are well developed but fail to address the systemic issues that initially contribute to labour shortages
All Western Balkan economies have begun adapting policies with the aim of attracting migrants with relevant skills to meet the demands of the labour market. Specifically, they have all developed dedicated migration strategies that are broadly overseen by ministries or other government agencies responsible for implementation. The economies have also established dedicated inter-ministerial bodies to co-ordinate migration policies, as well as implemented legal frameworks addressing migration that include specific laws on foreigners. Efforts are underway to harmonise national legislation with EU standards in this regard. However, there are significant differences in terms of progress: while laws in Serbia and Montenegro largely align with the EU acquis, Bosnia and Herzegovina and North Macedonia have yet to adopt relevant legislation that complies with EU guidance on the mutual recognition of professional qualifications.21
The effectiveness of migration policies in attracting skilled migrants to the domestic labour market in the WB6 economies hinges on the alignment of these policies with each economy’s specific needs and conditions, as well as the broader regional context. A key opportunity for the region lies in attracting highly skilled migrants to the rapidly growing ICT sector, which wields significant potential for economic growth and skilled employment (Mara and Landesmann, 2022[23]). Indeed, most WB6 economies have not fully utilised their migration frameworks to attract and retain ICT jobs, which could help reduce high-skilled emigration from the region (see Chapter 4 on Business Environment).
The WB6 economies have shown a commitment to enhancing regional economic integration through initiatives such as the Common Regional Market (CRM) 2021-24 Action Plan,22 endorsed at the Berlin Process Summit in November 2020. This plan aims to facilitate intra-regional mobility by adopting frameworks for the recognition of professional qualifications, implementing freedom of movement for students and professionals, and enhancing the recognition of academic qualifications.
In this regard, WB6 foreign ministers approved three regional agreements at the WB-EU ministerial meeting organised within the Berlin Process in 2022: 1) Freedom of Movement with Identity Cards; 2) Recognition of Higher Education Qualifications; and 3) Recognition of Professional Qualifications for Doctors of Medicine, Dentists and Architects (RCC, 2022[24]). Building on these agreements the WB6 economies signed a memorandum of understanding in October 2023 for the mutual recognition of professional qualifications with the aim of improving professional mobility and aligning skills with labour market needs.23 Moreover, in March 2024 Albania, North Macedonia and Serbia fully opened their labour markets to one another as part of the Open Balkan initiative.
Given the proximity and cultural ties between the WB6 economies, regional co‑operation on migration policies can help address common challenges and maximise the benefits of skilled migration for the entire region. However, despite these initiatives migration intentions within the WB6 remain limited, with only a small percentage of citizens interested in intra-regional migration, according to the 2023 Balkan Public Opinion Barometer (RCC, 2024[25]).
Beyond regional efforts, Albania, Montenegro and Serbia are actively engaging in bilateral agreements and ongoing negotiations to co-ordinate qualifications, education and social security systems. In contrast, Bosnia and Herzegovina, Kosovo and North Macedonia have made limited progress in these areas. Albania, North Macedonia and Serbia are also making strides in preparing to join the European Employment Services (EURES), while the remaining WB6 economies have shown limited progress in this regard.
Between 2018 and 2022, five of the WB6 economies saw a rise in the number of temporary foreign work permits issued (Table 3.4). While improvements to the design and implementation of migration policies might explain some of this increase, other factors – namely the Russian war of aggression against Ukraine – have played a more central role. For instance, in Serbia the war has contributed to the three‑fold increase observed in temporary foreign workers, with the economy hosting an estimated 150 000 Russian migrants as of February 2024 (Euronews, 2024[26]). This influx can be attributed to a combination of logistical, economic and cultural factors.24 Similarly, Montenegro’s increase in foreign workers can be partially explained by the increase in Russian migrants who are attracted to the economy’s tourism sector and the ease of starting a business (the economy facilitates the acquisition of temporary residence permits that allows foreign workers to stay) (Ivanovic, 2023[27]).
Table 3.4. Temporary foreign workers in the WB6 economies (2018-22)
Note: The data for North Macedonia in the first column are from 2019.
Sources: European Commission (2023[28]; 2023[29]; 2023[30]; 2023[31]; 2023[32]); Government of Kosovo (2018[33]; 2023[34]); International Organization for Migration (2022[35]); INSTAT (2019[36]); Kovačević (2020[37]); Ministry of the Interior (2021[38]); Ministry of Security (2020[39]).
While the increase in foreign workers in 2022 was primarily driven by the external shock of the Ukraine conflict, more recent efforts by the Western Balkan economies indicate a growing focus on addressing labour shortages by expanding the quota for foreign employment permits. For instance, North Macedonia raised its quota from 3 250 permits in 2022 to 5 000 in 2023. Bosnia and Herzegovina increased its quota by almost 50%, from 3 500 permits in 2023 to 6 073 in 2024. Additionally, in March 2024 Montenegro proposed raising its quota to 30 000.25 However, these increases may still fall short of meeting demand, with North Macedonia and FBiH advocating for doubling the new quotas.26
Although raising the quota of foreign employment permits can offer a short-term solution to expanding the region’s skills pool, the focus needs to shift towards addressing the underlying issues driving high levels of emigration, such as uncompetitive salaries and a lack of employment opportunities. A more systematic approach will help engage and strengthen ties with migrant workers effectively. One strategy to achieve this is by enhancing mechanisms for the inclusion and integration of migrants.
The scope and depth of initiatives to promote the inclusion and integration of skilled migrants vary substantially across the region
The migration policy strategies of most WB6 economies contain objectives and measures to address irregular migration and to support the socio-economic integration of immigrants, while also making the most of foreign talent. These strategies also envisage the facilitation of labour mobility for return migrants and other migrant workers through adapted services, promotion programmes, language courses and the recognition of prior learning. Albania, Bosnia and Herzegovina and North Macedonia have ongoing active action plans to implement domestic strategies, while plans in Montenegro, Kosovo and Serbia expired in 2023 (with no indication of whether new initiatives are envisaged).
Several actions have been taken across the region to more tangibly promote the inclusion and integration of skilled migrants into domestic labour markets and society. As shown in Table 3.5, Albania and North Macedonia offer the broadest array of measures, whereas Bosnia and Herzegovina and Kosovo do not have any of these elements included in their policy frameworks – which may prove particularly problematic for Bosnia and Herzegovina given the significant increase in foreign workers in recent years and plans to nearly double this quota in 2024.27 Most economies ensure that migrants have the right to emergency healthcare, public education and equal pay for equal work.
Table 3.5. Inclusion and integration measures for skilled migrants in the WB6 economies
Source: Ministries of labour/employment or ministries of foreign affairs of the WB6 economies.
Governments in the region are actively liaising with diaspora communities through diverse initiatives to expand the transfer of skills and knowledge
With an estimated diaspora population of 10 million, the Western Balkans could benefit from closer engagement with those living abroad to attract their skills, particularly those who are well educated and highly skilled. This would help to support the region’s socio-economic development. All WB6 governments have established institutional and policy frameworks to engage with their diaspora communities. These frameworks vary in duration and focus: Kosovo, Montenegro, North Macedonia and Serbia have a longer history of institutionalised co-operation with the diaspora, while Albania and Bosnia and Herzegovina have only recently prioritised strategic development. However, all economies seek to encourage and facilitate diaspora engagement to maximise their contributions to national development and strengthen trust between the state and diaspora communities. Diaspora policies in the region are elaborated through targeted strategies and usually fall under the competence of ministries of foreign affairs. The exception is Serbia, where related efforts are part of its strategic framework on migration, with multiple ministries and governmental bodies involved in diaspora policy.
While some WB6 economies have ongoing diaspora strategies, others have outdated frameworks: Montenegro and North Macedonia's strategies expired in 2023 and there is no information available regarding plans for new ones. Kosovo is preparing to launch public consultations for a new diaspora strategy and law after the National Diaspora Strategy 2019-23 failed to gain approval due to political turmoil.
Governments in the Western Balkans have launched diverse initiatives to attract diaspora skills, focusing on skills and knowledge transfer programmes, networking and summits, and collaboration platforms. Each economy has developed some version of an online platform to map and engage with diaspora (Table 3.6). Fellowships, which can contribute to the transfer of important knowledge and skills, are also common and include the Albanian-American Development Foundation’s Research Expertise from the Academic Diaspora Fellowship Programme, the Citizen Diplomacy Fellowship (Kosovo), Engaging Diaspora Professionals Programme (Kosovo), and Macedonia2025’s internship programme (North Macedonia). Linking scientific diaspora with relevant institutions in the economies is also a popular initiative, such as through Montenegro’s Scientific Network portal or Serbia’s Science and Diaspora Collaboration Programme. These efforts all represent different avenues for further strengthening collaboration between domestic institutions and diaspora – particularly those who are highly skilled – to maximise skills and knowledge transfer from the diaspora population.
Table 3.6. Online platforms for diaspora engagement in the WB6 economies
Sources: Ministries of labour/employment or ministries of foreign affairs of the WB6 economies; OECD (2022[21]).
It is vital for the WB6 economies to target engagement efforts at competitive or economically important sectors. For example, the ICT sector is one of the fastest growing in the region and offers substantial potential for economic growth and skilled employment opportunities (Mara and Landesmann, 2022[23]). Serbia has distinguished itself by offering incentives such as more competitive wages or tax relief for employers who hire highly skilled diaspora. However, other economies have yet to capitalise on this potential to attract and retain jobs in the ICT sector, and thus may struggle to curb high-skilled emigration and encourage the return of highly skilled individuals (see Chapter 4).
Recommendations for developing relevant skills
Increase access to high-quality, affordable childcare across the region. First, the WB6 governments should ensure that there is an adequate number of institutions that can properly meet demand. Second, improving equity in access involves ensuring that ECEC is either provided for free (supported by the government) or has fees determined by household income. Together, these two reforms would likely benefit children from disadvantaged backgrounds or those living in rural areas – the groups who tend to enrol in ECEC at much lower rates – as well as encourage increased labour force participation among women.
Scale up initiatives for ensuring inclusivity in educational opportunities for disadvantaged groups. Given the relatively low enrolment rates of children and students from vulnerable and disadvantaged groups at all levels of education, the WB6 governments should consider alternative or reinforcing avenues for further strengthening existing programmes. Such measures could include scholarships for upper secondary education, additional teacher training, or more comprehensive data collection on the enrolment and completion rates for these groups.
Develop incentives to enhance the attractiveness of flexible adult learning opportunities, particularly those focused on developing skills for the digital and green transitions. Given the current absence of education and training programmes focused on developing workers’ skills, WB6 economies should prioritise creating and implementing initiatives to enable individuals to upskill or reskill accordingly. It will also be crucial to ensure the affordability of these programmes. This can be achieved by encouraging employers to offer financial incentives such as tax breaks, vouchers or other subsidies that can offset the cost of participating in training (OECD, 2023[20]). Such tools would be more impactful if they were coupled with increased government support to business initiatives in the green economy (for more information, see Chapter 6).
Collect comprehensive and comparable data on adult learning and skills. Given the variation in the data collected on education and employment policy, it is crucial that the WB6 economies effectively benchmark their outcomes both within the region and with international peers. While most economies (except for Bosnia and Herzegovina) participate in international assessments that measure student outcomes, such as PISA, none have a standardised way of assessing and comparing adult skills. As such, participation in the OECD’s Programme for the International Assessment of Adult Competencies (PIAAC) could offer a promising avenue (Box 3.1).
Box 3.1. Measuring adult skills: OECD’s Survey of Adult Skills
The Survey of Adult Skills, which is part of PIAAC, is an initiative that allows participating governments to evaluate and monitor an array of skills among their adult populations. It is the most comprehensive international survey of adult skills in the world.
By measuring the level and distribution of literacy, numeracy and problem-solving competencies it provides data on several relevant aspects of skills, including (but not limited to):
information processing skills across different sub-groups of adults in participating economies
factors that impact the acquisition and development of these skills
performance of national education and training systems
equity in educational and labour market outcomes
lifelong learning.
A new round of data collection for the second cycle of the Survey of Adult Skills is being implemented in 2024-29. Starting to participate in the survey – and continuing on a regular basis – allows economies to benchmark progress over the time, which is particularly important for the WB6 economies given the persistent challenges facing their education systems and labour markets.
Source: OECD (2024[40]).
Augment efforts to support skilled migrants successfully integrate into their new communities. To achieve this, closer collaboration with the local government, civil society organisations, businesses and educational institutions is necessary to identify and agree on effective context-based integration programmes. By leveraging their resources and expertise, stakeholders can develop more impactful programmes that address the specific needs of skilled migrants and facilitate their inclusion and integration.
Putting skills to effective use
Easing the school-to-work transition
The WB6 economies surpass the EU with respect to the percentage of the labour force with advanced (tertiary) education, with the WB6 average nearly double that of the EU (76% versus 42%). However, despite this impressive tertiary education achievement, most of the region faces difficulties with education and training systems adapting to changes within the labour market. This has contributed to high youth inactivity and unemployment, as well as high levels of emigration of young skilled adults from the region.
High youth NEET and unemployment rates underscore persistent challenges with the school-to-work transition
The region is underperforming with respect to the school-to-work transition. While the average youth unemployment rate in the Western Balkans fell from 40.3% in 2017 to 25.5% in 2023, this is far above the EU average of 13.8% (World Bank, 2024[41]). Moreover, this decrease is partially a product of the sustained high levels of youth emigration, rather than well-developed employment policies or activation programmes.
As with unemployment rates, the region’s NEET rates are significantly above EU levels (Figure 3.4), exhibiting a sluggish pace of convergence. Notably, while all six Western Balkan economies report rates higher than the EU average, there is significant variation across the region, with rates ranging from 12.9% (Serbia) to 32.9% (Kosovo). A high NEET rate can indicate that young people are not acquiring the skills most sought after by employers through education or training – which can result in an increased and sustained risk of becoming disconnected from the labour market.
Figure 3.4. Youth NEET rates in the WB6 economies and the EU (2022)
Sources: World Bank (2024[42]); Vienna Institute for International Economic Studies (2024[43]); Eurostat (2023[44]).
VET programmes are widely used, but their quality and relevance must be improved
Strengthening VET governance is particularly important in the Western Balkans given the high levels of enrolment and the ability of these systems to provide in-demand, occupation-specific skills in quickly expanding fields. It also can counter high NEET rates by encouraging young people to remain in education or training while cultivating valuable skills. The vocational path is a common option among Western Balkan students, with the region reporting a much higher rate of enrolment in VET programmes than the OECD average: more than 50% of students in the WB6 economies are enrolled in pre-vocational or vocational programmes at age 15, compared to an OECD average of 13% (Figure 3.5). While these high enrolment rates suggest that VET programmes are considered attractive, for most WB6 economies VET is unlikely to be the preferred choice for education or training, but is rather viewed as a fallback option.28
Figure 3.5. VET enrolment in the WB6 economies and the OECD (2022)
Notes: Caution is advised when interpreting estimates because one or more PISA sampling standards were not met (see PISA 2022 Reader’s Guide, Annexes A2 and A4). Countries and economies are ranked in descending order of the percentage of students enrolled in pre-vocational or vocational programmes. Bosnia and Herzegovina is not included due to its lack of participation in PISA 2022.
Source: OECD (2022[3]).
Most economies track VET outcomes such as completion rates, employment rates of graduates and earnings. However, only Albania, Montenegro, North Macedonia and Serbia consistently and systematically monitor and adjust their VET policies based on these data, even though such efforts can improve the labour market relevance of VET programmes.
The relevance of VET can be bolstered through strong engagement with social partners.29 Almost every WB6 economy has some mechanism or structure in place to engage social partners in the decision-making process for VET policy. By consulting these partners and leveraging their “on the ground” knowledge, governments in the region can better understand skills gaps in the labour market and tailor VET curricula and policies accordingly. Surveying social partners to better understand skills demands is particularly useful, and almost all economies conduct such surveys on at least a yearly basis (and even on a quarterly basis in North Macedonia).30 However, none of the WB6 economies has established a Centre for Vocational Excellence,31 reflecting the relatively limited nature of formalised, systematic public-private partnerships in support of VET. Furthermore, while structures exist to engage social partners in the provision of VET, there is significant scope to improve the efficiency of these mechanisms.
Increasing the importance attached to work-based learning (WBL) is another way of better aligning VET programmes with the needs of the labour market. As an important component of VET systems, WBL can ease school-to-work transitions and facilitate meeting labour market demands (OECD, 2021[45]). Many VET graduates cite the lack of opportunities to develop practical, workplace-relevant skills as one of the primary reasons for problems finding suitable employment.32 The development of dual education systems is an area of WBL that has gained traction as it aims to prepare students for the workforce by equipping them with both theoretical knowledge and practical skills demanded by employers, thereby bypassing the typical delay of the education system in responding to evolving needs. In recent years, all WB6 economies have made strides in piloting, implementing or strengthening frameworks for dual education models. Montenegro and Serbia are the most advanced: Montenegro was the first to introduce a national roll out of dual VET, and Serbia established a dedicated Law on Dual Education in 2017. Conversely, economies such as Albania and Bosnia and Herzegovina are still in the process of piloting dual education programmes.
These ongoing developments of WBL are still relatively nascent and have not yet been matched with concrete mechanisms for expanding WBL opportunities for students. For example, very few economies offer incentives to employers to encourage WBL and apprenticeships. Only in FBiH, North Macedonia and Serbia do these incentives exist, and little information is available beyond their presence. Montenegro plans to create a “Fund for Dual Education”, which will be used to pay employers to host students during their study programmes. One structural issue with increasing the availability of WBL opportunities is the prevalence of small and medium-sized enterprises (SMEs), which constitute 99% of all firms operating in the WB6 (OECD, 2022[46]). Given the small-scale operations and more limited resources of SMEs, they might be less capable of providing WBL options to students.
Despite various efforts to improve VET governance, systems across the WB6 continue to encounter significant challenges that affect their quality and relevance, although the nature and severity of these issues vary by economy. In PISA 2022, VET students across the WB6 reported weaker learning outcomes compared to those participating in general education, highlighting a disparity in educational quality between the two types of programmes (OECD, 2023[1]). These difficulties in instilling strong foundational skills not only impede a smooth work-to-school transition, but also hinder students’ ability to adapt to changing labour market needs (OECD, 2020[47]).
Even in economies with high-quality systems, VET programmes still struggle with alignment with the demands of the labour market. This is partly due to outdated curricula, which leads to a gap between the skills taught to students and those required by employers (OECD, 2022[7]). This is evident from the perspective of employers across the Western Balkans, with a majority of firms reporting that they faced problems hiring workers for “routine jobs” (i.e. those usually covered by VET) due to applicants lacking skills or experience.33 Obsolete technologies and inadequate equipment further hinder students’ skills development, particularly as a growing proportion of sectors and positions require digital competences (Regional Challenge Fund, 2023[48]). Kosovo stands out due to its recent efforts to equip 10% of its VET schools with augmented reality and virtual reality tools, significantly increasing the perceived appeal among students (University for Business and Technology, 2023[49]).
All economies have taken steps to improve the labour market relevance of their higher education programmes
All the WB6 economies have objectives of enhancing the labour market relevance and outcomes of higher education within their education strategies. To support these strategic goals, several mechanisms are employed, the most common of which is the use of communications or awareness campaigns to provide prospective students with relevant information when selecting their programme. These campaigns can highlight the skills and qualifications most in demand, thus encouraging students to pursue programmes in areas currently experiencing shortages or that have more employment opportunities. Other common avenues for boosting labour market relevance include the use of block grants or scholarships to finance participation in in-demand programmes, and using labour market information to inform curricula design. However, despite these efforts there is still a problem across the region with the most popular fields of study not being those where the most vacancies exist, resulting in a gap between the oversupply of humanities and social science graduates and the demand for those with science, technology, engineering and mathematics (STEM) degrees.
All economies collect some statistics to monitor progress and assess the outcomes of higher education, although the variety and comprehensiveness of these collection efforts vary. Nearly every economy collects data through employer surveys and surveys of workers/graduates. However, only North Macedonia, Serbia, FBiH and RS collect data on employment rates by field of study – an important data point for discerning which fields of study are most in demand or most “employable.”
Youth Guarantee schemes across the region represent a commitment to reducing youth inactivity and unemployment, but are at different stages of development
To address the high prevalence of young people who are NEET and not actively searching for employment – and given the difficulties with the school-to-work transition in both VET and higher education – most PES in the region have started the process of adopting and implementing Youth Guarantees, a flagship project under the Economic and Investment Plan for the Western Balkans that aims to reduce youth unemployment. In July 2021 the WB6 economies pledged to implement the Youth Guarantee programme in the Western Balkans Declaration on the Sustainable Integration of Youth into the Labour Market (ESAP, 2021[50]). These schemes seek to expand knowledge and access to counselling, education, training and employment opportunities for young people aged 15 to 29 years. This policy instrument was first implemented across the EU in 2014 due to persistently high levels of youth unemployment: the EU reported an average youth unemployment rate of 24.1% in 2014 – less than two percentage points below the current WB6 average of 25.6% (ranging from 21.3% in Kosovo to 29.8% in Bosnia and Herzegovina) (World Bank, 2024[51]; Eurostat, 2024[52]).
However, the WB6 economies are at very different points in the implementation process. North Macedonia was the first economy in the region to implement a Youth Guarantee scheme (2020-22) that focused on early intervention, outreach and improved quality of employment service provision, and has continued these efforts through its Youth Guarantee Plan 2023-26 (see North Macedonia economy profile). Albania and Serbia have both adopted their own Youth Guarantee plans and launched their pilot phases in October 2023 and January 2024, respectively. Montenegro and Kosovo have adopted implementation plans; however, while piloting is expected to start in 2025 in Montenegro, Kosovo has yet to achieve the conditions for launching its pilot – namely restructuring the Employment Agency. In Bosnia and Herzegovina, only RS has adopted an implementation plan, although FBiH has two ongoing “micro‑pilots” in the Zenica Doboj and West Herzegovina cantons.
Matching skills with labour market needs
All the WB6 economies are currently struggling with pervasive vertical and horizontal skills mismatches. Vertically, many workers find themselves over-qualified for their position. Horizontally, some sectors are oversaturated, while others face significant shortages despite high demand from the labour market.
According to recent surveys, on average 23.6% of firms in the Western Balkans identified an inadequately educated workforce as a major obstacle restricting their competitiveness (Table 3.7). The percentage by economy significantly varied, ranging from 2.3% in Bosnia and Herzegovina to 44.2% in Kosovo. This does not necessarily indicate that the region’s workers are poorly educated, but rather they lack the proper skills that align with employers’ needs. Moreover, a 2023 survey showed that 26% of employees and 31% of businesses in the region disagreed that the skills taught in their economy’s education system met the needs of their work.34
Table 3.7. Inadequately educated workforce as a major constraint in the WB6 economies (2019, 2023)
Notes: Data for BIH, MNE, and MKD are from 2023; data for ALB, KOS, and SRB are from 2019.
Source: World Bank (2024[53]).
Skills intelligence systems are under development across the region, although few economies are utilising advanced predictive tools to anticipate skills imbalances
The WB6 economies have begun to analyse and establish mechanisms to address the prevalent skills imbalances in their economies. Skills intelligence systems are tools and frameworks used to collect, evaluate and disseminate information about the skills and competences needed in the labour market, and enable policy makers, employers and the public to promptly identify shifts in skills and occupation profiles.
The most common skills intelligence system used in the region is employer skills needs surveys, which are conducted by all WB6 economies apart from Kosovo. These surveys assess the challenges that employers face in recruiting and retaining a qualified workforce by looking at the perceived skillsets of new workers, as well as inadequacies among existing employees.
Albania and Serbia have also established sector skills councils to analyse sectoral needs, a substantial step toward complementing national skills intelligence with sector-specific intelligence. These councils utilise their assessments to update existing or propose new qualifications to better align with market needs. Notably, Serbia has councils in 15 sectors, while Albania has councils in tourism (one of the economy’s most important sectors) and ICT (the fastest growing sector that attracts substantial foreign direct investment [FDI]). However, a gap emerges in the Albanian case as there is no council for other sectors, namely energy, that are also major recipients of FDI. This underscores a broader challenge: apart from Serbia, skills intelligence in the region does not sufficiently prioritise the demands of investors in key priority sectors, which means that opportunities to bolster the competitiveness of WB6 economies may be missed.
Tracer studies, which evaluate graduates’ employability and determine the skills most in demand in the labour market, are also widely used to identify skills gaps. All WB6 economies have at least piloted a tracer study, although the level of advancements of these efforts significantly varies. For example, whereas studies in Albania and Kosovo focus exclusively on graduates from VET programmes, those in Bosnia and Herzegovina and North Macedonia include both VET and higher education graduates. The frequency of these studies also varies, with Albania the sole WB6 economy that conducts an annual tracer study that requires all VET institutions to share relevant data. Thus, for most of the region the absence of regular tracer studies limits the ability of governments to systematically track progress and monitor education and employment outcomes, particularly among VET graduates.
While these tools are useful in assessing current skills imbalances, some economies have undertaken efforts to anticipate future in-demand skills and occupations with more predictive tools. One prominent avenue has been through the establishment of skills observatories in Albania and North Macedonia that aim to identify both current and future skills needs. These observatories compile a variety of administrative, economic and labour market data across various government sources to support evidence-based policy making. Another method is the use of skills intelligence barometers. Kosovo offers a strong example as it has developed three such barometers: the Skills Barometer, the Labour Market Barometer and the VET Barometer. Specifically, the Skills Barometer, published in December 2021, aimed to forecast the supply of and demand for different occupations and sectors over a five-year period (OECD, 2022[46]). Economies such as Bosnia and Herzegovina and Montenegro seemingly lag behind their peers in terms of their use of smart skills mechanisms.
Although these various advances demonstrate ongoing efforts to develop systematic skills intelligence, and consequently address skills mismatches, these systems are still relatively new, meaning that their efficacy has yet to be observed. Moreover, there are still several shortcomings facing these tools. First, in economies with several mechanisms the results of skills analysis are rarely centralised, which limits their utility for evidence-based policy making and means that students and the workforce do not have a centralised location to access data on skills shortages and growing areas of employment or get tailored information. Second, most existing skills intelligence tools (with the exception of skills intelligence barometers) in the Western Balkans primarily use occupations or sectors as the unit of analysis, rather than specific sets of competences or skills. Such a traditional approach is likely to become less relevant in the future as occupations evolve and require a more diverse and flexible set of skills (European Commission, 2021[54]).
Activating unused skills
Providing people with better opportunities to participate in the labour market is crucial to help economies mobilise unused skills, particularly in the Western Balkans where the regional employment rate is more than 10 percentage points lower than in the EU (Figure 3.6).
Figure 3.6. Employment rates in the WB6 economies and the EU (2022)
Percentage of the total labour force
Notes: For all WB6 economies except for Kosovo, modelled ILO estimates for unemployment (as a percentage of total labour force) were available, which allows for increased comparability across economies. To populate the graph with data for Kosovo, the latest available data (national estimate from 2022) was used.
Source: International Labour Organization (2024[55]).
Government policies for improving job readiness and helping people find suitable employment remain limited due to insufficient financial and human resources
PES seek to assist jobseekers with locating suitable employment opportunities and ensuring that they have the necessary skills to demonstrate employability and subsequently enter (or re-enter) the labour market. In the Western Balkans these entities face chronic structural challenges, such as large shares of long-term unemployment, youth unemployment, and the prevalence of vertical and horizontal skills mismatches. PES are generally responsible for the implementation of active labour market programmes (ALMPs), which seek to increase jobseekers’ employability and employment opportunities.
However, the efficacy of ALMPs in the Western Balkans is limited by several obstacles, one of the most prominent being insufficient funding. The budget spent on these programmes across the Western Balkans is far below the EU average, with significant differences across the region. In 2022, the budget spent on ALMPs, measured as a percentage of GDP, ranged from 0.03% in Kosovo to 0.25% in Albania – all substantially below the EU average of 0.39%.35
This lack of funding negatively impacts other aspects of PES, particularly insufficient staff numbers as due to limited budgets they cannot hire additional personnel. As such, although there is a big range – 159 registered unemployed individuals per one counsellor in Montenegro to 1 160 registered unemployed individuals per one counsellor in FBiH – all economies fall above the recommended ratio of 100 registered unemployed individuals to one counsellor, which is particularly important when dealing with groups that face greater barriers to employment. Little or no improvements have been made to increase staff capacity; however, some advances have been achieved in organising PES processes more effectively, such as through digitalisation processes, reorganising work or deploying additional counsellors to municipalities most in need. As PES advance on implementing Youth Guarantee schemes the burden on these entities will only increase, highlighting the challenges involved in fulfilling their mandate and helping people find suitable employment.
Initiatives targeting vulnerable and disadvantaged jobseekers exist across the region, but some groups remain underserved
There are several employment services and ALMPs provided by PES in the region that target vulnerable groups. These include mainly jobseekers from ethnic minorities, specific groups of women (e.g. those in rural areas), people with disabilities and those who are long-term unemployed. One of the most common types of initiative targets Roma men and women, such as mentoring (North Macedonia), job subsidies (FBiH) or part-time employment and training opportunities (Albania). There are also programmes for those who are long-term unemployed in several economies (FBiH, Albania and Serbia).
However, several challenges are related to the current design of ALMPs. First, vulnerable groups often have not previously been employed and the resulting lack of experience and skills, compounded by lower rates of educational attainment, means that they are in particular need of intensified support. Additionally, while the aforementioned groups tend to be the priority targets of existing ALMPs, other disadvantaged groups are less well-served, including older workers, low-skilled individuals, victims of violence and migrants. As such there is a stark divide regarding which groups receive specific attention, as well as regarding the resources dedicated to supporting such programmes.
The limited focus on older unemployed individuals is particularly problematic in the WB6, as most economies (apart from Kosovo) are grappling with an ageing population and declining birth rates. As such, the region must not simply focus its efforts on engaging its youth, but instead should prioritise engaging workers aged 50+ who will constitute an increasing proportion of the workforce. While there are dedicated ALMPs for youth across all the WB6 economies, only four of the six economies have ALMPs targeting older unemployed individuals. Programmes that exclusively target this population are even rarer, as the remaining economies tend to simply bundle this population with other hard-to-employ target groups.
Another mechanism that benefits disadvantaged jobseekers – albeit more indirectly – is the use of profiling by PES to segment individuals by employability and consequently offer customised services. Most economies have a two- or three-tier system, with the upper tiers encompassing jobseekers with multiple barriers to employment. These individuals have access to special services such as additional training or intensive interactions with PES advisors. This profiling tool often recognises the overlapping or reinforcing challenges faced by certain groups within society and slots them into the tier that grants them access to additional support services.
Despite numerous initiatives aimed at improving the employment rates of women, low rates and a large gender employment gap persist due to multiple barriers
Gender inequalities are pronounced in the region. Women are less often employed than men, and this gap is larger in the region than the EU average (with the exception of Montenegro) (Figure 3.7). Between 2019 and 2022, Albania, Kosovo, Montenegro, North Macedonia and Serbia all reduced the employment gender gap, while it increased in Bosnia and Herzegovina. The gender employment gap was highest and the employment rates of women lowest in Bosnia and Herzegovina and Kosovo.
Figure 3.7. Gender employment gap in the WB6 economies and the EU (2019, 2022)
Percentage point difference of employment rate of men and the employment rate of women aged 15-64 years
Note: The “gender employment gap” is calculated by finding the difference between the employment rate of men and the employment rate of women aged 15-64 years.
Sources: Data provided by National Statistical Offices (ALB, BIH, KOS, MNE, MKD); Eurostat (2024[56]) (SRB, EU average).
Gender employment gaps are noticeable in STEM fields across the Western Balkan economies, with women accounting for only 14% of STEM jobs in the region.36 Part of the reason for this gap is the lower rates of enrolment by women in STEM fields in higher education in some economies. However, another important contributor is the “leaky pipeline phenomenon”, which argues that women have the interest and ability to pursue STEM careers but elect not to due to systemic barriers such as gender stereotypes or significant gender pay gaps (Calhoun, Jayaram and Madorsky, 2022[57]). Nearly every WB6 economy reports a gender pay gap between male and female employees working in STEM, particularly within the ICT sector (Drezin, 2021[58]).
One notable regional advance has been the establishment of the Regional Network of Women in STEM, led by the Regional Cooperation Council and the United Nations Development Programme as part of the Common Regional Market Action Plan 2021-24. However, at the economy level there is limited vocational guidance in place to encourage young women to take up vocational or university education in STEM study fields; instead, most initiatives are either funded by donors (Kosovo, North Macedonia, Serbia) or think tanks (Albania).
Multiple initiatives aimed at increasing women’s employment rates have been instituted by every economy in the region. All are supported by key strategies and action plans (either in place or in the process of adoption) to address low labour market participation rates, although there is only a specific budget accompanying these policies in Albania, Montenegro and Serbia.
However, only some economies have policy frameworks for improving conditions for work-life balance – and the existing frameworks are far from comprehensive, with concrete measures and initiatives beyond paid maternity leave not well-defined in most WB6 economies. The exceptions include Albania, which offers childcare for school children through its new “Family Hub” services, as well as services for elderly support. In addition, Serbia has increased its annual vacation time for single parents and instituted flexible working hours. However, no economy has a framework or initiatives that cover all ages of children, childcare and old-age care support – despite the fact that women are more likely than men to take on childcare and elderly care roles. The lack of affordable and available childcare services in the region (particularly in rural areas) has been found to disproportionately impact the labour market engagement of women (World Bank, 2018[59]). Reconciling these obligations and ensuring a better work-life balance is vital, as women with families do not necessarily seek to work less, but instead desire adaptable arrangements such as part-time positions or those with flexible schedules to manage their responsibilities (UNDP, 2024[60]).
Approaches to promoting women’s entrepreneurship significantly vary: FBiH, RS and Kosovo either entirely lack policy frameworks or have frameworks that have recently expired; Albania has a sub-measure aimed at stimulating and supporting the entrepreneurship of women, young women and girls within its National Strategy for Gender Equality 2021-30; and Montenegro and North Macedonia have specific, separate strategies that explicitly focus on promoting women’s entrepreneurship. This uneven proliferation of strategies has not engendered much success, with women remaining significantly underrepresented among entrepreneurs and business owners (UNDP, 2024[60]). A likely reason for this stems from gender stereotypes that dictate entrepreneurship as being more “masculine” – a belief that can then contribute or reinforce other difficulties such as gaining sufficient and reliable access to finance. It is notable that only Montenegro, North Macedonia and Serbia have developed frameworks or programmes that seek to reduce gender stereotypes in schools starting at an early age.
Leveraging skills for innovation
Skilled people play a fundamental role in innovation through their ability to generate new knowledge and ideas. In the Western Balkan context, innovation is seen as key to strengthening regional and European integration (OECD, 2021[45]). However, while several economies have significantly increased spending on scientific research in recent years, overall investments in the sector remain negligible and show little evidence of converging towards EU levels (Figure 3.8). This lack of funding severely impacts the research and innovation capacity of the Western Balkans.
Figure 3.8. Gross expenditure on research and development (GERD) in the WB6 economies and the EU (2008-22)
Gross domestic expenditure on research and development as a share of GDP
Note: This indicator measures the gross domestic expenditures on research and development measured as the share of gross domestic product.
Sources: World Bank (2024[51]) (WB6); Eurostat (2024[61]) (EU).
The productivity and innovation capacity of scientific researchers remains low, with the sector failing to attract new talent
The number of researchers in the Western Balkans has remained largely unchanged in recent years, despite significant efforts to boost STI performance across the region. This is in stark contrast to some regional peers, although intra-regional discrepancies are evident. Proportionally, the number of researchers is the highest in Serbia (at more than 2 218 researchers per million inhabitants), falling to a low in Bosnia and Herzegovina of 447 researchers per million.37 Even given this variation, all WB6 economies are far below the EU average of 4 450 researchers per million inhabitants (World Bank, 2024[51]). In addition, human resource capacity for research in some economies is dramatically affected by brain drain, particularly in important fields such as medical, health and ICT.
All economies provide some assistance to researchers to boost the attractiveness of the profession. Grant funding is available in most economies to support doctoral and postdoctoral research, scholarships, participation in conferences, and international tender support, although these remain largely ad hoc and small in scale. Specific programmes targeting young researchers are also in place in some economies. All economies participate in the Marie Sklodowska-Curie Actions (MSCA), the EU flagship programme that seeks to enhance researchers’ training and career development through providing new knowledge and skills.38 Between 2014 and 2023, researchers from the WB6 region participated in MSCA projects nearly 260 times,39 although over two‑thirds of these came from Serbia alone, thereby suggesting continuing capacity constraints.
All economies except Kosovo also participate in EURAXESS, a pan-European network initiative providing support services to researchers to help their mobility. Most major higher education institutions have endorsed the network’s Charter and Code of Conduct for Researchers, which constitutes the principal rights and obligations for researchers and research institutions. However, few local institutions have received the EURAXESS HR Excellence in Research award, which calls into question the long-term commitment of the WB6 region to aligning its human resource policies with European best practices.
An increased focus on stimulating linkages between academia and the private sector could lead to more skills transfer and the commercialisation of research
Co-creation between R&D institutes and industry remains the weakest link across the region’s STI systems, with incentives for business-academia collaboration either non-existent or applied inconsistently. The scale and scope of financial incentives range from large-scale innovation vouchers and competitive grants for joint research projects, proof of concept and technology transfer in Serbia, to the ongoing preparation of a competitive collaboration grant scheme in North Macedonia and a number of smaller scale support incentives in Montenegro and Albania. In contrast, financial support in Bosnia and Herzegovina and Kosovo is nascent or via donor-funded support to innovative SMEs, without a clear link to scientific research. Non-financial incentives specifically supporting collaboration between public scientific research and businesses are largely absent. Royalty splits between the inventor and the organisation holding the patent are not sufficiently nuanced in local intellectual property (IP) protection legislation, while the overall weak enforcement of IP continues to de-incentivise R&D activities. Tax incentives for businesses engaging in R&D are very limited.
As a result, the commercialisation of research remains limited. Except for Serbia, where monetary returns of IP have increased by nearly 300% since 2016, receipts for the foreign use of domestic IP remain negligible and largely stagnant at less than 0.1% of GDP (World Bank, 2024[51]).
The potential of smart specialisation to leverage and boost local skills for innovation is yet to be unleashed
Scientific research is a vehicle for fostering innovation and development. It is a key element of smart specialisation, which is a concept that has been at the forefront of European regional and industrial policy design in the last decade. More recently, smart specialisation has also gained momentum across the Western Balkans. All WB6 economies have embarked on the process of developing smart specialisation strategies (S3), with technical support from the European Commission’s Joint Research Centre. The state of play differs significantly between economies: in Montenegro and Serbia, S3 have been in place since 2019 and 2020, respectively, and implementation is well underway; North Macedonia adopted its S3 in late 2023; and in Albania, Bosnia and Herzegovina and Kosovo the development of an S3 is still in progress. Across all existing or draft strategies, ICT and energy efficiency have been identified as priority areas, thereby addressing key aspects of the region’s green and digital transitions.
Although the development of skills is recognised as an integral part of smart specialisation, incorporating human capital development, and working with education providers to upskill or reskill local workforces in support of S3 priority objectives, remains somewhat overlooked. Creating entrepreneurial and innovation skills, as well as local capacity to support the green and digital transformations, are reflected in all existing S3, with some implementation activities focused on updating curricular and study programmes. However, there is no evidence of a systematic approach to reforming vocational or higher education systems to fully align with S3 objectives.
Recommendations for putting skills to effective use
Continue to bolster skills intelligence systems. While all WB6 economies have made efforts to address skills mismatches, there is a need to further enhance skills intelligence to ensure the accurate assessment and planning of current and future skills needs. When transitioning from reactive to proactive mechanisms, WB6 governments should prioritise the development and/or regular implementation of predictive skills studies and skills forecasting tools. Additionally, it is crucial for WB6 economies to centralise relevant data and analysis, thus creating a robust and accessible evidence base for policy makers and the public. The European Centre for the Development of Vocational Training (CEDEFOP) Skills Intelligence tool can serve as an illustrative example of a centralised platform (Box 3.2).
Box 3.2. CEDEFOP’s Skills Intelligence platform
In 2015, CEDEFOP introduced the Skills Panorama, an interactive web platform designed to offer insights into skills needs across Europe. In 2021, the content of the Skills Panorama was integrated into the innovative Skills Intelligence tool, maintaining the original platform's commitment to providing insights across various occupations, sectors and countries. The primary goal of this transition was to facilitate evidence-based decision making for the public by aiding education and training choices, and for policy makers by supporting the revision or implementation of skills policies.
The Skills Intelligence platform employs 56 indicators and 26 skills dashboards, utilising both qualitative and quantitative data to highlight the skills most relevant and in demand by the labour market, based on current and future trends. It also offers an overview of skills anticipation approaches in EU member states, showcasing various assessments, forecasts and foresight mechanisms that can serve as inspiration or best practices.
Sources: CEDEFOP (2024[62]); European Institute of Public Administration (2024[63]).
Strengthen structured co-operation between VET and businesses. These partnerships, which should span from planning to provision, are integral for updating VET curricula and increasing their labour market relevance, thereby reducing the gap between skills taught in educational systems and those demanded by employers. Moreover, ongoing, systematic co-operation between VET programme providers and businesses in the private sector could help to expand the number of WBL opportunities available to students, which would help young workers accrue practical experience and develop “real world” skills and competences. The WB6 economies could potentially establish Centres of Vocational Excellence to further formalise these public-private partnerships.
Continue to develop and implement Youth Guarantee schemes. Although the WB6 economies are at different stages of finalising their Youth Guarantee schemes, all should continue towards achieving complete implementation. Specifically, while Albania and Serbia continue to the final phase and eventually roll out of their full schemes, Bosnia and Herzegovina and Montenegro should prioritise the timely adoption of their respective action plans. In parallel, WB6 governments should assess the capacities of their employment agencies to ensure that they possess the necessary resources and institutional structure to accommodate the demand of these schemes.
Develop targeted ALMPs to better activate older unemployed individuals. Although most WB6 economies have employment policies or training programmes that specify older people as a target group, they receive disproportionately little attention given the changing demographic composition of the region. As such, the WB6 economies should devote augmented resources towards strengthening counselling, training and/or job matching support for this population through either existing ALMPs or through developing new programmes.
Further boost the capacities of PES by allocating sufficient human and financial resources. Reducing the ratio of jobseekers to PES counsellors might be particularly beneficial in the Western Balkans given the high rates of unemployment, as lower ratios have been associated with more job offers and faster job entry (Böheim and Eppel, 2023[64]).
Use the new Western Balkans Research and Innovation Information Hub to enhance regional co-operation on fostering innovation. This platform represents a valuable opportunity for the WB6 economies to individually strengthen their own innovation capacities, and for regional co-operation and information sharing in the R&D sphere to be improved (Box 3.3).
Box 3.3. The Western Balkans Research and Innovation Information Hub
Launched in 2022, the Western Balkans Research and Innovation Information Hub is a platform that seeks to stimulate and sustain regional co-operation in the fields of research and innovation. The overarching objective of the hub is to facilitate the enhanced integration of the WB6 economies into the European Research Area. The creation and implementation of the Information Hub is overseen by the EU’s Horizon Europe funding programme.
The project makes available an array of tools and mechanisms to the WB6 economies. Through identifying common priorities, organising policy dialogue, establishing regional information hubs, and designing and carrying out regional pilot activities the region can boost the attractiveness of its research sector and thus attract (and retain) new talent.
One of the central objectives of the Information Hub is to strengthen linkages between governments, academia and the private sector in the WB6 economies through the application of the “triple helix model of innovation”. Additionally, significant emphasis is placed on forging strong relationships between the region and participating EU member states (Austria, Croatia, Germany and Italy) and organisations such as the Regional Cooperation Council and the European Commission. As such, the exchange of ideas, good practices and lessons learned could potentially lead to substantial improvements in the region’s innovation policy frameworks and outcomes.
Source: Western Balkans Information Hub (2024[65]).
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Notes
← 1. Unless otherwise indicated, any reference to the EU refers to the 27 member states.
← 2. This lack of participation hinders the economy’s ability to gauge its own progress towards improving educational outcomes, and limits the availability of comprehensive regional comparisons with the other WB6 economies.
← 3. The drop in the results of the students in Albania observed in PISA 2022 appears to be related to different factors. At the end of 2019, a strong earthquake hit Albania, causing significant damage to infrastructure, including schools and houses, across 12 main cities. About half of the students participating in PISA 2022 (50.5%) are originally from the cities most hit by the earthquake. Until April 2022, when PISA was conducted, these students were studying outside of their regular schools, with shifts and reduced teaching hours in place. The COVID-19 pandemic added to the challenges faced by the education system in Albania in 2020 and 2021, with the state of digital infrastructure posing great difficulties to the effective use of online and distance learning. The disruptions caused by the earthquake and by COVID-19 on the psycho-social life of students may have had a negative impact on the engagement of students in PISA 2022.
← 4. It is worth noting that not all WB6 economies started their participation in PISA at the same time. Albania and North Macedonia were the first from the region to participate in 2000; Serbia joined in 2003 followed by Montenegro in 2006, Kosovo in 2015 and Bosnia and Herzegovina in 2018.
← 5. To help understand differences in student knowledge and skills, PISA categorises student performance into different proficiency levels. They range from highest (Level 6) to lowest (Level 1). Level 2 is considered the baseline level of proficiency students need to participate fully in society.
← 6. This EU average excludes both Luxembourg and Cyprus.
← 7. Data on WB6 economies’ expenditure on education is relatively limited. As such, this calculation was made using the latest figures available across several sources. Data for both Albania (3.1% of GDP) and Serbia (3.3%) came from the UNESCO Institute for Statistics. Data for Bosnia and Herzegovina (4.4%) and North Macedonia (3.7%) came from previous OECD reports (Guthrie et al., 2022[69]; OECD, 2019[68]). Data for Montenegro (4.1%) came from Eurydice (Eurydice, 2024[66]). Data for Kosovo (4.7%) came from a report by the Kosovo Education Centre (Kosovo Education Centre, 2021[67]).
← 8. To calculate the regional average, data for Albania, Bosnia and Herzegovina, North Macedonia, Serbia, and the EU came from the World Bank (https://data.worldbank.org/indicator/SE.PRM.ENRL.TC.ZS?locations=AL-BA-XK-ME-MK-RS-EU). Data for Kosovo (https://masht.rks-gov.net/wp-content/uploads/2022/09/education-statistics-2018-2019.pdf) and Montenegro (https://www.monstat.org/userfiles/file/Obrazovanje/2016%2017/osnovne/primary%20school%20begining%202016-2017%20-.pdf) came from their respective statistical offices.
← 9. There is no information available for Montenegro or North Macedonia.
← 10. For more on the distribution of teachers’ salaries throughout Europe, including the Western Balkan economies, please see: https://op.europa.eu/en/publication-detail/-/publication/4b900c13-6977-11ee-9220-01aa75ed71a1/language-en.
← 11. These two cantons are Sarajevo and Tuzla.
← 12. This level of education generally corresponds to 14-15-year-olds.
← 13. These two levels correspond with ISECD 01 and ISCED 02. For more on these levels see: https://uis.unesco.org/sites/default/files/documents/international-standard-classification-of-education-isced-2011-en.pdf.
← 14. This requirement is outlined in the state-level Framework Law on Preschool Upbringing and Education in Bosnia and Herzegovina. To access this law, please see: https://planipolis.iiep.unesco.org/sites/default/files/ressources/bosnia-and-herzegovina-framework-law-preschool-upbringing.pdf.
← 15. This corresponds with ISCED 02, which targets children aged 3 years until the start of ISCED 1.
← 16. The exception is North Macedonia, which makes all secondary education compulsory.
← 17. Data for Albania, Bosnia and Herzegovina, Montenegro and Serbia came from the UNESCO Institute for Statistics (UIS) database. Data on North Macedonia can be accessed here: https://makstat.stat.gov.mk/PXWeb/pxweb/en/MakStat/MakStat__ObrazovanieNauka__SrednoObrazovanie__PocetokUcebna/250_sreducil_rsm_poc_t4_ml.px/table/tableViewLayout2/?rxid=46ee0f64-2992-4b45-a2d9-cb4e5f7ec5ef. The regional average excludes Kosovo as no data are available on net enrolment rates in upper secondary education.
← 18. Serbia has a Strategy for Digital Skills Development 2020-24, although digital competences are also addressed in its Law on Foundations of the Education System.
← 19. The ratios for Serbia and Montenegro come from PISA 2022. The ratio for Bosnia and Herzegovina was given in the government’s Economic Reform Programme 2024-26. The ratio for Kosovo was provided in the Competitiveness Outlook 2024 qualitative questionnaire.
← 20. The National Agency for Vocational Education Training and Qualifications and the National Agency for Employment and Skills.
← 21. This information comes from the European Commission’s 2023 reports on each WB6 economy.
← 22. To learn more about the CRM 2021-24 Action Plan please see: https://www.rcc.int/pages/143/common-regional-market.
← 23. A notable exception is the visa regime that exists between Kosovo and Bosnia and Herzegovina.
← 24. Specific reasons for this significant influx include the free-visa policy between the Russian Federation and Serbia, Serbia’s abstention in aligning with Western sanctions imposed on Russia, direct air travel connection between Belgrade and Moscow, and cultural and linguistic links between Russians and Serbians.
← 25. For information on North Macedonia’s increase to its quota, see: https://china-cee.eu/2023/03/29/north-macedonia-social-briefing-the-government-proposes-to-import-foreign-workers-to-address-labor-shortages. For information on Bosnia and Herzegovina’s increase to its quota, see: https://www.slobodenpecat.mk/en/zgolemena-godishna-kvota-na-rabotni-dozvoli-vo-bosna-i-hercegovina/#:~:text=With%20the%20decision%20to%20determine,of%20foreigners%20amounts%20to%206.073. For information on Montenegro’s proposed increase, see: https://en.vijesti.me/news/society/699122/Nisic-Ministry-has-prepared-a-proposal-for-determining-the-annual-quota-of-permits-for-temporary-residence.
← 26. Government officials from North Macedonia have indicated that the economy needs at least 10 000 foreign workers annually (see: https://ecfr.eu/article/depopulation-blues-how-immigration-can-counter-emigration-in-the-balkans). In FBiH, 4 295 foreign employment permits were set in the 2024 quota, although the FBiH Employer Association asked for the quota to be raised to 10 000 (see: https://sarajevotimes.com/the-need-for-foreign-workers-is-increasing-in-bih).
← 27. For more on these plans, see: https://www.slobodenpecat.mk/en/bosna-i-hercegovina-ja-zgolemuva-kvotata-za-stranski-rabotnici-na-6-000.
← 28. This lack of attractiveness is further detailed in the Torino Process System Monitoring Reports (2023) for the WB6 economies, see: https://www.etf.europa.eu/en/what-we-do/torino-process-policy-analysis-and-progress-monitoring.
← 29. Social partners generally encompass entities representing employers, workers and governments when meeting for the purpose of consultations and negotiations on labour, social and economic practices, policies and legislation. For more on social partners, please see: https://home-affairs.ec.europa.eu/networks/european-migration-network-emn/emn-asylum-and-migration-glossary/glossary/social-partners_en.
← 30. The one exception is in FBiH, where there are information days organised in the Zenica-Doboj Canton for businesses to inform them about their rights and obligations for hiring students from vocational or technical schools.
← 31. For more on Centres of Vocational Excellence (CoVEs), please see: https://ec.europa.eu/social/main.jsp?catId=1501.
← 32. This conclusion has been repeated in the Serbian context (https://www.etf.europa.eu/sites/default/files/2019-07/Skills%20mismatch%20measurement_Serbia_0.pdf), the Albanian context (https://www.undp.org/sites/g/files/zskgke326/files/2022-05/Review%20of%20the%20Regulatory%20Framework%20and%20Provision%20of%20Post-Secondary%20and%20Higher%20VET%20in%20Albania.pdf) and the Montenegrin context (https://www.etf.europa.eu/sites/default/files/2019-07/Skills%20mismatch%20measurement_Montenegro.pdf).
← 33. These findings were from the Skills Measurement Programme (STEP) survey.
← 34. These data come from the 2023 iterations of the Balkan Business Barometer and Balkan Public Barometer.
← 35. Budget spent on ALMPs of the cited WB6 economies came from answers provided by governments in the statistical sheets. Data on the EU average can be found here: https://www.oecd-ilibrary.org/employment/reaching-out-and-activating-inactive-and-unemployed-persons-in-bulgaria_f795f25d-en
← 36. For more on the gender employment gap in STEM fields in the Western Balkans, please see: https://www.balkaninnovation.com/news/15/network-of-women-in-stem-in-the-western-balkans-launched.
← 37. Data were provided in Competitiveness Outlook 2024 quantitative questionnaires.
← 38. For more on MSCA, please see: https://research-and-innovation.ec.europa.eu/funding/funding-opportunities/funding-programmes-and-open-calls/horizon-europe/marie-sklodowska-curie-actions_en.
← 39. For data on the current HorizonData programme, see: https://dashboard.tech.ec.europa.eu/qs_digit_dashboard_mt/public/sense/app/1213b8cd-3ebe-4730-b0f5-fa4e326df2e2/sheet/d23bba31-e385-4cc0-975e-a67059972142/state/analysis. For data on the old Horizon2020 programme, see: https://dashboard.tech.ec.europa.eu/qs_digit_dashboard_mt/public/sense/app/1213b8cd-3ebe-4730-b0f5-fa4e326df2e2/sheet/0c8af38b-b73c-4da2-ba41-73ea34ab7ac4/state/analysis.