3. Employment & Entrepreneurship
3.1 General context
Last update: 29 March 2022
Labour market situation in the country
As stated in the research Youth and Entrepreneurship in the Republic of Serbia, in recent years small and medium enterprises and entrepreneurs have become carriers of economic growth in Serbia. In general, Serbian economy is showing certain advancement on the world lists of competitiveness, innovation, business development and the like. Thus, Serbia has advanced by four places on the World Bank's 2020 list - "Doing Business List” and is now ranked 44thout of 190 countries.
Nevertheless, the economy of the Republic of Serbia is still characterized by a low level of innovation. According to innovation performance, Serbia is classified in the group of countries of moderate innovators and it lags behind the EU average (0.504) and most European countries. In the latest report, the Global Innovation Index for 2019, Serbia fell by two places and is on the 57th place out of 129 countries (Ibidem).
The total number of employees in 2020 was 2,215,475, which is an increase of 1.9% compared to 2019. There were 384,972 entrepreneurs and employees in legal entities, as well as self-employed persons, which is an increase of 2% compared to the previous year (Registered Employment, annual average 2020, Statistical release by Statistical Office of the Republic of Serbia).
When it comes to the unemployment rate, it was steadily declining in the past years from 18.9% (2015) to 9.7% (2020). However, in the first quarter of 2021 this rate increased to 12.8%, followed by a decline to 10.5% by the third quarter of the same year, according to the data provided by the National Bank of Serbia (Narodna banka Srbije) in the document Macroeconomic Developments in Serbia. According to the annual labour force surveys, the unemployment rates for the period 2015-2020 are as follows:
|Unemployment rate in %||18.9||16.4||14.5||13.7||11.2||9.7|
Source: Macroeconomic Developments of Serbia
Although general unemployment has been falling, it is still very high among young people (at the level of one fifth). According to the Labour Force Survey 2020, the contingent of young people, aged 15 to 24, continued to decrease in 2020 by 1.5% compared to 2019. The number of active young people in 2020 was reduced compared to the previous year as well as the employment rate of the young aged 15 to 24, as shown in the table below. The NEET rate (representing the share of young people who neither worked nor studied in the total population of the young aged 15–24) amounted to 15.9% in 2020, and it was higher by 0.6 p.p. compared to the previous year.
Young population aged 15-24
Changes in relation to the previous year
Rate of unemployment
Rate of employment
Rate of inactivity
Rate of activity
Source: Labour Force Survey, 2020
According to data on youth unemployment from September 2019 presented in Youth and Entrepreneurship in the Republic of Serbia, the number of unemployed youth in Serbia is 102,895, which represents 20.5% of the total number of unemployed. Practically, one fifth of the total unemployed in the Republic of Serbia are young people aged 15 to 30.
Figures in the table below show that even if the position of young people in the labour market has been improved compared to the previous period, young people in Serbia still face significant barriers in the labour market.
Source: National Employment Action Plan for 2020 in Youth and Entrepreneurship in the Republic of Serbia
When it comes to self-employment, young people in Serbia rarely choose it their first choice. In this respect, young people in Serbia do not differ much from their peers in the EU. According to available research by the International Labour Organization, there are different reasons why young people choose self-employment:
Source: Transition of young women and men in the labor market of the Republic of Serbia in Youth and Entrepreneurship in the Republic of Serbia
As it can be seen young people opt for self-employment only after a certain period of inability to find a paid job. In terms of business challenges, young entrepreneurs believe that by far the biggest challenge is the issue of insufficient financial resources, followed by competition in the market and legal regulations, however with a significantly lower frequency of responses.
The same research (Transition of young women and men in the labour market of the Republic of Serbia in Youth and Entrepreneurship in the Republic of Serbia),showed that most young entrepreneurs received money to start their own business from family or friends (51,4%) and only 1,2% took a loan from a bank of from a state institution (4,5%).
The survey done in 2016 by the Serbian Chamber of Commerce, the Youth Commerce Forum and the Serbian Development Agency (Youth and Entrepreneurship in the Republic of Serbia) focused on the needs of potential and existing young entrepreneurs in Serbia. According to this survey, young entrepreneurs consider placement and the market to be the biggest business problems (30%) collection of receivables (22%), the attitude that state institutions do not provide real support (20%), and the fear of being punished by the Tax Administration for regulations to which they are not referred (19%).
The current employment policy is defined by the Employment Act, 2014 (Zakon o radu, 2014).
Additionally, there are several strategies and accompanying action plans and programmes that are related to the youth employment and entrepreneurship. Most important are:
- The National Youth Strategy 2015-2025 - aims to encourage job creation, self-employment, and entrepreneurship among young people by implementing its Action Plans.
- The Employment Strategy of the Republic of Serbia 2021-2026 - aims to improve the labour market position of youth by ensuring cooperation between multiple sectors, introducing and formalising traineeships, preventing further misuse of non-labour contract modalities, supporting youth entrepreneurship through specialised entrepreneurship training programmes and mentoring support as well as the availability of different sources of financial support. On top of that, according to the Strategy, efforts will be made to introduce The Youth Guarantee scheme in RS.
- The Strategy of Scientific and Technological Development of the Republic of Serbia 2021-2025 - named "The Power of Knowledge" with the goals to strengthen the link between science, industry and society to encourage innovation. The strategy also envisions greater investment in individuals, especially young scientists.
- The Strategy for Education Development in Serbia by 2030 - with one of the priorities to introduce youth entrepreneurship in education and training programmes, etc.
- The Strategy for the Development of the Start-up Ecosystem of the Republic of Serbia 2021-2025 - with one of the goals to raise start-up entrepreneurial capacities through programs in secondary and high education which is aimed at youth, and it’s expected to result in more student start-ups.
Detailed review of abovementioned documents can be found in the study “Analysis of the Regulatory Framework for Entrepreneurs Focusing on the Three Most Potential Sectors, Proposing Simplified Procedures for Young Entrepreneurs” of the Ministry of Youth and Sports.