Serbs render transportation, mediation, consulting and training services from Albania to San Francisco - Export of services from our country grows by 20 percent in 2011

Serbia exported services worth USD 1.55 billion in the first five months of 2011, thus achieving a positive balance of USD 64.4 million in the exchange of services with foreign countries. At the same time, the export of services grew by 20.7 percent against the same period last year when a deficit of USD 7.5 million was registered.

Business, professional and technical services, road transportation, personal needs and recreation services, investment works, as well as services in the field of communications, are the areas in which the biggest surplus was registered in the period January-May 2011. The export/import ratio was the highest in the field of personal needs and recreation services - over 215 percent, and in the field of road transportation - 210 percent.

People at the Serbian Chamber of Commerce (SCC) told eKapija that the services belonging to the category "miscellaneous" had the biggest share in the total export of services from Serbia. That category includes financial services, insurance, computer and IT services, trade mediation, operating lease, copyrights, fees and licenses, business, professional and technical services, as well as personal needs and recreation services and services of government institutions.

- This group accounts for almost half of all services exported from our country, that is, 45.5 percent in the reference period. Professional, business and technical services represent the most significant item in the group, with a 22.2% share in the total export of services and a surplus of USD 82.921 in the exchange of services with foreign countries – people at the SCC explained.

The next on the list of biggest shares in Serbia's export of services are transportation (23.6%), tourism (20,1%), investment works abroad (6%), and services in the field of communications (4%).

From Albania to San Francisco

People from Serbia render the services of transportation, software upgrade, mobile phone application development, insurance, mediation, consulting and training all around the world.

Belgrade-based Tehnicom Computers mainly exports its services of web and mobile phone (Android, iPhone) application development to Great Britain. In that market they develop web portals for several companies engaged in brokerage activities.

- More than third of our services are rendered outside the borders of Serbia. In addition to Great Britain, we also work for companies in Germany, Spain, the USA, Australia and Switzerland - people at Tehnicom Computers told eKapija.

The value of the works this company does for foreign clients ranges from 2,000 to 20,000 euros per project. The biggest project they currently work on is the development of Android applications for trucking companies in Spain.

They established excellent business contacts with companies from Turkey and Singapore at the May CEBIT Fair in Hanover so that they hope to get a chance to work for them too. The company also plans to participate in another three international fairs, for which they received a grant from SIEPA last month, in the 11th round of the programme of financial support to exporters.

The software company Power Symbol Technology (PSTech) exports as much as 98% of its services. The company's biggest clients are U.S. companies (90% of all services are exported to that market), which is why they have decided to open a branch office in San Francisco, the center of Silicon Valley, by the year's end.

PSTech develops, maintains and tests software applications, tests performances, profiles and prunes databases, and renders consulting services. The company's total turnover in 2010 amounted to EUR 3.7 million.

Significance of export of services for economic growth

Lately, people all around the world have been questioning the significance of the industry for growth, export and employment. In the opinion of certain economists from the USA, it is necessary to demystify the belief that the industry is more technologically dynamic than services.

- The assumption that the global demand for services will stagnate is wrong - economist Goran Nikolic explains for eKapija.

- Namely, as developing countries become wealthier, they desire a wider range of services, including those most sophisticated ones. An often ignored fact is that the number of exchangeable services is growing and that it is the field in which wealthy countries achieve a surplus.

At the first glance, our country follows global trends - the share of the industry is constantly dropping, while the share of services is increasing (the share of the industry in the GDP dropped from 29% ten years ago to only 19% last year). Besides, the share of services in the total export is growing. However, the share of goods in exports is still dominant - 73.5% in 2010.

Goran Nikolic believes that services and their exports cannot yet serve as a support to the future economic growth of Serbia.

- In the period 2002-2008, financial mediation, trade, transport and telecommunications in Serbia grew by 15.4% at average. Other sectors of the economy grew at the average rate of only 2.3% - Nikolic explains.

Three quarters of the economic growth in Serbia were based on the sectors from the non-exchangeable part of the economy. Nikolic is of the opinion that this trend is unsustainable and that the economic growth in Serbia in the following period must be based much more on the exchangeable part of the economy, that is, industrial production.

He says that our country may have a comparative advantage in the IT sector and, maybe, in transport, but that it is still too early to expect the export of services to play a more significant role in the country's economic development.

- Serbia must first complete the "industrial phase", which may take less time than usual, and then start thinking about exports based on services. Although services are not less technologically advanced than the industry, it is hard to believe that they may soon become the carrier of the economic and export expansion of Serbia - Nikolic concludes.

M.S.

Privredna komora Srbije

Tehnicom Computers d.o.o. Beograd

Endava doo Beograd

Agencija za strana ulaganja i promociju izvoza SIEPA

Centar za upravljanje projektima-CPM Beograd

export of services

service export

foreign trade exchange of goods

balance of exchange of services

exporters

service exporters

SCC

Android

iPhone

tablet devices

tablet computer

CEBIT

Serbia Investment and Export Promotion Agency

Power Symbol Technology

San Francisco

Silicon Valley

Goran Nikolic

outsourcing

GDP

gross domestic product