Sector Specific Sources of Competitiveness in the Western Balkans
Recommendation for a Regional Investment Strategy
The Western Balkan region benefits from a cost-competitive labour force and geographic and cultural proximity to EU markets. However, cost competitiveness as a source of differentiation is not sustainable. Cost levels are increasing gradually in some sectors, reducing firms’ profitability. In order to sustain competitiveness, the Western Balkans needs to move up the value chain, from investing in automated technology to producing higher-quality goods and enhancing its human capital. This report examines the apparel manufacturing, automotive components and business process and technology outsourcing sectors, focusing on market competitiveness factors, industry key success factors and policy recommendations.
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Regional Competitiveness Initiative
Sustaining competitiveness in the longer term at both the country and regional level is vital. The OECD recommends addressing the cost trap the region is currently facing by developing institutions, mechanisms and processes to increase its competitiveness with limited outside support. To enhance competitiveness and sustain it in the longer run, the OECD proposes an approach based on three self-reinforcing pillars.
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