Albania and Bosnia, with the lowest level of research and development spending in Europe

2025-12-05 08:16:00, Ekonomi CNA

Albania and Bosnia, with the lowest level of research and development spending

Albania remains among the countries with the lowest research and development (R&D) expenditures in the region, allocating only 0.20% of GDP to innovation, a level almost identical to Bosnia (0.19%), according to data made public by Eurostat, for 2024, or the closest year to which the information is available.

In contrast, Serbia invests 0.93% of GDP and North Macedonia 0.36%, indicating a higher commitment to technological development and economic modernization.

The low level of financing in Albania limits productivity growth, innovation, and transformation of the economic model, making it more difficult for the country to compete with other developing economies.

Meanwhile, the European panorama presents a stark contrast. According to Eurostat, the European Union average in this indicator is 2.24% of GDP, the largest part of which, about 67%, comes from business research and development spending (1.49% of GDP).

In Albania, businesses invest only 0.07% of GDP in research and development. Business investments account for only 35% of total research and development spending in the country, well below the European average.

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European Union countries continue to invest many times more in research and innovation, considering R&D spending a fundamental pillar of long-term growth.

In the EU, many member states spend over 2% of GDP on research and development, creating a noticeable gap between developed economies and the Western Balkan countries.

Nordic countries, such as Sweden, Denmark and Finland, remain at the top of the rankings, combining public and private investment with strong university and industrial traditions.

Large economies, such as Germany, contribute in absolute value with significant budgets for technology, innovation and science, while Eastern European countries have gradually increased investments to approximate EU standards and modernize their manufacturing sectors.

According to Eurostat, in 2024, 6 EU countries recorded an R&D expenditure intensity equal to or higher than 3%, the EU target set by the European Council. The highest R&D intensity was recorded in Sweden (3.6%), Belgium (3.4%), Austria (3.3%) and Finland (3.2%), followed by Germany (3.1%) and Denmark (3.0%).

In contrast, 7 EU countries reported an R&D expenditure intensity lower than or equal to 1%: Romania and Malta (0.5% each), Cyprus (0.7%), Bulgaria (0.8%), Latvia (0.9%), as well as Slovakia and Luxembourg (1.0%).

67% of R&D spending comes from the business sector

The private enterprise sector continued to account for the largest share of research and development expenditure in 2024. It accounted for 66.5% of total EU R&D expenditure, reaching €268.1 billion. It was followed by the higher education sector (€86.1 billion; 21.4%), the government sector (€43.5 billion; 10.8%) and the private non-profit sector (€5.4 billion; 1.3%).

The European Commission has consistently underlined the direct link between investment in R&D and the competitive strength of EU economies.

According to Eurostat data, countries that spend more on research have higher productivity, more developed technological sectors and a greater ability to attract foreign investment. This policy has led the EU to aim for continuous growth in R&D spending and push the private sector to take a more active role in financing innovation.

Data shows that Albania is significantly lagging behind, risking being left out of the technological trends that are transforming the European economy. The gap between EU countries and the region is widening, while countries with higher investments in R&D are increasing their competitive position./ Monitor Magazine