In order for the countries of the region to utilise nearshoring opportunities, continuous work and commitment are needed from both the public and private sectors, together with the intensification of regional cooperation at all levels
The topic of nearshoring has become relevant since the outbreak of the Covid-19 pandemic, but also following the start of the war in Ukraine. Events unfolding globally have highlighted the importance of flexibility and adaptability in modern supply chains, which is why ever more companies are considering ways to increase the resilience of their production processes through the diversifying and shortening of supply chains, but also increased reserves.
The economies of the Western Balkans are increasingly attracting companies from Western Europe, due in particular to their geographical proximity, time zone, competitive labour costs, incentives for foreign investors, low living costs and wealth of natural resources.
In order to make Western Balkan countries even more attractive to potential nearshoring partners, it is necessary to work continuously to create the most favourable business environment possible, particularly by reducing administrative obstacles that hinder the establishing and running of a business, but also via additional tax breaks and subsidies for nearshoring partners.
In focusing on the creation of a high-quality and highly educated workforce, which is currently among the greatest inadequacies of the Montenegrin economy, essential prerequisites to take advantage of the potential of nearshoring opportunities include investing in education and training, but also modernising the education system as a whole. It would also be essential to continue investing in improving all types of infrastructure, transport infrastructure in particular, because lower transport costs are required for the development of production capacities.
From that aspect, geographical proximity to the European Union represents an important advantage of Western Balkan countries when it comes to nearshoring. Apart from European companies that are interested in establishing their own supply chains in the region, there are also investors who recognise the opportunity to launch production for the markets of the EU and the region.
Geopolitical events have created new economic conditions worldwide… and the Western Balkan economies shouldn’t miss out on the chance to take advantage of these changes
Geopolitical events have created new economic conditions worldwide. Changes are occurring right now and the Western Balkan economies shouldn’t miss out on the chance provided by the global repositioning of economic relations. However, in order for the countries of the region to utilise nearshoring opportunities, continuous work and commitment are needed from both the public and private sectors, together with the intensification of regional cooperation at all levels, which would boost competitiveness and ensure greater economic effects for the community as a whole.
Through the EU accession process, Western Balkan countries have obliged themselves to harmonise with European standards. The inclusion of Western Balkan countries in large supply chains could have a major positive impact on this process. Specifically, in order to be included in global supply chains, Western Balkan countries must meet international technical standards and specifications that are aligned with European standards. This encourages them to improve their operations to ensure that they are competitive on the European market. This also leads to transfers of knowledge, technology and best practices. Integration can itself increase exports of products and services from Western Balkan countries to the European market, while cooperation with European partners can make companies from the region more aware of the importance and need to adopt and apply European standards, which is one of the prerequisites for increasing competitiveness.
