1. Some feasible sources of future regional competitiveness – the case of Serbia as illustrative for the region. Vlastimir Matejić Sarajevo, 25th February.2010. 1

2. The landscape of global competitiveness From Global Competitiveness Report 2009-2010 we recognize, for the sake of comparison, five zones of competitiveness: 1.Black hole non-competitiveness – Burundi, Zimbabwe, …, Ghana, Venezuela, …, Cambodia 2.Worrisome non-competitiveness – B&H, Uganda, …, Albania,…, Serbia,…, Macedonia,…, Ukraine, … 3.Fair (average) competitiveness – …, Croatia, Greece, …, Romania,…, Montenegro, Turkey, …, Hungary 4.Sustainable competitiveness –, Italy, Slovak Republic, Slovenia, Spain, Czech Republic, China, Malaysia, … 5.Safe sustainable competitiveness – Korea Rep, Norway, Germany, Finland, Denmark, Sweden, …, Switzerland 2

3. The problem of the region 1.Current (2010) competitiveness is in the zone of worrisome non-competitiveness. Current economic and other systems and their structures lack capacities to increase competitiveness 2.Thus, future (2020) competitiveness, left to the spontaneous evolution, i.e. in the absence of proper policies can be aggravated. The proper policies are those which recognize and target the main and appropriate sources of competitiveness and apply productive measures in using them 3.The proper policies can improve competitivenes - but not radically during next 10 years. 3

4. We do not consider in further explanation otherwise very important conditions for competitiveness of national and regional economies, such as: 1. Democracy 2. Rule of law and legal security 3. Tolerable corruption 4. Good political relations inside the region, and similar since we consider them as pre-conditions for anything reasonable to be done in relation to competitiveness. 4

5. Appropriate policies and sources On short term – next 5 years 1.Goal: development of conditions for competitiveness 2.Key policies (sources of competitiveness): 1.Re-industrialization – current economic system is infeasible to be competitive 2.Concentration on export oriented sectors (instead of all sorts of things) 3.Development and structuring of SMEs clusters 4.Efficient utilization of resources (energy and others) 5.Efficient government, administration and institutional system 6.Appropriate exchange rate. 5

6. On long term- 20 years and beyond 1.Goal: transition to the zone of fair competitiveness 2.Key policies (sources) 1.Blue ocean strategy based on advantages of group of products, innovation and price competitive qualified labor 2.Specialization through regional economic co-operation and scale based efficiency of productive resources 3.Development of productive national innovation systems 4.Regional innovation projects 5.High quality education and regional cooperation in university education 6.Development of SMEs clusters toward tighter organizational structures 7.Support of knowledge based competitiveness. 6

7. Prospects to succeed? 1.In strategic undertakings, such as national and regional competitiveness, the success depends more on creative potentials, devotion to the goal and ability to change and less on the current state of the problem 2.Key success factors: socio-economic tissue which enables and supports competitiveness, skilled and knowledgeable population, knowledge and innovation oriented entrepreneurs, competent government 3.Key obstacles: value system, politics, great systemic and structural deficiency, low propensity for co-operation and lack of soft resources. 7