Serbia Information Technology Report 2013

BMI at around US$681mn, up from US$646mn in 2012. BMI expects a market CAGR of 8% for 2013-2017 as the country's new status as an EU Candidate Country fuels a new wave of ICT investment,despite the difficult economic context. Trading conditions will remain challenging for IT vendors, withfiscal pressures and modest private consumption and investment growth projected. However, on the pathto EU entry, an environment of privatisation deals and investment in modernisation is likely to drivegrowth.

Headline Expenditure Projections

Computer hardware sales: US$441mn in 2012 to US$461mn in 2013, +5% in US dollar terms.

Forecast in US dollar terms downwardly revised due to macroeconomic factors but tablet salesshould provide a growth area as prices fall.

Software sales: US$74mn in 2012 to US$80mn in 2013, +8% in US dollar terms. Forecast in US dollarterms downwardly revised due to macroeconomic factors, but the SME market for EAS softwarerepresents an opportunity.

IT services sales: US$362mn in 2012 to US$382mn in 2013, +5% in US dollar terms. Forecast in USdollar terms downwardly revised due to macroeconomic factors, but EU Candidate status should drive ITservices spending, particularly from government.

Risk/Reward Ratings: Serbia's score was 43.6 out of 100.0. Serbia is ahead of Bulgaria, but behindregional peers Croatia, Slovenia and Romania.

Key Trends & Developments

The country's new status as an EU Candidate Country should fuel a new wave of ICTinvestment, despite the difficult economic context. In 2012, despite the difficult fiscalenvironment, major modernisation projects with IT dimensions were being implemented withEU support. Among high-profile initiatives was a tender to provide elementary schools in Serbiawith a new IT infrastructure. The Serbian government has an e-government agenda, althoughprogress has been slow due partly to low computer penetration in the population.

The development of a modern healthcare system in Serbia is another area likely to provideopportunities for IT vendors. The Serbia Health project, which has received World Bankfunding, is designed to drive improvements in hospital care and increase efficiency ofdelivery. The government's target is to roll out electronic patient records and connect all healthcare establishments by 2015.

SMEs are one sector with strong potential to drive Serbian enterprise application spending overthe next several years. SMEs will be an important target for vendors due to the low level ofinformatisation, which is now a policy focus of the government. Most SMEs have localcomputer networks, but are still in a developmental phase in terms of IT infrastructure,representing a big potential market for basic ERP and ERM applications.