Vital Elements of the Software Production in the Republic of Serbia

Abstract

This paper examines the software development in Serbia, as a subsection within the IT domain. The objective is to identify and propose the high level government policies which stimulate development and growth of this space. We identify issues and provide recommendations for improvement. First, we examine the number of software developers and forecast its growth based on the increased number of IT graduates. Second, we focus on the workforce formal education and demonstrate that Serbian software developers have similar competency levels compared to the world average. Furthermore, we focus on the legal treatment of the workforce and explain the differences between two models: (1) agency model based on consulting services contracts - this model treats the workforce as entrepreneurs, and the (2) classical model based on employee contracts - this model treats workforce as employees. To conclude the analysis, we provide three main recommendations – the government should: (1) equalize the tax treatment of workforce in the IT sector, (2) motivate expat Serbian IT experts to return to Serbia, and (3) modernize the education system in line with the requirements of the IT sector.