Albania remains among the countries with the lowest research and development (R&D) spending in the region, allocating only 0.20% of its GDP to innovation — a level almost identical to Bosnia’s 0.19%, according to data published by Eurostat for 2024, or the most recent year available.
In contrast, Serbia invests 0.93% of GDP, and North Macedonia 0.36%, reflecting a stronger commitment to technological development and economic modernization.
Albania’s low level of financing limits productivity growth, innovation, and the transformation of its economic model, making it more difficult for the country to compete with other developing economies.
Meanwhile, the European landscape shows a stark contrast. According to Eurostat, the EU average for this indicator stands at 2.24% of GDP, most of which — about 67% — comes from business-sector R&D spending (1.49% of GDP).
In Albania, businesses invest only 0.07% of GDP in research and development. Business investment accounts for just 35% of total R&D expenditures in the country — far below the European average.
Europe
EU member states continue to invest significantly more in research and innovation, viewing R&D spending as a fundamental pillar of long-term growth.
In the EU, many member states spend more than 2% of GDP on research and development, creating a clear 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 strong public and private investments with solid university and industrial traditions.
Major economies like Germany contribute large absolute volumes of funding for technology, innovation, and science, while Eastern European countries have gradually increased their investments to align with EU standards and modernize their production sectors.
According to Eurostat, in 2024, six EU countries recorded R&D spending levels equal to or higher than 3% of GDP, the target set by the European Council.
The highest R&D intensity was registered in:
- Sweden (3.6%)
- Belgium (3.4%)
- Austria (3.3%)
- Finland (3.2%),
followed by: - Germany (3.1%)
- Denmark (3.0%)
In contrast, seven EU countries reported R&D intensity equal to or below 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 most of the EU’s research and development expenditures in 2024. It represented 66.5% of total EU R&D spending, reaching €268.1 billion.
It was followed by:
- Higher education sector: €86.1 billion (21.4%)
- Government sector: €43.5 billion (10.8%)
- Private non-profit sector: €5.4 billion (1.3%)
The European Commission has repeatedly emphasized the direct link between R&D investment and the competitive strength of EU economies.
According to Eurostat, countries that spend more on research have higher productivity, more advanced technology sectors, and a stronger ability to attract foreign investment.
This has driven the EU to pursue continuous increases in R&D spending and encourage the private sector to take a more active role in funding innovation.
Albania Lagging Behind
The data clearly shows that Albania is falling significantly behind, risking further isolation from the technological trends transforming Europe’s economy.
The gap between EU countries and the Western Balkans continues to widen, while countries with higher R&D investments are strengthening their competitive positions.
