Development Potentials Index

The Development Potentials Index (DPI) is an annual publication which analyzes 114 sectors within the Serbian manufacturing industry and ranks them according to their development potential.

The objective of presenting the annual DPI reflects the need to get to know the economy that surrounds us, especially its real sector. We often hear from the media about the achieved economic growth based on general trends of GDP, but without understanding who makes up this growth, who created it and who has the power to build it in the future. Thus, the DPI aims to better portray the state of the economy, respecting all of its entities and potentials, with the objective to recognize the sectors we should build the future growth on.

At the very beginning, it is necessary to point out one of the basic principles: Economic growth should be built on the sectors that have the development potential. These are primarily the sectors that are made up of competitive companies, i.e. the companies that are capable of recognizing opportunities to create competitive products, to add value, to be competitive on both domestic and foreign markets, to have positive spillover effects on the rest of the economy, etc. One of the main conclusions is that it is companies which should be brought into focus, as dynamic growth of the economy should be based on the very companies that have the greatest development potential.

In order to properly identify leaders, the DPI starts from the bird’s eye view, but soon moves to deeper levels, looking at individual companies operating in the Serbian economy. In particular, it looks at bona fide companies, i.e. the ones that regularly submit financial reports and whose financial reports are meaningful. In total, there were 80,000 such companies in the latest report, which we allocated to 114 different sectors. Sectors were analyzed based on all the firms operating in them, particularly on the results these firms recorded on domestic and on 110 foreign markets, within the period of six years after the crisis (as of 2014). Among the leaders, i.e. the sectors which showed the greatest agility, particularly outstanding were the sectors where Serbia has a strong domestic resource base – agribusiness and wood processing industry (especially the segments of these sectors that add greater value, such as wooden furniture, processed fruits and vegetables, and the like). Besides them, sectors of mechanical industry, metal industry, transport industry, rubber and plastic industry, as well as certain segments of textile industry, stood out as well. In order to fully utilize the potential of all of these sectors, we cannot leave them to develop on its own. Moreover, support measures should not be universal. Namely, some of the prosperous sectors are the very basic ones, such as fruits and vegetables, while the other ones are much more complex, such as production of medical instruments or food processing machinery. All of these sectors are very heterogeneous, so it is necessary to take into account their specific needs and problems they are facing. Therefore, the needed policies should be tailor-made, taking into account the specificities of each sector and drawing out the most of the potential.

Development Potentials Index of Tradable Sectors in Serbia

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