Is reindustrialization a realistic path? An empirical insight from South-Eastern Europe

Keywords: transition, reindustrialization, industrial policy, correlation analysis, South-Eastern Europe


The global economy has been faced with two dramatic crises (the global financial crisis and the pandemic), and it is still suffering. As an answer to the first crisis, the European Union formulated reindustrialization as a development approach, by which it wanted to strengthen its position on the world market, with the aim of manufacturing achieving a 1/5 share of the GDP. During the last decade, results have differed among the member countries, as well among the candidates for membership. Some countries have continued the trend of deindustrialization, while others have succeeded in starting reindustrialization. However, what is clear is the fact that achieving the goal defined is a challenge for all. There are economists who argue that this goal is not only unrealistic, but even not useful. The paper presents a comparative analysis exploring the development characteristics of several countries in South-Eastern Europe (SEE): Albania, Bosnia and Herzegovina, Croatia, Montenegro, North Macedonia, Kosovo and Serbia, using a meta-analysis in a synthesis of the results of this empirical research. It also shows a regression analysis and correlation analysis using the IBM SPSPS 28 software package. The paper analyzes whether the countries considered follow the trend of deindustrialization or reindustrialization, and it examines and tests whether a higher share of manufacturing within the GDP results in a higher rate of growth. The results show that all the countries under consideration have already fulfilled the aim of manufacturing having a 20% share of their GDP (except Montenegro). At the same time all of the countries, except two (Bosnia and Herzegovina and North Macedonia), have experienced a deindustrialization trend. The paper could be useful for policy makers in South-Eastern European Countries as well other transitory/transitional countries as they create reindustrialization policies in line with the EU industrial policy.


Ambroziak, A. A. (2015). Europeanization of Industrial Policy: Towards Re-industrialization? In P. Stanek, K. Wach (Eds.), Europeanization Processes from the Macro-economic Perspective: Industries and Policies. Krakow: Cracow University of Economics, pp. 61-95.

Bazhal, J. (2017). Innovation Development versus Re-industrialization, In J. Bazhal (Ed.), The Political Economy of Innovation Development. Cham: Palgrave Macmillan, pp. 87-99.

Boljanović, S., Hadžić, M. (2017). Impact of Foreign Direct Investments on Serbian Industry, Industry, Industrija, Vol. 45, No. 3, pp. 39-64.

Božić, M. (2009). Deindustrialization in Transition Countries and its Economic Consequences, Journal for Social Studies/ Teme – časopis za društvene nauke, Vol. 33, No. 2, pp. 423-442.

CEDEFOP (2021). Coronavirus impact on jobs in EU sectors and occupations: A skills forecast analysis. European Center for the Development of Vocational Training: News and events [online]. [Accessed: 10 Mar 2021].

Dabrowski, M., Myachenkova, Y. (2018). The Western Balkans on the road to the European Union, Policy Contribution, Issue No. 24, pp. 1-23. [Accessed: 10 Mar 2021].

Demekas, D., Horvath, B., Ribakova, E., Wu, Y. (2005). Foreign Direct Investment in South-Eastern Europe: What do the Data Tell us? In K. Liebscher, J. Christl, P. Moosclechner, D. Ritzberger-Grűnwald (Eds.), European Economic Integration and South-East Europe: Challenges and Prospects. UK: Edward Elgar, pp. 209-241.

European Commission (2010). Europe 2020 - A Strategy for Smart, Sustainable and Inclusive Growth, Brussels: European Commission [online]. [Accessed: 15 Apr 2021].

European Commission (2011). Industrial Policy: Reinforcing Competitiveness, Brussels: European Commission [online]. [Accessed: 21 Apr 2021].

European Commission (2018). A Credible Enlargement Perspective for and Enhanced EU Engagement with the Western Balkans, Brussels: European Commission [online]. [Accessed: 30 Apr 2021].

European Commission (2020a). A New Industrial Strategy for a Globally Competitive, Green and Digital Europe. Brussels: European Commission [online]. [Accessed: 1 Mar 2022].

European Commission (2020b). An Economic and Investment Plan for the Western Balkans. Economic and Social Committee and the Committee of the Regions, Brussels: European Commission [online]. [Accessed: 5 Mar 2022].

Fisher, S., Sahay, R. (2000). Taking Stock, Finance and Development, Vol. 37, No. 3, pp. 2-6.

George, D., Mallery P. (2019). IBM SPSS Statistics (6th ed.). New York: Routledge.

Hadžić, M., Zeković, S. (2019). Rethinking deindustrialization, and the reindustrialization policy in Serbia, SPATIUM, No. 41, pp. 14-22.

Kotynkova, M. (2017). Re-Industrialization of Europe: Industry4.0 and the Future of Work, European Scientific Journal, pp. 249-257.

Kozarzewski, P. (2021). State Corporate Control in Polish Transition: Main Outcomes, State Corporate Control in Transition, pp. 157-202.

Labus, M. (2020). Transition and Post-conflict Macroeconomic Policies in Serbia, Economic Annals, Vol. 65 No. 226, pp. 73-102.

Lojpur, A. (2016). Reindustrijalizacija kao odgovor na pitanje - da li je i kako moguć oporavak zemalja u tranziciji, V Scientific Conference with international participation, Jahorina Business Forum 2016, Tourism and Competitiveness – Conference proceedings. Pale: Ekonomski fakultet Pale, Univerzitet Istočno Sarajevo, pp. 25-37.

Mazzucato, M. (2015) Which Industrial Policy does Europe Need? Intereconomics, No. 50, pp. 120–155.

Mengoli, P., Russo, M. (2017). A Hybrid Space to Support the Regeneration of Competences for Re-industrialization, Lessons from a Research-Action. In F. Montanari, F. Sgaragli, D. Teloni (Eds.), Cities as engines of innovation: a transatlantic journey EU-USA, Dipartimento di Economia Marco Biagi, and Capp – Center for Analysis of Public Policies, Università di Modena e Reggio Emilia, Working paper series, No. 108, pp. 39-55.

Milivojević, S. (2015). Reindustrijalizacija Srbije u cilju jačanja konkurentnosti srpske privrede. In I. Stošić, M. Malović, D. Filimonović (Eds.), Strukturne promene u Srbiji – Dosadašnji rezultati i perspektive. Beograd: Institut ekonomskih nauka , pp. 553-562.

Moczadlo, R. (2020). Re-industrialization to foster growth and employment in the European Union, Ekonomski vjesnik / Econviews: Review of contemporary business, entrepreneurship and economic issues, Vol. 33, No. 1, pp. 39-58.

Nawratek, K. (2017). Der Arbeiter (Re-)Industrialization as Universalism?. In K. J. Nawratek (Ed.), Urban Re-Industrialization, Punctum Books, pp. 61-68.

Neagua, C., Bulearcă, M., Simaa, C., Mărguş, D. (2018). A SWOT Analysis of Romanian Extractive Industry and Re-industrialization Requirements of this Industry, Procedia Economics and Finance, Vol. 22, 2015, pp. 287-295.

Nevskaya, N. A., Garnov, A. P., Brykin, A. V., Malakhova, E. V. (2018). National Competitiveness as the Object of Indicative Planning in the Context of Re-industrialization, European Research Studies Journal, Volume XXI, Special Issue 1, pp. 148-155.

Pallant, J. (2020). SPSS survival manual: A step by step guide to data analysis using IBM SPSS (7th ed.). London: Routledge.

Popescu, V. A, Popescu, G. H. N., Popescu, C. R. (2015). Competitiveness and sustainability – a modern economic approach to the industrial policy, Metalurgija, Vol. 54, No. 2, pp. 426-428. [Accessed: 10 May 2022].

Regional Cooperation Council (RCC) (2013). South East Europe 2020: Jobs and Prosperity in a European Perspective. Sarajevo: RCC [online]. [Accessed: 10 May 2022].

Regional Cooperation Council (RCC) (2021). South East Europe Strategy 2030. Sarajevo: RCC [online]. [Accessed: 10 May 2022].

Rowthorn, R., Ramaswamy, R. (1997). Deindustrialization–Its Causes and Implications, IMF Working Papers, Vol. 97, No. 42, Washington, D. C.: IMF. [Accessed: 10 May 2022].

Sachs, J. (1998). International Economics: Unlocking the Mysteries of Globalization, Foreign Policy, No. 110, Special Edition: Frontiers of Knowledge (Spring, 1998), pp. 97-111.

Savić, Lj., Zeković, S. (2004). Industrijska politika EU-Pouke za zemlje. In N. Milašin, N. Spasić, M. Vujošević, M., Pucar (Eds.), Strateški okvir za održivi razvoj. Posebna izdanja 44, Beograd: IАUS, pp. 57-68.

Stiglitz, J. E. (2001). Whither Reforms? Ten Years of the Transition, Paper presented at the Annual World Bank Conference on Development Economics, Washington, DC, April 1999. In H-J. Chang (Ed.), Joseph Stiglitz and the World Bank: The Rebel Within, London: Anthem Press, pp. 127-171.

Taplin, I., Ngyen, M. T. T. (2016). From recession to re-industrialization. In J. Begley, D. Coffey, T. Donnelly, C. Thornley (Eds.), Global Economic Crisis and Local Economic Development, International cases and policy responses, London: Routledge, pp. 88-14.

United Nations Industrial Development Organization (UNIDO) (2020). UNIDO Statistics Data Portal. UNIDO [online]. [Accessed: 19 May 2022].

World Bank (2021). Datasets. World Bank [online]. [Accessed: 19 May 2022].

Zaborova, E., Makarova, E., Kleymenov, M. (2018). Entrepreneurship as the Resource for Re-industrialization, Series: Advances in Social Science, Education and Humanities Research, Vol. 240, 2nd International Scientific Conference on New Industrialization: Global, National, Regional Dimension - Conference Proceedings, pp. 634-638.

Zakharchenko, O. V., Eremina, A. R., Ushakov, D. S., Odintsov, O., Mylnichenko, S. M. (2019). Management of Reputation Risks at the Agricultural Enterprises of Eastern Europe as a Component of Increasing their Competitiveness, Journal of Reviews of Global Economics, No. 8, pp. 859-872.

Zeković, S., Hadžić, M. (2020). Perspektive nove industrijske politike u Srbiji i njene implikacije. In J. Petrić, M. Vujošević (Eds.) Teorijska, razvojna i primenjena istraživanja prostornih procesa za obnovu strateškog mišljenja i upravljanja u Srbiji. Posebna izdanja 88. Beograd: Institut za arhitekturu i urbanizam Srbije, pp. 27-67.

Zeković, S., Vujošević, M. (2015). Development of South-Eastern Europe: The Role of Industrial Policy, American Journal of Economics, Finance and Management, Vol. 1, No. 5, pp. 445-459.,2014,2014#comparison-link,2014.

Original Scientific Paper