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| Map of Western Balkans |
Foreign Direct Investments (FDIs) play a crucial role in employment in the Western Balkans and have a key impact on skills development.
An analysis of labor market developments in the Western Balkans conducted upon the request of the World Bank has revealed that nearly two-thirds of jobs created by foreign investors in the region are in secondary education.
In Albania, it is noticeable that the quality of jobs offered by foreign investors has declined during the latter half of the past decade. Out of the total employed by foreign companies, only 18% had higher education during 2016-2021, while this category accounted for 22% during 2010-2015.
As seen in the table below, in recent years, the weight of secondary education among the employed has increased, while the category of those with lower education has decreased, Monitor reports.
Specifically among the countries of the region, in Bosnia and Herzegovina and Kosovo, the skills required by job positions offered by FDIs improved during the latter half of the analyzed period (2016-2021), compared to the first half (2010-2015).
This is evidenced by an increase in the percentage of high-skilled job positions and a decrease in the percentage of low-skilled job positions. However, the opposite happened in Albania and Montenegro, where a decline was observed, while North Macedonia and Serbia experienced no significant changes.
The majority of jobs created by foreign investments throughout the region were not concentrated in capital cities. Kosovo had the highest percentage of FDIs jobs in its capital city, with 41% of employment, followed by North Macedonia with 39%, and Albania with 36%.
Foreign investments have been a key pillar of the economic model in which the economies of the Western Balkans continued their transition from post-communist regimes.
Across the region, foreign investments have employed around 180,000 people over the past decade, constituting 19% of the total employment growth in the region during this period. For every five jobs created in the region over the past decade, one was established by foreign investments.
The majority of FDI-related employment in the region was in the manufacturing sector (53%), followed by construction (23%) and wholesale and retail trade (12%).