The Information Technology (IT) sector in Albania is still in its early stages of development but faces significant competitive challenges compared to other developing European countries. According to Emerging Europe’s IT Competitiveness Index, Albania ranks 21st out of 23 countries, scoring a total of 36.37 points across four key categories: Talent, IT Infrastructure, Economic Impact, and Business Environment. This ranking places Albania below neighboring countries like Kosovo and others in the region, highlighting the need for improvement and strategic focus to boost competitiveness.
Talent: Building the Foundation for Growth
Albania’s ranking of 21st in the Talent category, with a score of 10.06, reflects the country's ongoing challenges in advancing IT education and workforce development. However, recent initiatives, such as introducing coding in schools and expanding digital literacy programs, are building a foundation for future growth. The Albanian education system is increasingly focusing on IT-related courses, with a steady rise in the number of students entering the field. In 2022, Albania saw significant progress in IT education, with a peak enrollment of 8,293 IT students, most of whom attended bachelor’s programs and courses.
Despite Albania ranking second in IT graduates per 100,000 inhabitants, those working in the sector are among the lowest-paid in the region. According to the report, in 2022, Kosovo, Serbia, and Estonia led in the number of ICT students per 100,000 people aged 15-64, followed by Latvia and Ukraine. Meanwhile, Albania, along with Ukraine and Estonia, topped the list for IT graduates per 100,000 inhabitants in 2022.
IT Infrastructure: Digital Transformation in Progress
Albania ranks 15th in IT infrastructure, scoring 8.52. The country has made significant strides in expanding its digital infrastructure, supported by government initiatives aimed at improving internet connectivity and increasing access to digital services. Although Albania’s infrastructure is relatively small compared to other developing European countries, it has ambitious plans to modernize its IT landscape. Key projects include smart labs in schools, the expansion of digital services, and the promotion of e-governance. By 2023, over 95% of public service applications were submitted online through the e-Albania portal, underscoring Albania’s commitment to embracing digital transformation.
Economic Impact: Steady Growth
In terms of Economic Impact, Albania ranks 19th with a score of 8.19. While Albania’s IT sector is still developing, the country has made notable progress in recent years, particularly in IT exports. The export of IT services, including computer services, has grown steadily, with the value of IT service exports increasing from €68.4 million in 2018 to €155.3 million in 2022. This represents a significant contribution from IT to the national economy. The IT sector continues to attract foreign investment, especially from companies seeking cost-effective solutions in software development and IT services. The government has introduced policies aimed at creating a favorable environment for foreign investors, particularly in the IT sector, which is expected to contribute more to the economy in the coming years.
Business Environment: Supporting Startups and Innovation
Albania ranks 19th in the Business Environment category, scoring 9.60. While the country still faces challenges in attracting large-scale investments, its startup ecosystem is rapidly evolving. Government programs, such as Albania Tech, and various entrepreneurial initiatives are fostering innovation and supporting the growth of new businesses. Albania has introduced several strategies to improve its business environment, including tax incentives for IT firms and increased support for tech-driven enterprises. The National Cybersecurity Strategy (2020-2025) further emphasizes the government’s commitment to providing a secure and supportive environment for the growth of IT businesses.
In summary, while Albania’s IT sector lags behind other European countries, ongoing reforms and government initiatives are setting the stage for future growth. With a strategic focus on education, infrastructure, economic impact, and a favorable business environment, Albania’s IT sector has the potential to grow and play a larger role in the regional digital economy.