TIRANA, Jan. 14 – Albania spends one of the region’s lowest amounts on research and development in a key barrier for the country’s emerging economy and its ability to innovate on products and services.
A recent report by the UNESCO Institute for Statistics shows Albania’s spending on R&D has remained almost unchanged at 0.2 percent of the GDP during the past decade, the lowest among regional EU aspirant countries, of which Serbia has the highest spending of around 0.8 percent of the GDP.
At 0.2 percent of the GDP in 2017, Albania spent around $250 million on research and development, but when measured in purchasing power parity dollars (PPP$), a unit that eliminates price differences, Albania’s spending on R&D is estimated at only $37.4 million, higher only compared to tinier Montenegro among regional competitors, according to the UN’s cultural and scientific agency.
Almost half of the amount, some $18 million in PPP$ is spent by universities, that involves some 38 higher education institutions, of which 24 privately-run ones. The rest is spent by government-funded agencies.
The UN agency estimates Albania has some 450 scientific researchers at a rate of 156 per million inhabitants.
A decade ago, back in 2008, Albania devoted only 0.15 percent of its GDP to R&D, just 3.3 percent of which came from the business enterprise sector.
Albania targets increasing its spending on science, research and innovation to 1 percent of the GDP by 2022 through public and alternative funds, according to a national strategy.
Back in 2018, a study on three of Albania’s main public universities found that Albania’s public universities spend more on luxury reconstruction and purchases rather than research and scholarships.
Albania climbed 10 places to rank 83rd among 126 economies in the 2018 Global Innovation Index, but yet lagging behind some of its key regional competitors.
The report shows Albania’s ranking is hampered by poor knowledge and technology outputs, a low level of business sophistication, low spending on human capital and research as well as insufficient creative outputs which rank the country 86th to 110th.
In its latest country report on Albania, the European Commission says the capacity for technological absorption, research, development and innovation in Albania remains low.
In a bid to stimulate private investment and employment on the information technology sector, the Albanian government has cut the corporate income tax on the IT sector to 5 percent starting this year, down from a previous standard 15 percent. The tax cut applies to software design, development and maintenance.
