Digital transformation is reshaping economies, unlocking new pathways for growth, innovation and competitiveness. This chapter assesses the Western Balkan economies’ progress toward EU levels across key aspects of digital transformation. It examines digital adoption by individuals, covering digital skills, internet use and online engagement, before turning to business digitalisation through website adoption and the use of AI technologies. The chapter concludes by assessing the extent to which digital transformation supports the development of competitive digital industries through ICT services exports and the development of secure digital infrastructure.
Economic Convergence Scoreboard for the Western Balkans 2026
Abstract
With a score of 49 in 2023-2024, the Western Balkan economies achieved less than half of the EU’s average performance on digital transformation. The cluster is nonetheless converging quickly: the regional average has increased by 11 points since 2020-2022, mainly driven by substantial progress in Albania and Bosnia and Herzegovina. Serbia leads the region, with a score above the EU neighbours' average, while Bosnia and Herzegovina ranks last, despite its recent progress (Figure 6.1).
Notes: “EU neighbours average” is the average cluster score of Bulgaria, Croatia, Greece, Hungary, Romania and Slovenia. For more information on score calculation and the overall methodological approach, please consult the Methodology section.
Digital connectivity is the region's highest-scoring area, with individuals’ internet use broadly matching the EU average (Figure 6.2). However, this connectivity has not yet fully translated into digital engagement. Internet use for online purchases and for interacting with public authorities remains at two-thirds and half the EU average, respectively, held back by the limited availability of digital public services and low awareness of existing services. Security concerns also contribute to low engagement across the region, as the cybersecurity infrastructure remains weak, with secure internet servers accounting for only 6% of EU levels. Limited digital skills prevent the region from fully benefiting from digital transformation: the share of the population reporting low digital skills is about 20 percentage points above the EU average.
Businesses are increasingly adopting digital tools, yet progress remains largely limited to basic solutions. Many leverage digital tools to strengthen their market presence, with website use reaching 89% of the EU average. The adoption of more advanced technologies has been slower, with AI use at 64% of the EU average, partly reflecting underdeveloped governance frameworks and policy instruments.
The information and communication technologies (ICT) sector has meanwhile become a driver of growth across the region, with ICT services exports relative to GDP reaching 56% of the EU level, and the regional average exceeding that of EU neighbouring economies. Several factors underpin this trajectory: targeted policies to attract investment, expanded infrastructure for start-ups and a young, digitally skilled workforce that has attracted outsourcing by foreign firms.
Notes: Scores are rounded to the nearest whole number. “EU neighbours average” is the average cluster score of Bulgaria, Croatia, Greece, Hungary, Romania and Slovenia. For more information on score calculation and the overall methodological approach, please consult the Methodology section
High levels of digital skills across the population can maximise the benefits of digital transformation for economic growth by increasing labour productivity.
Overall, most Western Balkan economies exhibit low proficiency levels, with only 35.8% of the population possessing at least basic or above basic digital skills in 2023-2024, compared to 57.6% in the EU. Moreover, convergence has been slow, with the regional average increasing by only 0.9 percentage points since 2020-2022 (Figure 6.3). One notable barrier to this shortfall is the limited support for digital inclusion among disadvantaged groups, especially among older individuals. While digital skills decline with age across both the EU and the Western Balkan economies, the decline is far steeper in the latter: in 2023, 61% of those aged 16-24 had at least basic digital skills against 17% of 55- 64-year-olds, compared with 74% and 44% respectively in the EU (Eurostat, 2026[1]). Insufficient access to digital education and training, particularly among adult workers seeking to reskill or upskill, contributes to these disparities across Western Balkan economies.1
Montenegro stands out as the regional leader with a share of 52%, exceeding the EU neighbours’ average (46.7%), while Albania records the lowest share at 23.3%.
Note: 2020-2022 refers to data collected in 2021; 2023-2024 to data collected in 2023.
Sources: (Eurostat, 2026[1]). Data for Kosovo (2021, 2023) and North Macedonia (2023) from (RCC, 2026[2]).
Widespread internet use provides the foundation for individuals to participate in the digital economy by accessing information, acquiring digital skills and engaging in online activities, thereby strengthening productivity and economic growth.
Internet use by individuals is the digital transformation cluster’s strongest-performing indicator, with 88.9% of the population using the internet in 2023-2024, compared to 92.2% in the EU and 87.3% in neighbouring EU economies. The regional average has increased by 6.3 percentage points compared to 2020-2022, with progress observed across all Western Balkan economies (Figure 6.4). Sustained improvements in digital infrastructure, notably in mobile network coverage and broadband connectivity (see the Infrastructure and Connectivity chapter for more details), have boosted internet use, while narrowing the urban-rural gap.2
Overall, Kosovo leads the region with a share of 98%, while Albania ranks last at 84.7%.
Note: Data are unavailable for Bosnia and Herzegovina (2022), Kosovo (2021, 2022, 2023) and North Macedonia (2022, 2023).
Source: (Eurostat, 2026[3]).
The share of the population using the internet to interact with public authorities provides an indication of the accessibility and uptake of digital public services, helping to reduce administrative burdens and foster an enabling environment for entrepreneurship and investment.
In 2023-2024, the regional average stood at 34.8% (Figure 6.5), up from 8.4 percentage points since 2020-2022, but still remains around half the EU average (63%), indicating that widespread internet use across the region has not yet been matched by comparable uptake of digital public services. While the supply of digital public services has expanded across the Western Balkan economies, differences in the availability of fully transactional services3 coupled with limited public awareness4 limit the uptake of digital public services in the region.
Overall, following marked gains since 2020-2022, Albania is the regional leader with a share of 58.4%, broadly in line with the EU average, while Bosnia and Herzegovina ranks last at 22.2%.
Note: Data are unavailable for Bosnia and Herzegovina (2022), Kosovo (2021, 2022) and North Macedonia (2022).
Sources: (Eurostat, 2026[4]). Data for Kosovo (2023) and North Macedonia (2023) sent by KAS and MAKSTAT to the OECD.
The share of the population using the internet to make purchases reflects how actively consumers adopt online channels to access goods and services, which widens market access and fosters digital commerce.
In 2023-2024, the regional average reached 47.2% of the population, representing two-thirds of the EU average (70.9%) (Figure 6.6). Rising from 51.2% of the EU average in 2020-2022, this is the cluster’s fastest-converging indicator, with improvements observed across all the region’s economies. Nevertheless, concerns over the security of online transactions continue to limit online transactions, reflecting also remaining gaps in data protection and consumer rights frameworks.5 The still-limited diffusion of debit and credit cards in some economies further constrains the expansion of e-commerce.6
Kosovo, North Macedonia and Serbia lead the region with around 60% of the population using the Internet to make purchases, matching EU neighbours’ performance, while Montenegro lags behind at 31.7%.
Note: Data are unavailable for Bosnia and Herzegovina (2022), Kosovo (2021, 2022) and North Macedonia (2022, 2023).
Sources: (Eurostat, 2026[5]). Data for Kosovo (2023) sent by KAS to the OECD.
The share of businesses with a website reflects how actively businesses leverage the digital economy to expand their market reach.
In 2023-2024, an average of 67.6% of Western Balkan businesses operated a website (Figure 6.7), compared with 76.1% in the EU. This share has risen by 4.9 percentage points since 2020-2022, raising the regional average from 84% to 88.9% of the EU average. The increase was driven by higher adoption among small enterprises, where website use rose from 60% in 2020-2022 to 76% in 2023-2024.7 A recent OECD survey found that the remaining convergence gap in part reflects lower digital engagement among potential customers and constraints on businesses’ capacity to invest in online presence.8
Overall, Montenegro and Serbia are the regional frontrunners, with 86% and 85% of businesses operating a website, respectively, both above the EU average, while North Macedonia ranks last at 52.5%.
Note: 2020-2022 refers to data collected in 2020 and 2021; 2023-2024 to data collected in 2023.
Sources: (Eurostat, 2026[6]).Data for Kosovo (2020, 2021) from (KAS, 2022[7]) and (2023, 2024) from (KAS, 2026[8]) for Kosovo. Data for North Macedonia (2023) from (MAKSTAT, 2024[9]). Data for Serbia (2022, 2024) from (SORS, 2026[10]). Data are imputed for Albania (2020-2024) and Montenegro (2020-2024). For more details on imputations, please refer to the Technical Annex, published separately from this report.
The use of AI technologies provides an indication of the extent to which businesses integrate emerging technologies into their operations, with implications for productivity growth, innovation and competitiveness.
In 2023-2024, the share of businesses having adopted AI technologies reached 7.2% in the region, or 64.1% of the EU average (11.3%) (Figure 6.8), representing a 2.9 percentage-point increase compared to 2020-2022. AI adoption across the region has been constrained by limited digital maturity among firms, as businesses that have adopted a wider range of digital technologies are considerably more likely to implement AI, according to a recent OECD survey.9 Still evolving governance frameworks for AI10 and limited awareness of AI’s potential applications have also slowed adoption, even though support for business AI uptake through financial incentives has been emerging across the region.11
Overall, Albania leads the region, with 10.6% of businesses using AI technologies, corresponding to 94.5% of the EU average, while Serbia ranks last at 4.4% in 2023-2024.
Notes: 2020-2022 refers to data collected in 2021; 2023-2024 to data collected in 2023. Data are unavailable for North Macedonia (2024).
Sources: (Eurostat, 2026[11]). Data for Albania (2023), Kosovo (2021, 2023) and North Macedonia (2021, 2023) from (RCC, 2026[12]). Data for Kosovo (2024) sent by KAS to the OECD.
ICT services exports capture the extent to which economies can generate economic value from digital activities and compete in the global digital economy.
At 2.9% of GDP in 2023-2024 (Figure 6.9), the region's ICT services exports reached 56.1% of the EU average (5.1% of GDP), up from 41.9% of EU levels in 2020-2022. This fast expansion has been supported by targeted incentives to attract investment in ICT and by the growth of innovation infrastructure, including technology parks, innovation hubs and start-up facilities, which has strengthened the ecosystem for the ICT sector.12 A relatively deep pool of young and digitally skilled workers has reinforced this momentum.13
Serbia leads the region, with ICT services exports at 4.8% of GDP, matching the EU average, while Albania records the lowest share at 0.9% of GDP.
Sources: OECD calculations based on (World Bank, 2026[13]) and (World Bank, 2026[14]).
Secure internet servers measure the availability of servers that use encryption to enable secure online transactions and digital services, indicating an economy’s readiness to address cybersecurity risks.
In 2023-2024, the regional average number of secure internet servers stood at just 5.8% of the EU level, with 4 914 servers per million inhabitants, compared with 84 617 in the EU (Figure 6.10), making it the weakest-performing indicator of the digital transformation cluster. This gap reflects the still-limited scale of secure hosting and data-processing capacity in the region, owing to low domestic demand for advanced hosting services and limited development of domestic hosting and cloud infrastructure.14
Serbia leads the region, yet still reaches only 15% of the EU average; the other Western Balkan economies remain at marginal levels.
Note: Data are unavailable for Kosovo (2020, 2021, 2023).
Sources: (World Bank, 2026[15]). Data for Kosovo has been sent by the government of Kosovo to the OECD. Data are imputed for Kosovo (2022). For more details, please refer to the Technical Annex, published separately from this report.
References
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← 1. An average of 22% of enterprises provide ICT training to their employees in the region. Montenegro (29%) and Serbia (26.8%) are the regional leaders, followed by Bosnia and Herzegovina (18.1%), North Macedonia (16.4%) and Kosovo (13.6%). The figures refer to 2024 for Bosnia and Herzegovina, Montenegro, and Serbia, and to 2025 for Albania, Kosovo, and North Macedonia (RCC, 2025[19]).
← 2. The urban-rural gap in internet use narrowed sharply between 2018 and 2024 in Bosnia and Herzegovina (10 to 0.2 percentage points), Montenegro (15.4 to 9.4 percentage points) and in Serbia (21.6 to 7.2 percentage points). In Kosovo and North Macedonia, the urban-rural gap was already relatively small in 2019, at 3 and 2.3 percentage points respectively (International Telecommunication Union, 2026[22]; ICEDA, 2020[21]; MONSTAT, 2026[25]).
← 3. Transactional services, which enable citizens and enterprises to submit applications, pay taxes, renew licenses or obtain official documents remotely without visiting a government office, remain scarce in most economies, with North Macedonia providing 24% of such services digitally and Montenegro 30% (Maksić and Uzelac, 2024[16]; MAKSTAT, 2026[23]).
← 4. The Albanian case suggests that expanding the supply of digital public services may not be enough to lift uptake. Before 2024, e-Albania platform already offered over 1200 fully transactional online services, yet uptake remained comparatively low. The sharp rise in internet use for interacting with public authorities observed in 2024 coincided with complementary measures to improve accessibility, simplify user journeys and raise awareness (Government of Albania, 2026[28]).
← 5. Around 26% of citizens across the Western Balkan economies continue to identify the security of online payments as one of their main concerns related to the growing use of digital technologies (RCC, 2025[29]).
← 6. The cash-dominant nature of the region, which stems from various factors, including the prevalent informal economy, security concerns, or inaccessibility and lack of inclusivity of digital options, can make online purchases less accessible and practical for many consumers (World Bank, 2020[27]).
← 7. The breakdown of businesses with a website by size is calculated based on Albania, Bosnia and Herzegovina, North Macedonia, Montenegro and Serbia for 2020-2022 and 2023-2024. No data available for Kosovo (Eurostat, 2026[6]).
← 8. Among enterprises in the region, software and service fees (39%) and equipment costs (36%) are the two most frequently cited barriers to investing in digital tools. At the same time, financial returns remain uncertain as more than half of small and medium enterprises selling online generate less than 10% of their revenue through e-commerce (OECD, 2026[18]).
← 9. AI adoption increases sharply with firms’ digital maturity, rising from 29% among firms using only one digital tool to 80% among those using six or more. At the same time, adoption remains concentrated in accessible generative AI tools, while more advanced AI applications requiring greater technical capacity remain uncommon (OECD, 2026[18]).
← 10. AI strategies or related frameworks already exist or are under preparation in Albanian, Montenegro, North Macedonia and Serbia. By contrast, Bosnia and Herzegovina and Kosovo still lack dedicated AI policy frameworks (OECD, 2026[20]).
← 11. All Western Balkan economies provide financial support for AI adoption through grants; innovation funds or dedicated support programmes, alongside non-financial assistance, such as mentoring, to help small businesses adopt and advance AI technologies. Serbia has gone further, establishing its Research and Development Institute for Artificial Intelligence, which fosters public-private collaboration, supports AI start-ups and raises awareness of AI's applications (OECD, 2026[20]).
← 12. Recent OECD work documents the expansion of innovation infrastructure across the Western Balkan economies, including technology transfer offices, science and technology parks, digital innovation hubs and businesses incubators (OECD, 2026[20]).
← 13. The region’s skilled youth with strong English proficiency and competitive wages have made it an attractive destination for foreign companies to outsource and relocate ICT services. The outsourcing of European companies has led to the emergence of early-stage ICT “clusters” in economies such as Serbia (Vojvodina) and Albania (Tirana) (Kacani and Shaqiri, 2024[17]).
← 14. The limited number of secure internet servers is consistent with the region’s shortage of edge nodes, or local infrastructure points used to deliver and process digital services closer to users. In 2025, the Western Balkan economies recorded only 23 edge nodes compared with 2 257 in the EU, suggesting that a significant share of digital services used in the region relies on infrastructure located abroad (RCC, 2025[19]).