Digital transformation is reshaping how SMEs compete, but requires more than access to technology. This cluster examines whether the right conditions are in place for SMEs to navigate this transition successfully. It looks at how policies are designed and implemented to support SME digitalisation and productivity, how they build the digital safety environment that underpins trust and resilience, and how they support SMEs in moving beyond basic digital tools toward more advanced and sustainable technologies; assessing in each case whether policy ambition is matched by effective delivery and measurable outcomes at firm level.
SME Policy Index for Western Balkans and Türkiye 2026 – Economy Profile for Kosovo
Abstract
Digital transformation is increasingly recognised as a central lever for strengthening small and medium‑sized enterprise (SME) productivity, innovation and competitiveness, yet its impact depends on the broader ecosystem in which firms operate. Digital tools can help SMEs improve efficiency, reach new customers and reorganise business processes, but these gains can only be realised when firms have the adequate skills, access to finance, interoperable digital infrastructure and enabling institutional frameworks (Bianchini and Lasheras Sancho, 2025[1]; OECD, 2021[2]; 2019[3]). Public policy, therefore, plays a decisive role in determining whether SME digitalisation remains limited to basic adoption or evolves into deeper, productivity-enhancing transformation that reshapes business models and market participation (OECD, 2024[4]).
Digital transformation has gained strategic recognition in recent years in Kosovo, with several frameworks positioning it as a key driver of competitiveness, innovation and economic growth. However, SMEs remain largely confined to the use of basic digital tools, and structural bottlenecks persist, including fragmented access to finance, uneven digital skills development and limited firm-level support for more advanced technological upgrading. While policy commitments have expanded, implementation gaps remain, particularly in terms of targeted SME instruments, co-ordinated delivery mechanisms and sustained investment in enterprise digital capabilities. This section assesses whether the foundational conditions for SME digital upgrading are in place by examining Kosovo’s policy and financial support frameworks, the digital maturity of its SMEs, and the availability of digital skills development opportunities.
4.1.1. Strengthening policy and financial support for SME digital transformation
SME digital transformation relies on progress across multiple, interdependent areas, including skills development, access to finance, innovation support and effective co-ordination of public interventions. Smaller firms face structural disadvantages in this process, such as higher relative adoption costs, limited managerial and technical capacity, and difficulties in planning and sequencing digital investments, making them particularly sensitive to gaps or inconsistencies in public support (OECD, 2021[2]). As a result, digital transformation is not driven by isolated policy measures but by the coherence of the overall framework: outcomes depend on whether governance arrangements reduce fragmentation; align incentives across institutions; and provide SMEs with clear and predictable pathways from basic digital uptake toward more advanced, productivity-enhancing transformation (OECD, 2019[3]).
Against this backdrop, Kosovo has recently strengthened its strategic commitment to digital transformation, moving beyond earlier approaches centered mainly on infrastructure expansion, basic ICT use and digital public services. The current policy direction increasingly frames digitalisation as a lever for SME competitiveness and innovation, recognising that meaningful transformation requires not only technology adoption but also organisational change, skills development, and a supportive innovation ecosystem capable of enabling more advanced technological upgrading.
A key turning point was the government’s approval of the Digital Agenda for Kosovo 2030, which establishes the most explicit and ambitious framework to date for advancing digitalisation across the economy. While the estimated cost for implementing the Digital Agenda amounts to EUR 152 million, the budget allocated specifically to the strategic objective on Digital Transformation of Business is estimated at EUR 31.6 million for the period 2022-2030. Since its approval, the government has initiated preparatory and implementation steps across institutional framework development, digital infrastructure and skills promotion, although comprehensive monitoring and reporting on progress and budget execution under this strategic objective are still being consolidated. The Digital Agenda places SMEs at the centre of two interrelated strategic objectives: 1) the digital transformation of business, which focuses on building firms’ digital capabilities, improving access to digital technologies, and strengthening participation in e-commerce and e-business; and 2) digitally capable population and innovative ecosystem, which supports enterprise digitalisation indirectly by promoting digital inclusion; strengthening skills across the education system; and fostering future talent in areas such as artificial intelligence (AI); science, technology, engineering and mathematics (STEM) and emerging technologies (see Cluster 4).
Despite this clear strategic ambition and dedicated funding envelope, implementation has so far been limited, and no publicly available reporting exists on progress or budget execution under the Digital Agenda. Several key measures remain outstanding, including the planned SME digital support portal, the establishment of digital innovation centres and government-led financing schemes for digital investments. Where support has been delivered, it has largely been through donor-supported initiatives rather than government-led instruments. Complementary actions related to digital and ICT vocational training, industry-education linkages, expert advisory services and diaspora engagement have also only been partially implemented and at a limited scale (Table 4.1). As a result, while the skills and innovation objective may help ease structural talent constraints over time, its contribution to enterprise digitalisation remains indirect, and the Digital Agenda’s direct impact on firm-level digital upgrading is yet to be seen.
Note: The table considers all policy frameworks that are relevant for SME digitalisation or digital transformation.
1. A strategy sets the overall vision, strategic objectives and long-term priorities for a given policy area whereas an action plan operationalises these priorities by defining concrete measures, responsible institutions, timelines and (where available) indicative budgets. In other words, the strategy explains what the government intends to achieve while the action plan details how it will be implemented. Action plans thus serve as the main reference point for assessing the extent to which strategic commitments translate into measurable, on-the-ground interventions.
2. An indirect SME targeting approach refers to strategies that do not contain SME-specific measures, instruments or implementation mechanisms, but instead pursue economy-wide objectives from which SMEs may benefit. While such strategies may support areas relevant to SMEs (e.g. innovation, digital infrastructure or skills), they do not explicitly account for SME-specific constraints, capacities or policy needs.
Source: Information provided by the government of Kosovo during the assessment period (2025).
In parallel, Kosovo’s Development Strategy 2030 further reinforces digital transformation as a horizontal enabler of economic growth, competitiveness and resilience. Its objective to accelerate digital transformation and innovation in SMEs and start-ups explicitly recognises digitalisation as a driver of enterprise productivity, innovation and market integration. The Development Strategy 2030 promotes SME digitalisation through improved digital infrastructure, the adoption of advanced technologies and strengthened digital skills while prioritising the digitalisation of public services to reduce administrative burdens and improve service delivery.
These priorities are further supported by Kosovo’s Strategy for Industrial Development and Business Support 2030. Although primarily focused on industrial development, the framework considers digital transformation as a cross-cutting driver of competitiveness, especially in manufacturing. A specific objective on accelerating digital transformation in manufacturing foresees financial support schemes to encourage SME digitalisation and the adoption of advanced manufacturing technologies, with the aim of strengthening productivity and technological upgrading in industrial SMEs. In parallel, the Smart Specialisation Strategy process has been initiated to identify priority sectors for innovation- and technology-driven growth (Smart Specialisation Platform Kosovo, 2025[5]). However, as the government has not yet formally approved it, its role as an operational framework for directing SME digital and innovation support remains limited, and its full contribution to guiding innovation and technology-oriented policy measures will depend on timely adoption.
The misalignment between strategic ambition and practical delivery is partly shaped by institutional arrangements, making it important to examine how co-ordination mechanisms influence implementation. In Kosovo, responsibility for SME digital transformation is shared across three institutional levels rather than anchored in a single authority. The Ministry of Economy leads digital infrastructure, ICT policy and horizontal digitalisation agendas and drafted the Digital Agenda 2030. The Digital Transformation Unit within the Prime Minister’s Office plays a central role in cross-governmental co-ordination and implementation. Meanwhile, SME-focused digital support instruments are mainly delivered through the Ministry of Industry, Entrepreneurship and Trade, notably via the Kosovo Investment and Enterprise Support Agency (KIESA), which manages grants and advisory schemes with growing digital components. In parallel, the Agency for Information Society provides the technical backbone for digitalisation affecting SMEs, including through the management of the eKosova platform used by businesses to access public services. While the Digital Transformation Commission, chaired by the Prime Minister, provides high-level strategic oversight, the overall governance framework remains complex, and its effectiveness will depend on sustained co-ordination across institutions and the ability to translate strategic objectives into coherent, SME-oriented implementation.
Financial support for SME digital transformation has been slowly expanding in Kosovo, with several new government-backed instruments (Table 4.2), though the overall scale of funding remains modest relative to the investment needs associated with more SME technological upgrading. The primary vehicle is KIESA’s Public Call for Support of MSMEs for Digitalisation Services 2025, which provides a total budget of roughly EUR 150 000 and individual grants ranging from EUR 2 000 to EUR 4 000 – amounts generally sufficient only for entry-level digital services (KIESA, 2025[6]). Building on this, the Digitalisation Grant Scheme 2024, implemented through the Digital Empowerment Initiative, offered more targeted grants across key areas: EUR 2 500 for digital marketing, EUR 2 000 for human resources digital platforms, EUR 3 500 for e-commerce solutions, EUR 2 500 for customer relationship management/enterprise resource planning (CRM/ERP) and EUR 4 000 for automation tools (Kosovo Ministry of Industry, Entrepreneurship and Trade, 2024[7]). In 2025, the Digital Empowerment Initiative provided EUR 150 000 in financial support to 42 businesses, implemented in partnership with the Economic Initiative for Kosovo (ECIKS) and funded by the Austrian Development Agency and KIESA (KIESA, 2026[8]). These instruments broaden the scope of eligible digital investments yet still fall short of financing more complex upgrades, such as integrated management systems or production-line automation. Beyond grants, the Kosovo Credit Guarantee Fund Start-Up Window improves access to finance for young and digitally oriented firms by guaranteeing loans between EUR 3 000 and EUR 100 000, with guarantees covering up to EUR 80 000 (KCGF, 2025[9]), although firms must still navigate borrowing requirements and collateral obligations. At the same time, Kosovo lacks simple, demand-driven instruments such as digitalisation vouchers, which are widely used across European Union (EU) member states to help SMEs access advisory services and technology upgrades. Voucher schemes can be particularly effective for SMEs because they are agile, involve limited administrative burdens and allow enterprises to select solutions that match their specific digital transformation needs (Eurofound and Cedefop, 2025[10]).
Notes: ERP: enterprise resource planning; CRM: customer relationship management. The table includes an overview of government and donor financial support for SME digital transformation.
Source: OECD compilation based on publicly available information.
Complementing these government measures, a growing ecosystem of donor-funded programmes plays an important role in supporting SME digital transformation in Kosovo, often providing higher financial volumes or more advanced technical assistance than current government schemes. The EBRD-EU Go Digital in the Western Balkans programme, with a regional envelope of up to EUR 350 million, channels financing through local banks, including a EUR 5 million credit line in Kosovo, combined with EU investment grants of around 10% of project costs, although most support remains loan-based (Cela, 2025[11]). Similarly, the EU-funded “Digitalisation of Micro and Small Businesses to Increase Their Resilience in Crisis” project allocated EUR 2.2 million to Kosovo between 2022 and 2024, offering grants and advisory services to accelerate SME digital uptake (GIZ, 2024[12]). Broader competitiveness initiatives, such as the outdated Kosovo SME Competitiveness Support Programme, combine loans and grants to help SMEs adopt EU-compliant technologies, including digital tools for export readiness (EBRD, 2023[13]).
In addition, several donor-backed initiatives focus directly on capability building. The former ACCESS project helped MSMEs improve their digitalisation levels and establish market linkages with a funding envelope of more than EUR 1.2 million (ECIKS, 2022[14]). The project has since been extended under the new name “Enabling Income Generation for the Poor” until June 2026, with additional EU-funded business support of approximately EUR 510 000. The Digital4Business project supported advanced digital transformation through tailored advisory services and enterprise-level diagnostics (ITP, 2023[15]), though it remains an ad hoc intervention rather than a permanent support mechanism. Furthermore, the “Biznesi Im” platform, implemented through the ACCESS project, provides SMEs with a suite of digital tools, online business services and practical guidance aimed at improving operational performance and competitiveness, helping firms to overcome information gaps and access digital solutions more easily (ECIKS, 2020[16]). Finally, UNDP Kosovo’s “Towards Inclusive, Whole-of-Society Digital Transformation” programme aims to strengthen structural enablers of digitalisation across the economy, including targeted support for SMEs (UNDP, 2025[17]). While donor support has been instrumental in expanding access to finance, expertise and experimentation in Kosovo, heavy reliance on externally funded and time-bound programmes can raise concerns about the continuity and coherence of support for SMEs.
4.1.2. Assessing the digital maturity of SMEs in Kosovo
Assessing SME digital readiness requires looking beyond whether firms use digital tools to how strategically these tools are embedded in their everyday operations and decision making. Globally, SME digitalisation is still in the exploratory phase, with adoption mostly focused on low-cost, low-risk solutions that improve visibility or administrative compliance but do not fundamentally alter productivity, processes or business models (OECD, 2023[18]). OECD findings suggests that deeper and more transformative uptake is far more likely when public policy combines skills development, tailored advisory support and accessible financing in a co-ordinated manner, helping SMEs move from basic use toward higher value digital applications (OECD, 2021[2]; 2023[18]).
In Kosovo, digital adoption among SMEs remains at an early stage, with uptake being lower than in most Western Balkan and Türkiye (WBT) economies. About 79% of SMEs in Kosovo that took part in the OECD survey for the Western Balkans and Türkiye (see Annex B for more information) use at least one digital tool, compared to the WBT average of 93% (OECD, forthcoming[19]), highlighting the economy’s lag in digital maturity. In contrast, surveyed SMEs in Kosovo show a pattern similar to that of SMEs in other WBT economies when it comes to the type of digital tools they rely on: use is heavily concentrated in basic technologies, with 54% of surveyed SMEs having a company website, 54% using social media and 31% using electronic invoicing (Figure 4.1), (OECD, forthcoming[19]). Conversely, e-commerce and cloud computing are only used by 8% of respondents and more advanced technologies (such as CRM, ERP and big data) by around 6%. These patterns suggest that digitalisation in Kosovo is still centred on visibility, marketing and compliance-related functions rather than deeper integration of digital tools into core operations.
Source: OECD (forthcoming[19]).
Medium-sized surveyed firms stand out in the survey results, with all of them reporting the use of at least one digital tool, compared to 74% of small firms and 79% of microenterprises report. This indicates that firm size remains a key determinant of digital readiness (OECD, forthcoming[19]). On the other hand, the use of more complex digital solutions seems to be entirely absent: only 6% of surveyed SMEs report using big data analytics (OECD, forthcoming[19]), underscoring substantial gaps in data capabilities and the need for significantly more awareness-raising and skills development. Kosovo’s digital adoption landscape thus points to operational rather than strategic use of technology.
Moreover, understanding SMEs’ motivations for going digital offers important insight into the depth of digital ambition in Kosovo’s enterprise sector. Survey results show that SMEs in Kosovo adopt digital tools mainly for operational and market-related gains: 63% use them to broaden their customer base, 50% to automate internal processes and 45% to increase domestic sales (OECD, forthcoming[19]) (Figure 4.2). This emphasis on domestic market performance is broadly in line with patterns observed across WBT economies, where 43% of SMEs report domestic sales as a key driver of digital adoption (OECD, forthcoming[19]), suggesting that Kosovo does not diverge significantly from regional trends. More strategic drivers exist but are less common; 40% of surveyed SMEs report using digitalisation to enhance the products they offer. By contrast, only 8% of surveyed SMEs use digital tools for teleworking and 13% for employer branding, indicating that more advanced organisational applications remain limited. This shows that while SMEs increasingly acknowledge the practical benefits of digital tools, not all of them have formed a clear strategic vision of how digitalisation can support a more transformative change in their daily business operations.
Note: The chart excludes respondents who cited “Do not use digital tools” in the previous question. See Figure 4.1.
Source: OECD (forthcoming[19]).
This can be closely tied to the awareness regarding available public support, as only about 23% of surveyed SMEs in Kosovo are familiar with government programmes for SME digitalisation (OECD, forthcoming[19]). This is in line with broader trends: awareness in the WBT region stands at 17%, while it is 21% in the OECD sample (OECD, forthcoming[19]; Bianchini and Lasheras Sancho, 2025[1]).
Furthermore, barriers to digital maturity in Kosovo are significant and are shaped largely by businesses’ financial and capability constraints. Surveyed SMEs report that the biggest obstacles are the cost of acquiring and repairing digital tools, cited by 40% of firms, and the cost of maintaining them, cited by 35% (Figure 4.3) (OECD, forthcoming[19]). This is closely followed by capacity-related challenges: 35% of surveyed SMEs point to the cost of training as a barrier while 21% highlight the time required for training. These findings indicate that, beyond the direct financial burden of digital tools, the lack of skills and the need for continuous upskilling comprise the next most pressing challenge for SMEs attempting to move beyond basic digital adoption. Notably, 29% of surveyed SMEs stated that they face no barriers at all, a share that increases to 36% among older firms (OECD, forthcoming[19]). This may suggest limited digital ambition, satisfaction with the current low-level practices or a lack of awareness of what more complex digital transformation entails. This also implies that while financial obstacles are immediate, deeper issues related to skills and strategic planning risk slowing Kosovo’s transition toward higher levels of digital maturity.
Note: “None” refers to respondents who reported no challenges related to digital tool use (i.e. they did not cite any of the listed challenges), regardless of whether they use digital tools.
Source: OECD (forthcoming[19]).
4.1.3. Enhancing digital skills and capacities
Across OECD and EU economies, digital transformation is increasingly reshaping skill requirements for SMEs, extending well beyond basic digital literacy to include more advanced technical, analytical and transversal competences embedded across core business functions (OECD, 2023[20]). Firms that invest in continuous upskilling are far more likely to adopt advanced technologies and avoid becoming locked into low-skills, low-productivity trajectories, while weak adult learning systems remain a key bottleneck to digital upgrading (OECD, 2021[2]; OECD, 2023[20]; World Economic Forum, 2023[21]). As digital tools permeate all sectors, strengthening lifelong learning, problem-solving capacity and adaptability has become a critical precondition for inclusive and sustained SME digital transformation (OECD, 2024[22]).
This is especially relevant for Kosovo, where SMEs depend mainly on basic digital tools and frequently lack the internal capacity to adopt more complex digital technologies. With more than 90% of jobs now requiring at least basic digital skills, and the fastest-growing demand concentrated in ICT, cybersecurity and data analytics (European Commission, 2023[23]), the capacity of SMEs in Kosovo to upskill and reskill their workforce is becoming a decisive factor for their competitiveness and their advancement along the digital maturity ladder.
Evidence from the survey provides insight into how this challenge is materialising in practice. In Kosovo, surveyed SMEs rely on a diverse and often informal mix of sources for digital expertise: 23% use external consultants, 21% depend on internal IT specialists, and a further 21% turn to friends or family members for support (OECD, forthcoming[19]). This high reliance on informal networks points to limited in-house capacity and constrained access to professional digital services, reflecting broader structural informality in the SME sector.
While the 23% of surveyed SMEs using external consultants in Kosovo is broadly comparable to the OECD average of 27%, SMEs across the OECD sample complement this with a wider range of structured and semi-structured learning channels, such as online research (35%), e-commerce platform training (30%) and internal knowledge sharing (23%) (OECD, forthcoming[19]; Bianchini and Lasheras Sancho, 2025[1]). Overall, this suggests that although SMEs in Kosovo do engage external expertise at similar rates, they rely more heavily on informal personal networks and appear less embedded in diversified and systematised digital skills development pathways.
At the same time, only 10% of surveyed SMEs in Kosovo cite digital skills as a major barrier to their digital transformation (Figure 4.4), which may not indicate the absence of constraints but rather limited awareness of rising and more complex skills needs as digitalisation deepens. This interpretation is supported by system-level evidence, which shows that only 38% of citizens aged 16-74 possess at least basic digital skills in Kosovo, placing the economy well below the EU average of 56% (RCC, 2024[24]).
Source: OECD (forthcoming[19]).
Despite the limited digital skills capacity observed among SMEs, several of Kosovo’s strategic frameworks that collectively shape its human-capital foundations for digital transformation embed digital skills objectives (see Cluster 4). The Digital Education Strategy 2022-2027 establishes the core framework for improving digital literacy, strengthening digital pedagogy and upgrading ICT infrastructure in schools, with the aim of equipping young people with the foundational competences needed in a digital economy. Implementation is ongoing, with initial steps including teacher training programmes in digital pedagogy, expansion of digital learning resources, and efforts to strengthen school ICT infrastructure. Complementing this, the Digital Agenda for Kosovo 2030 places a strong emphasis on developing a “digitally capable population”, outlining measures to enhance basic and advanced digital skills; expand online learning opportunities; and align education and training systems with emerging technological needs, including AI and STEM-related competences. Initiatives such as the Kosovo Digital Competence Framework, the expansion of the KREN research and education network, and the planned review of university ICT programmes to better reflect labour-market demand reinforce these efforts. In addition, the new Smart Specialisation Strategy, although still pending government approval, intends to integrate digital skills development into a broader innovation and competitiveness framework by prioritising sectors such as ICT and promoting stakeholder alignment around sector-specific human capital needs (Smart Specialisation Platform Kosovo, 2025[5]).
The current policy framework provides a broadly coherent approach linking early education, higher education and adult learning, although co-ordination challenges remain, particularly in lifelong learning, where responsibilities are dispersed across multiple institutions and no strategy directly targets SME workforce skills. While all frameworks recognise the importance of advanced digital competencies for economic development, measures continue to prioritise general population and education system reforms; SMEs are not yet clearly defined as a distinct beneficiary group.
Additionally, some efforts to better align higher education with labour market needs are gaining traction, with indirect but potentially important implications for SME digitalisation. A key initiative is the EU- and Austrian Development Agency-funded Aligning Education and Training with Labour Market Needs (ALLED/ALLED2) programme, which works with universities, vocational institutions and employers to modernise curricula, strengthen quality assurance mechanisms, and improve co-operation between education providers and the private sector. By promoting competency-based curricula, updating ICT‑related programmes and reinforcing employer engagement in skills design, ALLED contributes to a more digitally relevant skills base and improves the long-term availability of talent for SMEs, particularly in ICT-intensive sectors. Complementing this, KIESA, in co-operation with the Luxembourg Development Cooperation Agency (LuxDev) and the Ministry of Education, Science, Technology and Innovation, has initiated steps toward a dual-education scheme, whose aim is to strengthen work-based learning and links between firms and education providers. Moreover, through the United States Agency for International Development-funded Private Sector Partnerships to Strengthen Higher Education activity, the University of Iowa and Kosovo’s public universities (Pristina, Peja and Prizren) collaborate with ICT and agriculture companies to update curricula via competency-based methods and regular industry panels (University of Iowa, 2024[25]).
Furthermore, Kosovo’s digital skills landscape is shaped by a growing number of donor- and non‑governmental organisation-supported initiatives, though only a limited share explicitly targets SME needs. The EU-funded Digital4Business: Empower Kosovo’s Micro and Small Enterprises to Embrace the Benefits of the Digital Age stands out as the most SME-oriented programme, providing digital skills training to over 800 youth and women and directly supporting around 30 micro and small enterprises through digital maturity assessments and early-stage transformation strategies (ITP, 2023[15]), thereby linking capacity building with concrete business-level change. Complementing this, the Digital Innovation Gateway for Kosovo (DIG-4K), co-funded by the European Union and the government of Kosovo and co‑ordinated by the Innovation and Training Park in Prizren, aims to strengthen digital skills, innovation capacity and technology uptake among businesses and other ecosystem actors, supporting SMEs through training, experimentation and innovation-oriented services. In parallel, the Enterprise Europe Network Kosovo Innovation Consortium (EEN KosInn) contributes to SME capability development by supporting innovation, internationalisation and access to specialised advisory services, including those related to digitalisation. By contrast, large-scale initiatives such as the recently completed ICT for Kosovo’s Growth programme focus on advanced ICT training (e.g. programming, cloud, machine learning, cybersecurity) for more than 3 000 young professionals and students (Box 4.1) (ICT for Kosovo's Growth, 2025[26]). Similar programmes, including the United Nations Development Programme’s Digital Skills for All (RIT Kosovo, 2023[27]) and the Luxembourg-funded Skills for Sustainable Jobs in Kosovo implemented by LuxDev (LuxDev, 2024[28]), support individuals seeking upskilling or reskilling. While these efforts expand the talent pool, SMEs benefit from them mainly indirectly, through improved access to skilled workers rather than through targeted upskilling of their existing workforce.
ICT for Kosovo’s Growth is one of Kosovo’s largest and most sustained digital skills initiatives. The initiative is implemented by the Ministry of Economy in partnership with the European Union and the government of Japan. Launched in 2018 and expanded through multiple phases, the programme aims to strengthen Kosovo’s human capital base in advanced ICT fields and address skills shortages that limit the growth of Kosovo’s digital economy.
The programme provides intensive, industry-oriented training in areas such as software development, web and mobile programming, database management, cloud computing, machine learning, and cybersecurity. Training is delivered through blended learning formats combining online instruction, hands-on workshops and project-based assignments aligned with current labour market needs. Since its launch, over 3 000 young professionals, students and jobseekers have completed courses under the programme, making it one of the most significant contributors to Kosovo’s growing ICT talent pipeline.
While the programme primarily targets individuals entering or advancing within the ICT labour market, small and medium-sized enterprises (SMEs) benefit indirectly through greater availability of skilled ICT professionals; improved digital literacy among the workforce; and opportunities to connect with trainees during networking sessions, demo days and job-matching activities. However, the initiative does not include structured mechanisms for upskilling existing SME employees and participation is generally oriented toward individuals rather than firms.
Source: ICT for Kosovo’s Growth (2025[26]).
The way forward for strengthening SME readiness for the digital transformation
Strengthen the SME dimension within existing strategic and policy frameworks for digital transformation while establishing a comprehensive digital maturity support pathway. Kosovo could enhance the SME focus of its current and forthcoming strategies, such as the Digital Agenda, ICT Strategy or Smart Specialisation Strategy, by introducing dedicated SME digitalisation components with clear priorities, measurable targets and implementation mechanisms. This could include defining the types of digital tools SMEs should be supported to adopt according to their size, sector and digital maturity, combining support for entry-level tools with more advanced solutions such as ERP/CRM systems, automation, data-driven applications and e-commerce integration. In parallel, the government could establish an economy-wide digital transformation programme that links standardised digital maturity diagnostics with tailored advisory services and targeted financial incentives. SMEs would enter the programme through a common assessment tool; receive customised guidance through digital innovation hubs, innovation centres and certified consultants; and be directed to matching grants or guarantee-backed loans for implementation. Anchoring this integrated pathway within existing strategic frameworks would reduce fragmentation; strengthen co-ordination across institutions; and ensure that SMEs receive practical, productivity-enhancing support throughout their digital transformation journey.
Launch a dedicated SME Digital Skills Voucher Scheme to strengthen in-house digital capabilities and support digital adoption. Despite growing recognition of the importance of digital skills, SME upskilling in Kosovo remains fragmented, with limited mechanisms directly targeting the existing SME workforce. The government should introduce a Digital Skills Voucher Scheme that co-finances short, modular training for owners, managers and employees in areas such as digital productivity tools, e-commerce operations, data literacy, cybersecurity and AI readiness (Box 4.2). Training should be delivered through accredited providers, including vocational education and training (VET) centres, universities, digital innovation hubs, innovation centres, and qualified private trainers, ensuring economy-wide coverage. Vouchers should prioritise microenterprises, women-led enterprises and SMEs in priority sectors while linking training content to concrete technology adoption projects identified through digital maturity diagnostics. In parallel, partnerships with chambers of commerce, industry associations and innovation centres could help expand outreach and tailor content to sector-specific needs. Establishing clear monitoring mechanisms, including tracking participation, skill acquisition and subsequent technology adoption, would allow the scheme to evolve into a core, evidence-based pillar of SME digital transformation and workforce productivity policies.
Latvia has sought to increase employer investment in workforce skills through a comprehensive policy package combining financial incentives, regulatory tools and capacity-building measures. Implemented with support from the European Union’s Technical Support Instrument, the initiative aims to address the low levels of enterprise training by reducing financial, informational and co-ordination barriers, particularly among small and medium-sized enterprises (SMEs).
The Latvian approach is built around several complementary elements:
Financial incentives for training: Enterprises can access subsidised training projects funded by EU Structural Funds, as well as tax exemptions on training expenditures. These measures help reduce the direct cost of employee training, which is a key barrier for SMEs.
Training vouchers and active labour market programmes: Kosovo’s Employment Agency provides vouchers for training, including digital and online courses, supporting both unemployed individuals and workers at risk of displacement.
Employer-centred support instruments: The policy package includes tools such as additional training agreements, payback clauses and planned sectoral Skills Funds, which pool resources across firms to co-finance training and reduce the risk of employee poaching.
Capacity-building and co-ordination measures: The reform emphasises the role of diagnostic tools, coaching, competence centres and co-operation between enterprises and education providers, recognising that financial incentives alone are insufficient without support for organisational learning and skills planning.
Latvia’s experience shows that improving enterprise training requires a balanced mix of financial support, regulatory incentives and institutional co-ordination, illustrating how integrated policy packages can stimulate SME investment in workforce skills and support more sustained, productivity-enhancing digital transformation.
Sources: OECD (2022[29]); European Commission (2022[30]).
Once the basic enablers of digital adoption are in place, the key issue shifts from access to impact: whether digitalisation is actually improving productivity at the firm level. Evidence indicates that SME productivity gains depend less on the mere presence of digital tools and more on how effectively firms integrate them into core business functions such as sales, innovation, workflow organisation and market engagement (OECD, 2023[18]; 2021[2]). The COVID-19 pandemic significantly accelerated the expansion of e-commerce and digital business models, further reinforcing the role of online channels as a key driver of SME resilience and productivity (OECD, 2021[2]). SMEs across the OECD and the European Union that combine e‑commerce, digital innovation and organisational change are better positioned to scale operations, diversify revenue streams and compete beyond local markets, while those that adopt digital tools only superficially tend to realise limited efficiency gains (OECD, 2023[31]; European Commission, 2024[32]). Crucially, productivity gains do not stem from digital presence alone: they materialise when online sales, innovation activities and organisational change reinforce each other, allowing firms to scale, adapt and compete beyond local demand (OECD, 2023[31]; 2021[2]). Thus, ultimately, productivity depends on SMEs’ ability to embed digital tools into their core operations and decision-making processes, rather than using them only for short-term functions.
In Kosovo, firms have yet to fully realise the productivity gains offered by e-commerce and digital innovation. While recent policy reforms, grant schemes and innovation hubs have begun to support SME digital engagement in Kosovo, structural constraints persist, including the limited scale of financial support, gaps in managerial and digital skills, and weak integration of digital tools into core business processes, which limits the extent to which digitalisation translates into measurable productivity improvements. This section sheds light on how e-commerce adoption and innovation activities can contribute to SME productivity in Kosovo, key conditions for enabling firms to expand markets, strengthen competitiveness and sustain growth in an increasingly digital economy.
4.2.1. Leveraging the use of e-commerce and online platforms to drive SME growth
E-commerce and online platforms are among the most direct ways through which digitalisation can translate into productivity gains for SMEs. When e-commerce is embedded within broader business processes rather than treated as a peripheral sales tool, it can lower transaction costs, expand market reach, and generate valuable data for operational and strategic decision making (OECD, 2025[33]). SMEs that combine physical and digital sales channels are better positioned to scale, diversify revenue streams and adapt to changing demand patterns, particularly as digital platforms increasingly shape market access and value chain participation (OECD, 2023[31]; 2025[34]). The extent to which firms move beyond basic online presence toward integrated digital sales models is, therefore, a key determinant of whether e‑commerce supports sustained productivity growth.
In Kosovo, e-commerce offers clear opportunities for SMEs to expand their customer reach and improve service accessibility, yet uptake remains relatively limited and concentrated on low-cost, informal channels. Social media is by far the most commonly used sales channel, employed by 58% of surveyed SMEs, significantly higher than in many other WBT economies where company websites typically dominate (OECD, forthcoming[19]). However, only 31% of surveyed SMEs use their own website to support online sales, and uptake of third-party marketplaces is minimal at just 6%, with another 2% using other sales platforms, indicating that more scalable and structured e-commerce models remain underutilised (Figure 4.5).
Source: OECD (forthcoming[19]).
The limited depth of e-commerce engagement is also reflected in firms’ revenues: 49% of surveyed SMEs using e-commerce report that online sales account for less than 10% of total income, and only 16% generate more than half of their revenues through e-commerce, demonstrating that online sales remain peripheral for most firms (OECD, forthcoming[19]). This limited uptake persists despite strong OECD evidence that digital tools and hybrid sales models can significantly raise productivity by lowering transaction costs, expanding customer reach and enabling more data-driven business decisions (OECD, 2023[31]). It also contrasts with trends across many OECD Member countries, where online platforms increasingly shape trade patterns and allow SMEs to access new markets and value chains (OECD, 2025[34]). Thus, Kosovo’s e-commerce landscape remains characterised by early-stage, low-intensity use, with significant scope for SMEs to transition from online sales toward more structured and growth-oriented digital commerce models.
Despite SMEs’ low engagement with e-commerce, Kosovo has made progress in strengthening the policy and legal foundations for it. The Digital Agenda for Kosovo 2030 embeds the digital transformation of business as a strategic objective and recognises the need to develop an “e-business/e-commerce ecosystem”. Additionally, the legal framework includes the Law on Information Society Services (2012), which grants legal equivalence to electronic documents and enables online contracts; the Law on Consumer Protection (2012); the Law on Electronic Identification and Trust Services (2022); and the Law on Protection of Personal Data (2019). Together these laws establish core rules on trust services, consumer rights, electronic identification and data protection, creating an enabling environment for online trade. However, while the outlined laws broadly reflect key EU principles, their alignment with the EU acquis, including recent updates to consumer, e-commerce and digital services regulations, remains only partial.
Building on this, Kosovo also introduced an economy-wide, government-led instrument that supports SME e-commerce adoption through the KIESA Grant Scheme on Digitalisation. Implemented under the Investment and Financial Development framework, the scheme provides targeted grants for digital services, including dedicated support for e-commerce and online sales platforms, with individual grants of up to EUR 3 500 (KIESA, 2025[6]). Eligible services also include digital marketing, CRM/ERP systems, human resources platforms and automation solutions, allowing SMEs to select one digitalisation pathway aligned with their immediate business needs. While this represents an important step towards structured public support for SME digitalisation, the relatively small grant amounts limit the scheme’s ability to support more advanced or integrated e-commerce solutions, such as cross-border platforms, logistics integration or multi-channel online sales strategies.
Additionally, several donor- and partner-led initiatives play a complementary role, aiming to support SME business development. The EU-GIZ-funded “Digitalisation of Micro and Small Businesses to Increase Their Resilience in the Crisis” project targeted micro and small enterprises across Kosovo with training, advisory services and digitalisation support, including digital marketing, e-commerce solutions, digital management tools and business process adaptation; participating firms improved their online presence and operational efficiency, with some adopting new digital sales channels (GIZ, 2024[12]). Meanwhile, EEN KosInn also includes a pillar on digitalisation and internationalisation of SMEs which is implemented through a partnership of local innovation and ICT associations (EEN KosInn, 2025[35]). Additionally, the Go Digital programme offers financial incentives and technical assistance for SME digital and automation investments in Kosovo (Cela, 2025[11]). These initiatives provide meaningful entry points for SMEs to engage in digital commerce, but support for e-commerce remains fragmented and modest in scale, with no dedicated, large-scale programme focused specifically on building SME capabilities for online sales, platform-based trade and cross-border e-commerce.
4.2.2. Fostering innovation and collaboration for SME productivity
Digitalisation enhances SME productivity not only through expanded sales channels, but also through its close link with innovation and the diffusion of knowledge. SMEs that use digital and data-driven tools to innovate tend to be more efficient, more resilient and have more growth potential, as innovation enables improvements in products, processes and organisational performance (Hall, Lotti and Mairesse, 2012[36]; Mohnen, Polder and Van Leeuwen, 2018[37]). However, empirical evidence shows that these gains are unevenly distributed: firms that already possess stronger managerial capabilities, skills and intangible assets are better positioned to translate digital technologies into productivity improvements, while others struggle to do so (Brynjolfsson and McAfee, 2011[38]). Across OECD Member countries, this dynamic has contributed to widening productivity gaps between leading and lagging firms, particularly in ICT-intensive sectors where more productive and larger firms are better positioned to exploit digital technologies (Berlingieri, Blanchenay and Criscuolo, 2017[39]). As a result, digitalisation can reinforce existing performance gaps rather than reduce them, particularly in contexts where access to finance, technology transfer and absorptive capacity are constrained (European Commission, 2024[32]). Assessing how policy frameworks and institutional support enable SMEs to engage in digital innovation is, therefore, central to assessing whether an economy can turn strategic ambition into broad-based productivity growth rather than progress concentrated among a small group of digitally advanced firms.
Kosovo’s policy framework for innovation is anchored in the Development Strategy 2030 and the Digital Agenda for Kosovo 2030, both of which emphasise technology adoption, applied research and the development of an innovation-friendly ecosystem. These frameworks build on earlier policy efforts, notably the Innovation Strategy 2019-2023, which provided the first structured approach to fostering innovation, entrepreneurship and technology transfer, although its implementation remained limited and largely project-based. The Ministry of Economy plays a central co-ordinating role, while the Ministry of Industry, Entrepreneurship and Trade and KIESA contribute through targeted competitiveness and innovation measures. Innovation objectives are further reflected in the Strategy for Industrial Development and Business Support 2030, which includes a dedicated sub-objective aimed at improving product innovation and supporting the transition towards higher value-added manufacturing. However, Kosovo does not yet operate a dedicated innovation fund: the establishment of such a fund is foreseen under the draft Law on Innovation, but its operationalisation remains pending due to delays in the approval of the law. In the interim, Kosovo has joined the Enterprise Innovation Fund (ENIF) for the Western Balkans, which mobilises over EUR 40 million in regional investment support for innovative high-growth companies, providing an additional financing channel while the domestic framework is finalised.
Within this landscape, the most significant domestic financial instrument is the KIESA-LuxDev Innovation Grant Scheme (LuxDev, 2024[40]). With a total budget of EUR 1.9 million, the scheme provides up to EUR 40 000 for established MSMEs (covering up to 50% of project costs) and up to EUR 15 000 for start‑ups (covering up to 80% of the project costs), supporting the development of new or improved products, services and production processes. While this represents a notable step forward, Kosovo still lacks a broader suite of public programmes capable of financing larger, higher risk or transformative innovation investments, an important gap given the capital intensity of advanced technologies and automation.
Against this backdrop, international partners continue to fill critical gaps in Kosovo’s innovation financing and advisory landscape. EBRD’s Advice for Small Businesses programme provides firms with digital diagnostics, managerial training and technology-upgrade advice (EBRD, 2025[41]) while the Go Digital programme offers blended financial and technical support for automation and digitalisation investments (Cela, 2025[42]). The newly established EEN KosInn, funded under the EU Single Market Programme, further strengthens SME innovation and internationalisation by offering brokerage, technology transfer services and guidance for accessing EU value chains (EEN KosInn, 2025[35]). These initiatives significantly expand access to expertise and markets, yet their limited scale and project-based nature mean they do not fully substitute for a sustained, domestically rooted innovation support architecture.
Complementing financial measures, Kosovo’s innovation infrastructure has grown stronger and more diversified. The Innovation and Training Park (ITP) Prizren has become a central hub, hosting the Digital Transformation Center and the Digital Innovation Hub, which function as one-stop shops offering digital maturity assessments; prototype testing; advisory services; and training in areas such as AI, cybersecurity and automation (Box 4.3) (Innovation and Training Park (ITP) Prizren, 2025[43]). Kosovo’s first European Digital Innovation Hub (EDIH) – DIG-4K – launched in 2025 under the EU Digital Europe Programme, adds further capacity through its Digital Skills Academy, tech-testing facilities, and tailored guidance on funding and technology adoption, firmly linking Kosovo with European innovation ecosystems (European Commission, 2025[44]). Additional innovation actors broaden the landscape: STIKK – Tech Park Prishtina supports ICT sector development and start-ups; the Bonevet network operates hands-on innovation and STEM centres across numerous municipalities (including Prishtina, Gjakova, Mitrovica and Gjilan), fostering early-stage digital and entrepreneurial skills; Venture Up focuses on start-up acceleration and investment readiness; and university-linked hubs such as the UBT Innovation Hub and the University of Prishtina’s Innovation Center promote applied research, prototyping and collaboration between academia and businesses. The Jakova Innovation Center further contributes by supporting local entrepreneurship and digital business development outside the capital. Together with initiatives such as Digital4Business, the Innovation Centre Kosovo and the Kosovo Virtual Business Incubator, these organisations provide incubation, acceleration, mentoring and digital skills support (ITP, 2023[15]; ICK, 2025[45]; KVI, 2025[46]). While this network has become increasingly dense and diverse, many hubs remain donor-funded and concentrated in larger urban centres, raising questions about long-term sustainability, co-ordination and equitable access for SMEs across the economy.
The Innovation and Training Park (ITP) Prizren, established in 2020 through a partnership between the government of Kosovo, the government of Germany and GIZ, has rapidly become one of Kosovo’s main centres for digital transformation, innovation and enterprise development. Located on a refurbished former Kosovo Force base, it hosts a growing community of small and medium-sized enterprises (SMEs), start-ups, research institutions, vocational centres, and international organisations, offering a multi-actor environment designed to support technology-driven growth. ITP Prizren also serves as the co‑ordinator of the Digital Innovation Gateway for Kosovo (DIG-4K), Kosovo’s first European Digital Innovation Hub (EDIH), which focuses on strengthening SME digital skills, innovation capacity and technology adoption.
ITP Prizren provides SMEs with access to state-of-the-art infrastructure, including co-working spaces, training facilities, prototyping and testing labs, and modern industrial premises tailored for technology-oriented firms. Through its Digital Transformation Center, the Digital Innovation Gateway for Kosovo (DIG-4K), it functions as a one-stop shop for digital transformation services. DIG-4K structures SME support around four pillars: 1) test-before-invest services; 2) training and digital skills development; 3) access to finance; and 4) innovation ecosystem networking.
All SMEs entering DIG-4K complete a standardised digital maturity assessment to determine their digital readiness and priority areas for action. Following an open call, 40 SMEs were selected and classified into basic, intermediate or advanced levels of digital maturity, forming the basis for tailored support. Based on their digital maturity assessment results, participating SMEs receive customised digitalisation strategies and sequenced support packages, including advisory services, training and technology-testing opportunities.
ITP Prizren additionally hosts flagship programmes such as Digital4Business and Boost x Kosovo, implemented with the European Union and bilateral partners, which help SMEs explore advanced technologies, build digital skills and pilot new tools. By the end of the current project term (December 2028), DIG-4K plans to have provided structured services to at least 80 SMEs. By combining infrastructure, advisory services, training and international partnerships within a single hub, ITP Prizren and DIG-4K together provide a comprehensive support ecosystem that complements SME policies and helps close critical gaps in Kosovo’s innovation landscape.
Source: Innovation and Training Park (ITP) Prizren (2025[43]).
On the demand side, recognition of the importance of digital innovation among SMEs in Kosovo is growing, although current use remains less widespread than in some WBT economies. About 47% of surveyed SMEs apply some form of digital innovation to enhance their products, services or internal processes (OECD, forthcoming[19]). Within this group, 28% report using digital innovation at a moderate level and 19% at a significant level, suggesting that nearly half of Kosovo’s SMEs have begun integrating new digital approaches into their operations (Figure 4.6). A further 49% of surveyed SMEs state that they intend to adopt such practices in the near future, pointing to a broad and expanding awareness of the potential benefits of digital innovation. On the other hand, only 4% report no use at all, indicating a relatively small group of complete non-adopters. Interestingly, digital innovation appears more prevalent among women‑led SMEs (64% compared to 42% among male-led SMEs) and among newer firms, with 62% of businesses established after 2015 using digital innovation, compared to 32% of older firms, reflecting generational differences in adoption patterns.
Source: OECD (forthcoming[19]).
However, the depth and sophistication of digital innovation among SMEs in Kosovo remains uncertain. Moderate or significant use may often correspond to incremental improvements, such as enhancing website functionalities, adopting basic software tools or applying digital marketing, rather than more transformative innovations involving automation, advanced analytics or AI. The large share of SMEs only planning to innovate suggests that many of them remain in the exploratory phase (OECD, forthcoming[19]), potentially facing constraints related to access to finance, shortages of digital skills or uncertainty about the returns on technology investment.
Additionally, data on SME innovation collaboration in Kosovo remain scarce, making it difficult to assess the extent of business-academia linkages and inter-firm co-operation. The absence of systematic data collection, combined with fragmented policy support, indicates that collaborative innovation is likely underdeveloped and highly uneven across sectors. This calls for strengthening data collection of these indicators to ensure proper investigation of SME collaborative innovation in Kosovo.
Financing of SME innovation in Kosovo is also a major constraint. Kosovo’s research and innovation expenditure stood at about 0.1% of gross domestic product (GDP) in 2024 – far below levels seen in EU economies (2.2%) and even lower than in all the WBT economies (0.5%;Figure 4.7) (OECD, 2025[47]). This underinvestment restricts not only public research and development but especially the capacity of SMEs to engage in higher risk, longer term innovation projects. SME innovation efforts thus remain small‑scale, ad hoc or dependent on external donor support rather than backed by a systematic funding pipeline that can drive transformative change across the broader enterprise base.
Notes: Research and development expenditure as a percentage of GDP encompasses spending by governments, higher education institutions, business enterprises and private non-profit organisations. The 2014-2016 and 2020-2023 figures represent three-year unweighted averages of research and development expenditure as a percentage of gross domestic product.
Source: Eurostat (2024[48]).
The way forward for increasing SME productivity through digital transformation
Launch a comprehensive SME e-commerce enablement programme linking diagnostics, advisory support and targeted investments. Kosovo should introduce an integrated programme to help SMEs adopt and scale e-commerce as a core business channel, with a focus on productivity gains, market expansion and export readiness (Box 4.4). Delivered through existing structures such as the EDIH DIG-4K, ITP Prizren, chambers of commerce and local business support organisations, the programme should combine digital maturity diagnostics, modular training and tailored coaching in key areas of online trade. Priority modules should include online storefront development, integration with regional and EU marketplaces, digital marketing and customer-acquisition strategies, digital payment solutions, cross-border logistics and delivery management, and compliance with EU consumer protection and data protection requirements. Each participating SME should receive a customised e-commerce action plan followed by hands-on advisory support to embed online sales into day-to-day operations. Anchoring delivery in regional business centres and partner organisations would help ensure broad geographic coverage and avoid excessive concentration in major urban areas, enabling SMEs across Kosovo to participate more actively in regional and EU digital markets.
France provides a useful example of how governments can strengthen small and medium-sized enterprise (SME) e-commerce capacities through centralised, practical advisory and training support embedded within existing business support structures. As part of its broader digital transformation agenda, the French Ministry of Economy launched a comprehensive online support offer to help SMEs adopt digital tools and e-commerce solutions, hosted on the platform France Num.
The initiative combined two complementary elements:
1. The government issued a call to private digital service providers, including e-commerce platforms, payment service providers, logistics companies and communication tools, to offer free or preferential-rate services to small businesses. These offers were consolidated into a publicly accessible inventory, allowing SMEs to easily identify trusted solutions for building online shops, accessing marketplaces, managing digital payments, and organising delivery and logistics.
2. The government complemented this inventory with a step-by-step e-commerce guide tailored to SMEs. The guide provides practical instructions on setting up or improving an online presence, using social media and marketplaces effectively, managing customer communication, and maintaining digital sales channels. It also includes links to specialised guides on topics such as online payments, cybersecurity and logistics, as well as concrete case studies showing how small firms have successfully adopted digital commerce tools.
By combining advisory content, private sector solutions and real-world examples on a single, easily accessible platform, France reduced entry barriers for SMEs and supported more structured and confident engagement with e-commerce. The approach demonstrates how governments can scale SME digital trade support without creating new institutions, by leveraging partnerships with business associations, technology providers and chambers of commerce.
Sources: OECD (2021[2]); France Num (2025[49]).
Accelerate the adoption of the Law on Innovation to enable the establishment and operationalisation of a consolidated SME Innovation Fund. To move beyond small, fragmented grant schemes, Kosovo should prioritise the adoption of the Law on Innovation, which foresees the creation of an Innovation Fund, and ensure its rapid operationalisation. Once established, the fund should provide multi-tier support for SME innovation, including grants for early-stage experimentation and co-financing for larger projects such as automation, applied research and development, prototyping, or AI adoption. The fund should operate with clear selection criteria, simplified application procedures and predictable annual calls, ensuring continuity beyond donor project cycles. By pooling resources currently spread across KIESA instruments, LuxDev‑supported schemes and other competitiveness programmes, the government could create a stable and scalable mechanism capable of supporting transformative SME innovation. This would help address Kosovo’s chronic underinvestment in research and innovation and enable SMEs to move from incremental digital improvements toward higher value, technology-driven growth.
Establish a mechanism to systematically collect and monitor SME innovation and collaboration data. Kosovo should task a dedicated institution with building a regular data collection system that tracks SME engagement in innovation, collaboration with universities and research centres, participation in cluster initiatives, and uptake of emerging technologies (Box 4.5). This should include standardised annual or biennial SME innovation surveys aligned with OECD or EU methodologies to ensure comparability and evidence-based policymaking. By generating reliable and granular data, Kosovo would gain the analytical foundation needed to design targeted support instruments, strengthen knowledge transfer mechanisms and identify priority sectors where collaborative innovation can generate the highest impact.
The European Union’s Small Business Act (SBA) Scoreboard is a core monitoring instrument used to track the implementation and results of small and medium-sized enterprise (SME) policies across the EU-27. It provides a structured, data-driven overview of SME performance, helping policymakers identify gaps, benchmark progress and adjust policy priorities.
The SBA Scoreboard evaluates SME performance across ten policy dimensions, including entrepreneurship, access to finance, skills and innovation, public procurement, the Single Market, and internationalisation. This allows for consistent monitoring across countries and over time.
Within the “Skills and Innovation” dimension, the framework relies on recognised international indicators, such as:
the Digital Economy and Society Index
the European Innovation Scoreboard
the Innovation Output Indicator
the Global Innovation Index.
By combining these indicators into a single framework, the SBA Scoreboard links SME outcomes with broader digital and innovation conditions, supporting evidence-based policymaking and policy co‑ordination.
The SBA Scoreboard illustrates how a structured monitoring system can strengthen SME policy coherence, improve accountability, and help ensure that digital and innovation strategies translate into measurable results for firms.
Source: European Commission (2025[50]).
As SMEs deepen their reliance on cloud computing, online payments, digital platforms and data-driven tools, digital risks increasingly become intertwined with business performance. Smaller firms are often more exposed to these risks, as limited financial resources, informal internal procedures and scarce specialised staff constrain their ability to manage data protection and cybersecurity in a systematic way (Bianchini and Lasheras Sancho, 2025[1]; OECD, 2021[2]). At the same time, the gradual expansion of EU digital trust requirements has raised baseline expectations for compliance and risk management, making data governance and cyber resilience essential conditions for SMEs seeking to operate digitally, participate in value chains or engage in cross-border activity (European Commission, 2024[51]).
In Kosovo, exposure to data protection risks and cyber threats has increased alongside digitalisation, reflected in repeated cyber incidents and a growing number of personal data breaches. Although Kosovo has established a largely EU-aligned legal framework and a dedicated supervisory authority, implementation remains uneven, with many SMEs struggling to translate formal obligations into everyday data governance and cybersecurity practices (OECD, forthcoming[19]). This section looks at the regulatory framework, institutional arrangements and firm-level practices shaping SME data protection and cybersecurity readiness in Kosovo.
4.3.1. Adapting data protection to evolving digital threats
Robust data protection frameworks play an increasingly important role in fostering trust in digital services and supporting business competitiveness by clarifying rights, responsibilities and safeguards in data-intensive markets (EDPB, 2025[52]). For potential candidates of EU accession, alignment with the General Data Protection Regulation is not only a legal requirement but also a signal of institutional credibility and digital reliability in cross-border economic activity (European Commission, 2025[53]). In this context, understanding how SMEs operationalise data protection obligations and embed governance practices into their daily operations is essential for assessing the resilience, credibility and long-term sustainability of their digital activities.
Kosovo has experienced a sustained rise in exposure to cyber and data protection risks in recent years, highlighted by a major cyberattack on government IT systems in 2022 that temporarily disrupted online public services (Vllahiu, 2022[54]), followed by further attempted breaches targeting official platforms and communications systems in 2023 and 2024 (Reporteri, 2023[55]; Association of Journalists of Kosovo, 2024[56]). These developments illustrate growing systemic vulnerabilities as digitalisation deepens across the economy. In parallel, pressure on the data protection framework has intensified: between 2022 and 2024, the Information and Privacy Agency recorded around 400 complaints related to personal data breaches – 145 in 2022, 121 in 2023 and 134 in 2024 (Canolli, 2025[57]) – but 544 complaints in the first half of 2025 alone, 431 of which were resolved and 113 remain under review (AIP, 2025[58]). While these figures likely underestimate the true scale of incidents, they point to persistent weaknesses in data handling and compliance. Crucially, such breaches increasingly translate into tangible economic and trust-related harms, including identity misuse, fraudulent loans and reputational damage for affected individuals and businesses, underscoring that data protection in Kosovo has become a material business risk rather than merely a formal regulatory requirement.
At the enterprise level, Kosovo’s SMEs show moderately strong uptake of data protection practices, broadly in line with patterns observed across the WBT region. About 64% of surveyed SMEs have a data privacy policy in place, while the remaining 36% still lack one, pointing to uneven internal capacity to formalise and operationalise data management responsibilities (OECD, forthcoming[19]). Adoption varies depending on the firm’s characteristics: at 72%, newer firms are more likely to have a policy compared to 55% of older firms, and women-led SMEs demonstrate higher uptake at 73% compared with 59% among male-led firms, suggesting that generational factors and leadership profiles influence data governance choices to some extent.
When asked about the difficulty of managing data protection, 53% of surveyed SMEs consider it neither easy nor difficult, 32% find it challenging, and 15% do not view it as a challenge (OECD, forthcoming[19]). Newer firms appear to struggle more: 36% report data protection as challenging compared with 27% of older firms, possibly reflecting their more complex digital processes or greater awareness of the risks. The perceived challenge is even higher among SMEs that have experienced a cyber incident, with 63% finding data protection difficult, compared with 42% among those that have not experienced such an incident. Despite the relatively high presence of formal policies, these results highlight the difficulty SMEs face in translating compliance into consistent operational practice. As firms grow and their data volumes expand, these challenges are likely to intensify, underscoring the need for more accessible guidance and practical support to help SMEs embed robust data protection routines into their day-to-day operations.
In terms of data storage practices, SMEs in Kosovo display a mixed and somewhat fragmented pattern of adoption (Figure 4.8). While almost a third of SMEs in Kosovo report using a combination of cloud and on‑site storage, which is typically associated with more digitally mature and resilient data management models (OECD, forthcoming[19]), a substantial 30% are unsure where their business data are stored, indicating significant gaps in digital literacy and limited access to technical guidance. This high share of firms unable to specify their storage model raises particular concerns: uncertainty about where data reside can increase vulnerability to security breaches, hinder effective incident response and limit firms’ ability to comply with data protection requirements. Finally, exclusive reliance on on-site storage is relatively low at 13%, suggesting that full dependence on local servers is less common, but that cloud adoption remains uneven and not always well understood.
Source: OECD (forthcoming[19]).
Furthermore, Kosovo’s legal and policy framework for data protection provides a solid basis, with the Law on Protection of Personal Data 2019 serving as the legal foundation. The law is mostly aligned with the EU General Data Protection Regulation and applies to public and private sector controllers and processors, requires transparency, secures data subject rights, and obliges controllers outside Kosovo to designate a local representative if they process personal data via equipment in Kosovo. A working group has been established to advance alignment with the EU Law Enforcement Directive (European Commission, 2025[53]). Enforcement and supervision are vested in the independent Information and Privacy Agency, which is empowered to monitor compliance, conduct inspections, issue guidelines and impose administrative measures. Nevertheless, a limitation seems to be that many smaller controllers and processors lack workflow protocols and awareness of their obligations under the law, which weakens practical implementation across private businesses (Zeqiraj, 2024[59]).
Additionally, support for businesses to comply with data protection obligations in Kosovo is emerging but remains modest and largely informational. Sector-specific guidance materials and a practical compliance checklist, such as How to Start Complying with the Personal Data Protection Law in Your Business (Haziraj, 2025[60]), offer SMEs introductory steps for meeting the legal requirements. The Agency for Information and Privacy supplements this with public recommendations and alerts, including clarifications on consent requirements in direct marketing. In early 2025, the agency also launched a new platform for reporting and identifying personal data breaches (Si, 2025[61]). While the platform is primarily oriented toward public institutions and institutional monitoring purposes, it contributes to building a broader picture of data security risks that can indirectly benefit businesses, including SMEs, by improving transparency about threats and trends. This represents a meaningful step toward strengthening oversight and enforcement capacity (AIP, 2025[62]).
Additional resources come from donor-supported initiatives, such as the Kosovo Inclusive Economic Engagement Toolkit, which provides MSMEs with practical guidance on data protection principles, internal audits and staff training (KCDF, 2025[63]). The EEN KosInn further supports SMEs by offering advisory services on EU-aligned standards, including data protection compliance (EEN KosInn, 2025[64]). While these tools help bridge important knowledge gaps, they remain fragmented and limited in scale, underscoring the need for more systematic and SME-oriented support mechanisms.
4.3.2. Strengthening SME cybersecurity resilience
Cybersecurity weaknesses tend to weigh more heavily on SMEs than on larger firms, as smaller enterprises often lack the financial buffers, technical expertise and incident-response capacity needed to absorb cyber shocks (OECD, 2021[2]). Beyond direct losses, inadequate cybersecurity can also constrain business growth by limiting access to procurement contracts, international value chains and partnerships with larger firms that increasingly require compliance with defined digital security standards (OECD, 2023[18]). Strengthening SME cybersecurity is, therefore, not only a matter of reducing exposure to cyber risks, but also a prerequisite for participation in more integrated, trust-based digital markets.
Cybersecurity has become an increasingly pressing issue in Kosovo as public institutions and businesses face a rise in cyberattacks, prompting the government to introduce measures such as the recent ban of TikTok in public institutions due to security risks (Zeqiri and Hoti, 2024[65]). These steps signal growing institutional concern over digital vulnerabilities that affect the wider economy, particularly SMEs. Yet, despite the economy’s growing exposure to such risks, citizen awareness remains low: only 14% report that hybrid or cyber-related threats negatively impact their feeling of security – a share significantly lower than in other neighbouring economies (RCC, 2023[66]).
At the SME level, businesses in Kosovo face substantial obstacles in strengthening their cybersecurity practices, driven by low awareness, limited internal capacity and a lack of tailored support. Almost 35% of surveyed SMEs do not use any cybersecurity measures, a share significantly higher than the OECD sample average of 9% (Bianchini and Lasheras Sancho, 2025[1]). Among firms that do implement cyber safety measures, adoption is concentrated almost exclusively in basic measures: 50% report using strong passwords and 27% rely on antivirus software. More advanced practices such as two-factor authentication, firewall systems, cybersecurity training or regular security assessments are rarely used (Figure 4.9) (OECD, forthcoming[19]). This reliance on minimal, entry-level measures suggests that many SMEs lack the knowledge, resources or perceived urgency to invest in more robust cybersecurity safeguards.
Note: VPN: virtual private network.
Source: OECD (forthcoming[19]).
Survey findings also reveal important vulnerabilities related to cyber incidents. About 17% of surveyed SMEs report having been hacked, a rate below the OECD sample of 32% (Bianchini and Lasheras Sancho, 2025[1]), while 66% state they have not experienced a breach (OECD, forthcoming[19]). However, a further 17% of surveyed SMEs in Kosovo are unsure whether they have been attacked, pointing to significant gaps in monitoring, detection capacity and basic cybersecurity awareness. This uncertainty suggests that many surveyed SMEs may lack the systems or expertise needed to identify breaches, leaving them exposed to undetected risks. Although the reported incidence of attacks is not exceptionally high, the combination of limited monitoring and low adoption of protective measures amplifies firms’ vulnerability. Cost perceptions also play a notable role: as in other WBT economies, cybersecurity tools, professional services and specialised training are often viewed as costly, discouraging proactive SME investment (OECD, forthcoming[19]).
At the institutional level, the government has upgraded its cybersecurity policy framework with the adoption of the Cyber Security Strategy 2023-2027, which now serves as the central reference point for efforts to strengthen digital resilience. The strategy, developed under the Ministry of Internal Affairs, sets a vision of a “safe and resilient online environment for all citizens, businesses and the government” and explicitly recognises the role of the private sector, calling on institutions to create mechanisms, guidelines and fora to support businesses in meeting cybersecurity standards and promote an ecosystem of cybersecurity start-ups. However, while the framework acknowledges the importance of business preparedness and public-private co-operation, it does not yet translate this into a detailed set of SME‑specific measures or tailored capacity-building programmes, leaving the practical implications for micro and small enterprises only partially addressed.
Complementary digital policy documents also contribute to Kosovo’s cybersecurity agenda, albeit indirectly. The Digital Agenda for Kosovo 2030 frames cybersecurity and digital trust as preconditions for accelerated digital transformation, but its concrete impact on SME cyber-risk management remains to be seen, particularly as implementation is still at an early stage and business-facing guidance is limited.
On the legislative side, the adoption of the Law on Cyber Security in 2023 marked a major step in modernising Kosovo’s regulatory environment. It establishes the core principles of cybersecurity, clarifies institutional responsibilities, and foresees the creation of a Cyber Security Agency as the central authority for oversight and co-ordination, while also promoting inter-institutional co-operation and alignment with EU and Council of Europe standards (European Commission, 2024[51]). In line with ongoing EU integration efforts, Kosovo is working to further align its cybersecurity legislation with the European Union’s Network and Information (NIS2) Directive, including broadening sectoral coverage and strengthening obligations for risk management and incident reporting (European Commission, 2024[51]). Although the law primarily targets operators of essential services and key digital service providers, it indirectly affects SMEs by raising baseline security expectations across the economy and reinforcing an environment of digital trust. At the same time, the evolving regulatory landscape may create new compliance and capacity challenges for smaller firms, particularly in the absence of dedicated SME-oriented support mechanisms.
Beyond formal policy and legal frameworks, Kosovo benefits from a number of cybersecurity initiatives supported by public institutions, international partners, civil society organisations and academia. On the public sector side, the Kosovo Computer Emergency Response Team remains the core operational actor, monitoring cyber incidents, issuing alerts, and providing technical guidance to public institutions and, indirectly, businesses. These efforts are being reinforced by upcoming capacity-building programmes such as the EUR 120 000 civil servant cybersecurity training project, to be launched by the Ministry of Industry, Entrepreneurship and Trade in 2025, as well as the establishment of a cybersecurity lab within the Agency for Strategic Planning, designed to simulate cyberattacks and provide hands-on training in co-operation with the Ministry of Economy.1 Broader resilience efforts also include the Critical Infrastructure Digitalisation and Resilience project, which since 2021 supports critical infrastructure operators in assessing vulnerabilities and strengthening preparedness against disruptions (Cybil, 2021[67]).
Civil society and media also contribute to cybersecurity awareness. The CyberSecure Kosovo initiative, led by Open Data Kosovo with Arcus and the e-Governance Academy, provides cybersecurity assessments, tailored interventions, and capacity building for independent media and civil society organisations, indirectly contributing to a safer digital environment for SMEs (Fazliu, 2025[68]). In parallel, universities, ICT associations and innovation centres deliver educational and awareness-raising activities, complemented by targeted donor-supported initiatives. Notably, the 2022 Fulbright Alumni Small Grants project on SME cybersecurity succeeded in training 144 employees across 25 companies, exceeding its initial goal of training staff from 10 organisations (KUSA, 2022[69]). The project has since been completed without a formal extension, underscoring the current project-based nature of SME cybersecurity support in Kosovo.
The way forward for establishing a trustworthy and safe business environment
Develop SME-specific data protection guides and sector-tailored compliance toolkits. Kosovo should task the Information and Privacy Agency, in co-operation with the Ministry of Economy, with producing simple, industry-specific guidance packages that translate legal obligations into practical steps for SMEs. They should include plain language checklists, template privacy notices, examples of compliant data processing workflows, and short guidance on cloud vs. on-site storage, all adapted to the most common SME sectors such as retail, hospitality and professional services. The guides should be accompanied by brief online tutorials or “how-to” sessions delivered through existing channels (e.g. KIESA, chambers of commerce). By replacing general legal information with practical, actionable guidance, Kosovo can help SMEs embed data protection routines into their daily operations and reduce the high share of firms uncertain about their data management practices.
Launch a SME Cybersecurity Starter Programme delivering basic security packages, practical training and low-cost diagnostics. To address the low use of cybersecurity measures among SMEs, the government should introduce a structured programme that provides a standardised “basic protection package”, including guidance on password protocols, two-factor authentication set-up and antivirus installation (Box 4.6). This should be complemented by introductory, hands-on workshops delivered through institutions such as the Kosovo Computer Emergency Response Team, ITP Prizren and ICT associations, alongside simple cybersecurity self-assessment tools that allow SMEs to identify gaps in monitoring, incident response and data‑handling practices. Participating firms could receive short, guided onboarding sessions to implement minimum safeguards during the training itself. This operational, practice-oriented approach would help SMEs move quickly beyond informal or ad hoc practices and raise baseline cyber readiness across the enterprise sector.
In 2022, the United States launched the Cybersecurity for Small Business Pilot Program, implemented by the Small Business Administration in co-operation with the Cybersecurity and Infrastructure Security Agency, to help small businesses improve cybersecurity practices through practical training and counselling. The programme was designed to address capacity constraints faced by small and medium-sized enterprises (SMEs) by pairing financial support with guidance, rather than imposing complex compliance requirements.
The pilot focused on providing SMEs with access to basic cybersecurity assessments, tailored training and advisory support, alongside practical tools such as checklists and guidance on data protection, incident response and cyber hygiene. The programme enabled smaller firms to strengthen compliance with data protection and cybersecurity expectations without disproportionate administrative or financial burden.
This experience is relevant for Kosovo as it implements the 2025 Law on Protection of Personal Data. Complementing the new legal framework with SME-tailored compliance tools, such as a unified Data Protection Toolkit with templates for privacy policies, consent forms, records of processing activities and data-breach procedures, would help micro and small enterprises meet their obligations in a practical manner. Introducing a simplified compliance path for low-risk SMEs, aligned with the European Union’s General Data Protection Regulation’s risk-based principles and supported by awareness workshops delivered through chambers of commerce and development agencies, would mirror the programme’s emphasis on facilitation and capacity building rather than enforcement alone.
Source: US Small Business Administration (2022[70]).
As SMEs move beyond basic digital adoption, the central challenge becomes whether they can integrate advanced technologies in ways that raise productivity while remaining inclusive and sustainable. Technologies such as AI, advanced analytics and automation are increasingly shaping how firms innovate, reorganise production and compete, yet their diffusion remains highly uneven across firm sizes. Across OECD Member countries, AI (including generative and non-generative forms) is used by about 12 of small enterprises, compared to 40% of large companies, illustrating a persistent adoption gap (OECD, 2025[71]). Moreover, OECD findings show that smaller firms lag far behind large enterprises in adopting AI and other frontier technologies, reflecting persistent constraints related to limited financial resources, skills gaps, data availability and weaker organisational capacity (OECD, 2025[71]; 2025[33]), despite a marked acceleration in SME adoption between 2022 and 2024 driven by generative AI tools that have significantly reduced barriers to uptake (OECD, 2024[72]). Firm-level evidence also confirms that AI adoption overall is closely linked to complementary assets such as digital skills, data capabilities and organisational readiness, which are more prevalent among larger firms (Calvino and Fontanelli, 2023[73]). Without targeted policy support, these barriers risk reinforcing productivity divides, as the benefits of advanced digitalisation accrue mainly to firms already well-positioned to absorb and deploy new technologies.
In Kosovo, this challenge is particularly relevant as the adoption of advanced and sustainable digital technologies among SMEs remains uneven and is largely driven by donor-supported initiatives rather than co‑ordinated government programmes. Although strategic and policy frameworks signal ambition to promote emerging technologies and green-digital transitions, concrete SME-oriented pathways for AI, automation and data-driven solutions remain limited, and financial instruments linking digital and environmental objectives are yet to be developed. This section examines how SMEs in Kosovo are adopting AI and emerging technologies and the extent to which policy instruments support a sustainable and energy-efficient uptake, identifying both progress made and remaining bottlenecks.
4.4.1. Encouraging SME adoption of artificial intelligence and emerging technologies
Advanced digital technologies, including AI and data-driven solutions, are increasingly influencing how firms organise production, deliver services and take strategic decisions, offering significant potential for efficiency gains and innovation (OECD, 2022[74]). However, SMEs tend to realise these benefits to a much lesser extent than larger enterprises, as they often lack the data foundations, managerial capabilities and strategic capacity needed to embed advanced technologies into core business processes (OECD, 2021[2]). Consequently, SME engagement with AI frequently remains experimental and tool-oriented, relying on readily available applications rather than driving deeper organisational change, an outcome that underscores the importance of targeted policy support to enable more transformative and productivity-enhancing adoption.
At the strategic level, Kosovo has taken steps to address these gaps through its Digital Agenda (Table 4.3). Notably, Strategic Objective 2: Digital Transformation of Business, explicitly aims to support SMEs in adopting new technologies and sets a measurable target of ensuring that 75% of enterprises use cloud computing services, big data and AI by 2030, signalling a strong policy ambition. However, translating this objective into effective implementation will require clearly defined support instruments, practical guidance and accessible capacity-building mechanisms to ensure that SMEs can realistically meet these targets.
Source: Information provided by the government of Kosovo during the assessment period (2025).
Other strategic frameworks complement the Digital Agenda, though more indirectly. Kosovo’s Development Strategy and Plan 2030 include references to emerging technologies within its broader priorities on research, advanced skills and innovation ecosystem strengthening. Yet these frameworks remain high-level and do not specify concrete mechanisms, such as pilot projects, sector-specific AI use cases or targeted support instruments, that could enable SMEs to meaningfully engage with emerging technologies.
Financial and technical support for the adoption of emerging technologies in Kosovo remains at an early stage and is still driven largely by donor-backed initiatives and innovation hubs rather than by dedicated, large-scale government programmes. ITP Prizren plays a central role in this ecosystem, hosting digital transformation assessments; access to prototyping and testing facilities; and advisory services related to AI, automation and cybersecurity through its DIG-4K Hub and Digital Transformation Centre (Innovation and Training Park (ITP) Prizren, 2025[43]). Similarly, the Innovation Centre Kosovo provides training, incubation and mentorship in ICT and emerging technology fields, including AI-related workshops and cloud-based solutions, though its services primarily target start-ups and digitally advanced SMEs rather than the broader SME base (ICK, 2025[45]).
Additional support is provided through ecosystem actors with a stronger focus on applied innovation and skills diffusion. The UBT Innovation Hub links SMEs with academic research, applied AI projects and technology pilots while the Jakova Innovation Center supports SMEs outside Pristina through training and early-stage experimentation with digital and data-driven solutions. EU-supported initiatives such as the EEN KosInn further complement these efforts by offering technology-transfer support, brokerage services and access to European innovation partners (EEN KosInn, 2025[35]). These initiatives provide important entry points for SME exposure to emerging technologies, including AI, but their reach remains uneven and concentrated in innovation-active areas and sectors. The absence of a co-ordinated, government-led programme linking diagnostics, advisory services and financing continues to limit the scale, inclusiveness and productivity impact of emerging technology adoption among SMEs.
On the demand side, adoption of emerging technologies among SMEs in Kosovo remains uneven. About 48% of surveyed SMEs report using some form of AI tools for their products or processes, indicating a relatively substantial level of early uptake (Figure 4.10) (OECD, forthcoming[19]). This is above the WBT regional findings, where 39% of SMEs report using some form of AI (OECD, forthcoming[19]). However, about 67% of firms use no advanced technologies beyond basic digital tools, and uptake of other frontier technologies remains limited: only 19% use Internet of Things and 13% report using blockchain solutions.
Note: AI: artificial intelligence.
Source: OECD (forthcoming[19]).
Among firms that do use AI, adoption is concentrated in generative AI applications, such as content creation and information-generation tools, used by 35% of surveyed SMEs. Only 15% of surveyed SMEs deploy machine-learning models and the same percentage use custom AI systems or other advanced AI solutions. Moreover, newer firms appear more inclined to experiment with emerging technologies: 58% of businesses established after 2015 use AI, compared with 46% of older firms (OECD, forthcoming[19]). Taken together, these trends suggest that while experimentation with tools such as generative AI is increasing, the integration of more complex AI technologies remains limited, pointing to significant scope for deeper and more strategic adoption across SMEs.
SMEs in Kosovo express broadly positive and confident perceptions of AI, reflecting a growing belief in its business potential. Survey findings indicate a strong agreement that AI is a valuable tool, with 78% of surveyed SMEs stating that it boosts innovation, 72% believing it improves daily efficiency and 65% considering it useful for identifying new revenue sources (OECD, forthcoming[19]). Across the broader OECD sample, most AI users report at least a moderate business impact: 43% cite efficiency gains and 18% report significant improvements, yet only 6% report experiencing transformational change (Bianchini and Lasheras Sancho, 2025[1]).
The optimism among surveyed SMEs in Kosovo may also reflect limited awareness of potential risks and regulatory obligations associated with AI use, as concerns about data protection, misinformation and reliability appear relatively low among surveyed firms. Indeed, 67% of respondents report not being aware of data-privacy issues, and only 8% believe AI produces harmful content (OECD, forthcoming[19]). On the other hand, concerns about data privacy, harmful content and legal risks appear to be widespread among SMEs in OECD countries (Bianchini and Lasheras Sancho, 2025[1]).
Against this backdrop, the relatively low level of concern among SMEs in Kosovo suggests that positive expectations may be outpacing both practical experience with AI’s transformative potential and awareness of the associated risks. However, this consensus weakens when SMEs assess the broader organisational implications of AI: views are evenly split on whether AI would allow firms to operate with fewer staff, pointing to underlying uncertainty about its longer term impact on employment structures and business operations (OECD, forthcoming[19]).
Additionally, as Kosovo advances its broader digital transformation, the environmental implications of the use of emerging technologies require closer policy attention. Worldwide, data-processing infrastructures are becoming major energy consumers: in 2024, global data centres consumed about 415 terawatt hours (TWh), or roughly 1.5% of global electricity use, and, according to the International Energy Agency (IEA), this demand may more than double to around 945 TWh by 2030 (IEA, 2025[75]). For Kosovo, where electricity generation remains heavily dependent on lignite and other fossil fuel sources, these trends imply that policies encouraging AI, cloud migration or automation should incorporate clear “green-digital” safeguards. This includes promoting energy-efficient ICT infrastructure; encouraging cloud and data centre providers to rely on renewable or low-carbon energy sources; and offering practical guidance to SMEs on selecting efficient hardware, optimising data storage and managing the life cycle impacts of digital investments (OECD, 2025[76]). Without integrating environmental considerations into digitalisation policies, Kosovo risks facing rising operational costs for firms and increased strain on its already carbon-intensive energy system, potentially counteracting the productivity and competitiveness gains that emerging technologies offer.
4.4.2. Promoting a sustainable digital transformation
As digitalisation advances, its interaction with environmental performance is becoming increasingly central to SME competitiveness, influencing how firms manage energy consumption, resource use and compliance with environmental standards. Digital technologies can enhance efficiency, transparency and monitoring, but when adopted without sustainability considerations they may also raise operating costs and contribute to higher emissions, particularly through energy-intensive ICT use (OECD, 2024[4]; 2023[18]). The ability to align digital upgrading with environmental objectives is, therefore, emerging as a key factor in ensuring that digital transformation supports long-term productivity and resilience rather than creating new cost or compliance pressures for SMEs.
Kosovo’s strategic frameworks increasingly signal the need to bridge digital transformation and environmental sustainability, but concrete pathways for SMEs to integrate digital and green investments remain underdeveloped. Kosovo’s Development Strategy and Plan 2030 explicitly positions a “digital, circular and competitive economy” as a priority within Pillar I – Sustainable Economic Development, highlighting that businesses will be supported in innovation, digitisation and sustainability efforts. Likewise, the Digital Agenda for Kosovo 2030 aligns itself with the EU Green Deal and identifies sustainable digital technologies and energy-efficient ICT infrastructure among its strategic orientations. However, without targeted measures to help SMEs adopt energy-efficient digital technologies, access greener digital infrastructure and integrate sustainability considerations into their digital investments, there is a risk that the expansion of data-intensive technologies increases energy demand and operational costs, undermining environmental objectives.
In addition to the digital and development strategies outlined above, climate and energy planning frameworks in Kosovo touch upon SME-related digital and circular economy priorities. Kosovo’s Energy and Climate Plan 2025-2030 identifies the “acceleration of digital transformation and innovation in SMEs and start-ups” and the “mobilisation of industry towards the circular economy” as strategic objectives. However, these priorities are presented in parallel rather than as an integrated green-digital pathway specifically tailored to SME needs. Moreover, Kosovo’s Energy and Climate Plan has not yet been formally approved or accepted by the Energy Community. Kosovo submitted the draft to the Energy Community Secretariat in July 2023, received recommendations at end of 2023, but has not yet finalised or resubmitted the plan, with 2030 targets in legislation remaining outstanding. As a result, while these frameworks signal emerging alignment between climate, digitalisation and economic development objectives, they do not yet translate into binding or operational policy commitments.
Financial support for SME uptake of digital technologies for environmental management, energy efficiency and circular business models in Kosovo is still emerging and remains fragmented. There is no dedicated, comprehensive financial instrument that explicitly combines digital and green objectives for SMEs; instead, support is channeled through a mix of general digitalisation facilities and green credit lines where digital components may be eligible. A notable example is the Clean Energy Grants Scheme signed between KIESA and LuxDev, worth EUR 1 million, aimed specifically at MSMEs and focusing on increasing energy efficiency and renewable energy use in production (KIESA, 2025[77]). The scheme co-finances investments that improve energy performance and reduce electricity costs, including renewable energy generation (photovoltaic and solar thermal systems), battery storage for solar electricity, energy-efficiency measures in business buildings, and equipment that reduces energy consumption in production lines. Under this scheme, enterprises may receive up to EUR 20 000 for a single measure (and up to EUR 25 000 for combined measures), supporting tangible investments that can indirectly enable greener and more digitally enabled production processes.
In parallel, donor support has a central role in financing Kosovo’s green and digital transition. The Go Digital programme provides credit lines via local partner banks, such as Banka për Biznes and NLB Banka Prishtina, to support SME investments in digitalisation and automation with a strong green component, combining loans with EU-funded grant incentives and technical assistance (Cela, 2025[42]). Additionally, the SME Go Green programme channels EBRD and EU funds to local banks (e.g. Raiffeisen Bank Kosovo, NLB Banka Prishtina) for on-lending to MSMEs investing in green technologies, often coupled with investment incentives of up to 15% of the amount of the loan (EBRD, 2024[78]). While these facilities are not exclusively focused on digital solutions, they can finance projects where digital technologies underpin energy efficiency, environmental management or cleaner production.
Furthermore, some initiatives indirectly allow SMEs to explore the link between digitalisation and the green transition. At ITP Prizren, programmes such as BOOST x Kosovo and “Digitalisation of Micro and Small Businesses to Increase Their Resilience in the Crisis” introduce firms to energy management practices, green business models and digital tools that enhance resource efficiency, often supported by mentoring, on financing options (Box 4.7) (UNDP, 2025[79]; GIZ, 2024[12]). Complementing these, the TechEco Pathways Programme, implemented by the Innovation Centre Kosovo with LuxDev, supports green-digital skills through components such as GreenTech (training in ICT and renewable energy sectors) and DevelopHer (programming and cybersecurity skills for women and girls) (LuxDev, 2024[80]). Kosovo has also begun integrating digital sustainability practices into priority sectors; together with the Food and Agriculture Organization, it launched the Digital Agriculture Programme and Action Plan to embed digital tools across agricultural value chains, strengthen rural economies and align with EU standards (FAO, 2024[81]). Taken together, these initiatives demonstrate growing institutional attention to the twin transition, but their project-based and externally funded nature limits their continuity, scale and coverage across the SME population. This highlights the need to complement pilot initiatives with a more systematic, locally anchored advisory and financing framework for green-digital upgrading.
BOOST x Kosovo, implemented by UNDP Kosovo in partnership with the Innovation and Training Park (ITP) Prizren, helps small and medium-sized enterprises (SMEs) integrate sustainability and digitalisation into their business models. Launched as part of the United Nations Development Programme’s global BOOST platform, the Kosovo edition focuses specifically on strengthening SMEs’ resilience, green innovation capacity and ability to adopt technology-driven solutions that support environmental performance.
The programme combines training, mentoring and financial support to help SMEs translate green and digital ambitions into concrete business improvements. In its first edition, 50 SMEs were selected to participate in an intensive acceleration cycle covering 4 core modules: 1) Green Transformation; 2) Tech and Digital Transformation; 3) Impact Measurement and Management; and 4) Entrepreneurship and Business Acceleration. These modules provide firms with practical guidance on energy management, resource efficiency, circular business models and the integration of sustainable technologies into day-to-day operations.
Following the training phase, 15 SMEs were awarded grants of around EUR 20 000 each to scale the most promising green or digitally enabled solutions. Supported projects ranged from introducing renewable energy systems and energy-efficient equipment to developing digital tools that reduce resource consumption or improve environmental monitoring. However, the complete impact of the initiative on SMEs and their uptake of more sustainable digital practices is yet to be seen.
Source: UNDP (2025[79]).
Several donor-supported initiatives have also emerged with the objective of strengthening SME-level green and digital innovation-oriented investment. The Greening Private Enterprises in Kosovo project, funded by the Swiss Agency for Development and Cooperation and currently in its inception phase, aims to enhance SME competitiveness and climate resilience by supporting the adoption of cleaner, more resource-efficient technologies and practices, with a focus on inclusive and sustainable employment outcomes. Nevertheless, despite the growing number of donor-financed instruments, their design remains primarily financial segment oriented rather than SME-use-case oriented.
Moreover, the demand side illustrates a limited and uneven picture of SME engagement with sustainable digital practices. About 29% of surveyed SMEs have a formal plan or strategy to reduce their environmental footprint using digital tools, with uptake rising sharply to 80% among medium-sized firms, reflecting size‑based differences in administrative and strategic capacity (OECD, forthcoming[19]). At 60%, the largest share of all surveyed SMEs reports not having a formal plan but intends on developing one, indicating a substantial pool of enterprises that recognise the importance of environmental action, but require support to translate intentions into structured strategies (Figure 4.11). Only 7% of surveyed SMEs report having no formal plans at all, suggesting that outright disengagement is relatively rare.
Source: OECD (forthcoming[19]).
Engagement is notably higher among firms already active in green markets: 54% of SMEs offering green products or services report having formal sustainability plans, compared with just 13% among those that do not (OECD, forthcoming[19]). Overall these patterns point to a growing awareness of the relevance of digital tools for sustainability but also highlight a clear need for targeted policy guidance and financial incentives to help SMEs convert environmental intentions into actionable, digitally enabled practices.
Furthermore, adoption of digital technologies with clear environmental benefits, such as Internet of Things-based energy monitoring, smart metering, digital waste management systems or cloud-based paperless workflows, remains limited among SMEs in Kosovo, reflecting early-stage engagement with digitally enabled sustainability solutions. However, awareness of the environmental impact of purchasing ICT equipment is comparatively strong: 87% of surveyed SMEs report considering environmental factors when purchasing digital technologies or services, with particularly high uptake among medium-sized enterprises at 100%, compared to 86% of small enterprises and 83% of microenterprises (OECD, forthcoming[19]).
Early-stage engagement can also be seen with ICT disposal practices and e-waste management. About 40% of surveyed SMEs do not know how their ICT equipment is disposed of once it is no longer in use, indicating substantial information gaps and limited internal procedures (OECD, forthcoming[19]). Among the remaining firms, 24% report disposing of equipment through electronic waste channels, while another 24% retain old devices, often due to caution around data security or uncertainty about correct disposal methods. A smaller share, 11%, discard ICT equipment through general waste streams, underscoring persistently weak practices in environmentally sound disposal. The high proportion of firms unaware of their disposal methods points to a broader challenge: without clear guidance, dedicated services or awareness-raising efforts, many of Kosovo’s SMEs remain ill-equipped to manage ICT end-of-life processes in a sustainable manner.
When it comes to monitoring environmental performance, the picture is more mixed. While many SMEs track at least one sustainability indicator, most commonly energy consumption and energy efficiency, a significant share either does not monitor environmental performance at all (18%) or is unsure whether such metrics are tracked within their firm (27%) (OECD, forthcoming[19]), indicating notable gaps in awareness and internal systems. This pattern broadly reflects trends observed across OECD Member countries, where only 28% of SMEs use digital tools to monitor environmental data, primarily focusing on energy consumption, while the tracking of other indicators such as carbon emissions, waste or water use remains below 10% (Bianchini and Lasheras Sancho, 2025[1]). However, evidence suggests that Kosovo faces an even more pronounced challenge, particularly in moving beyond basic energy metrics towards more comprehensive and systematised sustainability monitoring (Figure 4.12).
Note: Tracking energy efficiency: e.g. reductions in energy waste, impact of energy-saving upgrades like LED lighting or efficient machinery; Tracking energy consumption: e.g. electricity and gas consumption by department or production line, peak vs. off-peak usage patterns, etc.
Source: OECD (forthcoming[19]).
The way forward for supporting the sustainable uptake of advanced technologies
Develop an AI Strategy with a dedicated pillar on SME adoption and responsible AI uptake. Kosovo should accelerate the preparation of its AI Strategy to provide a coherent framework linking AI, broader digitalisation and sustainable technology use (Box 4.8). A dedicated SME pillar should identify priority sectors and use cases; outline responsible AI principles adapted to SMEs; and address key risks related to data protection, cybersecurity, reliability and energy use. Practical tools such as vendor selection guides, basic data governance templates and energy-efficiency checklists could support implementation. The strategy should also define a co-ordinated capacity-building agenda, delivered through innovation hubs, universities and business associations, offering short, applied training on AI literacy, data readiness, risk management and sustainable deployment. This would help SMEs experiment with AI solutions more safely and translate emerging technology ambitions into productivity-enhancing adoption.
Spain’s National Artificial Intelligence Strategy, launched in 2020 as a core component of the Digital Spain 2025 agenda, provides a comprehensive framework for developing trustworthy, human-centric and sustainable artificial intelligence (AI) across the economy. The strategy combines investment in research and infrastructure with measures to promote responsible adoption, particularly among businesses and small and medium-sized enterprises (SMEs).
The strategy is structured around several strategic pillars, including strengthening AI research capacity; promoting data and digital infrastructure; fostering AI adoption in the private sector; and ensuring ethical, inclusive and environmentally sustainable deployment. It explicitly emphasises trustworthy AI, with measures addressing transparency, accountability, data governance and societal impacts, alongside efforts to promote energy-efficient computing and sustainable digital infrastructures.
For enterprises, the strategy is complemented by targeted programmes such as AI adoption pilots, sector-specific use cases and support for digital innovation hubs, which provide experimentation facilities, advisory services and access to expertise. These instruments help SMEs test AI solutions before full deployment and integrate them into core business processes while respecting ethical and sustainability principles.
Spain’s approach illustrates how an AI strategy can combine innovation, responsible governance and sustainability considerations within a single framework while providing practical support mechanisms to help SMEs adopt AI safely and productively.
Sources: Spanish Ministry of Economy, Commerce and Business (2020[82]); STIP Compass (2020[83]).
Establish a support facility for SME adoption of advanced digital technologies. Kosovo should introduce a dedicated support window, anchored within KIESA and implemented with innovation hubs and donor partners, to help SMEs adopt advanced technologies such as AI, automation and data analytics tools in ways that also improve energy and resource efficiency. The facility should combine simplified grants or vouchers for practical, business-relevant applications (e.g. AI-enabled workflows, smart inventory systems or digital process automation) with a Green Digital Toolkit providing step-by-step guidance on energy-efficient ICT use, responsible procurement and e-waste management (Box 4.9). Building on existing KIESA digitalisation schemes, the instrument should introduce a specific green-digital category, simplified application procedures for microenterprises and small firms, and standardised cost lists to ease access. Delivery could be co-ordinated by KIESA, with technical support from structures such as ITP Prizren, innovation centres and certified advisors, ensuring that SMEs can adopt advanced technologies in a way that supports productivity growth and environmental objectives while avoiding fragmented support programmes.
Ireland has integrated green and digital priorities within its small and medium-sized enterprise (SME) support framework, notably through the Harnessing Digital – Digital Ireland Framework and the SME Strategy for a Sustainable and Digital Europe. A central instrument is the Climate Toolkit 4 Business, a government-led initiative designed to help SMEs begin their transition toward lower carbon and more resource-efficient operations.
The toolkit provides practical, step-by-step support rather than complex regulatory guidance, making it accessible for smaller firms with limited internal capacity. The toolkit’s key features include:
Carbon footprint calculator, allowing SMEs to estimate emissions based on energy use, travel and waste data.
Tailored action plans, offering concrete recommendations to improve energy efficiency, reduce resource consumption and adopt sustainable practices.
Integrated financial guidance, linking firms to relevant grants, energy audit schemes and funding for low-carbon technologies.
Practical sustainability roadmaps, helping SMEs identify cost-saving opportunities, improve resource efficiency and respond to growing demand for environmentally responsible products and services.
Ireland’s approach shows how a simple, user-friendly toolkit, combined with access to financing, can help SMEs translate sustainability goals into concrete actions while aligning digital adoption with environmental objectives.
Source: National Enterprise Hub (2026[84]).
References
[62] AIP (2025), “The Commissioner for Information and Privacy welcomes the team that created the platform for identifying personal data leaks in a meeting”, https://aip.rks-gov.net/en/the-commissioner-for-information-and-privacy-welcomes-the-team-that-created-the-platform-for-identifying-personal-data-leaks-in-a-meeting.
[58] AIP (2025), “The Information and Privacy Agency presents the semi-annual work report for the January-June 2025 period”, https://aip.rks-gov.net/en/the-information-and-privacy-agency-presents-the-semi-annual-work-report-for-the-january-june-2025-period.
[56] Association of Journalists of Kosovo (2024), “Cyber attack against Sbunker”, web page, https://agk-ks.org/en/cases/sulm-kibernetik-ndaj-sbunker-prishtine-16.07.2024.
[39] Berlingieri, G., P. Blanchenay and C. Criscuolo (2017), “The great divergence(s)”, OECD Science, Technology and Industry Policy Papers, No. 39, OECD Publishing, Paris, https://doi.org/10.1787/953f3853-en.
[1] Bianchini, M. and M. Lasheras Sancho (2025), SME Digitalisation for Competitiveness: 2025 OECD D4SME Survey – Policy Highlights, OECD, Paris, https://www.oecd.org/content/dam/oecd/en/networks/oecd-digital-for-smes-global-initiative/D4SME-2025-Policy-Highlights.pdf.
[38] Brynjolfsson, E. and A. McAfee (2011), Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, Digital Frontier Press, https://www.academia.edu/2662722/Race_against_the_machine_How_the_digital_revolution_is_accelerating_innovation_driving_productivity_and_irreversibly_transforming_employment_and_the_economy.
[73] Calvino, F. and L. Fontanelli (2023), “A portrait of AI adopters across countries: Firm characteristics, assets’ complementarities and productivity”, OECD Science, Technology and Industry Working Papers, No. 2023/02, OECD Publishing, Paris, https://doi.org/10.1787/0fb79bb9-en.
[57] Canolli, A. (2025), “Kosovo’s data privacy crisis: Systematic failure in the digital age”, Balkan Insight, https://balkaninsight.com/2025/04/09/kosovos-data-privacy-crisis-systematic-failure-in-the-digital-age.
[11] Cela, J. (2025), “EBRD and EU support the digitalisation of SMEs in Kosovo”, news, European Bank for Reconstruction and Development, https://www.ebrd.com/home/news-and-events/news/2025/ebrd-and-eu-support-the-digitalisation-of-smes-in-kosovo.html.
[42] Cela, J. (2025), “EBRD lends €20 million to Kosovo’s NLB Banka Prishtina”, news, European Bank for Reconstruction and Development, https://www.ebrd.com/home/news-and-events/news/2025/ebrd-lends--20-million-to-kosovo-s-nlb-banka-prishtina.html.
[67] Cybil (2021), “Critical Infrastructure Digitalization and Resilience (CIDR) in Kosovo”, web page, https://cybilportal.org/projects/critical-infrastructure-digitalization-and-resilience-cidr-in-kosovo.
[41] EBRD (2025), “Advice for small businesses”, https://www.ebrd.com/home/what-we-do/products-and-services/support-for-start-ups-and-msmes/access-business-advice.html.
[78] EBRD (2024), “EBRD and EU launch SME Go Green programme in Kosovo: New credit line to increase green funding for local businesses”, https://www.eeas.europa.eu/delegations/kosovo/ebrd-and-eu-launch-sme-go-green-programme-kosovo-new-credit-line-increase-green-funding-local_en.
[13] EBRD (2023), “Small and Medium Enterprise (SME) Competitiveness Support Programme”, web page, https://kosovoprojects.eu/project/small-and-medium-enterprise-sme-competitiveness-support-programme/#:~:text=The%20Kosovo%20SME%20Competitiveness%20Support,product%20safety%2C%20product%20quality%20and.
[14] ECIKS (2022), “Market Access and Business Development Services for Kosovo Companies (ACCESS)”, web page, https://www.entwicklung.at/en/projects/detail-en/market-access-and-business-development-services-for-kosovo-companies.
[16] ECIKS (2020), ““Biznesi im” – the Austrian concept of digital services for businesses”, web page, https://eciks.com/my-business-the-austrian-concept-of-digital-services-for-businesses.
[52] EDPB (2025), Data Protection Guide for Small Businesses, European Data Protection Board, https://www.edpb.europa.eu/sme-data-protection-guide/data-protection-benefits-for-you_en?utm_source.
[35] EEN KosInn (2025), “EEN KosInn launches ambitious four-year programme to drive Kosovo’s SMEs into global markets”, https://eenkosovo.eu/een-kosinn-launches-ambitious-four-year-programme-to-drive-kosovos-smes-into-global-markets.
[64] EEN KosInn (2025), “Helping ambitious SMEs to innovate and grow internationally”, https://eenkosovo.eu.
[10] Eurofound and Cedefop (2025), SME Digitalisation in the EU: Trends, Policies and Impacts, Publications Office of the European Union, Luxembourg, https://www.eurofound.europa.eu/en/publications/all/sme-digitalisation-eu-trends-policies-and-impacts.
[44] European Commission (2025), “DIG-4K Hub Kosovo”, web page, https://european-digital-innovation-hubs.ec.europa.eu/edih-catalogue/dig-4k.
[53] European Commission (2025), Kosovo 2025 Report, European Commission, Brussels, https://enlargement.ec.europa.eu/document/download/127563ea-4c03-44a4-b56c-2d569afd86a5_en?filename=kosovo-report-2025.pdf.
[50] European Commission (2025), “Supporting policy with scientific evidence”, web page, https://knowledge4policy.ec.europa.eu/projects-activities/monitoring-sme-performance-eu_en.
[32] European Commission (2024), European Innovation Scoreboard 2024, Publications Office of the European Union, https://op.europa.eu/fr/publication-detail/-/publication/8a4a4a1f-3e68-11ef-ab8f-01aa75ed71a1.
[51] European Commission (2024), Kosovo Report 2024, European Commission, Brussels, https://enlargement.ec.europa.eu/document/download/c790738e-4cf6-4a43-a8a9-43c1b6f01e10_en?filename=Kosovo%20Report%202024.pdf.
[23] European Commission (2023), Report on the State of the Digital Decade 2023, European Commission, https://digital-strategy.ec.europa.eu/en/library/2023-report-state-digital-decade.
[30] European Commission (2022), “Supporting reforms to strengthen labour markets social protection systems, and migration management”, web page, https://reforms-investments.ec.europa.eu/technical-support-instrument-0/labour-market-and-social-protection/support-employers-promoting-skills-development-latvia_en.
[48] Eurostat (2024), Research and development expenditure by sector of performance, Eurostat, https://ec.europa.eu/eurostat/databrowser/view/tsc00001__custom_18725399/default/table.
[81] FAO (2024), “Digital Villages Initiative in Europe and Central Asia”, news, https://www.fao.org/digital-villages-initiative/europe/news-and-articles/news-and-articles-detail/kosovo-launches-the-development-of-the-digital-agriculture-programme-and-action-plan-with-fao-support/en?utm_source.
[68] Fazliu, B. (2025), CyberSecure Kosovo: Strengthening Cyber Resilience in Media and Civil Society, Open Data Kosovo, https://opendatakosovo.org/portfolio/cybersecure-kosovo-strengthening-cyber-resilience-in-media-and-civil-society-2.
[49] France Num (2025), “About”, web page, https://www.francenum.gouv.fr.
[12] GIZ (2024), “Digitalisation of Micro and Small Businesses to Increase Their Resilience in the Crisis”, web page, https://kosovoprojects.eu/project/digitalisation-of-micro-and-small-businesses-to-increase-their-resilience-in-the-crisis.
[36] Hall, B., F. Lotti and J. Mairesse (2012), “Evidence on the impact of R&D and ICT investment on innovation and productivity in Italian firms”, NBER Working Papers, No. 18053, National Bureau of Economic Research, Cambridge, MA, https://doi.org/10.3386/w18053.
[60] Haziraj, V. (2025), Practical Guide: How to Start Complying with the Personal Data Protection Law in Your Business, Vokshi & Lata, Pristina, https://vokshilata.com/guide-data-protection-business.
[45] ICK (2025), Innovation Centre Kosovo website, https://ickosovo.com.
[26] ICT for Kosovo’s Growth (2025), “ICT for Kosovo’s Growth”, https://kosovoprojects.eu/project/eu-support-for-the-competitiveness-of-kosovos-ict-sector/.
[75] IEA (2025), Energy and AI, International Energy Agency, Paris, https://www.iea.org/reports/energy-and-ai.
[43] Innovation and Training Park (ITP) Prizren (2025), Innovation & Training Park Prizren website, https://itp-prizren.com/#.
[15] ITP (2023), “Digital4Business: Empower Kosovo’s Micro and Small Enterprises to Embrace the Benefits of the Digital Age”, web page, https://itp-prizren.com/digital4business-empower-kosovos-micro-and-small-enterprises-to-embrace-the-benefits-of-the-digital-age/.
[63] KCDF (2025), “Data security and compliance: What MSMEs in Kosovo need to know”, https://kcdf.org/toolkit/data-security-and-compliance-what-msmes-in-kosovo-need-to-know.
[9] KCGF (2025), “Start-up Window”, web page, https://fondikgk.org/en/start-up-window.
[8] KIESA (2026), Annual Work Report of KIESA, Kosovo Investment and Enterprise Support Agency, Pristina, https://kiesa.rks-gov.net/desk/inc/media/4ED7D5E9-4978-4F61-9F3A-9A0D6971EFCC.pdf.
[77] KIESA (2025), “Agreement signed between KIESA and LuxDev for clean energy grant scheme, worth 1 million euros”, news, https://kiesa.rks-gov.net/Page.aspx?id=2,5,1004.
[6] KIESA (2025), “Public Call for Support of MSMEs for Digitalization Services”, https://kiesa.rks-gov.net/page.aspx?id=2,134,1003.
[7] Kosovo Ministry of Industry, Entrepreneurship and Trade (2024), Guidelines for Application to the Public Call for Financial Subsidies: Digital Empowerment Initiaitve (DEI) – Digitalisation Grant Scheme, Government of the Republic of Kosovo, https://mint.rks-gov.net/desk/inc/media/DEC67510-6EEA-4D7A-A011-34CFF0E665CE.pdf.
[69] KUSA (2022), “Developing cybersecurity education and awareness program for small and medium-sized enterprises in Kosovo”, web page, https://kusalumni.org/developing-cybersecurity-education-and-awareness-program-for-small-and-medium-sized-enterprises-in-kosovo/?utm_source.
[46] KVI (2025), Kosovo Virtual Incubator website, https://kvi.ubt-uni.net.
[40] LuxDev (2024), “Innovative businesses to get a boost with new grant scheme”, news, https://luxdev.lu/en/news/innovative-businesses-get-boost-new-grant-scheme.
[28] LuxDev (2024), “New partnership to enhance skills for future jobs”, news, https://luxdev.lu/fr/node/7150#:~:text=The%20Skills%20for%20sustainable%20jobs%20in%20Kosovo%20project%20is%20financed,development%20in%20a%20greener%20Kosovo.
[80] LuxDev (2024), “TechEco Pathways: Empowering Kosovo’s future through innovation and sustainability”, news, https://luxdev.lu/en/news/techeco-pathways-empowering-kosovos-future-through-innovation-and-sustainability#:~:text=It%20is%20a%20programme%20that,like%20tech%20and%20renewable%20energy.
[37] Mohnen, P., M. Polder and G. Van Leeuwen (2018), “R&D and organizational innovation: Exploring complementarities in investment and production”, NBER Working Papers, No. 25044, National Bureau of Economic Research, Cambridge, MA, https://doi.org/10.3386/w25044.
[84] National Enterprise Hub (2026), Climate Toolkit 4 Business website, https://www.neh.gov.ie/business-supports/climate-toolkit-4-business.
[71] OECD (2025), AI Adoption by Small and Medium‑sized Enterprises: OECD Discussion Paper for the G7, OECD, Paris, https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/12/ai-adoption-by-small-and-medium-sized-enterprises_9c48eae6/426399c1-en.pdf?utm_source.
[47] OECD (2025), Economic Convergence Scoreboard for the Western Balkans 2025, OECD Publishing, Paris, https://doi.org/10.1787/bc0babf3-en.
[76] OECD (2025), Energy Prices and Subsidies in the Western Balkans: Reforms for a Fair and Green Future, OECD Development Pathways, OECD Publishing, Paris, https://doi.org/10.1787/082ea26a-en.
[33] OECD (2025), “SME digitalisation”, web page, https://www.oecd.org/en/topics/sub-issues/digitalisation-of-smes.html?utm_source.
[34] OECD (2025), The 2025 OECD definition of e-commerce and guidelines for interpretation, OECD Publishing, Paris, https://doi.org/10.1787/2254f1de-en.
[22] OECD (2024), Bridging Talent Shortages in Tech: Skills-first Hiring, Micro-credentials and Inclusive Outreach, Getting Skills Right, OECD Publishing, Paris, https://doi.org/10.1787/f35da44f-en.
[4] OECD (2024), OECD Digital Economy Outlook 2024 (Volume 2): Strengthening Connectivity, Innovation and Trust, OECD Publishing, Paris, https://doi.org/10.1787/3adf705b-en.
[72] OECD (2024), SME Digitalisation in 2024: Managing Shocks and Transitions: An OECD D4SME Survey, OECD, Paris, https://www.oecd.org/content/dam/oecd/en/networks/oecd-digital-for-smes-global-initiative/FINAL-D4SME-2024-Survey-Policy-Highlights.pdf.
[20] OECD (2023), OECD Skills Outlook 2023: Skills for a Resilient Green and Digital Transition, OECD Publishing, Paris, https://doi.org/10.1787/27452f29-en.
[18] OECD (2023), OECD SME and Entrepreneurship Outlook 2023, OECD Publishing, Paris, https://doi.org/10.1787/342b8564-en.
[31] OECD (2023), “SMEs in the era of hybrid retail: Evidence from an OECD D4SME survey”, OECD SME and Entrepreneurship Papers, No. 41, OECD Publishing, Paris, https://doi.org/10.1787/882f30b0-en.
[74] OECD (2022), “OECD Framework for the Classification of AI systems”, OECD Digital Economy Papers, No. 323, OECD Publishing, Paris, https://doi.org/10.1787/cb6d9eca-en.
[29] OECD (2022), Supporting Employers in Promoting Skills Development in Latvia: Assessing the Key Barriers and Enabling Conditions for Employers to Invest in Skills Development in Latvia, OECD, Paris, https://www.oecd.org/content/dam/oecd/en/about/programmes/dg-reform/latvia/latvia-employers-report-2022.pdf.
[2] OECD (2021), The Digital Transformation of SMEs, OECD Studies on SMEs and Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/bdb9256a-en.
[3] OECD (2019), Going Digital: Shaping Policies, Improving Lives, OECD Publishing, Paris, https://doi.org/10.1787/9789264312012-en.
[19] OECD (forthcoming), Digital and Green SMEs: Western Balkans Business Survey, OECD, Paris, forthcoming.
[24] RCC (2024), Western Balkans Digital Economy and Society Index 2024 Report, Regional Cooperation Council, Sarajevo, https://www.rcc.int/pubs/211/western-balkans-digital-economy-and-society-index-2024-report#:~:text=The%20Western%20Balkans%20Digital%20Economy,the%20EU%20DESI%202024%20methodology.
[66] RCC (2023), SecuriMeter2023: Public Opinion Survey on Security, Regional Cooperation Council, Sarajevo, https://www.rcc.int/pubs/163/securimeter2023public-opinion-survey-on-security.
[55] Reporteri (2023), “The websites of the Kosovo presidency, Prime Minister’s Office and Prosecutor’s Office were the target of a cyberattack”, news, https://reporteri.net/en/NEWS/The-websites-of-the-Kosovo-presidency--prime-minister-and-prosecutor%27s-office-were-the-target-of-a-cyberattack./.
[27] RIT Kosovo (2023), “Digital Skills for All”, web page, https://www.rit.edu/kosovo/DS4A.
[61] Si, N. (2025), “Kosovo launches platform for cyberattack protection”, Euronews Albania, https://euronews.al/en/kosovo-launches-platform-for-cyberattack-protection.
[5] Smart Specialisation Platform Kosovo (2025), Smart Specialisation Strategy website, https://smartkosova.rks-gov.net/en.
[82] Spanish Ministry of Economy, Commerce and Business (2020), “Pedro Sánchez presents the National Artificial Intelligence Strategy with a public investment of €600 million for the period 2021-2023”, https://portal.mineco.gob.es/es-es/comunicacion/Paginas/201202_np_enia.aspx?utm_source.
[83] STIP Compass (2020), “National Artificial Intelligence Strategy (ENIA)”, web page, https://stip.oecd.org/stip/interactive-dashboards/policy-initiatives/2023%2Fdata%2FpolicyInitiatives%2F27013.
[17] UNDP (2025), “Digital: Kosovo”, web page, https://www.undp.org/kosovo/digital.
[79] UNDP (2025), “The Kosovo Green Challenge”, web page, https://boostimpact.org/challenges/the-kosovo-green-challenge.
[25] University of Iowa (2024), “Collaborative curriculum development: UI, Kosovo public universities partner with industry leaders”, news, https://education.uiowa.edu/news/2024/04/collaborative-curriculum-development-ui-kosovo-public-universities-partner-industry?utm_source.
[70] US Small Business Administration (2022), “SBA Administrator Guzman announces new pilot program to bolster cybersecurity infrastructure of emerging small businesses”, press release, https://www.sba.gov/article/2022/jan/21/sba-administrator-guzman-announces-new-pilot-program-bolster-cybersecurity-infrastructure-emerging#:~:text=WASHINGTON%20%E2%80%93%20Today%2C%20Administrator%20Isa.
[54] Vllahiu, E. (2022), “Kosovo to establish agency for cyber security amid recent attacks”, Balkan Insight, https://balkaninsight.com/2022/09/14/kosovo-to-establish-agency-for-cyber-security-amid-recent-attacks.
[21] World Economic Forum (2023), The Future of Jobs Report 2023, World Economic Forum, Geneva, https://www.weforum.org/publications/the-future-of-jobs-report-2023/?utm_source.
[59] Zeqiraj, D. (2024), Legal Landscape of Digital Rights in Kosovo, Institute for Technology and Society, Pristina, https://institutets.com/wp-content/uploads/2024/11/ITS-Legal-Landscape-of-Digital-Rights-in-Kosovo-Final-EN-3.pdf?utm_source.
[65] Zeqiri, A. and I. Hoti (2024), “Kosovo bans TikTok in state institutions for cyber security reasons”, Balkan Insight, https://balkaninsight.com/2024/06/28/kosovo-bans-tiktok-in-state-institutions-for-cyber-security-reasons.
← 1. Information provided by the government of Kosovo during the assessment period.