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Foreign investments in the Region are creating fewer jobs for the invested capital

Politiko 2026-07-14 09:59:17
Foreign investments in the Region are creating fewer jobs for the invested

Foreign investments in the Western Balkans are becoming increasingly capital-intensive, while for each amount invested, fewer jobs are being generated than before.

The World Bank in its latest Regional report noted that foreign direct investment per job has increased in most countries in the region during the period 2021–2025, compared to 2016–2020.

The indicator measures the ratio between the value of investment and the number of jobs created. Its increase means that new projects require more capital for each job created, signaling a shift towards larger, more costly, and less employment-intensive investments.

The amount invested per job after the pandemic marked the strongest growth in Albania, with over 300% compared to the period 2016-2020, while Serbia ranked second, with around 190%. Montenegro and North Macedonia recorded more moderate increases, in the range of around 80–90%.

In Bosnia and Herzegovina, capital expenditure per job remained almost unchanged, indicating that the structure of investment projects has not changed significantly compared to the previous period. Kosovo showed a different performance, as foreign investment per job slowed down in the period 2021–2025.

The size of investment projects increased in most Western Balkan countries between 2010 and 2025, with the exception of Bosnia and Herzegovina and Montenegro.

The increase became more noticeable in Albania after 2020, while in North Macedonia and Kosovo it had started since 2018. In absolute terms, the largest projects were registered in Montenegro, followed by Serbia.

This trend shows that foreign investment is increasingly directed towards projects that require large sums of money for buildings, equipment, technology and infrastructure, but that are not creating a large number of jobs. As a result, the invested capital is growing faster than the employment generated by it.

Increasing capital spending per job can also have positive effects, if it is linked to more advanced technology, automation and increased productivity. But in the case of the Balkan countries, the indicator does not prove that the projects are more productive or that they are creating better quality jobs.

Investments in the energy sector, especially photovoltaic parks, energy production or real estate, generate capital but not employment./Monitor.al

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