“Startups succeed despite the system in Serbia, while success in the United States is the result of a strong, consistent, and long-term support system.” This statement from a well-known podcast stayed with me for a long time. The phrase “despite the system” precisely captures a sentiment that repeatedly emerges in conversations with local startups.

A few months ago, I spoke with the founder of a Belgrade-based startup who complained that problems appear the moment a business model deviates even slightly from what is considered “standard.” It is encouraging that we have come a long way - from “it cannot be done at all” to “it can be done, but you need to come tomorrow when Pera is on shift; it will be ready this week… FT1P…” On the other hand, we still struggle with different interpretations of the same regulations, depending on who interprets them. When you add applications for support programs whose conditions and deadlines sometimes change along the way, a large part of the initial entrepreneurial energy ends up being spent navigating the system instead of developing products.

Nevertheless, over the past decades the business environment in Serbia has undoubtedly improved. This is reflected in the World Bank’s Doing Business Index, where Serbia improved by approximately 50 places and ranked 44th in the last published report. However, from the perspective of innovation, Serbia moved down several places on the Global Innovation Index during the same period. This suggests that while we have improved our ability to address standard business problems, we still struggle to keep pace with innovation and the needs of 21st-century companies.

Entrepreneurs most often identify the state as the main culprit for an insufficiently supportive business environment. One of the fundamental roles of the state is indeed to build a favorable environment - but are businesses equally responsible? From nearly twenty years of experience working on market development - from agriculture to ICT across different parts of the world - I can confidently say that market actors themselves share significant responsibility for the state of the market. Companies have considerable influence over decision-makers in government as well as over individual officials. It is not uncommon for that influence to be used for private advantage rather than for the benefit of the market as a whole.

Whether it is competition for subsidies or lobbying to favor a particular sector in which they have a direct interest, companies often end up working against the market itself in their attempt to secure a better position for themselves. I have seen this pattern everywhere - from Nigeria to Fiji. A company representative insists that his firm deserves special treatment, grants, and incentives, unintentionally distorting the real picture of the market in order to persuade us to intervene exactly where it would benefit his company. The next day, the same story repeats with the main competitor. Everyone wants support for themselves and lobbies on all sides, pushing the system to defend itself against them instead of working on development.

In practice, building a supportive business environment also means ensuring that the system can protect itself from those who see it only as a short-term opportunity. It is not uncommon for projects with no clear business logic to “game” the system and disappear the moment the grant money is spent. These “grant wasters” undermine the system not only through inefficient use of funds but also by turning financial support into a goal in itself.

And then, occasionally, I meet someone who understands that the market is not a pie to be divided but dough that grows. I remember a conversation in the office of the owner of one of the region’s leading e-commerce platforms. We were discussing the creation of an industry association that would, paradoxically, benefit his competitors the most. I asked him whether he truly understood that - and whether he still wanted to support such an initiative. He looked at me for a few seconds and said: “Today I may have 95 percent of a very small market that could completely stagnate if it doesn’t grow. This market has the potential to grow thousands of times. I would be more than happy to keep five percent - if the market really grows.”

Such “champions of change” are rare, but they are crucial. Across continents, cultures, and levels of development, the pattern repeats itself: where systems function well, success multiplies; where they do not, success merely survives. The dynamics of the business environment always settle into a certain equilibrium - whether it is more discouraging or more stimulating for companies operating within it. The secret lies in a deep understanding of the market and the ability to identify the element capable of pushing the system out of inertia and initiating change.

In 2022, the Serbian Ministry of Agriculture proudly announced that Serbia had one of the highest numbers of beehives per capita, thanks to government support. But I remember a time when that was not the case.

Back in 2013, our project team identified beekeeping as a business opportunity with clear market logic. The support program connected honey buyers, new producers, beekeeping associations, and experienced mentors. With limited project support and commodity credit, around 250 new beekeepers started production in 2014.

Initially, interest was minimal. Only one company participated, institutional support was modest, and most stakeholders were skeptical. However, transparent selection and professional implementation quickly changed the perception of risk. The following year, local governments, buyers, and suppliers began investing their own resources, and the model became self-sustaining.

The key lesson is not about the project itself - it is about the market. When a business opportunity has clear economic logic, the system adapts to it. When it does not, even the largest incentives cannot sustain it.

Work on improving the business environment follows the same principles everywhere—in Serbia and everywhere else I have worked. The first and most important element is that the market we aim to support must have real commercial potential. The second is choosing the right partners. At the beginning, we do not necessarily need the “best” or the “most motivated” company, but the partner with the greatest capacity to generate visible positive results, demonstrate profitability, and influence how others perceive risk. The third key lesson is that every project must plan its own exit and cultivate market actors who will take over the role of catalysts. Only in that way can results remain sustainable.

Over the past twenty years, I have witnessed many positive changes - and many failures. But failures can be valuable, as long as we learn from them and improve the system. Everything is possible. What is required is will, knowledge, and persistence.

The fundamental question facing every society - including Serbian society - is whether it wants to play an active role in shaping its own business environment or wait for someone else to build it instead. Models like Switzerland demonstrate what happens when citizens and businesses treat the system as a shared responsibility, where decisions are made close to those most affected by them. The only thing we truly control is our own behavior and our relationship with the community in which we operate.

If we create value, return part of that value to the market, and invest in its development, the system will quickly catch up with us. Otherwise, we will continue to take pride in succeeding despite the system - while others, more quietly and more quickly, advance because of it.