Migration and mobility have long shaped the socio-economic fabric of Southeastern Europe. Since the 1990s, countries such as Bosnia and Herzegovina, Serbia, and Hungary have faced persistent challenges of labor migration, demographic decline, and economic restructuring. However, in the context of the new knowledge economy, these trends are being redefined. Digital transformation, remote work, and innovation networks are reshaping mobility from a phenomenon of “brain drain” to one of “brain circulation.” This paper explores how migration and mobility intersect with digitalization, education, and entrepreneurship in Southeastern Europe, and proposes a framework for harnessing human capital mobility as a driver of inclusive growth and regional development.
Keywords: migration, brain circulation, knowledge economy, Southeastern Europe, innovation, digital transformation, diaspora engagement
1. Introduction: From Brain Drain to Brain Circulation
The fall of socialist regimes in Eastern and Southeastern Europe unleashed major migration flows. Millions left in search of economic stability and better living conditions. In Bosnia and Herzegovina, war and post-war instability drove large-scale emigration; in Serbia, economic sanctions and political isolation intensified the outflow of skilled labor; and in Hungary, EU accession in 2004 facilitated new labor mobility to Western Europe (Horváth & Hárs, 2012).
Traditionally, such migration has been described as brain drain a one-way loss of human capital. Yet, globalization and the rise of digital technologies have complicated this narrative. Increasingly, migration is becoming circular, networked, and knowledge-based (Meyer, 2011). The concept of brain circulation recognizes that skills, information, and innovation flow transnationally, even when people move temporarily or virtually.
This shift is central to the idea of a new knowledge economy, in which knowledge not physical labor is the primary resource for competitiveness. For Southeastern Europe, understanding how to convert mobility into a development asset is key to escaping the low-wage, high-emigration trap.
2. Structural Drivers of Migration in Southeastern Europe
Economic disparities between Southeastern and Western Europe remain a central driver of migration. Despite recent growth, the region faces structural challenges: limited access to high-value employment, underfunded research systems, and weak innovation ecosystems (World Bank, 2021).
In Bosnia and Herzegovina, youth unemployment rates exceed 30%, pushing skilled workers abroad. In Serbia, surveys show that over one-fifth of university graduates intend to emigrate for better job prospects (OECD, 2022). Even Hungary, though more industrially developed, has experienced a steady outflow of professionals, particularly in healthcare, academia, and IT, due to limited institutional autonomy and political centralization (Kahanec & Careja, 2016).
Educational mobility also plays a role. The Bologna Process and Erasmus+ programs have enabled thousands of students to study abroad, but low incentives for return migration exacerbate the “brain drain” effect. Thus, migration is both an individual strategy for advancement and a systemic reflection of uneven development.
3. The New Knowledge Economy and Virtual Mobility
The emergence of the knowledge economy introduces new forms of mobility that transcend geography. Digital technologies allow individuals to participate in global labor markets without permanent relocation. Remote work, digital entrepreneurship, and transnational start-ups have become viable alternatives to emigration (ILO, 2021).
Cities like Belgrade, Sarajevo, and Budapest have developed vibrant IT outsourcing and innovation sectors that capitalize on global connectivity. The COVID-19 pandemic accelerated this transformation, normalizing remote collaboration and “virtual return migration,” where diaspora professionals contribute knowledge and mentorship to home-country projects online (OECD, 2022).
In this sense, the new knowledge economy is redefining not only how people work but also how they belong. Mobility becomes less about relocation and more about participation in transnational innovation networks.
4. Diaspora Networks and Brain Circulation
Southeastern Europe’s extensive diasporas especially in Germany, Austria, and the United States represent a major socio-economic resource. In Serbia, the diaspora is estimated at more than four million people, and in Bosnia and Herzegovina, nearly one-third of the population lives abroad (IOM, 2021).
Beyond remittances, these communities provide knowledge, investment, and innovation linkages. Programs such as “Returning Experts” (Serbia) and the Diaspora for Development (Bosnia and Herzegovina) demonstrate growing interest in leveraging skilled migrants for national innovation systems (UNDP, 2020).
However, institutional weakness and bureaucratic barriers often limit their long-term impact (Bartlett & Prica, 2020).
Brain circulation emphasizes that the benefits of migration depend not only on return but on sustained exchange between home and host countries. Digital tools online mentorship platforms, collaborative research projects, and remote start-up accelerators can foster such connectivity.
5. Innovation Ecosystems and Entrepreneurial Return
The rise of start-up ecosystems in Southeastern Europe marks a turning point. Cities like Belgrade and Novi Sad in Serbia, and Sarajevo in Bosnia and Herzegovina, are emerging as digital innovation hubs (Startup Genome, 2022). Many of these ventures are led by return migrants
who bring managerial experience, global networks, and access to venture capital.
In Hungary, government-led initiatives such as the Hungarian Startup University Program aim to retain young talent, though political centralization and academic restrictions pose challenges to creativity (Kovács, 2021). Across the region, successful innovation depends not only on funding but also on institutional transparency and trust conditions essential for attracting both local and diaspora entrepreneurs.
6. Policy Recommendations
To transform migration into a driver of innovation, regional policymakers should:
- Encourage Hybrid Mobility: Support short-term and virtual return programs for diaspora experts.
- Invest in Education and Research: Strengthen universities and innovation labs to attract and retain talent.
- Foster Public–Private Partnerships: Connect start-ups with multinational networks to scale innovation.
- Enhance Institutional Trust: Simplify administrative processes and ensure merit-based governance.
- Promote Regional Cooperation: Establish a Southeastern European Knowledge Mobility Platform under EU frameworks.
These strategies can turn mobility from a symptom of economic weakness into a foundation for inclusive growth.
7. Conclusion
Migration and mobility have long defined Southeastern Europe’s history. In the 21st century, they must be reimagined through the lens of the new knowledge economy. As digital transformation dissolves geographical boundaries, the region’s challenge is to create systems that value openness, innovation, and collaboration.
By integrating diaspora engagement, entrepreneurial ecosystems, and adaptive policy frameworks, countries such as Bosnia and Herzegovina, Serbia, and Hungary can transform mobility into a dynamic cycle of learning and renewal. Tech-driven brain circulation thus becomes not a loss but an opportunity the foundation of a resilient, knowledge-based future for Southeastern Europe.
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