Montenegro’s small and medium-sized enterprises show strong performance in introducing product and business-process innovations, but the country continues to lag behind the European Union in research investment, venture capital and technology exports.
Strong SME Innovation Performance
The European Commission’s 2026 Innovation Scoreboard classifies Montenegro as an “Emerging Innovator”, with an overall performance equal to 44.7% of the EU average. Montenegro ranks 33rd among the countries assessed and remains below the average performance recorded for other emerging innovators. At the company level, Montenegro records significantly stronger results. SMEs rank first among EU member states and neighbouring countries for introducing product innovations. Employment in innovative enterprises ranks fourth, while business-process innovation ranks sixth.
The share of SMEs introducing product innovations is more than twice the EU average, while cooperation between innovative SMEs reaches 141.5% of the EU benchmark. The corporate innovation indicators require qualification. The SME data date from 2022 and have been carried forward because newer observations are unavailable. Data on sales and employment generated by innovative companies are older, dating from 2018.
Research and Innovation Financing
Financial indicators are considerably weaker. Montenegro receives normalized scores of zero for venture capital, government support for corporate research and business expenditure on research and development. These scores indicate that Montenegro is at the bottom of the measured range, rather than necessarily meaning that no funding exists. The country’s broader finance-and-support score stands at only 9% of the EU average.
Public and private research activity have moved in different directions. Public-sector R&D performance increased by 13.8 percentage points between 2025 and 2026, supported by higher allocations and the growing role of Montenegro’s Innovation Fund. Business R&D performance, meanwhile, declined by 9.4 percentage points over the same period.
Montenegro’s venture-capital market remains limited, creating a financing gap for companies moving beyond the initial development stage. Businesses can receive support for developing an idea but face difficulties securing additional capital for hiring specialists, entering foreign markets and converting pilot projects into export-oriented operations.
Weak Technology Export Performance
The weakness is also reflected in trade statistics. Montenegro ranks 40th and last for the overall trade impact of innovation. Medium- and high-technology exports stand at only 23.5% of the EU average, while knowledge-intensive service exports reach 12.1% of the EU level. Services perform somewhat better than manufactured technology products, reflecting the development of ICT activities. However, the figures remain small relative to an economy heavily reliant on tourism, property development and foreign capital.
Research and Digitalisation Indicators
Several indicators have improved. International scientific co-publications increased sharply in the latest year, alongside cooperation between public researchers and private companies. Patent applications increased by 28 percentage points, while cloud-computing adoption has risen significantly since 2019.
Scientific output has not translated proportionately into internationally recognised research. Montenegro’s scientific publications remain underrepresented among the world’s most cited research, while the share of foreign doctoral students has fallen substantially since 2019. Montenegro ranks 38th for new doctorate graduates.
Digitalisation presents a similarly mixed performance. Business use of cloud services has increased, but Montenegro’s Digital Intensity Index remains below the EU average. Only a small proportion of the population has more than basic digital skills, and access differs between urban and rural households.
Investment and Structural Constraints
Montenegro’s structural conditions also constrain the development of technology businesses. The country has a population of approximately 600,000, while GDP per capita is around 52.5% of the EU average. The domestic market is too small to support many technology companies without access to export markets. At the same time, weak business research activity, limited risk capital and poor trade performance make international expansion more difficult.
Foreign direct investment remains substantial. The Commission profile records net FDI inflows at 9.4, compared with an EU average of 0.5 on the same measure. Historically, much of Montenegro’s investment attraction has been linked to tourism, energy and real estate. The policy challenge is to establish stronger connections between foreign investors and domestic suppliers, researchers and skilled workers.
Governance and Business Conditions
Institutional conditions also affect innovative businesses. Montenegro scores below the EU average in perceptions of corruption and the rule of law, factors relevant to companies whose operations depend on predictable regulation, enforceable contracts and intellectual-property protection.
The 2026 scoreboard places Montenegro between the adoption of new products and processes by companies and the development of domestic capacity to create, finance and export technology. Montenegrin SMEs have demonstrated their ability to introduce changes to products and business processes, while the country’s research base, private financing and export capacity remain less developed.
