Montenegro’s progress towards European Union membership is creating access to a much larger research and innovation market, but the country’s ability to exploit that opportunity remains constrained by a domestic system that invests little, relies heavily on universities and has yet to develop strong links between science and business.
The country hopes to complete accession negotiations by the end of 2026, potentially opening the way for membership in 2028. Of the 33 negotiating chapters, 18 have been provisionally closed, while the government says work on the remaining chapters has entered its final stage. Science and research was among the first chapters to be closed, in 2012, reflecting the relative ease of aligning legislation in an area where the acquis is less extensive than in fields such as competition, agriculture or the environment.
Yet formal alignment says little about Montenegro’s capacity to produce commercially valuable research, secure competitive European grants or retain the people needed to operate sophisticated scientific infrastructure. EU membership will expand the country’s financing options, but it cannot substitute for national spending, credible institutions or companies willing to invest in technology.
The scale of the domestic funding deficit is stark. Montenegro spent only 0.29% of gross domestic product on research and development in 2024, down from 0.51% in 2021. With nominal GDP of €7.65bn, the latest ratio implies total annual R&D expenditure of approximately €22mn.
That is a small base even for an economy of Montenegro’s size. It covers public institutions, universities, private companies and non-profit research rather than representing a discretionary government innovation budget. A single large European centre-of-excellence project can therefore be comparable with a substantial share of the country’s entire annual research effort.
The decline since 2021 is also more troubling than the headline level. R&D statistics can fluctuate in small economies because a few projects materially affect the total, but a falling ratio suggests that research has not kept pace with nominal economic growth. Montenegro has expanded through tourism, construction, consumption and property investment without generating a corresponding increase in knowledge-intensive activity.
This leaves the economy dependent on sectors whose productivity is constrained by land, infrastructure and seasonal labour. Tourism can continue to support growth, but it cannot by itself provide the technological exports, high-value employment and productivity increases needed for sustained convergence with the EU.
Raising R&D spending to 0.6% of GDP, still a modest European target, would require annual expenditure of about €46mn at the 2024 level of output. The incremental cost would be roughly €24mn a year. Reaching 1% would require around €76mn, or about €54mn more than the estimated 2024 total.
Those amounts are not negligible, but neither are they beyond Montenegro’s fiscal capacity if increases are phased in and paired with European funding. They are modest compared with the country’s €383.5mn allocation under the EU Reform and Growth Facility, comprising approximately €110mn in grants and €273.5mn in concessional loans.
The problem is less the absolute availability of money than the machinery required to convert it into productive investment. Research grants require proposals, partners, procurement systems, financial reporting, intellectual-property rules and teams capable of sustaining a project after the initial financing expires. Montenegro has begun building those institutions, but the gap between formal eligibility and effective absorption remains wide.
The country has secured more than €6mn from Horizon Europe, excluding its newly awarded Teaming project. That already exceeds the approximately €4.6mn obtained under Horizon 2020, indicating better participation in EU programmes. Montenegro also established a national Horizon Europe Office in 2026, intended to act as a central source of information and practical assistance for applicants.
These are important gains, but the totals remain small in macroeconomic terms. The cumulative Horizon Europe receipts amount to less than one-third of Montenegro’s estimated R&D expenditure in a single year. The challenge is to turn occasional successful applications into a repeatable pipeline involving universities, public research bodies and companies.
Horizon Europe is competitive funding, not an automatic transfer linked to EU membership. Montenegrin teams compete with experienced institutions that employ professional proposal writers, grant managers, legal specialists and technology-transfer staff. Many universities in established member states maintain permanent offices dedicated to assembling consortia and administering European projects. In Montenegro, those responsibilities often fall to researchers already carrying heavy teaching and administrative workloads.
The University of Montenegro is central to the country’s research system and is increasingly integrated into European academic networks. But its institutional structure, like that of many universities in the region, remains orientated primarily towards teaching. Research frequently depends on individual academics or small groups rather than durable laboratories with permanent technical personnel and multi-year financing.
This model can generate publications and isolated international partnerships, but it is fragile. When a leading researcher leaves, retires or moves into administration, the project pipeline may disappear with that person. Young scientists face rigid career structures, limited funding and few opportunities outside academia. Companies, meanwhile, rarely offer research positions capable of competing with salaries and facilities elsewhere in Europe.
EU accession could initially intensify this pressure. Freedom of movement will give qualified Montenegrins easier access to laboratories, universities and technology companies throughout the Union. Unless domestic institutions offer credible careers, integration may accelerate the departure of researchers before it produces significant circulation of skills and capital back into the country.
The policy response cannot be to restrict mobility. Montenegro instead needs research careers that allow scientists to leave, gain experience and return without sacrificing seniority or income. Competitive grants should include money for researchers, technicians and project managers, not only buildings and equipment. A laboratory that cannot retain personnel is not an investable asset, however modern its machinery.
The weakness of private-sector research is an even greater constraint. Most Montenegrin businesses are small, concentrated in services and accustomed to competing through location, prices or access to property rather than proprietary technology. Their capacity to finance multi-year experimentation is limited, while banks generally will not lend against an unproven product, patent or research team with no predictable cash flow.
The Innovation Fund of Montenegro, established in 2021, is beginning to fill part of this gap. By the end of 2025, it had financed 278 projects worth more than €12.2mn, including 109 projects supported with more than €4.1mn during 2025. Its programmes cover proof of concept, early-stage start-ups, innovation vouchers and collaboration between smaller companies and research organisations.
The Fund’s €2.4mn package of calls in 2025 illustrates both the progress and the limits. The largest component allocated €1.2mn to innovation in micro, small and medium-sized companies, with grants between €50,000 and €200,000. Proof-of-concept and early-stage start-up programmes each received €400,000.
These amounts are appropriate for testing ideas and building a project pipeline. They are not large enough to finance capital-intensive research or scale technology companies internationally. The Fund should therefore be judged by whether its recipients subsequently attract private capital, export revenue or larger European grants—not simply by the number of awards distributed.
Public financing also needs to demand genuine additional research. Broad tax incentives risk subsidising software purchases, routine consulting or activities that companies would have undertaken anyway. Support should be tied to measurable R&D payroll, prototypes, patents, licensing agreements, contracts with research institutions or verified spending on experimental development.
Montenegro’s first Smart Specialisation Strategy, adopted in 2019, identified sustainable agriculture and food, health and sustainable tourism, energy and the environment, and information and communications technology as areas of potential advantage. These choices broadly reflect the country’s economic structure, but broad priorities become meaningful only when linked to specific technical capabilities and customers.
Marine sensors, environmental monitoring, water management, energy-efficiency systems, digital tourism services and specialised food production are more investable propositions than an undefined ambition to become an innovation economy. They connect research to existing industries and to regulatory obligations Montenegro must meet as an EU member.
The newly awarded CENNA centre-of-excellence project, focused on smart environmental monitoring and nature-based solutions for protected areas, demonstrates this approach. It builds on the MONUSEN underwater sensor-network initiative and uses a field in which Montenegro has clear practical demand: monitoring a coastline and natural environment that underpin tourism, fisheries, water resources and property values.
A successful environmental-monitoring centre could produce services for municipalities, ports, tourism businesses, utilities and protected areas. It could also supply expertise to neighbouring Adriatic and Balkan markets facing similar regulatory and climate-related pressures. The commercial case, however, depends on whether the centre develops products, data services and long-term contracts rather than remaining dependent on grants.
EU Teaming for Excellence projects can receive contributions of as much as €15mn. For Montenegro, that ceiling is equivalent to more than two-thirds of the country’s estimated annual R&D expenditure. The scale is potentially transformative, but it also creates concentration risk. A major centre must have a credible operating budget, professional management and a pipeline of income beyond the grant period.
National co-financing therefore matters as much as the European award. The government needs a transparent multi-year reserve for successful EU projects so that institutions are not forced to negotiate matching funds after winning a grant. It also needs bridge financing because European programmes frequently reimburse eligible spending after costs have been incurred. Smaller institutions cannot carry long payment delays from their own balance sheets.
Montenegro’s proposed South East European International Institute for Sustainable Technologies presents the same issue on a much larger scale. The project, promoted since 2017, would use particle-accelerator technology for cancer treatment and biomedical research. Its design work has advanced, but implementation has stalled without a binding financing and governance structure.
The scientific and political attraction is evident. A regional institute could provide advanced treatment, attract researchers and anchor a health-technology cluster. But particle-therapy facilities require substantial capital, specialist personnel, continuous maintenance, clinical referral networks and enough patients to sustain utilisation. They cannot be justified as prestige infrastructure.
For SEEIIST to proceed, participating governments would need to agree on ownership, capital contributions, operating subsidies, patient referrals, procurement and liability. Development banks and EU institutions could support construction, but debt financing would still need to be serviced. Montenegro should not assume that a sophisticated building automatically creates a regional research centre.
The project’s sovereign significance lies in contingent liabilities. If regional partners fail to provide promised funding or patient volumes disappoint, the host country may be pressured to cover operating losses. Any investment decision should therefore separate the clinical case, research case and regional-development case, with stress tests for delays, cost overruns and lower utilisation.
Smaller projects may produce higher economic returns in the near term. Distributed laboratories linked to environmental science, agriculture, energy and digital services are less politically visible but easier to connect with domestic companies. They also allow Montenegro to build administrative experience before undertaking infrastructure whose annual operating costs could absorb a large part of the national science budget.
The experience of Croatia offers a useful benchmark. Its R&D expenditure rose from roughly €260mn around the time of EU accession in 2013 to more than €575mn, equivalent to approximately 1.35% of GDP. Access to European funds contributed, but the increase also required domestic spending, institutional reform and a larger corporate research base.
Montenegro cannot reproduce Croatia’s trajectory simply by joining the Union. Its economy and population are smaller, and its industrial base is narrower. Yet small size can also work in its favour. An additional €20mn–€30mn a year, properly allocated, would materially change research conditions without destabilising the public finances.
From a credit perspective, such spending should be treated as productive investment rather than an automatic fiscal cost. Montenegro’s larger sovereign risks arise from weak productivity, import dependence, infrastructure liabilities and exposure to tourism cycles. Research programmes that diversify exports and raise the technological content of domestic businesses can improve debt sustainability over time.
That case weakens when funding becomes fragmented among politically selected projects, buildings without staff or grants with no commercial follow-through. Investors will distinguish between an innovation policy that creates exportable capabilities and one that merely adds another channel for state support.
The next stage should therefore focus on absorption capacity. Universities need full-cost accounting, permanent grant offices, clearer intellectual-property rules and technology-transfer functions. The Innovation Fund needs the ability to follow promising companies through multiple stages while attracting private co-investors. Government ministries need a shared database of applications, awards, co-financing obligations and project results.
Public procurement can also create a domestic market for innovation. Municipalities, utilities and environmental agencies face problems in waste, water, traffic, energy use and coastal management that could be addressed through competitive pilot projects. The state should define the problem and performance requirements, allowing companies and research organisations to propose solutions, rather than prescribing a particular technology.
Montenegro’s participation in the European Institute of Innovation and Technology’s Jumpstarter programme is already showing increased interest. Applications rose from four in 2025 to 17 in 2026, with three Montenegrin teams succeeding. The figures are small, but they indicate that better information and institutional support can quickly expand the pipeline.
The decisive measure will be the number of those teams that become sustainable companies, attract follow-on investment or sell outside Montenegro. Research policy should follow projects for several years after an award, recording employment, revenue, exports, intellectual property and additional financing. Without those data, the government cannot determine which programmes deserve expansion.
Preparations for the EU’s next research framework, expected to cover 2028–2034, coincide with Montenegro’s possible accession timetable. That gives the country a narrow opportunity to enter the new funding cycle with experienced institutions instead of beginning capacity-building after membership.
The EU can provide grants, networks, standards and access to infrastructure. It can reduce Montenegro’s financing costs and improve confidence among foreign investors. It cannot decide which domestic sectors should conduct research, create stable scientific careers or persuade companies to invest in experimentation.
Montenegro’s research gap is therefore not primarily a question of eligibility. The country already participates in major European programmes and has demonstrated that its teams can win competitive funding. The constraint is the modest €22mn domestic R&D base, the small contribution from business and an institutional system that still treats research as an auxiliary activity.
EU membership will magnify both strengths and weaknesses. Well-managed institutions will gain access to partners and financing on a scale previously unavailable to them. Understaffed institutions may find that additional calls, reporting obligations and co-financing requirements exceed their capacity.
The economic return from accession will depend on whether Montenegro uses the remaining years before membership to build that capacity. Raising national R&D expenditure, professionalising project management and connecting research with companies would cost relatively little beside the country’s larger infrastructure and social commitments. The alternative is formal entry into Europe’s research market without the domestic capital, people or institutions needed to compete in it.
