Virginia wants to produce more engineers. But guess who’s out-producing us?

Some people look forward to the big movie blockbusters. Me? I look forward to the annual release of “The Global Startup Ecosystem Report” by StartUp Genome, a San Francisco-based nonprofit that studies and advises technology startups around the world.

I’m under no illusions that the report will ever mention anything in our part of Virginia, but I’m always curious to see what the report has to say that can be applied here.

Some lessons repeat every year.

• The places with the fastest growth tend to be ones with young median ages, a cautionary tale for Southwest and Southside, where most localities have older median ages.
  
• The places with the fastest growth also tend to be ones with lots of college graduates, another cautionary tale for us.
  
• The Washington, D.C. metro area is now a global technology capital — StartUp Genome ranks it 11^th in the world, just behind Seattle and just ahead of Seoul. That’s good news for Southwest and Southside if we can figure out more ways to leverage that proximity. (I still remain mystified at how Prince William County and others in Northern Virginia are feeling overrun by data centers when there are so many localities in Southwest and Southside that are literally begging for them.)
  
• The United States dominates the technology sector, but that dominance may not last. While China is a challenger (Beijing ranks as having the seventh-biggest technology ecosystem in the world, Shanghai ninth), it’s not our main challenger. Our main challenger is Europe, which we tend to overlook because, politically speaking, we’re on the same side. While Europe places only eight cities in the global Top 40 (London tied for second, Berlin 13^th, Amsterdam 14^th, Paris 18^th, Stockholm 22^nd, Zurich 36^th, Munich 37th,  Helsinki 39^th) compared to our 14 (Silicon Valley first, New York tied for second, Boston sixth, Seattle 10^th, Washington 11^th, San Diego 16^th, Chicago 19^th, Miami 23^rd, Austin 25^th, Philadelphia 27^th, Denver 28^th, Atlanta 29^th, Salt Lake City 31^st, Dallas 34^th), Europe dominates the list of “emerging ecosystems.” Of the top 100 emerging ecosystems, 41 are in Europe, 29 are in North America, which covers both the United States and Canada. Future growth is going to be more European.

It’s one of those European countries that catches my eye in this year’s report, just not one of the ones you might expect. One of the countries that the report singles out is Serbia. For many of us, Serbia hasn’t been a place we’ve thought about since the Balkan wars of the 1990s, a war that saw its president and other top leaders hauled off to The Hague for war crimes trials — and life imprisonment. (For former President Slobodan Milošević, that life imprisonment didn’t last long; he died in custody before his trial concluded.)

An entire generation has grown up since then and Serbia has looked for ways to rebuild its economy. The path it has chosen is potentially instructive for us because of some unexpected similarities between Virginia and this Balkan country.

First of all, we’re not that far apart in size: Serbia’s population (if you don’t count Kosovo, which remains a point of contention), is about 6.6 million. By contrast, Virginia’s population is about 8.7 million.

Serbia also suffers from net out-migration, or more people moving out than moving in. So does Virginia. In fact, a United Nations report found that Serbia has one of the 10 fastest-shrinking populations in the world “due to its low birth rates, high out-migration and low immigration.” Those leaving also tend to be the best educated, as they seek out economic opportunities elsewhere in the European Union. Virginia, too, exports more college graduates than it imports.

Serbia has taken multiple steps to deal with these demographic issues — offering financial benefits for families with multiple children, investing in more child care facilities to make the country more appealing for families, pushing more rural economic development, according to EuroNews. It’s also encouraged immigration, at least of a specific kind. The Wall Street Journal that Serbia has become a popular destination for Russians fleeing Vladimir Putin’s regime: “In race to lure Russian talent and capital, Serbia emerges as front-runner.“

Economically, Serbia has made a point of trying to develop a technology sector as a way to keep more young adults in the country.

“While a small player in global or even Western European terms, Serbia now generates 10 percent of its gross domestic product from information technology,” Reuters reports. That’s about what it is in the United States.

How has it done this? Primarily by producing more college graduates with expertise in engineering in general and computer science in particular.

The Serbian government reports that about 40,000 students graduate each year from Serbian universities. The State Council of Higher Education for Virginia says Virginia graduated 56,372 undergraduates in 2022, the last year for which full data is available. Given the different populations, Serbia and Virginia are educating college students at about the same rate, which might surprise some of you.

Out of those university graduates, though, Serbia produces a lot more engineers. A Serbian business website says that one-third of the nation’s university graduates each year are engineers. In May, Virginia Tech’s School of Engineering graduated 2,109 undergraduates — about 30% of the school’s total number of undergrads. However, most Virginia universities don’t have engineering programs, so while it’s difficult to estimate the percentage of state graduates each year who have engineering degrees, it’s safe to say that if it’s 30% at Virginia Tech, which typically has the most number of graduates, then the total percentage statewide is going to be somewhere south of that. That means Serbia is out-producing Virginia when it comes to engineers.

What about the more specific claim that Serbia graduates 3,300 software engineers each year? SCHEV cautioned me that there are “taxonomic” issues in comparing degrees across national borders — our definition of a software engineering degree may differ from Serbia’s. For instance, SCHEV lists 17 different types of computer-related degrees available in Virginia, some of which might be software engineers and some of which might not be. Perhaps more relevant: As part of the incentive package to attract Amazon’s HQ2 to Arlington, Virginia pledged to increase the number of graduates with computer backgrounds. Then-Gov. Ralph Northam vowed that the state would produce more than 31,000 such graduates over 20 years — that’s 1,550 a year, or less than half of what Serbia is doing.

Serbia is a country with a proud tradition of engineers — the airport in Belgrade is named not after a politician but after Nikolai Tesla, the Serbian-American inventor. It’s doubled down on that tradition to build a new economy. The odds are that Serbia will lose a lot of those newly minted software engineers to other countries, as those out-migration figures suggest. Still, Serbia seems to be developing a technology hub in what decades ago would have been considered a most unlikely place — or maybe still is. In 2019, the Hacker Rank business website ranked Serbia as the fifth-best source of software developers in the world.

Last fall, the U.S. electric car maker Rivian announced it would build a software development center in Belgrade that would employ 200 engineers with a projected workforce of 1,200. “We need the best engineers, we chose Belgrade on purpose,” said Rivian’s CEO.

I’ll let you draw your own conclusions about what localities in Southwest and Southside should be doing.