From Brain Drain to Brain Circulation: Rethinking Migration as an Economic Strategy in the Western Balkans

How the region can transform migration from a challenge into a driver of innovation.

Written by Una Zavisa, MSc Economic Policy for International Development

Introduction

Every year, tens of thousands of young professionals leave Serbia, Bosnia and Herzegovina, and Albania in search of better prospects. Doctors, engineers, and IT specialists form part of what locals call the “silent exodus.” More than a third of young adults from the Western Balkans now live abroad, often in the EU. It’s a familiar story - talent departs, growth slows, and governments wonder who will power the economy of tomorrow. But what if migration wasn’t just a loss, what if it could become an opportunity?

Across the world, policymakers are rethinking migration through the lens of brain circulation - the idea that people, skills, and capital can move productively in both directions. When used strategically, diasporas can become a country’s greatest development resource, transferring knowledge, funding startups, and connecting domestic economies to global markets. The EU-Western Balkans Growth Plan ① echoes this idea, emphasising talent retention, digitalisation, and stronger ties between Balkan economies and the EU.

This article argues that Western Balkan governments should stop trying to prevent emigration and instead harness it - through diaspora investment, circular migration programs, and digital infrastructure that transform mobility into long-term development.

The Problem: The Cost of Brain Drain

The Western Balkans - comprising Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia - exhibit some of the highest emigration rates in Europe. According to the World Bank, approximately one-third of tertiary-educated adults from the region reside abroad, many within the EU World Bank ②. This trend has intensified over the past two decades, with skilled professionals, including doctors, engineers, and IT specialists, seeking better opportunities abroad. The European Council on Foreign Relations notes that emigration from Bosnia and Herzegovina has increased from 15% in 1980 to 20% in 2020 .

The exodus of skilled workers significantly impacts local labor markets. Healthcare systems face shortages of medical professionals, while startups struggle to find qualified developers. Governments across the region face shrinking tax bases and mounting fiscal pressure as their working-age populations decline. In Serbia alone, the emigration of high-skilled workers costs the economy around 1% of GDP annually, while similar effects are seen in Bosnia and North Macedonia Open Knowledge Bank ③. This loss of human capital hampers economic growth and innovation.

Beyond economic ramifications, the social consequences are profound. Rural areas in southern Serbia and northern Albania have experienced population declines of up to 40% since the 1990s. This demographic shift leads to an aging population and the erosion of community structures. The persistent outflow of youth fosters a sense of hopelessness, perpetuating a cycle where migration becomes both a symptom and a cause of regional decline.

Decades of restrictive or reactive migration policies have failed to stem emigration. Instead, they have driven mobility underground and deepened disconnection from the diaspora. Yet viewing migration solely as a loss overlooks its potential as a catalyst for development. The mobility of individuals can also facilitate the exchange of knowledge, skills, and capital, offering opportunities for the Western Balkans to leverage their diaspora for economic advancement.

The Opportunity: Brain Circulation as a Development Strategy

The concept of “brain circulation” emerged in the early 2000s as policymakers sought alternatives to the traditional “brain drain” framing. Instead of seeing migration as a permanent loss of talent, brain circulation emphasises the potential for skills, knowledge, and capital to flow in both directions. The experiences of India and China illustrate this approach: professionals returning from Silicon Valley brought more than remittances- they returned with global networks, technical expertise, and entrepreneurial know-how. Governments actively encouraged return migration and diaspora engagement, creating incentives for knowledge transfer that helped fuel technology clusters in Bangalore and Shenzhen.

The Western Balkans also have large, economically active diasporas. Serbia alone counts more than two million citizens living abroad, mainly in Germany, Austria, and the United States. In 2023, remittances accounted for roughly 9% of Albania’s GDP and 10% in Bosnia and Herzegovina ④. These flows have stabilised household consumption and cushioned the impact of weak labour markets, but most remain informal. With stronger institutional support, diaspora capital could fuel startups, infrastructure projects, and education initiatives, turning personal remittances into an engine of sustainable growth.

Promising initiatives already exist. Serbia’s Returning Point connects diaspora professionals with domestic employers and entrepreneurial opportunities, while Albania’s Diaspora Engagement Strategy 2021–2025 aims to mobilise migrant capital for local development projects. Yet these efforts remain fragmented, underfunded, and vulnerable to political shifts, limiting their impact. For brain circulation to truly work, the Western Balkans need a coordinated, long-term approach built on transparency, stable institutions, and trust - ensuring that returning, investing, or collaborating are viewed as practical and rewarding choices, not risky ones. Turning migration into a true engine of growth will require long-term, practical policies that make staying connected - whether digitally, professionally, or financially - just as rewarding as leaving.

Policy Recommendations

To turn migration into a genuine engine of development, the Western Balkans need coordinated, forward-looking policies that convert mobility into opportunity. Below are five actionable strategies that can help governments harness migration for innovation, investment, and long-term growth.

1. Mobilise Diaspora Capital

Remittances to the Western Balkans total billions of euros each year, yet most of these flows go toward household consumption rather than productive investment. Governments could introduce Diaspora Bonds - financial instruments successfully used by India, Israel, and Ethiopia -allowing emigrants to safely invest in infrastructure, renewable energy, or innovation funds. For example, Serbia could partner with the European Bank for Reconstruction and Development (EBRD) to launch a Balkan Diaspora Fund supporting SMEs and green startups. Transparent governance, regular reporting, and measurable returns would be essential to build trust and credibility among investors abroad.

2. Incentivise Return and Entrepreneurship

Returning migrants bring valuable international experience, but often face bureaucratic barriers and limited opportunities at home. The Western Balkans could establish tax incentives, seed grants, and mentoring schemes for skilled returnees - coordinated through national investment agencies or innovation funds. Ireland’s Returning Diaspora Programme in the 1990s offers a proven model: by pairing business mentoring with small grants, it successfully attracted emigrant entrepreneurs back home. A similar approach could repatriate Balkan IT specialists, engineers, and healthcare professionals who might otherwise remain abroad, while stimulating local business ecosystems.

3. Promote Circular Migration Partnerships

Rather than pushing for permanent return, governments should foster circular migration - enabling workers to gain experience abroad and bring new skills home. Bilateral agreements with EU member states, aligned with the EU Talent Partnerships framework, could formalise short- and medium-term mobility programs for sectors like healthcare, IT, and skilled trades. Germany’s vocational training partnerships for nurses and technicians provide an effective template. This approach benefits both sides: the EU gains a flexible labour supply, while the Western Balkans retain ties with skilled workers who can return and reinvest their expertise.

4. Build Digital Infrastructure for Remote Work

The rise of remote work offers a new way to retain talent without requiring physical return. Investing in high-speed broadband, digital skills training, and regional co-working hubs would allow professionals to work for international companies while remaining in the Western Balkans. This approach aligns closely with the EU Digital Agenda for the Western Balkans, which promotes digital connectivity, innovation, and skills development as drivers of regional competitiveness. Estonia’s e-Residency programme and Croatia’s Digital Nomad Visa show how smaller countries can attract and retain global digital workers. Through similar initiatives, the Western Balkans could transform “brain drain” into “brain online.”

5. Strengthen Regional Cooperation

The Western Balkans should coordinate, not compete, for talent. Establishing a Regional Brain Circulation Platform, coordinated by the Regional Cooperation Council, could harmonise migration data systems, share best practices, and pilot regional diaspora investment programs. Joint initiatives would amplify bargaining power with EU partners and position the Western Balkans as a collective innovation hub, rather than a set of competing labour markets. Regional alignment could also attract greater funding under EU and World Bank development frameworks.If the 1990s were about escaping borders, the 2020s should be about using openness as strategy - transforming mobility from survival into a foundation for shared prosperity.

These proposals offer promising pathways for turning migration into development, but their success depends on political will and institutional capacity. Frequent government changes, weak coordination, and limited resources often undermine long-term planning. Many diaspora initiatives also face challenges of transparency and public trust, discouraging sustained engagement. At the same time, deep wage and opportunity gaps between EU countries and the region continue to drive emigration despite policy incentives. Overcoming these barriers will require not only migration-focused measures but also broader improvements in governance, education, and economic competitiveness - ensuring that return and investment are not just encouraged, but genuinely attainable.

Conclusion

Migration from the Western Balkans has long been framed as a crisis, the so-called “brain drain.” Yet the same mobility that challenges local labour markets can also serve as a bridge between the region and the wider world. The idea of brain circulation reframes movement not as a one-way loss but as a dynamic exchange of knowledge, capital, and innovation. Recent initiatives such as the Berlin Process 2023 ⑤ and the EU-Western Balkans Growth Plan ① in 2024 have created a policy window for translating this vision into practice. These frameworks already prioritise regional cooperation, investment in skills, and economic convergence with the EU, precisely the foundations needed to turn migration into a source of shared prosperity.

Progress will depend not only on sound policy design but on credible implementation. Governments must match ambition with execution - ensuring that mobility is harnessed, not halted, and that staying connected is as rewarding as returning. If governments can align migration, digital innovation, and education reform, the Western Balkans could turn the silent exodus into a cycle of renewal - one where mobility is not a loss, but the foundation of a confident, connected region.

Sources

① « Growth Plan for the Western Balkans », European Commission, 7 November 2023.

② Western Balkans Regular Economic Report, World Bank Group, Fall 2024.

③ « Serbia’s New Growth Agenda: Forging a New Future », World Bank Group, 9 April 2020.

④ International Migration Outlook 2023, OECD, 23 October 2023.

⑤ Overview of the 2023 Berlin Process Summit in Tirana, The Berlin Process, 2023.