The Western Balkan region benefits from a cost-competitive labour force and geographic and cultural proximity to EU markets. However, cost competitiveness as a source of differentiation is not sustainable. Cost levels are increasing gradually in some sectors, reducing firms’ profitability. In order to sustain competitiveness, the Western Balkans needs to move up the value chain, from investing in automated technology to producing higher-quality goods and enhancing its human capital. This report examines the apparel manufacturing, automotive components and business process and technology outsourcing sectors, focusing on market competitiveness factors, industry key success factors and policy recommendations.

Abbreviations
Introduction
Executive Summary
PART I. APPROACH AND METHODOLOGY
1. Sector Identification: The Sector Prioritisation Framework (SPN)
2. Primary Research
3. Secondary Research
4. The Policy Impact Model
PART II. SECTOR ANALYSIS AND POLICY RECOMMENDATIONS
Chapter 1. Apparel Manufacturing
-Summary
-Sector Definition and Segmentation
-Sector Trends
-Sector Implications and Key Success Factors
-Sector Attractiveness in the Western Balkans
-Recommendations
-Country-Specific Recommendations
Chapter 2. Automotive Components
-Summary
-Sector Definitions and Segmentation
-Sector Trends
-Sector Implications
-Key Success Factors for Automotive Component Suppliers
-Sector Attractiveness in the Western Balkans
-Recommendations
-Country-Specific Recommendations
Chapter 3. Business Process and Information Technology Outsourcing
-Summary
-Sector Definition and Segmentation
-Sector Trends
-Sector Implications and Key Success Factors
-Sector Attractiveness for the Western Balkans
-Regional Strategy
-Country-Specific Recommendations
PART III. RECOMMENDATION FOR A REGIONAL COMPETITIVENESS INITIATIVE
Chapter 4. Regional Competitiveness Initiative
Annex A. Summary of Country Recommendations
Annex B. SPF Weight Allocation Methodology
Annex C. Regional Capability Survey Questionnaires