Profit rate analysis and strategic direction of the Albanian economy, 2020 – 2024

Description

The purpose of the discussion is to conduct an in-depth analysis of profit margins across the main sectors of the Albanian economy during the period 2021–2024.

This analysis aims to identify high-performing sectors and highlight those requiring direct intervention to enhance competitiveness and economic impact.

Moreover, it is important to address the strategic orientation of the economy toward production and technology to ensure sustainable growth and long-term value creation.
In a developed and sustainable economy, value creation is a key element for economic growth and improved living standards.

Value added represents the difference between the value of a product’s output and the cost of inputs used to produce it, and creating this value is essential for achieving sustainable growth, increasing income, and generating employment.

This may offer opportunities for economic diversification, reducing dependence on a few sectors and making the economy stronger and more resilient to external shocks.

One of the main reasons it is important to identify sectors with potential for value creation is that these sectors not only increase national profits, but also provide opportunities for export growth and foreign investment attraction.

Sectors such as professional services and information technology have managed to generate significant added value, increasing profit margins and contributing to higher competitiveness in international markets.

The real estate sector and information services are also important, as they contribute to profit growth and provide potential for exports and foreign investment development.
Sectors like healthcare and tourism are also important for value creation, improving standards and developing high-quality products and services that attract visitors and contribute to export growth.

While identifying these sectors is crucial, challenges arising from dependence on low-profit-margin sectors such as trade and telecommunications are also evident.

These sectors often contribute less to economic growth and may hinder overall development.
The lack of modern infrastructure and productive capacities for sectors with potential for value creation, such as industrial production and technology are major barriers.

Many of these sectors face inadequate infrastructure, including the absence of technology parks and light industry zones, which are essential to stimulate growth.

Another challenge is the lack of skills and education in the labor force.

Virtually every sector with potential for added value requires a skilled and qualified workforce.
Therefore, investing in education and training is essential to support the development of these sectors and ensure their competitiveness in global markets.

Aligning training and education programs with the demands of these sectors is a priority that requires broad support from educational and professional institutions.

To overcome these challenges and build a more sustainable and competitive economy, economic policy must focus on supporting sectors with high value-creation potential.

This can be achieved by providing subsidies and fiscal incentives for key sectors such as industrial production, technology, and professional services.

Additionally, investments in advanced infrastructure are essential to boost competitiveness and efficiency in these sectors.

Another important aspect is improving the skills of the workforce, where promoting cooperation with universities and establishing specialized programs for high-value sectors can help meet labor market demands.

Furthermore, supporting small and medium-sized enterprises is also a critical step.
Developing support for start-ups and fostering innovation can contribute to increased competitiveness and added value generation by these businesses.

Efforts to create better conditions for innovation and support this sector can offer opportunities for growth and further development.

Identifying and supporting sectors that create added value is a necessary step toward sustainable economic development.

To achieve this, a comprehensive approach is required that includes infrastructure support, professional training, and investment incentives.

By implementing this approach, Albania can build a stronger and more competitive economy, contributing to increased income and well-being for all its citizens.

Strategic economic orientation

Production as a Priority

The Albanian economy must be oriented toward the development of productive sectors in order to increase their contribution to GDP.

Through processing and manufacturing industries, it is possible to enhance the value of products and reduce dependency on imports. In this context:

• Agribusiness has great potential to reduce imports and boost exports. Investments in food processing and export logistics can transform this sector into a vital pillar of the economy.
• Industrial production can be supported through fiscal stimulus policies and increased private and public investments in this field.

Technological Services and Innovation

The growth of technology and innovation sectors is another strategic pillar.
Investment in IT and start-ups can stimulate the creation of high-value jobs and support exports of technological services.

Human capacities must be enhanced to meet the growing demand for qualified workers in the technology sectors.

Developing technological ecosystems, including the creation of innovation centers and start-up incubators, is necessary to foster creativity and help small and medium enterprises grow.

Key Challenge

Poor infrastructure for productive and innovative sectors presents a significant obstacle to sustainable growth.

The development of the transport, energy, and logistics network is crucial.
The limited capacity to compete in global markets remains a challenge for many productive and technological sectors, making it necessary to raise quality standards and strengthen the “Made in Albania” brand.

Analyzing profit margins and the performance of key sectors is an important step in identifying the strengths and weaknesses of the Albanian economy.

To build a sustainable and competitive economy, there must be a particular focus on expanding productive sectors and developing technology.

This will lead to the creation of new jobs, increased exports, and the strengthening of the country’s economic position in the region and beyond.