The challenges of income convergence at times of the fourth industrial revolution

The paper argues that Serbia must address a complex set of challenges as it prepares for the EU accession and seeks convergence to the European quality of life within a reasonable timeframe. To successfully close institutional, infrastructure and income gaps with core EU countries, while, at the same time, responding to likely pressures from the Fourth Industrial Revolution requiring profound social, industrial and organizational changes, the country will have to first address the institutional legacy of the past which now stands in the way of introducing modern, efficient and transparent governance systems into the state, public and private sector. The only institutional and policy scenario that supports this growth path may be more demanding, but it offers relatively fast convergence based on a smart industrial policy and deep structural changes of economic organization, education and social systems. New social consensus may not be easy to reach, but it will be well worth the effort if it offers a base to fend off future governance risks and ensure prosperity in the challenging new digital world.