Innovation and digitalisation in SMEs in Bosnia and Herzegovina BASELINE STUDY
–
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 2
IMPRESSUM Published by the
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
Registered offices
Bonn and Eschborn, Germany
Innovation and Digitalisation in SMEs in Bosnia and Herzegovina
Vrbanja 1 (SCC Office Tower/ 12. floor) / 71 000 Sarajevo / Bosnian und Herzegovina
As at
02/2020
Authors
Haris Ćatić
Mirza Pale
Creative Development and Engineering Solutions (CEDES)
With contribution
Karin Rau
Selma Karavdic-Gaab
Donald Prohaska
GIZ is responsible for the content of this publication.
On behalf of the
German Federal Ministry for Economic Cooperation and Development (BMZ)
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 3
Innovation and digitalisation in SMEs in Bosnia and Herzegovina BASELINE STUDY
Authors
Haris Ćatić
Mirza Pale
Creative Development and Engineering Solutions (CEDES)
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 4
Contents
1. Introduction ................................................................................................................................................ 7
2. Methodology ....................................................................................................................................... 8
3. Status of Innovation and digitalization in SMEs – findings ............................................................. 10
3.1. Tourism sector ................................................................................................................................... 10
3.1.1. Sampling of SMEs and type of SMEs interviewed ......................................................................... 10
3.1.2. Needed support to improve business by using digital technology ............................................... 12
3.1.3. Support needed in the field of digital marketing .......................................................................... 13
3.1.4. Support needed in the field of improvement and digitalization of business model ..................... 14
3.1.5. Support needed in the field of digitalization of products / services - introducing new products with integrated digital solutions.................................................................................................................... 15
3.1.6. Support needed in the field of improvement of knowledge and skills for use of digital technologies .................................................................................................................................................. 16
3.1.7. Support needed in the field of improvement of research and innovation capacities .................. 17
3.1.8. Services already used in the process of digital transformation of the business ........................... 18
3.1.9. Established cooperation with other institutions / organizations .................................................. 19
3.1.10. Review of services used in the field of digital transformation of businesses that result in the increase of revenue growth .......................................................................................................................... 20
3.1.11. Review of use of ICT tools ............................................................................................................. 21
3.1.12. Level of integration of computer software systems ..................................................................... 22
3.2. Wood processing sector .................................................................................................................... 22
3.2.1. Sampling of SMEs and type of SMEs interviewed ......................................................................... 23
3.2.2. Needed support to improve business by using digital technology ............................................... 24
3.2.3. Support needed in the field of digital marketing .......................................................................... 25
3.2.4. Support needed in the field of improvement and digitalization of business model ..................... 26
3.2.5. Support needed in the field of digitalization of products /services - introducing new products with integrated digital solutions.................................................................................................................... 27
3.2.6. Support needed in the field of improvement of knowledge and skills for use of digital technologies .................................................................................................................................................. 28
3.2.7. Support needed in the field of improvement of research and innovation capacities .................. 29
3.2.8. Services already used in the process of digital transformation of the business ........................... 30
3.2.9. Established cooperation with other institutions / organizations .................................................. 31
3.2.10. Review of services used in the field of digital transformation of businesses that resulted in the increase of turnover of the companies ......................................................................................................... 32
3.2.11. Review of use of ICT tools ............................................................................................................. 33
3.2.12. Level of integration of computer software systems ..................................................................... 34
3.2.13. Participation on ICT events ............................................................................................................ 35
3.3. Metal processing sector and plastic sector ....................................................................................... 36
3.3.1. Sampling of SMEs and type of SMEs interviewed ......................................................................... 36
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 5
3.3.2. Needed support to improve business by using digital technology ............................................... 38
3.3.3. Support needed in the field of digital marketing .......................................................................... 39
3.3.4. Support needed in the field of improvement and digitalization of business model ..................... 40
3.3.5. Support needed in the field of digitalization of products / services - introducing new products with integrated digital solutions.................................................................................................................... 41
3.3.6. Support needed in the field of improvement of knowledge and skills for use of digital technologies .................................................................................................................................................. 42
3.3.7. Support needed in the field of improvement of research and innovation capacities .................. 43
3.3.8. Services already used in the process of digital transformation of the business ........................... 44
3.3.9. Established cooperation with other institutions / organizations .................................................. 45
3.3.10. Review of services used in the field of digital transformation of businesses that resulted in revenue growth of the companies ................................................................................................................ 46
3.3.11. Review of use of ICT tools ............................................................................................................. 47
3.3.12. Level of integration of computer software systems ..................................................................... 48
3.3.13. Participation on ICT events ............................................................................................................ 49
3.4. IT sector ............................................................................................................................................. 50
3.4.1. Sampling of SMEs and type of SMEs interviewed ......................................................................... 50
3.4.2. Support local SMEs with CMS based e-commerce solutions ........................................................ 52
3.4.3. Support local SMEs with ERP solutions ......................................................................................... 53
3.4.4. Avoidance of possible failure in IT solutions ................................................................................. 54
3.4.5. State of competition in IT sector ................................................................................................... 55
3.4.6. Switch to local SMEs as major market ........................................................................................... 56
4. Status of available services for digital transformation of companies - findings ............................ 58
4.1. Status of interviewed service providers ............................................................................................ 58
4.2. Provision of services in the field of digital marketing ....................................................................... 67
4.3. Provision of services in the field of improvement and digitalization of business model .................. 75
4.4. Provision of services in the field of Product / Service Digitization - Introducing a New Product with Integrated Digital Solution ............................................................................................................................ 83
4.5. Provision of services in the field of improvement of knowledge and skills for use of digital technologies .................................................................................................................................................. 89
4.6. Provision of services in the field of improvement of research and innovation capacities ............... 98
5. Status of service providers for digital transformation of companies - findings ........................... 106
5.1. Human capacities of the service providers to support provision of services to SMEs in digital transformation of businesses ...................................................................................................................... 106
5.2. Use of the ICT tools in the service providers organization .............................................................. 108
5.3. Organization and participation in ICT events .................................................................................. 108
5.4. Networking and public private partnership activities for digital transformation of MSMEs .......... 109
5.5. Potential role as business digitalization HUBs ................................................................................. 110
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 6
5.6. Available facilities managed by service providers (business incubators, innovation incubators, ICT startup support, prototype development facilities, etc.). ........................................................................... 111
6. Conclusions and proposed project strategy................................................................................... 112
7. ANNEXEX ......................................................................................................................................... 123
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 7
1. Introduction
The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, in partnership with the Ministry
for Foreign Trade and Economic Relations of Bosnia and Herzegovina and other relevant public and private
partners is responsible for implementing the project ‘’Innovation and digitalization in SMEs in Bosnia and
Herzegovina’’ (the Project) aimed at strengthening SMEs in selected sectors in BiH to make greater use of
opportunities to increase their competitiveness through innovation and digitalization. The planned project
duration is 2 (two) years and 6 (six) months (03/2019 – 09/2021).
In order to succeed in local, regional and international markets, SMEs have to increasingly introduce
innovations and digital solutions. The objective of the project is therefore to improve the conditions for
innovations and digitalization in SMEs.
Bearing in mind the Project’s focus on greater use of opportunities to increase SMEs competitiveness
through innovation and digitalization, this particular assignment aims at getting insight information on the
existing capacities and needs of both the SME sector and relevant service providing institutions (service
providers) to support innovations in companies by introducing new/ improved business models and
processes based on digital technologies. The Consultant activities resulted in delivery of the document
Analysis of data on digital transformation gaps in SMEs and Baseline study for the Innovation and
digitalization in SMEs in Bosnia and Herzegovina Project.
The produced document:
• Provides a good quality analysis of the current situation and identifies entry points for the project
interventions.
• Identifies/analyze already identified relevant stakeholders and existing development structures
(service providers), supposed to support innovative activities at company level including their human
and organizational capacities.
• Creates a set of baseline data to be used in the further stages of Project implementation. The purpose
of compiling data on the current situation is to enable comparison of project achievements at different
stages of the implementation of project activities in the forthcoming period of time.
The produced document assesses both the innovation gaps and absorbing capacities of the project
counterparts (SMEs and service providers) in the following project localities: Banja Luka, Tuzla, Sarajevo,
and Mostar, and in the sectors of Metal processing and plastic, Wood processing and Tourism.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 8
2. Methodology
The produced document aimed at:
• Quality analysis of the current situation and identification of entry points for the project
interventions
• Analysis of relevant stakeholders and existing development structures (service providers),
supposed to support innovative activities at company level including their human and
organizational capacities.
• Assessment of the innovation gaps and absorbing capacities of the project counterparts (SMEs
and service providers) in the following project localities: Banja Luka, Tuzla, Sarajevo, and Mostar,
and in the sectors of Metal processing and plastic, Wood processing and Tourism.
• Development of database to be used in the further stages of Project implementation with the
purpose of compiling data on the current situation to enable comparison of project achievements
at different stages of the implementation of project activities in the forthcoming period of time.
To achieve above stated expectation CEDES applied research methodology that included next major steps:
• Clarify the list of relevant service providers to be interviewed, using as a basis the internal project
document ‘’Entrepreneurial Ecosystem Map – Innovation and Digitalisation’’;
• Organise interviews with the selected service providers (10 service providers in 4 project
locations) on the basis of a questionnaire to be developed in close communication with the project
team;
• Compile data already collected via SME surveys in each of four project locations (for 200 SMEs)
with data collected on service providers in a single database per project sectors: Tourism, Wood
processing and Metal processing and plastic sector;
• Develop a baseline study for the Innovation and digitalisation in SMEs in Bosnia and Herzegovina
Project - Analysis of data on digital transformation gaps in SMEs;
Major characteristic of the survey:
• The project locations where the surveys were undertaken are regions of Sarajevo. Mostar, Tuzla
and Banja Luka.
• The project sectors are Tourism, Wood processing, Metal processing and Plastic sector.
• The individual databases per sector and regions, already populated by the information gathered
from 200 SMEs were delivered to CEDES, by GIZ project staff, and companies to be surveyed were
selected by GIZ.
• The list of 10 Service providers were defined based on the document ’Entrepreneurial Ecosystem
Map – Innovation and Digitalization’’, as suggested by GIZ project staff.
• The Survey questionnaires for 200 SMEs in the sector of Tourism, Wood processing, Metal
processing and Plastic sector were prepared by GIZ project staff
• The Survey questionnaires for 10 Service providers were developed by CEDES, and agreed with
the GIZ project staff
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 9
The major principle respected in the
process of development of survey
questionnaires for 10 Service
providers were to assure clear link
with the questionnaires for MSMEs,
in sense of provision of the same type
of information from the perspective
of service provider, in order to allow
assessment of the market gaps in the
field of digitalization and digital
transformation of private sector
(MSMEs), innovation gaps and
absorbing capacities of the project counterparts (SMEs and service providers), but also to enable
comparison of project achievements at different stages of the implementation of project activities in the
forthcoming period of time.
Services required by MSMEs per project
sectors (digitalization)
Services offered by Service providers
(digitalization)
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 10
3. Status of Innovation and
digitalization in SMEs – findings
3.1. Tourism sector
According to the latest statistic reports, in the period from January – October 2018 tourists realized
1,292,636 tourists’ arrivals which represent the increase by 12.4% and 2,702,502 overnight stays which is
increase by 13.8% as compared to the same period of 2017. The number of domestic tourist nights
increased by 15.5% and number of foreign tourist nights increased by 13.1% as compared to the same
period of 2017. Domestic tourist’s share of total number of overnight stays was 27.6% and foreign tourists
share was 72.4%. Concerning the structure of foreign tourist nights, most of them (50.6%) were realized by
tourists from Croatia (11.0%), Serbia (7.8%), Turkey (6.4%), Slovenia (5.5%), United Arab Emirates (5.2%),
Germany (5.1%), Italy (4.9%) and Poland (4.7%) . Tourists from other countries realized 49.4% of tourist
nights. Regarding the average detention of foreign tourist stays, on the first place comes Malta with
average stay of 5.3 nights, Ireland by 3.7 nights, Kuwait by 3.6 nights, Qatar with 3.3 nights, Island and
United Arab Emirates with 3.1 nights and France with 3.0 nights. According to the type of accommodation
facility the highest number of nights was recorded in Hotels and similar accommodation with share of
91.1%. Tourism sector is one of the fastest growing sectors in Bosnia and Herzegovina, with continual high
growth rate in last decade.
3.1.1. Sampling of SMEs and type of SMEs interviewed
The sample for this research were 9 companies active in tourism sector from all over Bosnia and
Herzegovina. The majority of the interviewed subjects are active in the field of accommodation and
hospitality, but also some are active in the field of provision of local tourism services and local products,
mostly in Sarajevo macro region. According to their opinion, the most significant improvements related to
their core business that can be achieved through the digitalization are related to:
• Linking guest check-in platforms to decrease official administration (according to the local law it is
required to do official check in 3 different records)
• Development of B2B systems, tourist destination application
• Sales/promotion through online advertising channels, direct sales through the online booking system
• Digitalization of libraries, archive material, digitalization of the Institute's art and other collections
• Web page development and upgrading
• Development and digitalization and promotion of gastronomic tours, cooking classes, gourmet shops
• Development of Guest info Channels for hotel guests, Smartphone hotel applications
• Online sales of local products, promotions, marketing
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 11
Number of employees in the
interview companies increase
since 2016 by the average annual
growth rate of 11.16%, while the
number of female employees
over the period growth by even
higher average annual growth
rate of 18.5%. This resulted in
higher participation of female
employees in total number of
employees in 2019 (49.3%), than
in 2016, when this participation
was 39.4%.
According the origin of customers (tourists in BiH),
informants stated that majority of goods and
services are provided to tourists from EU countries,
neighboring countries, Middle East and south east
Asia, as well as locals from Bosnia and Herzegovina. The improvements in access to those markets are
mostly focused on web page presentations, development of smartphone applications, and commercials
development for new markets.
Domaestic in (%) Foreign in (%)
Share in % 24 76
Tourism sector
Share on foriegn and domestic market
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 12
3.1.2. Needed support to improve business by using digital
technology
The most of the interviewed
subjects expressed their
needs for support to improve
their businesses by using
digital technologies in the
areas of Digital marketing,
Product/service digitalization
-introducing a new product
with integrated digital
solution and Improvement
and digitalization of business
model.
Digital
Marketing
Imrpvoment
and
digitalization
of business
model
Product / Service
Digitization -
introducing a new
product
with integrated
digital solution
Specific skills
provision /
skills for using
digital
technologies
Innovative
capacities/
research /
prototype
design
% of total number
of interviewd
subjects 77.8 44.4 55.6 22.2 22.2
In which of the following areas do you need support to improve
business by using digital technology?
Required
supporto to
improve
business by
using digital
technology
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 13
3.1.3. Support needed in the field of digital marketing
Almost 90% of surveyed
companies expressed
their needs for support in
the filed of Improving
experience in using
company Website/ Blog
and more than 55% needs
for support in improving
of content of digital
presentation of products
and services (content
marketing).
Improving user
experience
in using the
Website
/ company blog
Creating and
managing a
profile
and on social
networks
(Social media
platforms)
Improvement
of content of
digital
presentation of
products and
services
(Content
marketing)
Customer's
/user's
data
analysis
(Big data
analytics)
Search
engine
optimizatio
n
Automation
marketing
services
Optimization of
information
exchange
with customers /
users
and suppliers
(Conversation rate
optimization)
% of total number
of interviewed
subjects 88.9 44.4 55.6 44.4 44.4 11.1 22.2
Required support
in the field of digital
marketing
Required support in the field of digital marketing
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 14
3.1.4. Support needed in the field of improvement and
digitalization of business model
Regarding digitalization of the existing business model the most required support is in the field of
Development and application of software solutions for communication /cooperation. Most of the survey
companies were interested for services in the field of Introduction of new business models and its
digitalization and in certain level support in Adaption of business model to individual customer /user
requirements.
a1)Supply
chain
manageme
nt
a2) Customer
relationship
management
a3) Warehouse
/ logistic
management
a4) Development
and application
of software
solutions for
communication /
cooperation
% of total number of
interviewed subjects 22.2 33.3 33.3 66.7 66.7 33.3 11.1 11.1 0.0
Required support to
improve business
model
Required support to improve business model
a) Digitization of existing business model
b) Introducing
a new
business
model
and its
digitalization
c) Adapting the
business model
to individual
customer / user
requirements
(Individualization)
d) Professional
consulting in
optimizing the
production
process
e) Professional
consulting
for other
aspects of
business f) Other
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 15
3.1.5. Support needed in the field of digitalization of products
/ services - introducing new products with integrated
digital solutions
In the field of
digitalization of products /
services - introducing new
products with integrated
digital solutions,
interviewed companies
were mostly interested in
Support and
maintenance, Prototyping
and testing and Design of
new digital
products/services.
a) Analysis,
research and
preparatory
activities
b) Conceptualization
of new digital
products / services
b) Designing of
new digital
products / services
d) Prototyping and
testing
e) Sales of
product / services
f) Support and
maintenance
% of total number of
interviewed subjects 22.2 44.4 55.6 55.6 11.1 66.7
Required support tin
digitalization of
products /services -
introducing new
products with
integrated digital
solutions
Required support tin digitalization of products /services - introducing new products with integrated digital solutions
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 16
3.1.6. Support needed in the field of improvement of
knowledge and skills for use of digital technologies
Most required services and support in this field are related to Training to technical staff (productivity
improvement) , General improvement of e-skills at the company level, while most required trainings to
the workers are in the filed of Special software use and Marketing/sales.
c1) Customer
relationship
c2) Special
software
use
c3)
Marketing/s
ales
c4) Innovation
(product/proces
s)
c5) Some
other skills
% of total number of
interviewed subjects 33.3 88.9 44.4 66.7 55.6 33.3 0.0 44.4 55.6 0.0
Needed support in
provision of specific
skills /knowledge
Needed support in provision of specific skills /knowledge
a) Training to
management
staff
management
skills)
b) Training to
technical staff
productivity
improvement)
c) Training provision to workers in specific areas
d) Linking
with
education
institutions
e) General
improvement of
e-skills at the
company level f) Other
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 17
3.1.7. Support needed in the field of improvement of research
and innovation capacities
Most of the interviewed
companies require
support in improvement
of research and
innovation capacities
through the Participation
in professional seminars,
fairs, presentations and
training in the field of
innovation introduction.
a) Provision of
experts /
consultants
b) Organization of
training in the field of
innovation
introduction
c) Participation in
professional
seminars, fairs,
presentations
d) Something
else
% of total number of
interviewed subjects 22.2 55.6 66.7 0.0
Required support in
improvement of
innovation/research
capacities
Required support in improvement of innovation/research capacities
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 18
3.1.8. Services already used in the process of digital
transformation of the business
The mostly used services in BiH
are IT Consulting/ Services, while
mostly required services that
does not exist in BiH are services
in the field of Digital marketing
(education).
Use in BiH
It does not
exist in BiH,
but it is
necessary
Use in BiH
It does not
exist in BiH,
but it is
necessary
Use in BiH
It does not
exist in BiH,
but it is
necessary
Use in BiH
It does not
exist in BiH,
but it is
necessary
% of total number of
interviewed subjects 22.2 22.2 11.1 22.2 88.9 44.4 0.0 33.3
Services used and
required in the field
of digital
transformation of
business
What services are you using in the field of digital transformation of your business
a) Professional counseling b) Business consulting / service c) IT consulting / serviced) Education in the field of
digital marketing
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 19
3.1.9. Established cooperation with other institutions /
organizations
The most of the
interviewed companies
declare established
cooperation with the
Tourist boards,
International
projects/Donors and IT
companies .
a) IT
companies
b) Chambers
of Commerce
c) Employer /
business
associations
d) Technology
parks /
innovation
centers / IT
hubs e) Clusters
f) Development
agencies
g) Universities
/ Colleges h) Institutes
i) International
projects / donors
j) Tourist
boards
% of total number of
interviewed subjects 44.4 33.3 22.2 11.1 11.1 22.2 33.3 11.1 55.6 66.7
Established
cooperation with other
institutions /
organizations
Established cooperation with other institutions / organizations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 20
3.1.10. Review of services used in the field of digital
transformation of businesses that result in the increase
of revenue growth
Improvement that mostly
contributed to revenue
growth of the interviewed
companies in the last 3
years are in the field of
Digitalization of product
and services, Utilization of
the new technologies and
innovations and
Marketing/social
networks.
a) Marketing /
social
networks
b) Management
/ organization
c) Products
and services
d) Training of
employees in the
application of IT
technologies
e) Utilization of
new
technologies /
innovations
f)
Something
else
% of total number of
interviewed subjects 44.4 22.2 66.7 11.1 55.6 0.0
Improvements that
directly contributed
to revenue growth
over the past 3 years
through the use of
digital solutions
Improvements that directly contributed to revenue growth over the past 3 years through the use
of digital solutions
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 21
3.1.11. Review of use of ICT tools
About 56% of the
interviewed companies do
not possess own internal
computer network.
Regarding utilization of
appropriate
computer/software tools
most of the companies agree
that they use appropriate
computer software tools in
all aspects of business, with
the exception of the field of
Production, where prevail
negative opinion, and field of
Quality assurance, where
dominant opinion is
characterized by lack of
knowledge on situation.
Utilization of appropriate computer / software tools
Management
Fully agree % Agree % Does not know % Does not agree % Full disagree %
44.4 22.2 11.1 22.2 0.0
Marketing
Fully agree % Agree % Does not know % Does not agree % Full disagree %
33.3 22.2 22.2 11.1 11.1
Customer relationship
Fully agree % Agree % Does not know % Does not agree % Full disagree %
44.4 44.4 0.0 0.0 11.1
Suppliers/procurement
Fully agree % Agree % Does not know % Does not agree % Full disagree %
22.2 44.4 0.0 22.2 11.1
Production
Fully agree % Agree % Does not know % Does not agree % Full disagree %
0.0 11.1 22.2 22.2 44.4
Quality
Fully agree % Agree % Does not know % Does not agree % Full disagree %
22.2 11.1 44.4 0.0 22.2
Logistic
Fully agree % Agree % Does not know % Does not agree % Full disagree %
33.3 33.3 0.0 11.1 22.2
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 22
3.1.12. Level of integration of computer software systems
Regarding level of integration of
computer/software systems
most of the companies agree
that integration level in their
companies is low, with the
exception of procurement and
stock management systems
where the dominant attitude is
characterized by lack of
knowledge on that issue.
3.2. Wood processing sector
BiH has enormous raw material resources, in terms of wood processing, as the basis for future
development. However, the problem is that business activities within this sector in BiH are mainly based
on the export of raw materials, and situation is changed since recently.
In 2016, there were 1065 registered wood processing companies, while in 2018 that number increased by
33 companies and it counted 1098 companies. From listed companies, 59.4% companies had an income of
half of million BAM, 36.2% of them had up to BAM 5 million and 4.5% of them had an income of more than
BAM 5 million. The number of employees in the wood processing industry experienced significant growth
during recent years. The growth was most evident in 2017 when there was an increase of 1208 employees.
In 2018, the growth was not as intensive and increased only by 391 employees. The average gross monthly
salary in companies in the wood processing industry is BAM 943.00.
Annual growth rate calculated from working day adjusted volume of industrial production in BiH, for
November 2018- November 2017, shows the total industry growth rate of 2%. In the same period
Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw
and plaiting materials recorded 2% growth, while Manufacture of furniture recorded negative growth
(decline) of -0.9%, what should cause serious concern.
Link/Integration of company's computer / software systems, with other systems
CRM Systems (management systems)
Fully agree % Agree % Does not know
% Does not agree
% Full disagree
%
33.3 0.0 11.1 22.2 33.3
ERP Systems (management systems)
Fully agree % Agree % Does not know
% Does not agree
% Full disagree
%
11.1 0.0 11.1 22.2 55.6
Management
Fully agree % Agree % Does not know
% Does not agree
% Full disagree
%
22.2 11.1 11.1 11.1 44.4
Procurement
Fully agree % Agree % Does not know
% Does not agree
% Full disagree
%
22.2 11.1 33.3 11.1 22.2
Stock management
Fully agree % Agree % Does not know
% Does not agree
% Full disagree
%
22.2 0.0 33.3 11.1 33.3
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 23
3.2.1. Sampling of SMEs and type of SMEs interviewed
The sample for this research were 70 companies active in wood processing sector from all over Bosnia and
Herzegovina. The majority of the interviewed subjects are active in the field of
production of Furniture, kitchens, hotel room furniture, bedrooms, style furniture, chairs, office furniture,
firewood processing, sawmill products, drying services, raw materials processing, multi-ply and solid floors,
solid adhesive panels, wood beams, parquet, pellets, joinery, hives and hive elements, etc.. According to
their opinion, the most significant improvements related to their core business that can be achieved
through the digitalization are related to productivity enhancement, utilization calculation, CE marking,
product certification, production software introduction, procurement of new machines, process
digitization, procurement of CNC machines and tools, digital marketing, digital product presentation, sales
digitization, production process automation, order and production process digitization, work orders
digitalization, etc.
Number of employees in the
interviewed companies increase
since 2016 by the average annual
growth rate of 6.75%, while the
number of female employees over
the period growth by average
annual growth rate of 1.85%. This
resulted in lower participation of
female employees in total number
of employees in 2019 (22.44%),
than in 2016, when this
participation was 20.65%.
According the origin of customers, informants
stated that goods are provided almost equally to
the foreign and domestic customers. Export is
mostly oriented to neighboring West Balkan and also EU countries, UK, Switzerland, and as potential
market is mentioned China.
The improvements in access to those markets are mostly focused on digital marketing and sales, quality
certification of products and standardization, CE marking, web page presentations and digital order
placement and sale, better relations with the customers, using the new market niches, etc..
Domaestic in (%) Foreign in (%)
Share in % 45.7 54.3
Wood processing sector
Share on foriegn and domestic market
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 24
3.2.2. Needed support to improve business by using digital
technology
The most of the interviewed
subjects expressed their needs for
support to improve their
businesses by using digital
technologies in the areas of
Improvement and digitalization of
business model and Digital
marketing, and then
Product/service digitalization -
introducing a new product with
integrated digital solution.
Digital
Marketing
Improvement and
digitalization of
business model
Product / Service
Digitization -
introducing a new
product
with integrated
digital solution
Specific skills
provision /
skills for using digital
technologies
Innovative
capacities/
research /
prototype
design Other
% of total number
of interviewed
subjects 41.4 58.6 32.9 30.0 24.3 8.6
Required support
to improve
business by using
digital technology
In which of the following areas do you need support to improve
business by using digital technology?
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 25
3.2.3. Support needed in the field of digital marketing
Most of the surveyed
companies (41.4%)
expressed their needs for
support in the field of
Improvement of content
of digital presentation of
products and services
(Content marketing),
then Optimization of
information exchange
with customers / users
and suppliers
(Conversation rate
optimization and then in
the field of Improving the
user experience in using
the website / company
blog, as well as Big data
analytics.
Improving user
experience
in using the Website
/ company blog
Creating and
managing a
profile
and on social
networks
(Social media
platforms)
Improvement of
content of digital
presentation of
products and
services
(Content
marketing)
Customer's
/user's data
analysis
(Big data
analytics)
Search
engine
optimization
Automation
marketing
services
Optimization of
information
exchange
with customers /
users
and suppliers
(Conversation rate
optimization) Other
% of total number of
interviewed subjects 31.4 20.0 41.4 31.4 18.6 24.3 35.7 18.6
Required support in
the field of digital
marketing
Required support in the field of digital marketing
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 26
3.2.4. Support needed in the field of improvement and
digitalization of business model
Regarding digitalization of the existing business model the most required support is in the field of
Development and application of software solutions for communication /cooperation and then Wearhouse
/ logistic management. Most of the survey companies were also interested for services in the field of
Introduction of new business models and its digitalization and in Professional consulting in optimizing the
production process.
a1)Supply
chain
management
a2) Customer
relationship
management
a3) Warehouse /
logistic
management
a4) Development
and application
of software
solutions for
communication
/
cooperation
% of total number of
interviewed subjects 20.0 27.1 37.1 41.4 55.7 25.7 40.0 17.1 5.7
Required support to
improve business
model
Required support to improve business model
a) Digitization of existing business model
b) Introducing a
new business
model
and its
digitalization
c) Adapting the
business model
to individual
customer / user
requirements
(Individualizatio
n)
d) Professional
consulting in
optimizing the
production
process
e) Professional
consulting
for other
aspects of
business f) Other
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 27
3.2.5. Support needed in the field of digitalization of products
/services - introducing new products with integrated
digital solutions
In the field of digitalization of
products / services -
introducing new products
with integrated digital
solutions, interviewed
companies were mostly
interested in digitalization of
Sales of product / services and
Design of new digital product
/ services, as well as Analysis,
research and preparatory
activities in this area.
a) Analysis,
research and
preparatory
activities
b) Conceptualization
of new digital
products / services
c) Designing of
new digital
products /
services
d) Prototyping
and testing
e) Sales of
product /
services
f) Support
and
maintenanc
e g) Other
% of total number of
interviewed subjects 32.9 27.1 32.9 24.3 45.7 24.3 5.7
Required support tin
digitalization of
products /services -
introducing new
products with
integrated digital
solutions
Required support tin digitalization of products /services - introducing new products with integrated digital
solutions
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 28
3.2.6. Support needed in the field of improvement of
knowledge and skills for use of digital technologies
Most required services and support in this field are related to Training provision to workers (CNC operators)
, where 60% of interviewed companies expressed their needs for such trainings, then Training to technical
staff (productivity improvement) where more than 57% of the companies expressed their needs and
Training to management staff (management skills) where the interest expressed 41.4% of the companies.
c1) CNC
c2) IT (3D
modeling)
c3) Marketing
/ sales
c4)
Innovation
(product/pro
cess)
c5) Some
other skills
% of total number
of interviewed
subjects 41.4 57.1 60.0 35.7 35.7 27.1 15.7 30.0 40.0 7.1
Needed support
in provision of
specific skills
/knowledge
Needed support in provision of specific skills /knowledge
a) Training to
management
staff
(management
skills)
b) Training to
technical staff
productivity
improvement)
c) Training provision to workers in specific areas
d) Linking
with
education
institutions
e) General
improveme
nt of e-
skills at the
company
level f) Other
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 29
3.2.7. Support needed in the field of improvement of research
and innovation capacities
Most of the interviewed
companies require
support in improvement
of research and
innovation capacities
through the Training in
the field of innovation and
provision of consultancy
services.
a) Provision of experts /
consultants
b) Organization of
training in the field of
innovation introduction
c) Laboratory
services
d) Something
else
% of total number of
interviewed subjects 40.0 44.3 18.6 10.0
Required support in
improvement of
innovation/research
capacities
Required support in improvement of innovation/research capacities
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 30
3.2.8. Services already used in the process of digital
transformation of the business
The mostly used services
in the field of digital
transformation of
companies in wood
processing sector are
Business Consulting
Services of local service
providers, while mostly
required services that
does not exist in BiH and
there is need for such
services, are also Business
Consulting Services.
Obviously, there is strong
need for such services in
wood processing sector.
Use in BiH
It does not
exist in BiH,
but it is
necessary
Use in BiH
It does not
exist in BiH,
but it is
necessary
Use in BiH
It does not
exist in BiH,
but it is
necessary
% of total number of
interviewed subjects 21.4 18.6 42.9 22.9 20.0 7.1
Services used and
required in the field of
digital transformation of
business
What services are you using in the field of digital transformation of your
business
a) Professional
counseling
b) Business consulting /
servicec) IT consulting / service
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 31
3.2.9. Established cooperation with other institutions /
organizations
The most of the
interviewed
companies declare
established
cooperation with the
Chambers of
commerce,
Development agencies
and
Employers/business
association, mostly
with the quasi
institutional partners,
obviously.
a) IT
companies
b) Chambers
of Commerce
c) Employer /
business
associations
d) Technology
parks /
innovation
centers / IT
hubs e) Clusters
f)
Developme
nt agencies
g)
Universities
/ Colleges h) Institutes
i)
Internationa
l projects /
donors j) Other
% of total number of
interviewed subjects 27.1 67.1 45.7 10.0 37.1 54.3 17.1 5.7 18.6 5.7
Established cooperation
with other institutions /
organizations
Established cooperation with other institutions / organizations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 32
3.2.10. Review of services used in the field of digital
transformation of businesses that resulted in the
increase of turnover of the companies
Improvement that mostly
contributed to revenue
growth through the use
of digital solutions by the
interviewed companies in
the last 3 years are in the
field of Product and
services, Utilization of the
new technologies and
innovations.
a) Marketing /
social networks
b) Management /
organization
c) Products
and
services
d) Training of
employees in the
application of IT
technologies
e) Utilization of
new
technologies /
innovations
f) Something
else
% of total number of
interviewed subjects 22.9 18.6 64.3 22.9 35.7 0.0
Improvements that
directly contributed to
revenue growth over the
past 3 years through the
use of digital solutions
Improvements that directly contributed to revenue growth over the past 3 years through the use
of digital solutions
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 33
3.2.11. Review of use of ICT tools
Utilization of appropriate computer / software tools
Management
Fully agree % Agree % Does not know % Does not agree % Full disagree %
20.0 27.1 20.0 17.1 15.7
Marketing
Fully agree % Agree % Does not know % Does not agree % Full disagree %
11.4 15.7 38.6 18.6 15.7
Production
Fully agree % Agree % Does not know % Does not agree % Full disagree %
15.7 22.9 27.1 18.6 15.7
Quality
Fully agree % Agree % Does not know % Does not agree % Full disagree %
7.1 35.7 21.4 18.6 17.1
Logistic
Fully agree % Agree % Does not know % Does not agree % Full disagree %
10.0 32.9 24.3 15.7 17.1
Suppliers/procurement
Fully agree % Agree % Does not know % Does not agree % Full disagree %
14.3 34.3 25.7 11.4 14.3
Reception/delivery
Fully agree % Agree % Does not know % Does not agree % Full disagree %
7.1 24.3 22.9 28.6 17.1
Utilization of appropriate computer / software tools
Inventory management
Fully agree % Agree % Does not know % Does not agree % Full disagree %
12.9 22.9 20.0 27.1 17.1
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 34
About 81% of the interviewed companies possess own internal computer network. Regarding utilization of
appropriate computer/software tools most of the companies are indecisive about the utilization of the
appropriate computer software tools in all aspects of business. It is hard to find any aspects of the business
where clearly positive or clearly negative answers dominate over 50%.
3.2.12. Level of integration of computer software systems
Regarding level of
integration of
computer/software
systems most of the
companies are
indecisive about
integration level in their
companies, but slightly
more dominant positive
answers are in the field
of Procurement and
Storage.
Material flow in production
Fully agree % Agree % Does not know % Does not agree % Full disagree %
12.9 11.4 38.6 21.4 15.7
Delivery to customers
Fully agree % Agree % Does not know % Does not agree % Full disagree %
20.0 31.4 18.6 14.3 15.7
Other
Fully agree % Agree % Does not know % Does not agree % Full disagree %
4.3 1.4 0.0 0.0 94.3
Link/Integration of company's computer / software systems, with other systems
CAD Systems linked)
Fully agree % Agree % Does not know % Does not agree % Full disagree %
12.9 11.4 27.1 30.0 18.6
Procurement
Fully agree % Agree % Does not know % Does not agree % Full disagree %
7.1 32.9 28.6 14.3 17.1
Storage
Fully agree % Agree % Does not know % Does not agree % Full disagree %
7.1 37.1 24.3 14.3 17.1
CAD/CAE with CNC machines
Fully agree % Agree % Does not know % Does not agree % Full disagree %
14.3 17.1 20.0 28.6 20.0
ERP systems
Fully agree % Agree % Does not know % Does not agree % Full disagree %
4.3 24.3 24.3 27.1 20.0
Management
Fully agree % Agree % Does not know % Does not agree % Full disagree %
8.6 15.7 38.6 20.0 17.1
Other
Fully agree % Agree % Does not know % Does not agree % Full disagree %
2.9 0.0 12.9 0.0 84.3
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 35
3.2.13. Participation on ICT events
Company already participated or has interest to organize/participate on the events
Ideathon
Fully agree % Agree % Does not know % Does not agree % Full disagree %
4.3 7.1 22.9 34.3 31.4
Hackathon
Fully agree % Agree % Does not know % Does not agree % Full disagree %
4.3 7.1 20.0 37.1 31.4
Boothcamp
Fully agree % Agree % Does not know % Does not agree % Full disagree %
4.3 5.7 21.4 37.1 31.4
Competition of programmers
Fully agree % Agree % Does not know % Does not agree % Full disagree %
14.3 17.1 20.0 28.6 20.0
Other
Fully agree % Agree % Does not know % Does not agree % Full disagree %
1.4 0.0 2.9 2.9 92.9
Majority of the interviewed companies did not confirm their participation or interest to participate on the
ICT events such as Ideathon, Hackathon, Boothcamp, Competition of programmers and similar events, in any
form of participation (participants, key organization partners, one of the organization partners, etc.).
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 36
3.3. Metal processing sector and plastic sector
There is a longstanding tradition of metal processing in BiH, due to the country’s abundance in natural
resources such as iron ore, bauxite, lead, zinc, and copper. The metal sector is a significant export driver
with robust production growth rate of over ten percent in the past few years, although this growth
slowdown in the last period. The main export products of the metal sector included aluminum, steel and
automotive industry components, although since the problems in the largest aluminum producer the
production of aluminum will significantly decline. BiH’s metal sector exports are primarily oriented towards
the EU and Central European Free Trade Agreement (CEFTA) markets. The majority of metal processing
companies are small companies (80 percent) while medium sized companies represent 15 percent and
large companies represent five percent of companies in the metal sector. Taking into account income
generation criteria, the large companies still achieve the majority of income in the sector.
The existing structure of the metal sector, characterized by small companies, provides an opportunity for
larger companies to integrate existing primary producers and further develop their business
operations. The price of labor in the metal processing industry in BiH is competitive when compared with
global market labor costs. Besides materials for industrial processing, small private companies also buy
modern computerized equipment and strive to stay updated with current technologies. Many factories
are engaged in semi-processing of components for foreign companies based in the EU and neighboring
countries.
Annual growth rate calculated from working day adjusted volume of industrial production in BiH, for
November 2018- November 2017, shows the total industry growth rate of 2%. In the same period
Manufacture of rubber and plastic products recorded growth rate of 5%, Manufacture of other non-
metallic mineral products 4.6%, Manufacture of basic metals 1.4%, Manufacture of machinery and
equipment n.e.c. 7%, Manufacture of motor vehicles, trailers and semi-trailers 5.5%, Manufacture of other
transport equipment 1.2% and Repair and installation of machinery and equipment 23.8%. The only
subsector recorded negative trend is Manufacture of fabricated metal products, except machinery and
equipment with negative growth rate (decline) of - 5.8%.
3.3.1. Sampling of SMEs and type of SMEs interviewed
The sample for this research were 90 companies active in metal processing sector and plastic sector from
all over Bosnia and Herzegovina. The majority of the interviewed subjects are active in the field of
production of medical chairs and equipment, metal machining services, production of steel structures,
container parts, fabrication of metal assemblies, steel beams, turbojet engine repair, spare parts
production, special tooling, material testing, complex metal product manufacturing, traffic signs
production, medical plastic supplies production, cable manufacturing, industrial furnace production,
greenhouses, tractors, aluminum locksmiths and joinery production, PVC joinery, agricultural tools, forged
products, office furniture, pumps, fittings, electro-hydraulic hoists, gearbox repair and conveyors repair,
production of PE film, plastic tubes, plastic packaging, plastic bags, injection molded plastic, etc.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 37
Number of employees in the
interviewed companies
increase since 2016 by the
average annual growth rate
of 13.86%, while the number
of female employees over
the period growth by average
annual growth rate of
11.16%. This resulted in
lower participation of female
employees in total number of
employees in 2019 (20.55%),
than in 2016, when this
participation was 22.62%.
According the origin of customers,
informants stated that goods are provided
almost equally to the foreign and domestic
customers. Export is mostly oriented to
neighboring West Balkan and also EU countries, as well as USA. The improvements in access to those
markets are mostly focused on digital marketing and sales, quality certification of products and
standardization, CE marking, web page presentations, production process digitalization and improvement,
complex product development, IT technology introduction in production and management process, etc..
Domaestic in (%) Foreign in (%)
Share in % 50.4 49.6
Metal processing
and plastic sector
Share on foriegn and domestic market
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 38
3.3.2. Needed support to improve business by using digital
technology
The most of the interviewed
subjects expressed their needs for
support to improve their
businesses by using digital
technologies in the areas of
Improvement and digitalization of
business model and Specific skills
provision for using digital
technologies and then Digital
marketing.
Digital Marketing
Improvement
and
digitalization of
business
model
Product / Service
Digitization -
introducing a new product
with integrated digital
solution
Specific skills
provision /
skills for using
digital technologies
Innovative
capacities/
research /
prototype
design Other
% of total number of
interviewed subjects 45.6 55.6 30.0 50.0 15.6 3.3
Required support to
improve
business by using digital
technology
In which of the following areas do you need support to improve
business by using digital technology?
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 39
3.3.3. Support needed in the field of digital marketing
Most of the surveyed
companies (64.3%)
expressed their needs for
support in the field of
Support to information
exchange with customers
/ users and suppliers
(Conversation rate
optimization), then
Improvement of user
experience in using web
site /company blog, and
then in the field of
Bigdata analytics.
Improving
user
experience
in using the
Website
/ company
blog
Creating and
managing a
profile
and on social
networks
(Social media
platforms)
Improvement of
content of digital
presentation of
products and
services
(Content
marketing)
Customer's
/user's data
analysis
(Big data
analytics)
Search
engine
optimizatio
n
Automation
marketing
services
Optimization of
information
exchange
with customers /
users
and suppliers
(Conversation rate
optimization) Other
% of total number of
interviewed subjects 57.1 37.1 48.6 50.0 32.9 30.0 64.3 0.0
Required support in the
field of digital marketing
Required support in the field of digital marketing
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 40
3.3.4. Support needed in the field of improvement and
digitalization of business model
Regarding digitalization of the existing business model the most required support is in the field of
Development and application of software solutions for communication /cooperation and then Wearhouse
/ logistic management. Most of the survey companies were also interested for services in the field of
Professional consulting in optimizing the production process and then Introduction of new business models
and its digitalization.
a1)Supply
chain
management
a2) Customer
relationship
management
a3) Warehouse /
logistic
management
a4) Development
and application of
software solutions
for
communication /
cooperation
% of total number of
interviewed subjects 30.0 31.1 48.9 42.2 34.4 25.6 36.7 18.9 0.0
Required support to improve
business model
Required support to improve business model
a) Digitization of existing business model
b) Introducing
a new
business
model
and its
digitalization
c) Adapting the
business model
to individual
customer / user
requirements
(Individualizatio
n)
d) Professional
consulting in
optimizing the
production process
e) Professional
consulting
for other
aspects of
business f) Other
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 41
3.3.5. Support needed in the field of digitalization of products
/ services - introducing new products with integrated
digital solutions
In the field of
digitalization of products /
services - introducing new
products with integrated
digital solutions,
interviewed companies
were mostly interested in
digitalization of Sales of
product / services and
Analysis, research and
preparatory activities in
this area, as well as
Support and
maintenance.
a) Analysis,
research and
preparatory
activities
b) Conceptualization
of new digital
products / services
c) Designing
of new digital
products /
services
d) Prototyping
and testing
e) Sales of
product /
services
f) Support
and
maintenanc
e g) Other
% of total number of
interviewed subjects 30.0 21.1 18.9 20.0 40.0 22.2 2.2
Required support in
digitalization of products
/services - introducing
new products with
integrated digital
solutions
Required support in digitalization of products /services - introducing new products with integrated digital
solutions
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 42
3.3.6. Support needed in the field of improvement of
knowledge and skills for use of digital technologies
Most required services and support in this field are related to Training provision to workers (CNC operators) ,
where 46.7% of interviewed companies expressed their needs for such trainings, then Training for workers for
IT (3D modeling) with interest expressed by 43.3% of interviewed companies, as well as for Training for
technical staff (productivity improvement) where interest was 52.2%.
c1) CNC
c2) IT (3D
modeling)
c3) Marketing /
sales
c4) Innovation
(product/proce
ss)
c5) Some
other skills
% of total number of
interviewed subjects 43.3 52.2 46.7 43.3 37.8 26.7 13.3 28.9 24.4 1.1
Needed support in
provision of specific
skills /knowledge
Needed support in provision of specific skills /knowledge
a) Training to
management
staff
(management
skills)
b) Training to
technical staff
productivity
improvement)
c) Training provision to workers in specific areas d) Linking
with
education
institutions
e) General
improvement
of e-skills at
the company
level f) Other
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 43
3.3.7. Support needed in the field of improvement of research
and innovation capacities
Most of the interviewed
companies require
support in improvement
of research and
innovation capacities
through the Training in
the field of innovation
and provision of
consultancy services.
a) Provision of
experts /
consultants
b) Organization of
training in the field
of innovation
introduction
c) Laboratory
services
d) Something
else
% of total number of
interviewed subjects 37.8 46.7 31.1 0.0
Required support in
improvement of
innovation/research
capacities
Required support in improvement of innovation/research capacities
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 44
3.3.8. Services already used in the process of digital
transformation of the business
The mostly used services
in the field of digital
transformation of
companies in metal
processing and plastic
sectors are IT Consulting
Services of local service
providers, while mostly
required services that
does not exist in BiH and
there is need for such
services are Professional
Counseling Services.
Use in BiH
It does not exist
in BiH, but it is
necessary
Use in BiH
It does not exist in
BiH, but it is
necessary
Use in BiH
It does not exist
in BiH, but it is
necessary
% of total number of
interviewed subjects 10.0 25.7 21.4 17.1 40.0 15.7
Services used and required
in the field of digital
transformation of business
What services are you using in the field of digital transformation of your business
a) Professional counseling b) Business consulting / service c) IT consulting / service
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 45
3.3.9. Established cooperation with other institutions /
organizations
The most of the
interviewed
companies declare
established
cooperation with the
Development
agencies, Chambers of
commerce, and IT
companies, followed
by the
Universities/Colleges.
a) IT
companies
b) Chambers of
Commerce
c) Employer
/ business
association
s
d) Technology
parks /
innovation
centers / IT hubs e) Clusters
f) Development
agencies
g) Universities
/ Colleges h) Institutes
i) International
projects /
donors j) Other
% of total number of
interviewed subjects 45.6 48.9 27.8 6.7 13.3 53.3 38.9 30.0 15.6 8.9
Established
cooperation with other
institutions /
organizations
Established cooperation with other institutions / organizations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 46
3.3.10. Review of services used in the field of digital
transformation of businesses that resulted in revenue
growth of the companies
Improvement that mostly
contributed to revenue
growth through the use
of digital solutions by the
interviewed companies in
the last 3 years are in the
field of Product and
services, Utilization of the
new technologies and
innovations, as well as
Management /
Organization.
a) Marketing /
social
networks
b) Management
/ organization
c) Products
and
services
d) Training of
employees in the
application of IT
technologies
e) Utilization
of new
technologies /
innovations
f) Something
else
% of total number of
interviewed subjects 13.3 22.2 43.3 12.2 28.9 2.2
Improvements that
directly contributed to
revenue growth over the
past 3 years through the
use of digital solutions
Improvements that directly contributed to revenue growth over the past 3 years through the
use of digital solutions
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 47
3.3.11. Review of use of ICT tools
Utilization of appropriate computer / software tools
Management
Fully agree % Agree % Does not know % Does not agree % Full disagree %
17.8 34.4 26.7 12.2 8.9
Marketing
Fully agree % Agree % Does not know % Does not agree % Full disagree %
11.1 13.3 24.4 34.4 16.7
Production
Fully agree % Agree % Does not know % Does not agree % Full disagree %
16.7 36.7 15.6 24.4 6.7
Quality
Fully agree % Agree % Does not know % Does not agree % Full disagree %
10.0 34.4 26.7 21.1 7.8
Logistic
Fully agree % Agree % Does not know % Does not agree % Full disagree %
21.1 13.3 21.1 34.4 10.0
Suppliers/procurement
Fully agree % Agree % Does not know % Does not agree % Full disagree %
22.2 16.7 27.8 25.6 7.8
Utilization of appropriate computer / software tools
Reception/delivery
Fully agree % Agree % Does not know % Does not agree % Full disagree %
20.0 21.1 27.8 24.4 6.7
Inventory management
Fully agree % Agree % Does not know % Does not agree % Full disagree %
13.3 37.8 27.8 13.3 7.8
Material flow in production
Fully agree % Agree % Does not know % Does not agree % Full disagree %
14.4 12.2 44.4 18.9 10.0
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 48
Delivery to customers
Fully agree % Agree % Does not know % Does not agree % Full disagree %
17.8 12.2 22.2 33.3 14.4
Other
Fully agree % Agree % Does not know % Does not agree % Full disagree %
11.1 0.0 0.0 0.0 88.9
About 63% of the interviewed companies possess own internal computer network. Regarding utilization of
appropriate computer/software tools, the prevailing answers of the companies were dependent on the
aspects of the business. So, prevailing positive answers were recorded in the aspects of Management,
Production and Inventory management, while prevailing negative answer was recorded in the aspect of
Marketing.
3.3.12. Level of integration of computer software systems
Regarding level of
integration of
computer/software
systems most of
the companies are
indecisive about
integration level in
their companies,
but slightly more
dominant positive
answers are in the
field of
Procurement and
Storage and CAD
systems, while in
the other aspects
negative answers
prevailing.
Link/Integration of company's computer / software systems, with other systems
CAD Systems linked)
Fully agree % Agree % Does not know % Does not agree % Full disagree %
11.1 31.1 18.9 23.3 15.6 Procurement
Fully agree % Agree % Does not know % Does not agree % Full disagree %
14.4 34.4 17.8 25.6 7.8 Storage
Fully agree % Agree % Does not know % Does not agree % Full disagree %
12.2 36.7 24.4 18.9 7.8 CAD/CAE with CNC machines
Fully agree % Agree % Does not know % Does not agree % Full disagree %
8.9 25.6 17.8 28.9 18.9 ERP systems
Fully agree % Agree % Does not know % Does not agree % Full disagree %
11.1 7.8 33.3 32.2 15.6 Management
Fully agree % Agree % Does not know % Does not agree % Full disagree %
12.2 12.2 36.7 26.7 12.2 Other
Fully agree % Agree % Does not know % Does not agree % Full disagree %
1.1 0.0 0.0 0.0 98.9
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 49
3.3.13. Participation on ICT events
Majority of the interviewed companies did not confirm their participation or interest to participate on the ICT
events such as Ideathon, Hackathon, Boothcamp, Competition of programmers and similar events, in any form
of participation (participants, key organization partners, one of the organization partners, etc.).
Ideathon
Fully agree % Agree % Does not know % Does not agree % Full disagree %
6.7 5.6 14.4 45.6 27.8 Hackathon
Fully agree % Agree % Does not know % Does not agree % Full disagree %
6.7 5.6 15.6 44.4 27.8 Boothcamp
Fully agree % Agree % Does not know % Does not agree % Full disagree %
6.7 3.3 16.7 45.6 27.8 Competition of programmers
Fully agree % Agree % Does not know % Does not agree % Full disagree %
3.3 5.6 16.7 45.6 28.9 Other
Fully agree % Agree % Does not know % Does not agree % Full disagree %
2.2 0.0 1.1 1.1 95.6
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 50
3.4. IT sector
The information and communication technology (ICT) sector in BiH is one of the fastest growing sectors. The
employment in this sector has increased by 67 percent over the last five years, and it participates with 9.7
percent in the GDP of BiH, according to the information shared by Foreign trade chamber of BiH (2018 year).
Also same source declared that operating capacities of information technology companies in BiH have
increased by 60 % over the last five years. This sector in 2018 employs more than 5.000 people and has an
annual turnover of over 0,5 billion KM. According to the analysis provided by the by Foreign trade chamber of
BiH, most of the services of ICT sector is provided to the foreign customers.
3.4.1. Sampling of SMEs and type of SMEs interviewed
The sample for this research were 23 companies from IT sector from all over Bosnia and Herzegovina. The
majority of the interviewed subjects are specialized in the field of programming and coding (about 95% of
interviewed) and in the field of product development (again linked with the programming and coding).
Their activities are mostly focused on international markets (where 71% of companies see it as major markets
for their products), although most of them could imagine to work and provide services and products to local
SMEs (based on their needs).
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 51
Most of the interviewed
IT service providers are
specialized in
programming and coding
(about 95%), than in
product development
(again mostly software
development).
For support and after
sales services are
specialized 39,13% of
interviewed companies
and 30.43 % are
specialized in services
related to quality.
The local IT companies
(interviewed) prefer to
provide services mostly to
service providers (foreign
companies), followed by
the production companies
and online retailers.
Development and
provision of products and
services for sectors such
as logistics, forestry,
agriculture (with
relatively low level of
digitalization in local
conditions) is not from
the great interest of
interviewed representatives of IT sector in BiH.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 52
3.4.2. Support local SMEs with CMS based e-commerce
solutions
About 57 % (more than
half) of interviewed IT
companies possess
capacities to provide CMS
based e-commerce
solutions to local SMEs.
Regarding specific
services to be provided in
the field of CMS base e-
commerce, the most of
the interviewed IT
companies declared
ability to provide Online
shop solutions (52,17%),
as well as Dynamic
landing pages, then
Visitor registration
services (47,83%),
Automatic tracking and
analysis of the user data
(43,48%) and Artificial
intelligence based
solutions (about 30%).
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 53
3.4.3. Support local SMEs with ERP solutions
About 43 % (less than
half) of interviewed IT
companies possess
capacities to provide ERP
solutions to local SMEs.
Regarding specific services
to be provided in the field
of ERP solutions, the most
of the interviewed IT
companies declared ability
to provide CRM customer
relationship management
(47,83%), as well as
Business intelligence, then
Office and portal solutions
(30,43%). All other
mentioned specific
services is able to provide
less then 20% of
interviewed IT companies.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 54
3.4.4. Avoidance of possible failure in IT solutions
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 55
3.4.5. State of competition in IT sector
Expectation of the
state of competition
in the next 5 to 10
years vary,
depending on the
level at which
competition acts.
The opinion of the
interviewed IT
companies is that
competition of local
level will be dominantly unchanged to greater, at national level greater to unchanged, at international level
significantly higher, and on reginal level will be lower to unchanged.
Regarding prices the
competition will be
dominantly
unchanged or higher,
as well as regarding
new products.
Regarding quick
response to the
market changes the
competition will be
greater, and
regarding better
services unchanged to greater.
Significantly smaller Smaller No change Greater Significantly larger
4.35 8.70 34.78 26.09 26.09
Significantly smaller Smaller No change Greater Significantly larger
0.00 39.13 34.78 0.00 26.09
Significantly smaller Smaller No change Greater Significantly larger
0.00 0.00 34.78 43.48 17.39
Significantly smaller Smaller No change Greater Significantly larger
0.00 0.00 17.39 26.09 56.52
Regional
National
International
Expection of the state of competiton in the next 5 to 10 yars
Local
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 56
3.4.6. Switch to local SMEs as major market
Even if IT sector become
more oriented to local
SMES as potential
customers, estimation is
that still the majority of
the market will be
international market
(58%). This show strong
dependency of BiH IT
sector to international
market players, where
most of the local IT
companies provide just
component of the
services, not
development of branded products in IT industry.
Most of the interviewed
companies does not have
developed any
products/services for
local SMES (74%).
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 57
Still, most of the
interviewed companies
see the greatest
opportunities for their
business development for
international markets
(customers), more than
78%.
The specific IT areas in which the interviewed companies see their role as service providers are: Support and
training development, e-commerce solutions and Digitalization in Construction Industry, ERP, development
of custom software for e-commerce, cloud solution, Artificial intelligence, Product development and
support, hosting and support of cloud based solutions for service platforms, startups support , Smart City
Solutions and IT consultancy.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 58
4. Status of available services for
digital transformation of
companies - findings
4.
4.1. Status of interviewed service providers
Name service providers Contact information Innovation Center Banja Luka Dr. Mladena Stojanovića 4, 78000 Banja Luka Contact person: Dragana Ilibašić E: [email protected] T: +387 51 340 600
Mission and vision
The mission of the center is to create future-oriented businesses based on knowledge and technology, and
to help entrepreneurs to create successful businesses.
ICBL is a leading force in the development of an innovative society in RS / BiH, strong in the field of
knowledge and technology, a force that creates jobs and wealth. In order to become the main driver of
innovative society in Republika Srpska and connect science and research with the business sector, ICBL is
the foundation of innovation, providing relevant incubation and business development services, as well as
market-oriented professional consulting, training and conference facilities.
Types of services relating to the digitization of enterprise and innovation in business
ICBL Incubator provides a range of business services to customers whose endeavors are based on
knowledge. In this regard, ICBL serves customers who are at the beginning of their ideas or want to develop
a business story, expand international cooperation and expand their placement in the international market.
ICBL implements various digitization projects such as eGovernment, Banjaluka Smart City - Digital
Transformation and Smart Solutions - Action Plan.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 59
Name of the service provider Contact information CHAMBER OF COMMERCE OF THE REPUBLIC OF SRPSKA Đure Daničića 1/II, 78000 Banja Luka T: +387 51 215 744, 215 833 F: +387 51 215 565 E: [email protected]
Chamber of Commerce and industry of Republic of Srpska, with its Regional Chambers in Banja Luka,
Bijeljina, Doboj, East Sarajevo and Trebinje, makes a unique Chamber System of Republic of Srpska.
Vision and Mission
Vision: To become a leading institution in Republic of Srpska in the field of representing the interests of its
economy, promoting and linking the economy, business, education, information and advisory services.
Mission: For the purpose of economic development of Republic of Srpska, as a common mission of our
members, we have been entrusted to:
• represent the interests of the economy before the authorities and thus create conditions for the
improvement of operations;
• create and improve business ties with foreign countries and to present Republic of Srpska economy in
the country and abroad;
• provide a professional education, business information and counseling.
The Chamber is a non-governmental, independent, professional – business organization, non-profit public
– legal association of business subjects and economic associations from the territory of Republic of Srpska.
Activities of RS Chamber of Commerce and Industry are primarily focused on representing the interests of
members and the economy as a whole before the legislative and executive authorities, as well as to connect
entrepreneurs in the RS and BiH and development of economic relations of the RS economy with the
economies of other countries, professional trainings and the provision of all necessary information and
advisory services to its members.
Types of services relating to the digitization of enterprise and innovation in business
The Chamber staff provide some limited services in the field of digitization; there is an idea to create a
Digital Transformation Center where IT professionals would provide direct support.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 60
Name service providers Contact information Development Association NERDA Mihajla i Živka Crnogorčevića 5, Tuzla 75000 Contact person: Jasenko Omerčehajić E: [email protected] T: +387 35 369 900
Development Association NERDA was registered with the BiH Ministry of Justice as a non-governmental
and non-profit organization in May 2004 and officially became operation in January 2005. NERDA acts as
a Regional Development Agency for North-East BiH (NE BiH), that comprises of 34 cities and
municipalities and Brčko District BiH (total of ca. 1 million population).
NERDA's Mission is:
The unique purpose of the Development Association NERDA is to stimulate economic development of the
NE region of BiH by managing strategic development, and to be a tool in the hands of people, businesses,
NGOs, and governments that jointly work on poverty reduction, economic sustainability and stability of
the NE region and entire BiH.
NERDA’s Vision is:
NERDA is the leading organization in socio-economic development of the region, supporting self-
sustainable and harmonized development by creating better working and living conditions and
perspective for all.
Types of services relating to the digitization of enterprise and innovation in business
Development Agency NERDA currently has no employees in the ICT sector, services in the area of
digitalization provide external consultants if necessary.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 61
Name service providers Contact information Cantonal Chamber of Commerce Tuzla Trg slobode b.b., Tuzla 75000 Contact person: Edina Kurtic E: [email protected] T: +387 (0)35 369-550; 369-560
Cantonal Chamber of Commerce Tuzla is an independent, non-governmental, non-profit, public-legal
association of legal entities of the Tuzla Canton, which is voluntary basis in order to achieve common
interests.
Vision: Become a leading institution in Tuzla Canton in the field of representing the interests of the
economy of the Tuzla Canton, business education, information and advisory services, and promoting
connectivity and economy of Tuzla Canton with the global economy.
Mission: Improvement of the economy and entrepreneurship in the Tuzla Canton through advocacy of
the economy, education, information, promotion and business networking.
Types of services relating to the digitization of enterprise and innovation in business
The main activity of the Chamber of Commerce in cooperation with SMEs is to organize trainings in
various fields. Some of the trainings include topics related to digital marketing and digital transformation
of businesses.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 62
Name service providers Contact information Sarajevo Navigator Hasana Brkića 45/I 71000, Sarajevo T: +387 (0)33 719 065; +387 (0)33 716-550 E: [email protected] Contact person: Enis Vadic
The goal of Sarajevo Navigator is to develop, promote Sarajevo as an attractive tourist destination. Sarajevo
Navigator is promoting the destination of Sarajevo through free, multilingual, print and online media.
At the beginning of each month, Srajevo Navigator's printed guide, distributed in 10,000 copies, is
distributed at more than 270 locations throughout Sarajevo. At the beginning of the summer season, the
printed publication "Sarajevo Map" is available to tourists, with a circulation of 60,000 copies, which brings
a map of the entire city with content in 4 languages (b / h / s, eng, tur, ar). Destination Sarajevo is a top
quality travel guide, published at the beginning of each year, providing users with detailed information on
the destination of Sarajevo also in 4 languages.
Types of services relating to the digitization of enterprise and innovation in business
• Internet portal Sarajevo.travel / most visited portal - promotion of products of services and location
of tourist offer of the City of Sarajevo.
• Sarajevo Application Navigator (Mobile applications for Android and IOS showing the complete offer
of the City of Sarajevo tourist destination in one place.
• Partner Promotion through Social Network Channels (100,000 Followers)
• Newsletter (educational about developments and significant changes in tourism)
• Direct support for users to create their digital profiles (consulting)
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 63
Name service providers Contact information CLUSTER WOOD PRIJEDOR Aleja Kozarskog odreda bb Prijedor T: +38752241600 E: [email protected] Contact person: Sanja Karanovic,
Cluster “DRVO” Prijedor is an organization whose goals are business networking, education, exchange of
information and promotion of businesses and entrepreneurs active within the wood and furniture
industries, as well as improving the conditions for performing wood processing, production of wood and
furniture products, monitoring technical and technological achievements in this field and harmonization of
common interests.
Vision: The vision of the Cluster “DRVO” Prijedor is to become the most organized business association
according to the activities and benefits it brings to its members, and to make the area of northwestern
Republika Srpska and BiH recognizable by the level of wood industry development and the quality of
finished wood products.
Mission: Cluster “WOOD” Prijedor is an organization whose goals are business networking, education,
exchange of information, development of wood industry, as well as harmonization of common interests of
members. Through its activities, the Cluster contributes to improving the business of companies and
entrepreneurs engaged in woodworking and related activities, as well as improving the working conditions
of the wood and furniture industries.
Types of services relating to the digitization of enterprise and innovation in business
The Prijedor Cluster Tree currently has no activities in the digitization sector, the activities are mostly
implemented in cooperation with the Preda Development Agency.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 64
Name service providers Contact information ZEDA Zenica Development Agency Zmaja od Bosne b.b. 72000 Zenica, BiH T: +387 32 449-410 E: [email protected] Contact person: Senad Pašalić, Mirza Sikirić
ZEDA Agency is a development institution whose task is to create the development priorities of the
Municipality of Zenica, to create partnerships for the implementation of development projects, to prepare
them, and to coordinate their implementation.
Today, ZEDA takes an active part in the projects implemented by the City of Zenica and is a significant
instrument of support to the City of Zenica in the preparation of all important strategic documents.
Vision: ZEDA Agency, an instrument of the City of Zenica to create an environment of young entrepreneurs,
a competitive workforce and a dynamic business environment.
Mission: Creating conditions for developing a dynamic business environment, developing entrepreneurial
infrastructure by integrating and directing material, human and financial resources, with the aim of
increasing employment, improving living standards and attracting domestic and foreign investors.
Types of services relating to the digitization of enterprise and innovation in business
• Development Agency Zeda in the area of digitalization, provides digital marketing training (social
networks and web shops for SMEs). As part of their activities, they organize conferences, product
promotion and SMEs, assistance with cyber business
• Within the Agency there is also a LINDT laboratory (software digital process of safety testing).
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 65
Name service providers Contact information Herzegovina Wood Cluster Bulevar narodne revolucije 15 88000 Mostar T: +387 (0)36 557 210 E: [email protected] Contact person: Vanja Ivankovic, Zdravko Vojvodic
The cluster was established with the aim of sharing knowledge among member states, increasing
competition and improved market entry, implementing new technologies, procedures and new materials,
and producing products according to EU standards.
The main goals of the HWC Association are:
• strengthening the competitiveness of domestic companies from the wood industry
• Establishing and ensuring cooperation
• Networking and creating possibilities foe exchange of knowledge
• Supporting education and training of experts
Types of services relating to the digitization of enterprise and innovation in business
The wood cluster supports SMEs in creating web pages, brochures, and organizes trade shows.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 66
Name service providers
Contact information Cluster of metals and plastics Matice hrvatske bb 88000 Mostar T: +387 36 337 004 E: [email protected] Contact person: Mirela Jurić
The cluster of metals and plastics helps in eliminating the structural problems of small and medium-sized
enterprises in order to ensure competitiveness. This applies in particular to research and development,
cooperation in the field of production, provision of professional staff, marketing and sales.
This collaboration aims to create a platform for collaboration and networking with the aim of continually
increasing the scope and level of innovative partner activities.
The cluster of metals and plastics connects companies, research institutes and educational institutions in
the field of metal, plastic and manufacturing technology.
Types of services relating to the digitization of enterprise and innovation in business
The cluster was recently established through the EU Prolocal project implemented by GIZ, the current
activities are education in the LEAN center (LEARNING FACTORY). Cluster is supported by University in
Mostar.
Name service providers Contact information Tourism Cluster Herzegovina Bulevar narodne revolucije 15, 88000 Mostar T: +387 36 557 210 E: [email protected] Contact person: Stanislava Borovac
Development of tourism sector and networking of tourism stakeholders in a cluster in Herzegovina region
has been a comprehensive three year process. In December 2013, Constituent Assembly of the Association
was held, and since July 7th 2014 the Association Tourism Cluster Herzegovina according to the decision
on registration of the Ministry of Justice of Bosnia and Herzegovina, is a legal entity under the title
Association Tourism Cluster Herzegovina and the abbreviated title Association of TKH.
Vision: TCH is a regional organization recognized at tourism map, of the wider region and Europe. It
encompasses enthusiastic and successful entrepreneurs and representatives of the public and civil sectors.
These stakeholders together generate products and services with high added value for the most demanding
guests from various cultures. TCH is also the initiator (the center) of sustainable economic development in
Herzegovina region.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 67
Mission: TCH mission is to create strategic partnerships between TCH members with the aim of developing
distinctive Brand – tourism destination Herzegovina – destination to which domestic and foreign visitors
gladly come back to. TCH mission is also to provide continuous support to its members in increasing the
quality of existing and development of new local products and services through the application of new
knowledge, technology and international quality standards.
Types of services relating to the digitization of enterprise and innovation in business
The main activities of the Herzegovina Tourism Cluster are the promotion and branding of the tourism
offer; they currently have 32 members, for whom they occasionally provide training in the field of digital
marketing.
4.1.
4.2. Provision of services in the field of digital marketing
Out of totally 10 interviewed BS providers,
70% declared provision of services to private
sector in the digital marketing domain or in
creating a more favorable environment for
digital marketing development in the field of
Content enhancements to the digital
presentation of products and services and
Improving the user experience in using the
company website / blog, while 60% declare
activities in the field of Creating and managing
profiles on social media (Social media
platforms). All other services are less
introduced on the market.
Although the significant number of BS providers declared provision of different type of services in the field
of Digital marketing, most of these services are provided in form of Training and education provision to
MSMEs and related to Improving users experience in using web pages/blogs, Digital presentation of
products and services and managing profiles on social media platforms. Taking into account structure of the
employees in BS providers (low level of specialized knowledge), it can be concluded that most of the services
are externally contracted. Most common services are financed usually from private sector directly, then
from Projects/donations (projects financed by international or quasigovernmental organizations), and in
limited number of cases from public budgets (different levels).
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 68
a) Improving the user experience in using the company website / blog
From 70% of surveyed BS providers that
provide services of Improving the user
experience in using the company
website/blog, most (6 BS providers)
provide services in the form of Training
and education provision, while only 2 BS
providers provide Direct support to
MSMEs in this filed.
The significant share of financing for
provision of this service originate directly
from the private MSMEs financing (43%),
and equally is financed through the
Donations/projects (provision of service
within the Project activities financed by
donors, mostly foreign organizations). Only
14% of the services provided in this domain
is financed through the public budgets (at
different levels).
b) Creating and managing profiles on social media (Social media platforms)
10
7 6
2
02468
1012
Total numberof surveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding direct
support toSMEs
Nu
mb
er o
f SP
s
Digital merketing - Improving the user experience in using the company
website / blog
43%
43%
0%
0%
14%
Digital merketing - Improving the user experience in using the
company website / blog
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 69
From 60% of surveyed BS providers
that provide services of Creating and
managing profiles on social media,
most (5 BS providers) provide services
in the form of Training and education
provision, while only 2 BS providers
provide Direct support to MSMEs in
this filed.
The significant share of financing for
provision of this service originate
directly from the private MSMEs
financing (67%), and only 16% is
financed through the
Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations). Only 17% of the
services provided in this domain is
financed through the public budgets
(at different levels).
c) Content enhancements to the digital presentation of products and services
10
65
2
02468
1012
Total number ofsurveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding directsupport to SMEs
Nu
mb
er o
f SP
s
Digital merketing - Creating and managing profiles on social media (Social media
platforms)
16%
67%
0%
0%
17%
Digital merketing - Creating and managing profiles on social media
(Social media platforms)
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 70
From 70% of surveyed BS providers
that provide services of Content
enhancements to the digital
presentation of products and services,
most (5 BS providers) provide services
in the form of Training and education
provision, while 3 BS providers provide
Direct support to MSMEs in this filed.
The significant share of financing for
provision of this service originate
directly from the private MSMEs
financing (57%), and 29% is financed
through the Donations/projects
(provision of service within the Project
activities financed by donors, mostly
foreign organizations). Only 14% of
the services provided in this domain is
financed through the public budgets
(at different levels).
d) Big data analytics
10
75
3
02468
1012
Total number ofsurveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding directsupport to SMEs
Nu
mb
er o
f SP
s Digital merketing - Content
enhancements to the digital presentation of products and services
29%
57%
0%0%
14%
Digital merketing - Content enhancements to the digital presentation of products and
services)
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 71
From only 20% of surveyed BS
providers that provide services of Big
data analytics, 1 BS provider provide
services in the form of Training and
education provision, while 1 BS
provider provide Direct support to
MSMEs in this filed.
The only source of financing for
provision of this service originate
directly from the private MSMEs
financing (100%).
e) Search engine optimization
10
21 1
0
2
4
6
8
10
12
Total number ofsurveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding directsupport to SMEs
Nu
mb
er o
f SP
s
Digital merketing - Big data analytics
0%
100%
0%0%0%
Digital merketing - Big data analytics
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 72
From only 30% of surveyed BS
providers that provide services of
Search engine optimization, all three
BS providers provide services in the
form of Training and education
provision, while there is no BS
providers to provide Direct support to
MSMEs in this filed.
The significant share of financing for
provision of this service originate
directly from the private MSMEs
financing (67%), and 33% is financed
through the Donations/projects
(provision of service within the Project
activities financed by donors, mostly
foreign organizations). There is no
services in this domain financed
through the public budgets (at
different levels).
f) Marketing service automation
10
3 3
00
2
4
6
8
10
12
Total number ofsurveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding directsupport to SMEs
Nu
mb
er o
f SP
s Digital merketing - Search engine
optimization
33%
67%
0% 0%0%
Digital merketing - Search engine optimization
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 73
From 40% of surveyed BS providers that
provide services of Marketing service
automation, most (3 BS providers)
provide services in the form of Training
and education provision, while 2 BS
providers provide Direct support to
MSMEs in this filed.
The modalities of financing of provision
of this service are equally originated per
modalities such as Directly from the
private MSMEs financing (25%), through
the Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations) (25%), 25 % of the
services provided in this domain is
financed through the public budgets (at
different levels) and 25% partially from
public budgets and projects/donations.
g) Conversation rate optimization
25%
25%
0%
25%
25%
Digital marketing - Marketing service automation
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
10
43
2
0
2
4
6
8
10
12
Total number ofsurveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding direct
support toSMEs
Nu
mb
er o
f SP
s Digital marketing - Marketing service
automation
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 74
From only 10% of surveyed BS
providers that provide services of
Conversation rate optimization, only 1
provide services in the form of
Training and education provision,
while there is no BS providers provide
Direct support to MSMEs in this filed.
The only source of financing for
provision of this service originate
directly from the Donations/projects
(provision of service within the Project
activities financed by donors, mostly
foreign organizations), 100%.
10
1 10
0
2
4
6
8
10
12
Total number ofsurveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding directsupport to SMEs
Nu
mb
er o
f SP
s Digital marketing - Conversation rate
optimization
100%
0%
0%0%0%
Digital marketing - Conversation rateoptimization
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 75
4.3. Provision of services in the field of improvement and
digitalization of business model
Out of totally 10 interviewed BS
providers, 60% declared
provision of services to private
sector in Enhancing their
business model in the field of
Digitization of existing business
model - Customer Relationship
Management, while 50%
declare activities in the fields of
Digitization of existing business
model - Supply chain
management, Digitization of
existing business model -
Development and
implementation of software
solutions and
communication tools, Advising
in optimizing the production
process and Professional
consulting for other aspects of
business. All other services are
less introduced on the market
and 40 % of all BS providers
provide these services to the
private sector.
About 60% of BS providers declared provision of different type of services in the field of Business Model
Improvement and Digitization, almost equal number of these services are provided in form of Training
and education provision to MSMEs and in form of Direct support to MSMEs. Taking into account structure
of the employees in BS providers (low level of specialized knowledge), it can be concluded that most of
the services are externally contracted. Most common services are financed usually from
Projects/donations (projects financed by international or quasigovernmental organizations), then from
public budgets and in limited number of cases from private sector directly.
5
6
4
5
4
4
5
5
0 1 2 3 4 5 6 7
Digitization of existing business model -Supply chain management
Digitization of existing business model -Customer Relationship Management
Digitization of existing business model -Warehouse / Logistics Management in
general
Digitization of existing business model -Development and implementation of
software solutions and…
Introduction of a new business modeland its digitization
Customizing the business model toindividual customer / user requirements
(Individualization)
Advising in optimizing the productionprocess
Professional consulting for other aspectsof business
Business Model Improvement and Digitization - Total SPs providing services
Total SPs providing services
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 76
a) Digitization of existing business model - Supply chain management
From 50% of surveyed BS
providers that provide services of
Digitization of existing business
model - Supply chain
management, most 3 BS providers)
provide services in the form of
Training and education provision
as well as Direct support to MSMEs
in this filed, while only 1 BS
provider provides services in the
form of support to networking to
MSMEs.
The significant share of financing
for provision of this service
originate directly from the private
MSMEs financing (40%), and 20%
is financed through the
Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations), and equal share is
financed from public budgets (at
different levels) and as combined
financing through public budgets
and projects/donations.
10
5
3 3
1
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
directsupport to
SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Digitization of existing business model -Supply chain management
20%
40%
20%
0%
20%
Digitization of existing business model - Supply chain
management
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 77
b) Digitization of existing business model - Customer Relationship Management
From 60% of surveyed BS providers
that provide services of Digitization
of existing business model -
Customer Relationship
Management, most (5 BS providers)
provide services in the form of
Training and education provision as
well as Direct support to MSMEs in
this filed, while only 1 BS provider
provides services in the form of
support to networking to MSMEs.
The significant share of financing for
provision of this service originate
from combined financing (public
budgets and projects/donations),
17% is financed directly from private
sector and 17% only from public
budgets (at different levels), while
16% is financed exclusively through
the Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations).
10
65 5
1
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
directsupport to
SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Digitization of existing business model -Customer Relationship Management
16%
17%
17%
0%
50%
Digitization of existing business model - Customer Relationship
Management
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 78
c) Digitization of existing business model - Warehouse / Logistics Management in general
From 40% of surveyed BS
providers that provide services of
Digitization of existing business
model - Warehouse / Logistics
Management in general, most (3
BS providers) provide services in
the form of Training and
education provision as well as
Direct support to MSMEs in this
filed, while only 1 BS provider
provides services in the form of
support to networking to MSMEs.
The equal share of financing for
provision of this service (25%)
originate from 4 sources, from
combined financing (public
budgets and projects/donations),
directly from private sector, only
from public budgets (at different
levels), and exclusively through
the Donations/projects (provision
of service within the Project
activities financed by donors,
mostly foreign organizations).
10
4
3 3
1
0
2
4
6
8
10
12
Total number ofsurveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding directsupport to SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Digitization of existing business model -Warehouse / Logistics Management in
general
25%
25%25%
0%
25%
Digitization of existing business model- Warehouse / Logistics Management
in general
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 79
d) Digitization of existing business model - Development and implementation of software solutions and
communication tools
From 50% of surveyed BS
providers that provide services of
Digitization of existing business
model - Development and
implementation of software
solutions and communication
tools, most (4 BS providers)
provide services in the form of
Direct support to MSMEs in this
filed, 3 BS providers in a form of
Training and education provision,
while only 1 BS provider provides
services in the form of support to
networking to MSMEs.
The significant share of financing
for provision of this service
originate directly from private
sector (40%) and equal share from
Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations), while 20% of
financing originate from public
budgets (at all levels).
10
5
34
1
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Digitization of existing business model -Development and implementation of
software solutions andcommunication tools
40%
40%
0%0%
20%
Digitization of existing business model - Development and
implementation of software solutions and
communication tools
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 80
e) Introduction of a new business model and its digitization
From 40% of surveyed BS providers
that provide services of Introduction
of a new business model and its
digitization, 2 BS providers provide
services in the form of Direct
support to MSMEs in this filed, 2 BS
providers in a form of Training and
education provision, while there is
no BS provider provides services in
the form of support to networking
to MSMEs
The significant share of financing
for provision of this service
originate from Donations/projects
(provision of service within the
Project activities financed by
donors, mostly foreign
organizations) (40%), while 25% of
financing originate from direct
financing from private sector.
10
4
2 2
00
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
directsupport to
SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Introduction of a new business model and its digitization
75%
25%
0% 0%0%
Introduction of a new business model and its digitization
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 81
f) Customizing the business model to individual customer / user requirements (Individualization)
From 40% of surveyed BS providers
that provide services of Customizing
the business model to individual
customer / user requirements
(Individualization) , most (3 BS
providers) provide services in the
form of Training and education
provision, 2 BS providers in a form of
Direct support to MSMEs, while only
1 BS provider provides services in
the form of support to networking to
MSMEs.
The equal share of financing for
provision of this service originate
from Donations/projects (provision
of service within the Project
activities financed by donors, mostly
foreign organizations) (50%), and
from direct financing from private
sector (50%).
10
43
21
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
directsupport to
SMEs
Total SPsproviding
networkingto SMEs
(Integratator)
Nu
mb
er o
f SP
s
Customizing the business model to individual customer / user requirements
(Individualization)
50%50%
0%0%
0%
Customizing the business model to individual customer / user
requirements (Individualization)
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 82
g) Advising in optimizing the production process
From 40% of surveyed BS providers
that provide services of Advising in
optimizing the production process,
most (3 BS providers) provide services
in the form of Direct support to
MSMEs, 2 BS providers in a form of
Training and education provision,
while only 1 BS provider provides
services in the form of support to
networking to MSMEs.
The significant share of financing for
provision of this service originate
directly from private sector (40%)
and equal share from
Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations), while 20% of
financing originate from public
budgets (at all levels).
10
5
23
1
0
2
4
6
8
10
12
Total numberof surveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Advising in optimizing the production process
40%
40%
0%0%
20%
Advising in optimizing the production process
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 83
4.4. Provision of services in the field of Product / Service
Digitization - Introducing a New Product with Integrated
Digital Solution
Out of totally 10
interviewed BS providers,
50% declared provision of
services to private sector
in Digitalization of
prodcuts/services in the
field of Prototyping and
testing, while 20% declare
activities in the fields of
Design of new digital
products / services and
equal number in
Conceptualizing new
digital product services. All
other services are less
introduced on the market and 10 % of all BS providers provide these services to the private sector.
About 50% of BS providers declared provision of different type of services in the field of Product / Service
Digitization - Introducing a New Product with Integrated Digital Solution, and most of these services are
provided in form of Direct support to MSMEs, following by Training and education provision to MSMEs
and support to networking to MSMEs. Taking into account facilities managed by BS providers, it can be
concluded that most common services are provided directly by limited number of BDS providers, while
also significant number is externally contracted. Most common services are financed usually from
Projects/donations (projects financed by international or quasigovernmental organizations), then from
Direct private financing, and in limited number of cases from public budgets.
1
2
2
5
1
0 1 2 3 4 5 6
Analysis, research and preparatory activities
Conceptualizing new digital products /services
Design of new digital products / services
Prototyping and testing
Product servicing
Digitalization of prodcuts/services - Total SPs providing services
Total SPs providing services
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 84
a) Analysis, research and preparatory activities
From 10% of surveyed BS providers
that provide services of Digitalization
of prodcuts/services - Analysis,
research and preparatory activities,
all (1 BS provider) provide services in
the form of Direct support to MSMEs,
while there is no provision of services
in a form of Training and education
and support to networking to
MSMEs.
The exclusive modality of financing
for provision of this service originate
directly from Donations/projects
(provision of service within the
Project activities financed by donors,
mostly foreign organizations), while
other sources of financing are not
present.
10
10
10
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
directsupport to
SMEs
Networking
Nu
mb
er o
f SP
s
Digitalization of prodcuts/services -Analysis, research and preparatory
activities
100%
0% 0%0%0%
Digitalization of prodcuts/services - Analysis,
research and preparatory activities
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 85
b) Conceptualizing new digital products / services
From 20% of surveyed BS providers
that provide services of Digitalization
of prodcuts/services -
Conceptualizing new digital
products/services, 1 BS provider
provide services in the form of Direct
support to MSMEs, while also 1
provides services in the form of
Training and education, while there is
no services in the form of support to
networking to MSMEs.
The equal share of financing for
provision of this service originate
from Donations/projects (provision
of service within the Project activities
financed by donors, mostly foreign
organizations) (50%), and from direct
financing from private sector (50%).
10
21 1
00
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
directsupport to
SMEs
Networking
Nu
mb
er o
f SP
s
Digitalization of prodcuts/services -Conceptualizing new digital
products/services
0%
50%
0%
50%
0%
Digitalization of prodcuts/services -
Conceptualizing new digital products/services
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 86
c) Design of new digital products / services
From 20% of surveyed BS providers
that provide services of Digitalization
of prodcuts/services - Design of new
digital products / services, 2 BS
provider provide services in the form
of Training and education, while there
are no services in the form of support
to networking to MSMEs and Direct
support to MSMEs.
The equal share of financing for
provision of this service originate from
Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations) (50%), and from direct
financing from private sector (50%).
10
2 2
0 00
2
4
6
8
10
12
Totalnumber of
surveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
directsupport to
SMEs
Networking
Nu
mb
er o
f SP
s
Digitalization of prodcuts/services -Design of new digital products / services
50%
0%0%
50%
0%
Digitalization of prodcuts/services - Design of
new digital products / services
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 87
d) Prototyping and testing
From 50% of surveyed BS providers that
provide services of Digitalization of
prodcuts/services - Prototyping and
testing, 1 BS provider provides services
in the form of Training and education,
and 1 in a form of support to
networking to MSMEs, while 3 BS
providers provide services in the form
of Direct support to MSMEs.
The equal share of financing for
provision of this service originate from
Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations) (40%), and from direct
financing from private sector (40%),
while 20% originate from public
budgets(at different levels) .
10
5
1
3
1
0
2
4
6
8
10
12
Totalnumber of
surveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
directsupport to
SMEs
Networking
Nu
mb
er o
f SP
s
Digitalization of prodcuts/services -Prototyping and testing
40%
40%
0%
20% 0%
Digitalization of prodcuts/services - Prototyping
and testing
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 88
e) Product servicing
From 50% of surveyed BS providers that
provide services of Digitalization of
prodcuts/services - Product servicing,
all, 1 BS provider provides services in the
form of Direct support to MSMEs, while
other forms such as Training and
education, and support to networking to
MSMEs, are not present on the market.
The exclusive modality of financing for
provision of this service originate directly
from private sector, while other
modalities are not present.
10
10
10
0
2
4
6
8
10
12
Totalnumber of
surveyed SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
directsupport to
SMEs
Networking
Nu
mb
er o
f SP
s
Digitalization of prodcuts/services -Product servicing
0%
100%
0% 0%0%
Digitalization of prodcuts/services - Product
servicing
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 89
4.5. Provision of services in the field of improvement of
knowledge and skills for use of digital technologies
Out of totally 10 interviewed
BS providers, 80% declared
provision of services to
private sector in Provision of
specific skills / knowledge for
use of digital technologies –
Management training, while
70% declare activities in the
fields of Liaison with
educational institutions,
Training of workers in
Innovation (product/process)
and Training of technical staff
in improving the productivity.
Training of workers for CNC
operators are offered by 60%
of BS providers, while other
services are less present on
the market.
Although, about 80% of BS providers declared provision of different type of services in the field of
Provision of specific skills / knowledge for use of digital technologies, most of these services are provided
in form of Training and education and services of networking to MSMEs, while direct support to MSMEs
is rare option. Taking into account facilities managed by BS providers as well as structure of their
employees, it can be concluded that most common services are provided by externally contracted
experts / consultant / organizations. Most common services are financed usually from
Projects/donations (projects financed by international or quasigovernmental organizations), then from
Direct private financing, and in limited number of cases from public budgets or combination of public
budgets and project donations or private sector.
8
7
6
3
7
3
3
7
5
0 1 2 3 4 5 6 7 8 9
Management training (management skills)
Training of technical staff (improving…
Training of workers - CNC
Training of workers - IT (3D modeling)
Training of workers - Marketing / Sales
Training of workers - Innovation (product…
Training of workers - Some other skills /…
Liaison with educational institutions
General improvement of e-literacy and…
Provision of specific skills / knowledge for use of digital technologies - Total SPs providing
services
Total SPs providing services
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 90
a) Management training (management skills)
From 80% of surveyed BS providers
that provide services of Provision of
specific skills / knowledge for use of
digital technologies - Management
training (management skills), 6
provide services in the form of
Training and education, 3 in form
of providing networking to MSMEs
and only 1 direct support to
MSMEs.
The significant share of financing
for provision of this service
originate from Donations/projects
(provision of service within the
Project activities financed by
donors, mostly foreign
organizations) (37%), 25 % from
private sector directly and equal
share from combined sources of
Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations) and public budgets,
while 13% of financing originate
exclusively from public budgets (at
all levels).
10
8
6
1
3
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Provision of specific skills / knowledge for use of digital technologies - Management
training (management skills)
37%
25%0%
13%
25%
0%
Provision of specific skills / knowledge for use of digital technologies - Management
training (management skills)
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 91
b) Training of technical staff (improving productivity)
From 70% of surveyed BS providers
that provide services of Provision of
specific skills / knowledge for use of
digital technologies - Training of
technical staff (improving
productivity), 6 provide services in
the form of Training and education,
2 in form of providing networking to
MSMEs and only 1 direct support to
MSMEs.
The significant share of financing for
provision of this service originate
from Donations/projects (provision
of service within the Project
activities financed by donors, mostly
foreign organizations) (43%), 14 %
from combined sources of
Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations) and public budgets,
14% exclusively from public budgets
(at all level) while 29% of financing
originate exclusively from private
sector directly.
10
76
12
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
directsupport to
SMEs
Total SPsproviding
networkingto SMEs
(Integratator)
Nu
mb
er o
f SP
s
Provision of specific skills / knowledge for use of digital technologies- Training of technical staff (improving productivity)
43%
29%
0%
14%
14%
0%
Provision of specific skills / knowledge for use of digital technologies - Training of technical staff (improving productivity)
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 92
c) training of workers – CNC
From 60% of surveyed BS providers
that provide services of Provision of
specific skills / knowledge for use of
digital technologies - Training of
workers - CNC, 4 provide services in
the form of Training and education,
3 in form of providing networking
to MSMEs and there is no BS
providers providing services in form
of direct support to MSMEs.
The major share of financing for
provision of this service originate
from Donations/projects (provision
of service within the Project
activities financed by donors,
mostly foreign organizations)
(67%), 16 % from private sector
directly and 17% exclusively from
public budgets (at all level).
10
6
4
0
3
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Provision of specific skills / knowledge for use of digital technologies- Training of
workers - CNC
67%
16%
0%
17%
0% 0%
Provision of specific skills / knowledge for use of digital technologies - Training of
workers - CNC
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 93
d) training of workers - IT (3D modeling)
From 30% of surveyed BS providers
that provide services of Provision of
specific skills / knowledge for use of
digital technologies - Training of
workers - IT (3D modeling), 3
provide services in the form of
Training and education, while there
is no other form of support such as
direct support to MSMEs or
networking.
The major share of financing for
provision of this service originate
from Donations/projects (provision
of service within the Project
activities financed by donors,
mostly foreign organizations) (67%),
while 33% originate exclusively
from public budgets (at all level).
10
3 3
0 00
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Provision of specific skills / knowledge for use of digital technologies - Training of
workers - IT (3D modeling)
67%
0%0%0%
33%
0%
Provision of specific skills / knowledge for use of digital technologies - Training of
workers - IT (3D modeling)
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 94
e) training of workers - Marketing / Sales
From 70% of surveyed BS providers
that provide services of Provision of
specific skills / knowledge for use of
digital technologies - Training of
workers - Marketing / Sales, 6
provide services in the form of
Training and education, 2 in form of
providing networking to MSMEs
and there is only 1 BS provider
providing services in form of direct
support to MSMEs.
The major share of financing for
provision of this service originate
from direct private sector financing
(62%), 25% from Donations/projects
(provision of service within the
Project activities financed by
donors, mostly foreign
organizations), while 13% originate
exclusively from public budgets (at
all level).
10
76
12
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Provision of specific skills / knowledge for use of digital technologies- Training of
workers - Marketing / Sales
25%
62%
0%0% 13%
0%
Provision of specific skills / knowledge for use of digital technologies - Training of
workers - Marketing / Sales
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 95
f) training of workers - Innovation (product / process)
From 30% of surveyed BS
providers that provide services
of Provision of specific skills /
knowledge for use of digital
technologies - Training of
workers - Innovation (product /
process), 1 provides services in
the form of Training and
education, 2 in form of
providing networking to MSMEs
and there is no BS provider
providing services in form of
direct support to MSMEs.
The major share of financing for
provision of this service
originate from
Donations/projects (provision
of service within the Project
activities financed by donors,
mostly foreign organizations)
(67%), while 33% originate
exclusively from public budgets
(at all level).
10
3
10
2
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Provision of specific skills / knowledge for use of digital technologies - Training of
workers - Innovation (product / process)
67%
0%
0%
0%
33%
0%
Provision of specific skills / knowledge for use of digital technologies - Training of
workers - Innovation (product / process)
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 96
g) Liaison with educational institutions
From 70% of surveyed BS
providers that provide services
of Provision of specific skills /
knowledge for use of digital
technologies - Liaison with
educational institutions, 2
provide services in the form of
Training and education, 5 in
form of providing networking
to MSMEs and only 1 BS
provider providing services in
form of direct support to
MSMEs.
The significant share of
financing for provision of this
service originate from
Donations/projects (provision
of service within the Project
activities financed by donors,
mostly foreign organizations)
(29%), and equal share as
combination of public budgets
and Donations/projects, while
14 % originate from exclusively
public budgets, same share
from direct private sector
financing and equal share as
combination of public budgets
and projects/donations.
10
7
21
5
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Provision of specific skills / knowledge for use of digital technologies - Liaison with
educational institutions
29%
14%
0%
29%
14%
14%
Provision of specific skills / knowledge for use of digital technologies - Liaison with
educational institutions
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
SPs financing serviceprovision from privatesector andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 97
h) General improvement of e-literacy and e-skills at your company level
From 50% of surveyed BS
providers that provide services
of Provision of specific skills /
knowledge for use of digital
technologies - General
improvement of e-literacy and
e-skills at company level, 3
provide services in the form of
Training and education, 2 in
form of providing networking
to MSMEs and only 1 BS
provider providing services in
form of direct support to
MSMEs.
The significant share of
financing for provision of this
service originate from Direct
private sector financing (33%)
and equal share from
exclusively public budget
financing, while 17 % originate
from Donations/projects
(provision of service within the
Project activities financed by
donors, mostly foreign
organizations) and equal share
as combination of public
budgets and
Donations/projects.
10
5
3
12
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Provision of specific skills / knowledge for use of digital technologies - General improvement
of e-literacy and e-skills at company level
17%
33%
0%
17%
33%
0%
Provision of specific skills / knowledge for use of digital technologies - General improvement
of e-literacy and e-skills at company level
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 98
4.6. Provision of services in the field of improvement of
research and innovation capacities
Out of totally 10 interviewed
BS providers, 70% declared
provision of services to
private sector in
Improvement of research
and innovation capacities –
Provision of
experts/consultants, while
60% declare activities in the
field of Incubation of
business ideas and startups.
Half of interviewed declare
provision of services in the
field of Creating a favorable
environment for innovation
development and research
as well as provision of
Laboratory services. Other
services are less present on
the market.
Although, about 70% of BS providers declared provision of different type of services in the field of
Improvement of research and innovation capacities, most of these services are provided in form of
Support to networking to MSMEs and then in the form of Direct support to MSMEs. Taking into account
facilities managed by BS providers, it can be concluded that most common services are provided directly
by limited number of BDS providers, while also significant number is externally contracted (consultants).
Most common services are financed usually from Projects/donations (projects financed by international
or quasigovernmental organizations), then from Direct private financing, and in limited number of cases
from public budgets or combination of public budgets and other sources.
7
2
5
3
6
4
5
0 1 2 3 4 5 6 7 8
Provision of experts / consultants
Organization of training in the field ofinnovation introduction
Laboratory services
Prototyping
Incubation of business ideas and start-ups
Connecting with potential investors ininnovative products and services
Creating a favorable environment forinnovation development and research
Improvement of Innovation capacity and research- Total SPs providing services
Total SPs providing services
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 99
a) Provision of experts / consultants
From 70% of surveyed BS
providers that provide services of
Improvement of Innovation
capacity and research - Provision
of experts / consultants, 1
provides services in the form of
Training and education, 4 in form
of providing networking to MSMEs
and only 3 BS providers providing
services in form of direct support
to MSMEs.
Source of financing of these
services are versatile. The
significant share of financing for
provision of this service originate
from Direct private sector
financing (29%) and equal share
from Donations/projects
(provision of service within the
Project activities financed by
donors, mostly foreign
organizations). Exclusively public
budget financing is 14%, while
same shares originate from
different combined financing, as
presented in the chart.
10
7
1
34
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Improvement of Innovation capacity and research - Provision of experts / consultants
29%
29%
14%
0%
14%
14%
Improvement of Innovation capacity and research - Provision of experts /
consultants
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
SPs financing serviceprovision from privatesector andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 100
b) Organization of training in the field of innovation introduction
Only 20% of surveyed BS
providers that provide services
of Improvement of Innovation
capacity and research -
Organization of training in the
field of innovation introduction.
Only 1 provides services in the
form of form of direct support
to MSMEs and 1 in the form of
provision of networking to
SMEs (role of integrator).
Two sources f financing are
equally present. Financing from
Donations/projects (provision
of service within the Project
activities financed by donors,
mostly foreign organizations)
(50%) and Direct financing from
private sector (50%).
10
2
0
1 1
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Improvement of Innovation capacity and research - Organization of training in the field
of innovation introduction
0%
50%50%
0% 0% 0%
Improvement of Innovation capacity and research - Organization of training in the
field of innovation introduction
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 101
c) Laboratory services
From 50% of surveyed BS
providers that provide services of
Improvement of Innovation
capacity and research -
Laboratory services, 1 provides
services in the form of Training
and education, 3 in form of
provision of networking to
MSMEs and only 3 BS providers
providing services in form of
direct support to MSMEs.
Two sources f financing are
equally present. Financing from
Donations/projects (provision of
service within the Project
activities financed by donors,
mostly foreign organizations)
(40%) and financing from public
budgets exclusively (40%), while
Direct financing from private
sector participates with 20%.
10
5
1
3 3
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Improvement of Innovation capacity and research - Laboratory services
40%
20%
0%0%
0%
40%
Improvement of Innovation capacity and research - Laboratory services
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 102
d) Prototyping
From 30% of surveyed BS
providers that provide services of
Improvement of Innovation
capacity and research -
Prototyping, 1 provides services
in the form of Training and
education, 2 in form of provision
of networking to MSMEs and
only 1 BS provider provides
services in form of direct support
to MSMEs.
Two sources of financing are
present. Dominant source of
financing is public budget with
share of 67%, while share of
Direct financing from private
sector is 33%.
10
3
1 1
2
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Improvement of Innovation capacity and research - Prototyping
0%
33%
0%0%0%
67%
Improvement of Innovation capacity and research - Prototyping
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 103
e) Incubation of business ideas and start-ups
From 60% of surveyed BS
providers that provide services of
Improvement of Innovation
capacity and research -
Incubation of business ideas and
start-ups, 1 provides services in
the form of Training and
education, 4 in form of provision
of networking to MSMEs and only
2 BS provider provide services in
form of direct support to MSMEs.
Five sources of financing are
present with the equal share in
financing of the activities (each
20%) as presented in the chart.
10
6
12
4
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Improvement of Innovation capacity and research - Incubation of business ideas and
start-ups
20%
0%
20%
20%
20%
20%
Improvement of Innovation capacity and research - Incubation of business ideas
and start-ups
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
SPs financing serviceprovision from privatesector andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 104
f) Connecting with potential investors in innovative products and services
From 40% of surveyed BS
providers that provide services of
Improvement of Innovation
capacity and research -
Connecting with potential
investors in innovative products
and services, 3 provide services in
form of provision of networking to
MSMEs and only 1 BS provider
provides services in form of direct
support to MSMEs.
Four sources of financing are
present with the equal share in
financing of the activities (each
25%) as presented in the chart.
One of these sources are
combined financing from pubic
budgets and project/donations.
10
4
01
3
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Improvement of Innovation capacity and research - Connecting with potential investors in innovative products and
services
25%
25%
0%
25%
25%
0%
Improvement of Innovation capacity and research - Connecting with potential investors in innovative products and
services
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 105
g) Creating a favorable environment for innovation development and research
From 50% of surveyed BS providers
that provide services of
Improvement of Innovation capacity
and research - Creating a favorable
environment for innovation
development and research, all 5
provide services in form of provision
of networking to MSMEs.
Four sources of financing are
present. Dominant is financing from
Donations/projects (provision of
service within the Project activities
financed by donors, mostly foreign
organizations) (40%) while financing
from public budgets exclusively,
Direct financing from private sector
and combined financing from public
budgets and Donations/Projects has
equal share (each 20%).
10
5
0 0
5
0
2
4
6
8
10
12
Total numberof surveyed
SPs
Total SPsprovidingservices
Total SPsproviding
trianing andeducation
Total SPsproviding
direct supportto SMEs
Total SPsproviding
networking toSMEs
(Integratator)
Nu
mb
er o
f SP
s
Improvement of Innovation capacity and research - Creating a favorable
environment for innovation development and research
40%
20%
0%
20%
20% 0%
Improvement of Innovation capacity and research - Creating a favorable
environment for innovation development and research
SPs financing serviceprovision fromDonations/projects
SPs financing serviceprovision from privatesector
SPs financing serviceprovision from publicbudgets
SPs financing serviceprovision from publicbudgets andprojects/donations
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 106
5. Status of service providers for
digital transformation of
companies - findings
5.1. Human capacities of the service providers to support
provision of services to SMEs in digital transformation of
businesses
Over the last four years the
total number of employees
in the 10 interviewed BS
service providers
organizations decline by
average annual rate of
5.33%, from 79 employees
in 2016 to 68 employees in
2019. Share of female
employees increased over
the period due to the lower
decline rate recorded. It is
also visible that number of
full time University degree
ICT employees (VSC ICT)
and University degree
technical professions
employees (VSS Technical
profession) recorded decline over the period.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 107
The average number of
employees per BDS provider
decline over the time, from 7.9 in
2016 to 6.8 in 2019. During the
period significant share of female
employees was presented (over
the 56% in total number of
employees in 2016, to over 60%
of female employees in 2019).
Average number of ICT engineers
in the structure of employees is
very low, 0.2, and there are no
female ICT employees. Little bit
better situation is with the
University educated technical
professionals that are fully
employed.
The largest share in the average
source of financing for typical BDS
provider is originated from
International programs / Donors /
Organizations (35.5%), while BDS
Providers almost does not rely on
financing from the budgets
(governments at all levels), where
only 15 % of financing originated
from public budgets. Significant
share is related to memberships
(28%) and financing through the
Direct sale of services to private
sector (21.5%).
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 108
5.2. Use of the ICT tools in the service providers organization
All interviewed BDS
providers use MS office
packages /MS windows as
key tool for delivery of
services. # out of 10
interviewed BDS
providers have access
and use CAD linked with
other systems, CAD/CAE
with CNC machines and
Special software for
management
5.3. Organization and participation in ICT events
Organization or participation at the events
As key organization
partner
As co-organization
partner As participant Participate in any role
Ideathon-a 1 1 0 2 Hackathon-a 1 2 1 4 Boothcamp-a 1 0 2 3 Competition for programmers 1 1 1 3 Other similar events 3 3 1 7 Total events 7 7 5 19
Most of the interviewed BDS providers participated on unspecified ICT events in the role of key organization
partner and co-organization partner, while just 5 had a role of participant, from which 2 participated on
Boothcamp event, 1 on the Hackathon, 1 on the competition of programmers and 1 on the similar events.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 109
5.4. Networking and public private partnership activities for
digital transformation of MSMEs
Most of the service providers declared that has excellent cooperation established with the ICT companies.
Some of them has permanent cooperation with specific ICT companies, consuming their services, but also
creating joint services to MSMEs.
Cooperation with the Chambers of commerce and Associations of employers are also stated from 8 out of
10 surveyed BS providers. It is mostly related to joint approach to donors (where Chambers are usually
partners in the projects, representing interest of the private sector), joint project implementation (financed
by international organizations in most cases), joint organization of conferences, etc.
Most of the interviewed BS providers declare the established cooperation with the Technology parks,
Business incubators, in domain of organization of education (joint), participation in the projects (applied to
international donors mostly), but this cooperation is described as low intensity cooperation.
Cooperation with existing clusters is described as intensive in sense of preparation of joint projects and as
gate to approach specific MSMEs, as well as with Regional development agencies.
All surveyed BS providers declared the extraordinary and intensive cooperation with the universities and
institutes (mostly local public universities), in domain of joint projects preparation and implementation, or
development of joint services to MSMEs, governments, etc.
Cooperation with the international organizations, quasigovernmental organizations, international
development agencies, etc., is at the high level, according to all interviewees, and among other most of
them underline cooperation with USAID, EC, GIZ, UNDP, SIDA.
The cooperation of BS providers and other relevant stakeholders is at the high level, but mostly oriented
to the preparation of joint projects usually financed by the international, quasigovernmental or
international development agencies. Activates oriented to development of services and products to the
MSMEs in BiH are limited.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 110
5.5. Potential role as business digitalization HUBs
According to the definition of Digital Innovation hubs describing this term as “ecosystems that consist of
SMEs, large industries, startups, researchers, accelerators, and investors. They aim to create the best
conditions for long-term business success for all involved”, we could define the same way Business
Digitalization HUB, since this term should also include ecosystems that consist of SMEs, large industries,
startups, researchers, accelerators, in BiH conditions public bodies, aiming at long term business success
based on digital transformation of companies.
For Bosnia and Herzegovina to remain competitive locally and internationally, its companies must be able
to benefit from digital opportunities. This will lead to higher value products and smarter processes. The
digital revolution brings opportunities for big and small companies, but many of them still find it difficult
to know in which technologies to invest and how to secure financing for their digital transformation. Small
and Medium Sized Enterprises (SMEs) are particularly slow in integrating digital technologies: only one out
of five SMEs in the EU are highly digitized, yet they represent over 90% of all businesses in Europe. There
are also strong differences in the level of digitalization across the Europe, depending on the sector and
region. To bridge the current divide, the EU proposed Digital Innovation Hubs as a key priority in
the Digitizing European Industry Initiative, adopted in April 2016.
Digital innovation hubs (DIH) can help ensure that every company, small or large, high-tech or not, can
grasp the digital opportunities. With technical universities or research organizations at the core, DIHs act
as one-stop-shops where companies —especially SMEs, startups and mid-caps— can get access to
technology-testing, financing advice, market intelligence and networking opportunities.
In Bosnia and Herzegovina there is one Digital Innovation HUB, and it is INTERA Technology Park in Mostar,
officially presented Pan-European network of Digital innovation HUBs, although operational functions of
this facility are quit questionable in sense of achieving the aims of such facility.
Form the interviewed BS providers, the number of these with potential to become Business Digitalization
HUBs are very limited. The potentials exist in ICBL and ZEDA, while Metal Cluster Mostar (in cooperation
with the University of Mostar and their project Learning Factory) also has potentials, with the remark that
Metal Cluster Mostar use the facilities and capacities of University in Mostar and is recently established.
.
Business digitalization hubs - ecosystems that consist of SMEs, large industries, startups, researchers,
accelerators, in BiH conditions public bodies, aiming at long term business success based on digital
transformation of companies. The existing potentials to become Business digitalization hubs have ICBL
and ZEDA, as well as Metal Cluster Mostar (in cooperation with University of Mostar and Learning Factory
facility)
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 111
5.6. Available facilities managed by service providers (business
incubators, innovation incubators, ICT startup support,
prototype development facilities, etc.).
Few of interviewed BS providers has some facilities related to the business and/or innovation incubation,
ICT startup support, prototype development facilities, etc. Specifically:
ICBL – is managing Business incubator where approximately 80% of start-up companies are in the ICT
sector, the rest are in different business service provision sectors. The incubator is major part of ICBL,
located in 4 locations in Banjaluka City. ICBL has training centers with capacity of 100 persons to be trained.
Metal Cluster Mostar – use capacities of University of Mostar (public university) and results of the project
Learning Factory (facility within the University).
ZEDA – has its own laboratory for testing the wood products, and provides services to the MSMEs from all
over BiH.
All other BS providers does not manage any similar facilities, and in addition to that some of them does not
have permanent offices (rather use offices of other organizations, or establishers), This is mostly refere to
surveyed Cluster organizations.
Most of the interviewed Business Service providers do not manage facilities such as business and
innovation incubators, start-up support facilities, etc., with the exception of one Business incubator
/Start-up support facility in ICBL, ZEDA wood testing laboratory, and Learning factory (metal Cluster
Mostar in cooperation with University of Mostar).
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 112
6. Conclusions and proposed project
strategy
Although, the overall economy of Bosnia and Herzegovina is tightly linked mostly with the economies of
neighboring West Balkan countries and EU, especially export oriented sectors such as wood processing
(final products), metal processing and plastic sector, as well as tourism as fastest growing sector, the
competitiveness of the economy is still low. The spill over effects of the accelerated digital transformation
of the companies in EU, is highly present and impact the BiH economy, based on the requests from clients
originating form EU, in a sense of fulfilling required demanding standards and increased competitiveness
of their local partners (exporters) in BiH. Since there is no clear digitalization strategy /policy in BiH, the
major engine for digital transformation of BiH companies is still the outer market pressure for more quality
products, better controlled (digitalized) production processes, and general adopting new business
managing style compatible with the EU (requiring more and more digital technologies to be used, from
point of initial communication with the business partners, to orders placement, controlled production
processes, storage, logistic, shipment, delivery, payment, etc.). It is obvious that Bosnia and Herzegovina
and local companies, in the process of digitalization do not have its own plan, although process of
digitalization is already ongoing process impacted by the mentioned spillover effect and requirements of
export markets mostly. This also highly impact the level of development, status and type of services
provision of Service providers in the process of the BiH company’s digitalization.
BUSINESS SERVICE PROVIDERS
Over the last four years the total number of employees in the 10 interviewed BS service providers
organizations decline by average annual rate of 5.33%, from 79 employees in 2016 to 68 employees in
2019. The structure of employees in this organization (chambers, associations, cluster organizations, etc.)
are typical for local development agencies, rather than specialized Service providers in the field
digitalization of companies. It is also visible that number of full time University degree ICT employees (VSC
ICT) and University degree technical professions employees (VSS Technical profession) (0.2 of such
employees per organization in ICT and 0.7 in other technical disciplines) also recorded additional decline
over the period.
The largest share in the average source of financing for typical BDS provider is originated from International
programs / Donors / Organizations (35.5%).
Usage of any specialized software or ICT tools by BS providers in provision of their services is relatively low
and does not exceed 30%, while all of them use MS Windows and MS Office packages. Neither of the
organization is not specialized in provision of specific services in the filed of ICT and digitalization, and this
fact is supported by their interest on organization or participation on any ICT events (such as Ideathon-a,
Hackathon-a Boothcamp-a, Competition for programmers, etc.).
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 113
Cooperation of BS providers and other organizations that could be relevant in the field of digitalization is
intense, but focused on the preparation of different project applications to donors (Mostly foreign
governments and quasigovernmental organizations), rarely targeting digitalization of the companies.
Business digitalization hubs - ecosystems that consist of SMEs, large industries, startups, researchers,
accelerators, in BiH conditions public bodies, aiming at long term business success based on digital
transformation of companies. The existing potentials to become Business digitalization hubs have ICBL and
ZEDA, as well as Metal Cluster Mostar (in cooperation with University of Mostar and Learning Factory
facility).
Most of the interviewed Business Service providers do not manage facilities such as business and
innovation incubators, start-up support facilities, etc., with the exception of one Business incubator /Start-
up support facility in ICBL, ZEDA wood testing laboratory, and Learning factory (metal Cluster Mostar in
cooperation with University of Mostar).
The significant number of BS providers declared provision of different type of services in the field of Digital
marketing, most of these services are provided in form of Training and education provision to MSMEs and
related to Improving users experience in using web pages/blogs, Digital presentation of products and
services and managing profiles on social media platforms. Most common services are financed usually from
private sector directly, then from Projects/donations (projects financed by international or
quasigovernmental organizations), and in limited number of cases from public budgets (different levels).
About 50% of BS providers declared provision of different type of services in the field of Business Model
Improvement and Digitization, almost equal number of these services are provided in form of Training and
education provision to MSMEs and in form of Direct support to MSMEs and related to Digitization of
existing business model - Customer Relationship Management, Digitization of existing business model -
Supply chain management, Digitization of existing business model - Development and implementation of
software solutions and communication tools, Advising in optimizing the production process and
Professional consulting for other aspects of business. Most common services are financed usually from
Projects/donations (projects financed by international or quasigovernmental organizations), then from
public budgets and in limited number of cases from private sector directly.
About 50% of BS providers declared provision of different type of services in the field of Product / Service
Digitization - Introducing a New Product with Integrated Digital Solution, and most of these services are
provided in form of Direct support to MSMEs, following by Training and education provision to MSMEs and
support to networking to MSMEs and related to Prototyping and testing, and then Conceptualizing new
digital product services. Most common services are financed usually from Projects/donations (projects
financed by international or quasigovernmental organizations), then from Direct private financing, and in
limited number of cases from public budgets.
About 80% of BS providers declared provision of different type of services in the field of Provision of
specific skills / knowledge for use of digital technologies, most of these services are provided in form of
Training and education and services of networking to MSMEs, while direct support to MSMEs is rare option.
Most of the services are related to Management training, Liaison with educational institutions, Training of
workers in Innovation (product/process) and Training of technical staff in improving the productivity.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 114
Training of workers for CNC operators are offered by 60% of BS providers, while other services are less
present on the market. Most common services are financed usually from Projects/donations (projects
financed by international or quasigovernmental organizations), then from Direct private financing, and in
limited number of cases from public budgets or combination of public budgets and project donations or
private sector.
About 70% of BS providers declared provision of different type of services in the field of Improvement of
research and innovation capacities, most of these services are provided in form of Support to networking
to MSMEs and then in the form of Direct support to MSMEs and related to Provision of experts/consultants
and Incubation of business ideas and startups. Half of interviewed declare provision of services in the field
of Creating a favorable environment for innovation development and research as well as provision of
Laboratory services. Most common services are financed usually from Projects/donations (projects
financed by international or quasigovernmental organizations), then from Direct private financing, and in
limited number of cases from public budgets or combination of public budgets and other sources.
Taking into account structure of the employees in BS providers (low level of specialized knowledge), as well
as their infrastructure, it can be concluded that most of the services are externally contracted. Many of the
organizations interviewed as “Business service providers” cannot be characterized as such. Among those
organizations there are organizations formed within activities of different projects financed by the
international organizations (or quasigovernmental organizations), not specialized in the provision of
business services, especially not in domain of digitalization where the high level of specialization is
required. Many of the interviewed organizations has status of quasigovernmental organizations (formed
and financed by government/governmental organizations or other public and quasigovernmental
organizations). Shortly, the role of this organization is hardly to be seen as credible Business service
providers to private sector in the process of digitalization of companies in BiH, with few exceptions, related
to specific services type and specific interviewed organizations.
Form the other side of the coin there are interviewed companies in BiH export-oriented sectors such as
metal processing and plastic, wood processing sector and tourism, and their needs for services in the
process of digitalization of companies.
TORUSIM SECTOR COMPANIES
The sample for this research were 9 companies active in tourism sector from all over Bosnia and
Herzegovina. The majority of the interviewed subjects are active in the field of accommodation and
hospitality, but also some are active in the field of provision of local tourism services and local products,
mostly in Sarajevo macro region. According to their opinion, the most significant improvements related to
their core business that can be achieved through the digitalization are related to:
• Linking guest check-in platforms to decrease official administration (according to the local law it is
required to do official check in 3 different records)
• Development of B2B systems, tourist destination application
• Sales/promotion through online advertising channels, direct sales through the online booking system
• Digitalization of libraries, archive material, digitalization of the Institute's art and other collections
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 115
• Web page development and upgrading
• Development and digitalization and promotion of gastronomic tours, cooking classes, gourmet shops
• Development of Guest info Channels for hotel guests, Smartphone hotel applications
• Online sales of local products, promotions, marketing
Most of the interviewed companies expressed their needs for support to improve their businesses by using
digital technologies in the areas of Digital marketing, Product/service digitalization -introducing a new
product with integrated digital solution and Improvement and digitalization of business model.
Digital marketing: Almost 90% of surveyed companies expressed their needs for support in the field of
Improving experience in using company Website/ Blog and more than 55% needs for support in improving
of content of digital presentation of products and services (content marketing).
Improvement and digitalization of business model: Most required support is in the field of Development
and application of software solutions for communication /cooperation. Most of the survey companies were
interested for services in the field of Introduction of new business models and its digitalization and in
certain level support in Adaption of business model to individual customer /user requirements.
Digitalization of products / services - introducing new products with integrated digital solutions:
Interviewed companies were mostly interested in services in the field of Support and maintenance,
Prototyping and testing and Design of new digital products/services.
Improvement of knowledge and skills for use of digital technologies: Most required services are Training
to technical staff (productivity improvement) , General improvement of e-skills at the company level, while
most required trainings to the workers are in the field of Special software use and Marketing/sales.
Improvement of research and innovation capacities: Most of the interviewed companies require support
Participation in professional seminars, fairs, presentations and training in the field of innovation
introduction
The mostly used services in BiH are IT Consulting/ Services, while mostly required services that does not
exist in BiH are services in the field of Digital marketing (education). Improvements that mostly contributed
to revenue growth of the interviewed companies in the last 3 years are in the field of Digitalization of
product and services, Utilization of the new technologies and innovations and Marketing/social networks.
About 56% of the interviewed companies do not possess own internal computer network. Regarding
utilization of appropriate computer/software tools most of the companies agree that they use appropriate
Digital
Marketing
Imrpvoment
and
digitalization
of business
model
Product / Service
Digitization -
introducing a new
product
with integrated
digital solution
Specific skills
provision /
skills for using
digital
technologies
Innovative
capacities/
research /
prototype
design
% of total number
of interviewd
subjects 77.8 44.4 55.6 22.2 22.2
In which of the following areas do you need support to improve
business by using digital technology?
Required
supporto to
improve
business by
using digital
technology
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 116
computer software tools in all aspects of business, with the exception of the field of Production, where
prevail negative opinion, and field of Quality assurance, where dominant opinion is characterized by lack
of knowledge on situation. Regarding level of integration of computer/software systems most of the
companies agree that integration level in their companies is low, with the exception of procurement and
stock management systems where the dominant attitude is characterized by lack of knowledge on that
issue.
WOOD PROCEESING SECTOR COMPANIES
The sample for this research were 70 companies active in wood processing sector from all over Bosnia and
Herzegovina. The majority of the interviewed subjects are active in the field of
production of Furniture, kitchens, hotel room furniture, bedrooms, style furniture, chairs, office furniture,
firewood processing, sawmill products, drying services, raw materials processing, multi-ply and solid floors,
solid adhesive panels, wood beams, parquet, pellets, joinery, hives and hive elements, etc.. According to
their opinion, the most significant improvements related to their core business that can be achieved
through the digitalization are related to productivity enhancement, utilization calculation, CE marking,
product certification, production software introduction, procurement of new machines, process
digitization, procurement of CNC machines and tools, digital marketing, digital product presentation, sales
digitization, production process automation, order and production process digitization, work orders
digitalization, etc. According the origin of customers, informants stated that goods are provided almost
equally to the foreign and domestic customers. Export is mostly oriented to neighboring West Balkan and
also EU countries, UK, Switzerland, and as potential market is mentioned China. The improvements in
access to those markets are mostly focused on digital marketing and sales, quality certification of products
and standardization, CE marking, web page presentations and digital order placement and sale, better
relations with the customers, using the new market niches, etc..
The most of the interviewed subjects expressed their needs for support to improve their businesses by
using digital technologies in the areas of Improvement and digitalization of business model and Digital
marketing, and then Product/service digitalization - introducing a new product with integrated digital
solution.
Digital marketing: Most of the surveyed companies (41.4%) expressed their needs for support in the field
of Improvement of content of digital presentation of products and services (Content marketing), then
Optimization of information exchange with customers / users and suppliers (Conversation rate
optimization) and then in the field of Improving the user experience in using the website / company blog,
as well as Big data analytics.
Digital
Marketing
Improvement and
digitalization of
business model
Product / Service
Digitization -
introducing a new
product
with integrated
digital solution
Specific skills
provision /
skills for using digital
technologies
Innovative
capacities/
research /
prototype
design Other
% of total number
of interviewed
subjects 41.4 58.6 32.9 30.0 24.3 8.6
Required support
to improve
business by using
digital technology
In which of the following areas do you need support to improve
business by using digital technology?
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 117
Improvement and digitalization of business model: Most required support is in the field of Development
and application of software solutions for communication /cooperation and then Wearhouse / logistic
management. Most of the survey companies were also interested for services in the field of Introduction
of new business models and its digitalization and in Professional consulting in optimizing the production
process.
Digitalization of products / services - introducing new products with integrated digital solutions:
Interviewed companies were mostly interested in digitalization of Sales of product / services and Design of
new digital product / services, as well as Analysis, research and preparatory activities in this area.
Improvement of knowledge and skills for use of digital technologies: Most required services and support
in this field are related to Training provision to workers (CNC operators) , where 60% of interviewed
companies expressed their needs for such trainings, then Training to technical staff (productivity
improvement) where more than 57% of the companies expressed their needs and Training to management
staff (management skills) where the interest expressed 41.4% of the companies.
Improvement of research and innovation capacities: Most of the interviewed companies require support
through the Training in the field of innovation and provision of Provision of experts/consultants.
The mostly used services in the field of digital transformation of companies in wood processing sector are
Business Consulting Services of local service providers, while mostly required services that does not exist
in BiH and there is need for such services, are also Business Consulting Services. Obviously, there is strong
need for such services in wood processing sector.
Improvement that mostly contributed to revenue growth through the use of digital solutions by the
interviewed companies in the last 3 years are in the field of Product and services, Utilization of the new
technologies and innovations. About 81% of the interviewed companies possess own internal computer
network. Regarding utilization of appropriate computer/software tools most of the companies are
indecisive about the utilization of the appropriate computer software tools in all aspects of business. It is
hard to find any aspects of the business where clearly positive or clearly negative answers dominate over
50%. Regarding level of integration of computer/software systems most of the companies are indecisive
about integration level in their companies, but slightly more dominant positive answers are in the field of
Procurement and Storage. Most of the interviewed companies did not confirm their participation or
interest to participate on the ICT events such as Ideathon, Hackathon, Boothcamp, Competition of
programmers and similar events, in any form of participation (participants, key organization partners, one
of the organization partners, etc.).
METAL PROCEESING AND PLSTAIC SECTOR COMPANIES
The sample for this research were 90 companies active in metal processing sector and plastic sector from
all over Bosnia and Herzegovina. The majority of the interviewed subjects are active in the field of
production of medical chairs and equipment, metal machining services, production of steel structures,
container parts, fabrication of metal assemblies, steel beams, turbojet engine repair, spare parts
production, special tooling, material testing, complex metal product manufacturing, traffic signs
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 118
production, medical plastic supplies production, cable manufacturing, industrial furnace production,
greenhouses, tractors, aluminum locksmiths and joinery production, PVC joinery, agricultural tools, forged
products, office furniture, pumps, fittings, electro-hydraulic hoists, gearbox repair and conveyors repair,
production of PE film, plastic tubes, plastic packaging, plastic bags, injection molded plastic, etc.
According the origin of customers, informants stated that goods are provided almost equally to the foreign
and domestic customers. Export is mostly oriented to neighboring West Balkan and also EU countries, as
well as USA. The improvements in access to those markets are mostly focused on digital marketing and
sales, quality certification of products and standardization, CE marking, web page presentations,
production process digitalization and improvement, complex product development, IT technology
introduction in production and management process, etc..
The most of the interviewed subjects expressed their needs for support to improve their businesses by
using digital technologies in the areas of Improvement and digitalization of business model and Specific
skills provision for using digital technologies and then Digital marketing.
Digital marketing: Most of the surveyed companies (64.3%) expressed their needs for support in the field
of Support to information exchange with customers / users and suppliers (Conversation rate optimization),
then Improvement of user experience in using web site /company blog, and then in the field of Bigdata
analytics.
Improvement and digitalization of business model: Most required support is in the field of Development
and application of software solutions for communication /cooperation and then Wearhouse / logistic
management. Most of the survey companies were also interested for services in the field of Professional
consulting in optimizing the production process and then Introduction of new business models and its
digitalization.
Digitalization of products / services - introducing new products with integrated digital solutions:
Interviewed companies were mostly interested in digitalization of Sales of product / services and Analysis,
research and preparatory activities in this area, as well as service related to Support and maintenance.
Improvement of knowledge and skills for use of digital technologies: Most required services and support
in this field are related to Training provision to workers (CNC operators) , where 46.7% of interviewed
companies expressed their needs for such trainings, then Training for workers for IT (3D modeling) with
interest expressed by 43.3% of interviewed companies, as well as for Training for technical staff
(productivity improvement) where interest was 52.2%.
Digital Marketing
Improvement
and
digitalization of
business
model
Product / Service
Digitization -
introducing a new product
with integrated digital
solution
Specific skills
provision /
skills for using
digital technologies
Innovative
capacities/
research /
prototype
design Other
% of total number of
interviewed subjects 45.6 55.6 30.0 50.0 15.6 3.3
Required support to
improve
business by using digital
technology
In which of the following areas do you need support to improve
business by using digital technology?
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 119
Improvement of research and innovation capacities: Most of the interviewed companies require support
through the Training in the field of innovation and Provision of experts/consultants.
The mostly used services in the field of digital transformation of companies in metal processing and plastic
sectors are IT Consulting Services of local service providers, while mostly required services that does not
exist in BiH and there is need for such services are Professional Counseling Services. Improvement that
mostly contributed to revenue growth through the use of digital solutions by the interviewed companies
in the last 3 years are in the field of Product and services, Utilization of the new technologies and
innovations, as well as Management / Organization. About 63% of the interviewed companies possess own
internal computer network. Regarding utilization of appropriate computer/software tools, the prevailing
answers of the companies were dependent on the aspects of the business. So, prevailing positive answers
were recorded in the aspects of Management, Production and Inventory management, while prevailing
negative answer was recorded in the aspect of Marketing. Regarding level of integration of
computer/software systems most of the companies are indecisive about integration level in their
companies, but slightly more dominant positive answers are in the field of Procurement and Storage and
CAD systems, while in the other aspects negative answers prevailing. Majority of the interviewed
companies did not confirm their participation or interest to participate on the ICT events such as Ideathon,
Hackathon, Boothcamp, Competition of programmers and similar events, in any form of participation
(participants, key organization partners, one of the organization partners, etc.).
IT SECTOR SERVICE PROVIDER COMPANIES
The sample for this research were 23 companies from IT sector from all over Bosnia and Herzegovina. The
majority of the interviewed subjects are specialized in the field of programming and coding (about 95% of
interviewed) and in the field of product development (again linked with the programming and coding).
Their activities are mostly focused on international markets (where 71% of companies see it as major
markets for their products), although most of them could imagine to work and provide services and
products to local SMEs (based on their needs).
Most of the interviewed IT
service providers are
specialized in
programming and coding
(about 95%), than in
product development
(again mostly software
development).
For support and after
sales services are
specialized 39,13% of
interviewed companies
and 30.43 % are
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 120
specialized in services related to quality.
About 57 % (more than half) of interviewed IT companies possess capacities to provide CMS based e-
commerce solutions to local SMEs. Regarding specific services to be provided in the field of CMS base e-
commerce, the most of the interviewed IT companies declared ability to provide Online shop solutions
(52,17%), as well as Dynamic landing pages, then Visitor registration services (47,83%), Automatic tracking
and analysis of the user data (43,48%) and Artificial intelligence based solutions (about 30%).
About 43 % (less than half) of interviewed IT companies possess capacities to provide ERP solutions to local
SMEs. Regarding specific services to be provided in the field of ERP solutions, the most of the interviewed
IT companies declared ability to provide CRM customer relationship management (47,83%), as well as
Business intelligence, then Office and portal solutions (30,43%). All other mentioned specific services is
able to provide less than 20% of interviewed IT companies.
Even if IT sector become more oriented to local SMES as potential customers, estimation is that still the
majority of the market will be international market (58%). This show strong dependency of BiH IT sector to
international market players, where most of the local IT companies provide just component of the services,
not development of branded products in IT industry. Most of the interviewed companies currently do not
have developed any products/services for local SMES (74%).
Still, most of the interviewed companies see the greatest opportunities for their business development for
international markets (customers), more than 78%.
The specific IT areas in which the interviewed companies see their role as service providers are: Support
and training development, e-commerce solutions and Digitalization in Construction Industry, ERP,
development of custom software for e-commerce, cloud solution, Artificial intelligence, Product
development and support, hosting and support of cloud based solutions for service platforms, startups
support , Smart City Solutions and IT consultancy.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 121
OVERALL CONCLUSION
The spillover effects of the accelerated digital transformation of the companies in EU, is highly present and
impact the BiH economy, based on the requests from clients originating form EU, in a sense of fulfilling
required demanding standards and increased competitiveness of their local partners (exporters) in BiH.
Since there is no clear digitalization strategy /policy in BiH, the major engine for digital transformation of
BiH companies is still the outer market pressure for more quality products, better controlled (digitalized)
production processes, and general adopting new business managing style compatible with the EU
(requiring more and more digital technologies to be used, from point of initial communication with the
business partners, to orders placement, controlled production processes, storage, logistic, shipment,
delivery, payment, etc.). It is obvious that Bosnia and Herzegovina and local companies, in the process of
digitalization do not have its own plan, although process of digitalization is already ongoing process
impacted by the mentioned spillover effect and requirements of export markets mostly. Since the process
of digital transformation is ongoing, there is strong need for appropriate specialized services to private
sector, in digital transformation.
Although some of the required services are available on the local market, the interviewed organizations
acting as service providers does not have internal human capacities and technical resources and level of
specialization to provide adequate services in the process of digitalization of local companies. They are
acting rather as market integrator (link between private sector requirements and existing services on the
market), mostly focused on finding the appropriate trainings for private sector, in smaller scope direct
support to private companies (in a form of on job assistance or even in smaller scope definition of
appropriate digitalization solutions for their processes, and networking of MSMEs and other stakeholders).
In the context mentioned above, capacity building of the interviewed business service provider
organizations (refer to most of them, with some exceptions), to become classical service providers in
domain of digitalization of private sector (BiH companies) is not something that will result in expected
results. Their role as market integrator for such services and promotors of digital transformation is more
appropriate, as well as their intermediary functions between private sector requirements, existing services
on the market (the real service providers in the field of digital transformation of the economy) and local
governments and stakeholders in the process of economy digital transformation. There are a lot of
appropriate activities to be undertaken in that context with interviewed BS providers, that should result in
speeding up digital transformation of BiH economy, trough provision of more appropriate diversified and
specialized services by Real business service providers on the BiH market.
Most of the interviewed IT companies (service providers), provide services to foreign customers. Even if IT
sector become more oriented to local SMES as potential customers, estimation is that still the majority of
the market will be international market (58%). This show strong dependency of BiH IT sector to
international market players, where most of the local IT companies provide just component of the services,
not development of branded products in IT industry. Most of the interviewed IT companies currently do
not have developed any products/services for local SMES (74%). Still, most of the interviewed IT companies
see the greatest opportunities for their business development for international markets (customers), more
than 78%. The specific IT areas in which the interviewed companies see their role as service providers are:
Support and training development, e-commerce solutions and Digitalization in Construction Industry, ERP,
development of custom software for e-commerce, cloud solution, Artificial intelligence, Product
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 122
development and support, hosting and support of cloud based solutions for service platforms, startups
support , Smart City Solutions and IT consultancy.
INNOVATION AND DIGITALISATION IN SMES IN BOSNIA AND HERZEGOVINA PROJECT 123
7. ANNEXEX
ANNEX I – questionnaire for SMEs survey in tourism sector
ANNEX II – populated database for SMEs in tourism sector
ANNEX III – questionnaire for SMEs survey in wood processing sector
ANNEX IV – populated database for SMEs in wood processing sector
ANNEX V – questionnaire for SMEs survey in metal processing and plastic sectors
ANNEX VI – populated database for SMEs in metal processing and plastic sectors
ANNEX VII – questionnaire for Service providers survey
ANNEX VIII - populated database for Service providers
ANNEX IX – Lis of interviewed service providers and interviews schedule