In BiH, development strategy is created at state, entity and cantonal levels. No nationwide strategy exists both for the development of SMEs and for an institutional innovation framework. The central strategy document is the Policy of Electronic Communications of BiH 2017-2021, which articulates a vision for a digital society based on knowledge and defines seven pillars of the ecosystem. This document identifies ecosystem players, describes their roles and how they are related, lists missing regulations, makes recommendations and proposes actionable measures to improve on the current situation. The document also identifies major threats to the ecosystem, including the following: the authorities’ indifference and unresponsiveness towards the ICT centric innovation ecosystem; a lack of financial support from government for ecosystem development; inadequate skills to qualify for and win EU funding. While the governments of the two entities that make up the country – FBiH and RS – co-created development strategy documents which have common goals for developing the innovation ecosystem.

There is no institutional framework at state level to support the development of SMEs, and there is a consequent shortage of financial instruments to promote innovation within SMEs. The FBiH Government provides some financial support. Both the FBiH Development Bank and the RS Investment and Development Bank offer favourable credit terms for SME development. Financial resources are segmented at micro level and coordinated mechanisms are missing. Private investments are limited when it comes to ecosystem research. Available resources offered through EU funds are underutilized.

Public sector and distribution of responsibilities

State level government: the BiH Ministry of Civil Affairs coordinates policies concerning scientific research and innovation. 

Entity level government: a) FBiH: the Ministry of Development, Entrepreneurship and Craft, and the FBiH Ministry of Education and Science; b) RS: Ministry of Science and Technology.

Cantonal level Government: ministries that coordinate policies concerning science, research and crafts in 10 cantons. 

Agencies at the state and entity levels, such as the Communication Regulatory Agency, the FBiH Banking Agency and Agency for the Development of Small and Medium Enterprises in RS; nongovernmental development organizations, such as NERDA Tuzla.

Relevant practices

The Business Innovation and Technology (BIT) Center in Tuzla is an incubator providing hard and soft infrastructure for ICT-based start-ups and SMEs. BIT center Tuzla is regarded as representing good practice. Since 2005, it has hosted over 53 companies, employed more than 500 highly skilled individuals, and has enabled more than 6,000 people to improve technical and entrepreneurial skills through workshops and training programs. Partnering with the Faculty of Electrical Engineering in Tuzla, the BIT Center established an ICT research lab and implemented the HERD project focused on collaborationand technology transfer across university and industry. This collaboration is continuing as ERASMUS PLUS project BENEFIT, in which BIT Center fosters soft infrastructure in the local innovation ecosystem and acts as a bridge between academia and industry.

From 2011-2016, the USAID implemented the USD 4.7 million Partnership for Innovation project to help young market entrants improve their skills and work readiness to prepare for jobs in the ICT sector. The project consisted of 24 internship programmes, eight work-readiness courses, and fifteen advanced software programming trainings for 2,000 young people. It also helped SMEs to adopt and better use ICT technologies and digitally enabled processes to improve their efficiency and market competitiveness. The project was implemented with partners from Sarajevo, Tuzla, Banja Luka and Mostar.