Innovation and digitalisation in SMEs in Bosnia and ... · • Organise interviews with the selected service providers (10 service providers in 4 project locations) on the basis of

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 BASELINE STUDY

Authors

Haris Ćatić

Mirza Pale

Creative Development and Engineering Solutions (CEDES)


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





3.2.5. Support needed in the field of digitalization of products /services - introducing new products with integrated digital solutions.................................................................................................................... 27





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



3.2.13. Participation on ICT events ............................................................................................................ 35

3.3. Metal processing sector and plastic sector ....................................................................................... 36






3.3.5. Support needed in the field of digitalization of products / services - introducing new products with integrated digital solutions.................................................................................................................... 41





3.3.10. Review of services used in the field of digital transformation of businesses that resulted in revenue growth of the companies ................................................................................................................ 46



3.3.13. Participation on ICT events ............................................................................................................ 49

3.4. IT sector ............................................................................................................................................. 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


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


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.


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


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)


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


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


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


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


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


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


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


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


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


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


innovation

introduction

c) Participation in

professional

seminars, fairs,

presentations

d) Something

else


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


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


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


3.1.9. Established cooperation with other institutions /

organizations

The most of the


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



Established

cooperation with other

institutions /

organizations

Established cooperation with other institutions / organizations


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



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


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


33.3 22.2 22.2 11.1 11.1

Customer relationship


44.4 44.4 0.0 0.0 11.1

Suppliers/procurement


22.2 44.4 0.0 22.2 11.1

Production


0.0 11.1 22.2 22.2 44.4

Quality


22.2 11.1 44.4 0.0 22.2

Logistic


33.3 33.3 0.0 11.1 22.2


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)


% Does not agree

% Full disagree

%

11.1 0.0 11.1 22.2 55.6

Management


% Does not agree

% Full disagree

%

22.2 11.1 11.1 11.1 44.4

Procurement


% Does not agree

% Full disagree

%

22.2 11.1 33.3 11.1 22.2

Stock management


% Does not agree

% Full disagree

%

22.2 0.0 33.3 11.1 33.3



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.


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..


Share in % 45.7 54.3

Wood processing sector




technology


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





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



Required support in

the field of digital

marketing






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



Required support to

improve 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



/services - introducing new products with integrated

digital solutions

In the field of digitalization of

products / services -

introducing new products


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


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


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




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


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





companies require


of research and


through the Training in

the field of innovation and

provision of consultancy

services.

a) Provision of experts /

consultants

b) Organization of


innovation introduction

c) Laboratory

services

d) Something

else



Required support in

improvement of

innovation/research

capacities





The mostly used services


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



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



organizations

The most of the

interviewed

companies declare

established


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


i)

Internationa

l projects /

donors j) Other



Established cooperation

with other institutions /

organizations




transformation of businesses that resulted in the

increase of turnover of the companies



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



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




Management


20.0 27.1 20.0 17.1 15.7

Marketing


11.4 15.7 38.6 18.6 15.7

Production


15.7 22.9 27.1 18.6 15.7

Quality


7.1 35.7 21.4 18.6 17.1

Logistic


10.0 32.9 24.3 15.7 17.1



14.3 34.3 25.7 11.4 14.3

Reception/delivery


7.1 24.3 22.9 28.6 17.1


Inventory management


12.9 22.9 20.0 27.1 17.1


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.

Material flow in production


12.9 11.4 38.6 21.4 15.7

Delivery to customers


20.0 31.4 18.6 14.3 15.7

Other


4.3 1.4 0.0 0.0 94.3


CAD Systems linked)


12.9 11.4 27.1 30.0 18.6

Procurement


7.1 32.9 28.6 14.3 17.1

Storage


7.1 37.1 24.3 14.3 17.1

CAD/CAE with CNC machines


14.3 17.1 20.0 28.6 20.0

ERP systems


4.3 24.3 24.3 27.1 20.0

Management


8.6 15.7 38.6 20.0 17.1

Other


2.9 0.0 12.9 0.0 84.3


3.2.13. Participation on ICT events

Company already participated or has interest to organize/participate on the events

Ideathon


4.3 7.1 22.9 34.3 31.4

Hackathon


4.3 7.1 20.0 37.1 31.4

Boothcamp


4.3 5.7 21.4 37.1 31.4

Competition of programmers


14.3 17.1 20.0 28.6 20.0

Other


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.).


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%.


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.




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..


Share in % 50.4 49.6

Metal processing

and plastic sector




technology


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


solution

Specific skills

provision /

skills for using

digital technologies

Innovative

capacities/

research /

prototype

design Other



Required support to

improve

business by using digital

technology





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



Required support in the

field of digital marketing






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



Required support to improve

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



/ services - introducing new products with integrated

digital solutions

In the field of

digitalization of products /

services - introducing new

products with integrated

digital solutions,


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


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


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




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



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





companies require


of research and


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



Required support in

improvement of

innovation/research

capacities





The mostly used services


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



Services used and required


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



organizations

The most of the

interviewed

companies declare

established


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


i) International

projects /

donors j) Other



Established

cooperation with other

institutions /

organizations




transformation of businesses that resulted in revenue

growth of the companies



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



Improvements that

directly contributed to

revenue growth over the

past 3 years through the


Improvements that directly contributed to revenue growth over the past 3 years through the





Management


17.8 34.4 26.7 12.2 8.9

Marketing


11.1 13.3 24.4 34.4 16.7

Production


16.7 36.7 15.6 24.4 6.7

Quality


10.0 34.4 26.7 21.1 7.8

Logistic


21.1 13.3 21.1 34.4 10.0



22.2 16.7 27.8 25.6 7.8


Reception/delivery


20.0 21.1 27.8 24.4 6.7

Inventory management


13.3 37.8 27.8 13.3 7.8

Material flow in production


14.4 12.2 44.4 18.9 10.0


Delivery to customers


17.8 12.2 22.2 33.3 14.4

Other


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.


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.


CAD Systems linked)


11.1 31.1 18.9 23.3 15.6 Procurement


14.4 34.4 17.8 25.6 7.8 Storage


12.2 36.7 24.4 18.9 7.8 CAD/CAE with CNC machines


8.9 25.6 17.8 28.9 18.9 ERP systems


11.1 7.8 33.3 32.2 15.6 Management


12.2 12.2 36.7 26.7 12.2 Other


1.1 0.0 0.0 0.0 98.9


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


6.7 5.6 14.4 45.6 27.8 Hackathon


6.7 5.6 15.6 44.4 27.8 Boothcamp


6.7 3.3 16.7 45.6 27.8 Competition of programmers


3.3 5.6 16.7 45.6 28.9 Other


2.2 0.0 1.1 1.1 95.6


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.


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).



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


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.


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%).


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.


3.4.4. Avoidance of possible failure in IT solutions


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


0.00 39.13 34.78 0.00 26.09


0.00 0.00 34.78 43.48 17.39


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


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.


companies does not have

developed any

products/services for

local SMES (74%).


Still, most of the


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.


4. Status of available services for


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.


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.


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.


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.


Development Agency NERDA currently has no employees in the ICT sector, services in the area of

digitalization provide external consultants if necessary.


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.


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.


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.


• 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)


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.


The Prijedor Cluster Tree currently has no activities in the digitization sector, the activities are mostly

implemented in cooperation with the Preda Development Agency.

mailto:[email protected]


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.


• 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).


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


The wood cluster supports SMEs in creating web pages, brochures, and organizes trade shows.


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.


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.

mailto:[email protected]


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.


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).


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


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.


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 SPsproviding


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 from publicbudgets



that provide services of Content

enhancements to the digital

presentation of products and services,


in the form of Training and education

provision, while 3 BS providers provide

Direct support to MSMEs in this filed.




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 SPsproviding



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)





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


The only source of financing for



financing (100%).

e) Search engine optimization

10

21 1

0

2

4

6

8

10

12



Total SPsproviding



Nu

mb

er o

f SP

s

Digital merketing - Big data analytics

0%

100%

0%0%0%

Digital merketing - Big data analytics






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





financing (67%), and 33% is financed

through the Donations/projects



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 SPsproviding



Nu

mb

er o

f SP

s Digital merketing - Search engine

optimization

33%

67%

0% 0%0%

Digital merketing - Search engine optimization






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


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



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 from publicbudgets andprojects/donations

10

43

2

0

2

4

6

8

10

12



Total SPsproviding


Total SPsproviding direct

support toSMEs

Nu

mb

er o

f SP

s Digital marketing - Marketing service

automation




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


directly from the Donations/projects



foreign organizations), 100%.

10

1 10

0

2

4

6

8

10

12



Total SPsproviding



Nu

mb

er o

f SP

s Digital marketing - Conversation rate

optimization

100%

0%

0%0%0%

Digital marketing - Conversation rateoptimization





4.3. Provision of services in the field of improvement and


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


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


a) Digitization of existing business model - Supply chain management

From 50% of surveyed BS



model - Supply chain

management, most 3 BS providers)


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




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 SPsproviding


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






b) Digitization of existing business model - Customer Relationship Management


that provide services of Digitization

of existing business model -

Customer Relationship

Management, most (5 BS providers)


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.



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



organizations).

10

65 5

1

0

2

4

6

8

10

12


SPs


Total SPsproviding


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






c) Digitization of existing business model - Warehouse / Logistics Management in general




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


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 SPsproviding



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






d) Digitization of existing business model - Development and implementation of software solutions and

communication tools




model - Development and

implementation of software

solutions and communication

tools, most (4 BS providers)


Direct support to MSMEs in this

filed, 3 BS providers in a form of


while only 1 BS provider provides

services in the form of support to

networking to MSMEs.



originate directly from private

sector (40%) and equal share from




organizations), while 20% of

financing originate from public

budgets (at all levels).

10

5

34

1

0

2

4

6

8

10

12


SPs


Total SPsproviding


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





e) Introduction of a new business model and its digitization


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



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


SPs


Total SPsproviding


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





f) Customizing the business model to individual customer / user requirements (Individualization)


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.



from Donations/projects (provision



foreign organizations) (50%), and

from direct financing from private

sector (50%).

10

43

21

0

2

4

6

8

10

12


SPs


Total SPsproviding


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)





g) Advising in optimizing the production process


that provide services of Advising in

optimizing the production process,


in the form of Direct support to

MSMEs, 2 BS providers in a form of


while only 1 BS provider provides

services in the form of support to




directly from private sector (40%)

and equal share from




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 SPsproviding


Total SPsproviding


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





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


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



a) Analysis, research and preparatory activities


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


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


SPs


Total SPsproviding


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




b) Conceptualizing new digital products / services



of prodcuts/services -

Conceptualizing new digital

products/services, 1 BS provider

provide services in the form of Direct

support to MSMEs, while also 1


Training and education, while there is

no services in the form of support to





of service within the Project activities


organizations) (50%), and from direct

financing from private sector (50%).

10

21 1

00

2

4

6

8

10

12


SPs


Total SPsproviding


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




c) Design of new digital products / services



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.


provision of this service originate from





financing from private sector (50%).

10

2 2

0 00

2

4

6

8

10

12

Totalnumber of

surveyed SPs


Total SPsproviding


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




d) Prototyping and testing


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.


provision of this service originate from





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 SPsproviding


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





e) Product servicing


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 SPsproviding


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




4.5. Provision of services in the field of improvement of


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


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



a) Management training (management skills)


that provide services of Provision of

specific skills / knowledge for use of

digital technologies - Management

training (management skills), 6


Training and education, 3 in form

of providing networking to MSMEs

and only 1 direct support to

MSMEs.



originate from Donations/projects




organizations) (37%), 25 % from

private sector directly and equal

share from combined sources of




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


SPs


Total SPsproviding


Total SPsproviding


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)






b) Training of technical staff (improving productivity)




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.






foreign organizations) (43%), 14 %

from combined sources of




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


SPs


Total SPsproviding


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)






c) training of workers – CNC





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





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


SPs


Total SPsproviding


Total SPsproviding


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






d) training of workers - IT (3D modeling)





workers - IT (3D modeling), 3


Training and education, while there

is no other form of support such as

direct support to MSMEs or

networking.






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


SPs


Total SPsproviding


Total SPsproviding


Total SPsproviding

networking toSMEs

(Integratator)

Nu

mb

er o

f SP

s


workers - IT (3D modeling)

67%

0%0%0%

33%

0%


workers - IT (3D modeling)






e) training of workers - Marketing / Sales





workers - Marketing / Sales, 6


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.



from direct private sector financing

(62%), 25% from Donations/projects




organizations), while 13% originate

exclusively from public budgets (at

all level).

10

76

12

0

2

4

6

8

10

12


SPs


Total SPsproviding


Total SPsproviding


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%


workers - Marketing / Sales






f) training of workers - Innovation (product / process)


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


education, 2 in form of

providing networking to MSMEs

and there is no BS provider

providing services in form of

direct support to MSMEs.


provision of this service

originate from

Donations/projects (provision




(67%), while 33% originate

exclusively from public budgets

(at all level).

10

3

10

2

0

2

4

6

8

10

12


SPs


Total SPsproviding


Total SPsproviding


Total SPsproviding

networking toSMEs

(Integratator)

Nu

mb

er o

f SP

s


workers - Innovation (product / process)

67%

0%

0%

0%

33%

0%


workers - Innovation (product / process)






g) Liaison with educational institutions





technologies - Liaison with

educational institutions, 2


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





(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


SPs


Total SPsproviding


Total SPsproviding


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 from privatesector andprojects/donations


h) General improvement of e-literacy and e-skills at your company level





technologies - General

improvement of e-literacy and

e-skills at company level, 3


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




organizations) and equal share

as combination of public

budgets and

Donations/projects.

10

5

3

12

0

2

4

6

8

10

12


SPs


Total SPsproviding


Total SPsproviding


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






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



a) Provision of experts / consultants



Improvement of Innovation

capacity and research - Provision

of experts / consultants, 1


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


from Direct private sector

financing (29%) and equal share

from Donations/projects




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


SPs


Total SPsproviding


Total SPsproviding


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







b) Organization of training in the field of innovation introduction

Only 20% of surveyed BS


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





(50%) and Direct financing from

private sector (50%).

10

2

0

1 1

0

2

4

6

8

10

12


SPs


Total SPsproviding


Total SPsproviding


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





c) Laboratory services





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


service within the Project



(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


SPs


Total SPsproviding


Total SPsproviding


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





d) Prototyping





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


SPs


Total SPsproviding


Total SPsproviding


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





e) Incubation of business ideas and start-ups





Incubation of business ideas and

start-ups, 1 provides services in


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


SPs


Total SPsproviding


Total SPsproviding


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







f) Connecting with potential investors in innovative products and services





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


SPs


Total SPsproviding


Total SPsproviding


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






g) Creating a favorable environment for innovation development and research


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




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


SPs


Total SPsproviding


Total SPsproviding


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






5. Status of service providers for


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.


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%).


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.


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.


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)

https://ec.europa.eu/digital-single-market/en/pillars-digitising-european-industry-initiative

https://ec.europa.eu/digital-single-market/en/glossary#digitalinnovationhubs


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).


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.).


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


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.


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


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


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


• 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



Required

supporto to

improve

business by

using digital

technology


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





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.


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.


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


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.


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.


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


solution

Specific skills

provision /

skills for using

digital technologies

Innovative

capacities/

research /

prototype

design Other



Required support to

improve

business by using digital

technology





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


and 30.43 % are


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.


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


development and support, hosting and support of cloud based solutions for service platforms, startups

support , Smart City Solutions and IT consultancy.


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

Documents

Innovation and digitalisation in SMEs in Bosnia and ... · • Organise interviews with the selected service providers (10 service providers in 4 project locations) on the basis of