Interview: A current market situation in Bosnia and Herzegovina from Chamber of Economy of the Federation of Bosnia and Herzegovina perspectives

KnowHub project starts the set of interviews with companies from targeted markets- Albania, Bosnia, and Herzegovina and Montenegro. We are aimed to identify industries perspectives on business-university collaborations and the current situation in the labour market. The Chamber of Economy of the Federation of Bosnia and Herzegovina is our first interviewed expert that gives his perspectives about needed qualifications and entrepreneurial mindset among students in Bosnia and Herzegovina. 

Please introduce us about your company? 

Bosnia and Herzegovina has a long tradition of organizing associations of craftsmen and other business entities. Following the model of public-law associations, chambers of commerce in Bosnia and Herzegovina appeared over one hundred years ago. In 1999 the Chamber of Economy of the Federation of Bosnia and Herzegovina was established with broad authorization like representing and promoting the economy and entrepreneurship and assistance to the government in the preparation and adoption of laws, regulations and measures of economic policy and instruments governing the economic position of economic entities. The Chamber of Economy of the Federation of Bosnia and Herzegovina has eight sectors and centers like sector for industry and services, sector for energy, center for promotion end education and center for international cooperation and cooperation with EU funds.

Describe your core business and what are your main products/service?

The Chamber of Economy of the Federation of Bosnia and Herzegovina has eight sectors and centers like sector for industry and services, sector for energy, center for promotion end education and center for international cooperation and cooperation with EU funds. Chamber of Engineers of the Federation of Bosnia and Herzegovina is also part of the Chamber of Economy of the Federation of Bosnia and Herzegovina. 

In your opinion, what are the biggest problems in the business of the economy of Bosnia and Herzegovina?

If we would like to point out something as the biggest problem in the business of the economy of Bosnia and Herzegovina, then it is the necessity to complete the only right path, and that is the final arrangement of the quality infrastructure system in Bosnia and Herzegovina. Quality infrastructure is one of the most important elements of the business environment. The main task of this system is to provide services to companies in the field of laboratory testing (conformity assessment), standardization, accreditation, and metrology, as well as market control. The impact of quality infrastructure on the development, production, and certification of the final product is fundamental, and therefore of great importance for the development and competitiveness of domestic companies.

The system of quality infrastructure in Bosnia and Herzegovina is very poorly developed and instead of facilitating business, it is more of a barrier to domestic companies, and at the same time, it is easier to enter imported goods into such an unprotected market.

Also, it is necessary to define strategic product groups for the Bosnia and Herzegovina economy, respecting the structure of production and involving in that process the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina, entity ministries, chambers of commerce, the scientific community and other stakeholders, and on the basis of that assessment, support the development of a conformity assessment body, their equipment, accreditation, cooperation with foreign bodies, the scientific community, and supervisory bodies.

Which work qualifications, i.e. what kind of staff is most lacking in Bosnia and Herzegovina economy?

Through the operational activities of the Chamber, independently and in cooperation with other chambers and institutions, through research and direct contacts with our members, we note that special attention should be paid to qualifications in the areas of standards and international harmonization of goods and services. Quality infrastructure is the foundation on which the functioning of the business sector in all countries of the world is based and it is very important instrument of trade policy. The key function of this system in the field of industrial products is to service the company by providing appropriate services in the field of standardization, metrology, accreditation and conformity assessment.

In the previous few years, until the beginning of the corona virus pandemic, a significant number of staff left Bosnia and Herzegovina and went to work in factories in the EU. The staff who left Bosnia and Herzegovina had quality education and work experience and they were of a professions that were missing in the EU. Bosnia and Herzegovina companies were forced to replace workers who were leaving with others, and they did so by asking educational institutions to produce the missing staff, but also by educating them in their own training centers. In general, currently the most wanted staff in Bosnia and Herzegovina are in the specialized areas of CNC machine handling, all welding technologies as well as the processing of non-metallic materials such as profiles made of PVC, fiberglass and carbon fiber. Also, significant is the demand of construction companies for workers working in the construction industry. In the field of textile and leather industry, there is a need for a skilled workforce, such as modelers, technicians etc.

If we talk about highly educated staff, it is certain that ICT occupations are the most sought after and most attractive both in Bosnia and Herzegovina and in other countries.

What should change in the educational system of Bosnia and Herzegovina in order to timely provide the staff needed by the economy in today’s dynamic market environment?

In order for the educational system of Bosnia and Herzegovina to provide the necessary staff for the economy, to strengthen economic entities, strengthen their competencies and improve the business that is now focused on online business as a “new normal”, it should be more flexible to dynamic market changes and be a stronger incentive in terms of the transition to digital business, a new approach to markets, e-marketing, and to prepare staff who will be ready to constantly change and learn again. Thus, new employees in companies, which will without burdening previously established technological processes, will be those who will work on improving knowledge and introducing innovations in business, which this “new age” requires for survival in the market, where we already know that in crises like this, those who manage to adapt most quickly to the new business regime, customer needs and market conditions.

I do not think that this requires some radical changes in the system, but only requires the strengthening of competition among existing educational institutions at all levels of education. Also, as a necessary direction of all educational institutions, is that educational programs provide more practical work, in a way that practical work is realized in companies in real conditions.

How do you see the current state of education of pupils and students in Bosnia and Herzegovina in terms of the development of entrepreneurial mindset as well as innovation?

The current level of education of pupils and students in Bosnia and Herzegovina in terms of entrepreneurship and innovation is the result of individual initiatives and enthusiasm of individual educational institutions, and as such at this time cannot have a complete assessment. The reason is the freedom to adopt educational policies in different administrative units of Bosnia and Herzegovina according to its organization and competencies. Regardless of the division of competencies within Bosnia and Herzegovina when it comes to the educational system, I believe that at all levels there will be the adoption and introduction of the basics of entrepreneurship as a subject in all high schools, which would be a systematic solution for entrepreneurship and innovation among young people. It is necessary to increase the allocation for innovation and strive for the models that more developed countries have.

Within the EU project entitled “Re-establishing links between universities and companies in order to support entrepreneurial activities and innovations”, the establishment of centers for commercialization of ideas and support for entrepreneurship at the universities of Sarajevo and Mostar is also planned. These centers should also support companies in introducing lean management practices in order to increase productivity, the efficiency of production processes and market competitiveness. How do you see the need of companies to establish such a center?

Following the needs of companies that are expressed in all strategic documents for which the Chamber was responsible for the needs of the competent institutions, together with the representatives of its members, it is concluded that it is necessary to form development and innovation centers the so-called Centers of excellence that would serve certain sectors of industry. In accordance with the regional needs of industry, universities are invited to, in cooperation with chambers and economic entities, close this triangle of knowledge whose resources would be used for the development of production processes. This would unite the forces of the development offices of individual companies into one more global resource that everyone would use. For this purpose, the Chamber of Commerce of the Federation of Bosnia and Herzegovina plans to form an innovation council that would be a link for such centers with policymakers in society.