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Why the IT industry is important for Bosnia and Herzegovina?

At the moment, there is a potential to employ additional 6,000 people in an environmentally friendly industry with excellent working conditions.

Amina Karić Amina Karić


February 1, 2021
in Economy
Članstvo u NATO-u donosi stabilnost i ekonomski rast

As we know, Bosnia and Herzegovina is a country with small population, whose historical circumstances were not favorable to its inhabitants. As a result, its economic growth could not always keep pace with the progress made by western neighbors. On the other hand, due to more complicated living circumstances, Bosnians had to be innovative and focused in order to compensate objective shortcomings of the system that they could not influence. Being a small and still underdeveloped, Bosnia and Herzegovina has failed to create its own trading companies that have been able to participate equally in international trade with global giants. These services have been limited in the past by the fact that buyers and sellers had to be close to each other in order to reduce the cost of transportation. Although the goods could be transported between countries, most services of international trade were provided by foreign firms, while domestic trade salesmen did a small part of the work, and their number was limited as well.

Thanks to the use of new telecommunication and information technologies, borders are being erased and people are getting closer to each other. New technologies greatly improve exchange of goods and services and offer the possibility of dealing with distance trade, which has developed the e-commerce. This is likely to have a significant impact on foreign direct investment in services and the role of transnational corporations in the services sector. Development of IT sector is particularly important for developing countries that are interested in taking advantage of new opportunities by increasing the offer of their services to the World market. Therefore, less developed countries would increase their service capacities over time and build a strong homegrown service industry, strengthen competitiveness and increase their own exports. Information technology has proven to be a key technology worldwide in the past decade. The widespread diffusion of Internet, mobile telephony and broadband networks show how this technology became globally important. Statistics have shown that developing countries with a strong national IT industry tend to perform better in attracting foreign direct investment (FDI). At the beginning of this century many IT companies were established in Bosnia and Herzegovina. Several of them were founded by Bosnian citizens who live abroad and who have had the opportunity to adopt the latest knowledge in the IT field. These companies have had an evident positive impact on the growth of domestic gross income, not only through software engineers working for them, but also through many other services that these companies need, such as accounting, legal services, education, banking, etc. The IT industry has been shown to have significant potential to drive economic growth, creating new jobs and generating new revenue. The positive effect of the IT industry on job creation is enhanced by the fact that IT is a labor-intensive industry. As a comprehensive technology, the IT industry is a driver of innovation, products and processes in other sectors of the economy. Currently, this sector in Bosnia and Herzegovina generates about 500,000,000 KM annually, and employees have an average salary much higher than the national average. At the moment, there is a potential to employ additional 6,000 people in an environmentally friendly industry with excellent working conditions. With the joint effort of companies from this sector, several organizations have been established that work to improve the status and conditions of the IT industry in the country. Besides necessary formal education, skills are reinforced with additional in house trainings.

Among the leading companies in the domestic market is the Authority Partners, which has launched its own IT laboratory called AP LAB. In the last 6 years the company have (has) trained more than 350 students, employing 134 of them after training. These results were achieved by relying only on internal resources without any incentive or outside help. Additional benefit that often goes unnoticed is that the promotion of the IT sector can contribute for improving the overall image of the country and its new and modern “branding”.

The challenges facing Bosnia and Herzegovina when it comes to promoting the IT sector can only be effectively addressed through a common approach involving all relevant players, from government and other system institutions, through donors, industry associations, academia to clusters and companies. Cooperation and close interaction between participants is needed to adopt and implement sustainable support measures for the local IT industry.

Times are rapidly changing, and new market conditions, along with a strong IT industry, are bringing opportunities like never before. The difference in the level of development among countries was dictated by the natural resources, mobility, trade, tourism and other sectors that a country possessed. Unlike before, the IT sector has shifted and erased borders creating an opportunity for each country to overcome its shortcomings. Bosnia and Herzegovina can accelerate its overall development thanks to a solid base in the IT industry whose capacities are not sufficiently used. Additional cooperation between the government and the IT sector would open up huge opportunities, many jobs and bring Bosnia and Herzegovina to the level of developed countries. Let’s take this opportunity.

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What is published on the IGES website does not necessarily represent the official position of IGES.

Amina Karić

Amina Karić

Amina Karic is Vice president of Operations in Authority Partners, one of the leading IT companies in Bosnia and Herzegovina. She studied Computing and Informatics at the Faculty of Electrical Engineering in Sarajevo, and has extensive experience in the area of IT, software engineering and management. She is a guest lecturer in many international and domestic conferences.

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