Slow Economic growth and continuous increase of unemployment, which is now 44% represents the biggest problems and challenges in Bosnia and Herzegovina. Such a high unemployment rate is a result of devastating effects that recent conflict and economic transition process had on big employers, state owned holding companies that have been a backbone of Bosnia and Herzegovina economy and provided most of the jobs — working places in Bosnia and Herzegovina. Privatization rather negatively affected these processes since privatized companies didn`t manage to achieve revenue they had before 1992 and many of them are extinguished. With view of it, the Fast Growing Small and Medium Enterprises (FGSMEs) that represent a small percentage of the total number of companies (up to 10%) contribute significantly to the solving of problems by creating between 60% and 75% of new jobs. FGSMEs are also resistant to market recession and don't lose jobs during this period.
Since Sarajevo Macro Region has no sufficient developed business support services oriented to the SME sector, in 2014 Sarajevo Economic Regional Development Agency (SERDA) initiated the solution aiming to foster business expansion of FGSMEs through development of the new services/consultancy for FGSME/SME support in the region.
The solution developed and introduced new specific local economic development tools created for employment and economic growth, including methodology for new jobs creation and provided 15 FGSMEs with the following services:
- 15 business analysis for FGSMEs;
- 15 Business consultancies for FGSMEs (management consulting, sales, changes management, support to development of export, financial consolidation, business planning, marketing, Business plan development, support to innovation development, market research, rural development);
- Of 15 companies that received business analysis, 11 companies receive grants of direct support (up to 50% project contribution), for production tools development, software, innovation development, EU standards introduction, education, equipment, product design, fairs visits).
Owing to the support received the following has been achieved:
- 11 companies has expanded their business. Among them is the FGSME Procedo that has reported 30% job growth in past 12 months (from 24 to 32) and 70% of export increase;
- Strengthened capacities and business expansion of FGSME in pilot municipalities;
- Positive experiences and best practices disseminated and transferred to wider regional area.
- 73 new working places were created;
- Transparency in SME sector increased through transparent financial support to companies that want to increase their business, to purchase new equipment, new software;
- Communication and cooperation among local institutions and B2B developed and supported
- The methodology for identification of FGSME and growth potential has been developed (for local purpose)
- Local SME sector analysis and set of indicators developed and applied in three municipality/partners
- Local action plan for support to the SMEs created (three of them) and Guidelines for local action plan on this practice developed (will be used in other municipalities)
Budget: 102,000 euro
Partners: Association of Business Consultants in BiH – LESPnet, Municipality Vogošća, Municipality Ilijaš, Municipality Novi Grad
Bosnia and Herzegovina
Sarajevo Economic Regional Development Agency (SERDA)
Contact Person: Faruk Cerić
Phone: +387 33 652 935; +387 33 648 686