IT MANIFESTO

 

Strategic plan of IT industry development in Bosnia and Herzegovina 

 

We, the key actors of IT industry of Bosnia and Herzegovina, are presenting a better and a faster way of the quality employment through the improvement of quality of education, which brings a huge and long-term value to our society.

 

Through long-lasting work and the accompanying experiences, we have come to three key values that would improve and enable progress and growth in all branches of economy, especially in those of the digital ecosystem:

 

1) Development of digital skills during elementary and secondary education

2) Adoption of applicable digital knowledge during higher education

3) Education of teachers of digital skills and knowledge in the entire education system.

 

We, the key actors of IT industry of Bosnia and Herzegovina, understand that these values are crucial for development of our society.

 

The past, present and future of our society depended, depend and will depend on the formal education that gives value to an individual, and they will give it to the whole economy and future prosperity.

 

ABOUT BIT ALLIANCE

 

Bit Alliance is the leading association of the most important companies of IT industry in Bosnia and Herzegovina, which has been guided since its founding in 2014 by an ultimate goal to strengthen our IT ecosystem and develop a positive business environment for further growth and development of IT industry by working continuously on solving the identified problems and challenges, and , at the same time, emphasizing an exceptional IT potential of B&H. Presently, 58 IT companies of our country, which employ around 80% of total IT personnel in B&H, are united in Bit Alliance. Our IT industry generates about 500,000,000 BAM annually. According to the latest research of Bit Alliance, B&H is currently facing a deficit of about 6,000 people in IT sector thus missing an opportunity to generate about 1.5 billion BAM on annual basis on environmentally clean jobs with excellent working conditions, which would result in reducing the unemployment rate and the youth outflow. We are presently cooperating with more than 50 partners with which we are associated through an integration of the identified expertise and resources, with a unique objective of creating an advanced platform, which will provide development of digital specifics not only of the economy but also of the society in B&H.

 

OUR VISION

 

It is particularly important to emphasise that all relevant participants of IT ecosystem are gathered around the vision of Bit Alliance, which includes IT companies, IT entrepreneurs, IT start-ups, technology centres, IT incubators, academic and other educational institutions, state institutions, nongovernmental organisations, professional associations, IT experts and all those united with the common standpoints of our association. We think that all participants of this IT ecosystem should focus the efforts and resources with the aim of creating a platform that would induce the digital economy development, since we live in the time of digital transformation, in which digitalization is the most important indicator of innovativeness, competitiveness, and development.

 

OUR MISSION

 

We are the association that provides a continuous focus on IT industry development with various activities, creating a platform of support and cooperation with our member companies and all our partners who possess the potential and energy for creating true values in the domain of development of information technologies, in order to create, with united forces, the successes of a new digital era, in the interest of all citizens of B&H.

The strategic orientation of Bit Alliance in the context of accomplishment of our mission, respectively the continuous development of IT industry in these regions, is to adequately integrate and position itself as a leader in the system of successful IT clusters, not only in the region but also far and wide. This would be realized by creating the system of concrete strategic goals that are really feasible in a short period of time and influence the accomplishment of long-term strategic goals that build the foundations of promising IT future.

 

OUR VALUES

 

The most important values by which Bit Alliance is guided:

 

– education as a basic hypothesis of digital society of the future,

– the positioning of general social interest before the individual, in the domain of information technologies

– integration of quality, knowledge and synergy of experiences of Bit Alliance members with an objective of creating a new, strategically important, expert IT capacity.

 

OUR OBJECTIVES

 

With the initiative of Bit Alliance for the strategic strengthening of IT industry in B&H one of our basic objectives has been declared: to start making institutional strategic decisions for key deficiencies, challenges and problems in the development of the industry, summarized in several groups:

 

– lack of qualified IT personnel and a negative trend that is continuing,

– undeveloped IT infrastructure and a lack of incentive for development,

– unfavorable legislative environment for business operations and growth of IT industry.

 

Having identified the mentioned key problems, herewith Manifesto we are setting the accompanying strategic goals for each of them in order to raise, at the same time, all elements of the unique platform for the prosperity of our IT industry with a parallel implementation of the proposed methods for an accomplishment and final solutions in each category.

 

Regardless of the fact that we are a small country, Bit Alliance finds the setting of the ambitious goals in IT industry development justified since our member companies have recognizable potential to considerably contribute united to the prosperity of B&H developing a promising industry. Namely, they put the resources at disposal, vision and focus of its leaders, as well as network of partners, in order to achieve the goals of Bit Alliance with united forces, in a high quality manner, wherein the established, quality cooperation with the state institutions, universities, secondary and elementary schools, and other institutions, organizations, agencies and associations, which are significant actors in IT ecosystem of B&H, plays an exceptionally important role.

 

OUR FOCUS OF ACTION

 

In accordance with our vision, mission, values and goals, we have defined three basic focuses of our action that represent a platform on which IT Manifesto was designed, so in that context, in the document itself, there are three basic elements for which we think that in the combination make a formula of successful development of IT industry in B&H. Three focuses of our action are the following:

 

1) Cooperation with the academic community

Our primary goal is cooperation with the educational institutions on creating new and revising the existing curricula and syllabuses in accordance with the needs of IT industry, by involving the Bit Alliance experts and the practices that bring the industry closer to science.

 

2) Cooperation with the authorities

Achieving cooperation with the state institutions at all levels of organization is one of the key factors in creating a stable business environment through defining the specific legal provisions that imply adoption and implementation of strategies and policies for the development of IT industry.

 

3) Cooperation with member companies

The common idea and mutual support make Bit Alliance a synergistic mechanism in which each member company represents an equally important link, and the joint action aims at contribution toward solving the challenges that slow down the growth of IT industry.

 

PROJECTION OF POTENTIAL OF IT INDUSTRY DEVELOPMENT IN B&H

 

The exponential dynamics of development of IT industry impact the accelerated development of other industries, new businesses, new occupations and many other innovative elements of all spheres of life and work. According to world’s researches, a phenomenon of IT industry development will continue to take more dynamic directions, particularly when it is observed as a basic element of the 4^th industrial revolution that is defined by the platform of digital transformation. This implies that the digital industrial revolution will, more than all previous industrial revolutions together, influence the changes in all segments of life and work of the mankind, in addition, it will directly influence the new world’s order that is subject to potentials of information technology and other technologies of the future.

 

In public, it is rarely and insufficiently clear emphasized how much work and how many new jobs are brought by the 4^th digital revolution, where one of its basic potentials is, which our country also can and must use much better, in a way that, as many young people as possible, are educated and trained for occupations of the future. Namely, we are witnessing that more and more IT companies search for new human recourses, from day to day, appealing that it is necessary to change admission policies in the education system. According to research conducted by Bit Alliance there is a need for approximately 6,000 new people in IT industry and the present education system cannot even produce them in 30 years. Also, the quality of IT education is questionable, so that the only way of reaching the goal of 6,000 people or, at least, approaching it, is a change of the policy with a focus on the support to young people through an adequate education that leads to employment, without investing necessarily into huge infrastructures, and alike.

 

The data that in the past several years incomes of IT companies in B&H increased by approximately 25%, from year to year, speak in favor of the fact that IT industry is in expansion, with a trend of long-term continuous growth. The similar trends are also recorded in the countries of the region, and some of the new EU members, like Romania, managed to raise its IT industry to a level of the most promising branch of industry in the whole economy.

 

Although in terms of the total exports it cannot be compared to branches of economy like special-purpose or timber and wood industry that records the exports of more than billion BAM, IT industry excels in many elements among which the quality of jobs, significantly higher than average salaries, the fact that it is not an important importer, produces „ecologically clean products“, records the highest growth of the exports, incomes and employed people, requires lesser investments for creating new jobs and reduces “brain drain”, are distinguished. According to the same research of Bit Alliance, one of the most important values of IT industry in B&H is also that 60-70% of labour force makes personnel up to the age of 35, which is a big potential for its development. Besides the mentioned advantages over the other industries, IT companies and their solutions make obligatory leverage in each more serious development of other industries.

 

According to analyses conducted by Bit Alliance at B&H level in 2017 and 2018, it is important to highlight that the average income per IT engineer amounts to about BAM 120,000, and there are presently about 4,000 of them in the labour market. Our companies belong to both groups of the companies for the development of IT solutions, both those who develop their own IT solutions and record a moderate trend of growth and those who perform IT services for foreign companies (outsourcing). This is currently one of the most represented segments of IT activities that opens an opportunity for rapid growth and employment of quality personnel with regard to insatiable needs of the world’s markets.

 

It has been estimated that with educating 1,000 new IT engineers Bosnia and Herzegovina can possibly earn an income of about 120 million BAM per annum. For comparison purposes, in Timisoara, which is in terms of a number of inhabitants approximate to that of Sarajevo, educational system educates about 7,000 IT engineers per annum, and the whole Romania has about 150,000 IT experts. It is important to emphasize that the world’s total deficit in IT engineers is about 2 million, and that number increases every year.

 

According to PwC research conducted this year at the level of B&H, approximately one half of the managers and owners of IT companies think that for no particular reason and need, there is a series of barriers that negatively affect the development of IT industry.

 

They particularly emphasize the absence of support by the state institutions, a lack of government investments into development of education, and thereby nonexistence of adequate programs for development of experts in this area, an insufficient promotion of capacities of this industry which makes the institutions give an advantage to foreign providers, instead of domestic ones, for realization of the same services. Furthermore, a weak institutional connection of the educational and real sector, an insufficient number of expert meetings from this field, discouraging taxation policy and weak integration of the companies in this industry according to the system of clusterization, with an unethical approach of the aggressive recruitment of talents are noted. Therefore, expert associations of IT companies, like Bit Alliance, represent an imperative factor of development in the countries of growing IT industries (in Croatia Association of Software Exporters CISEX is active, in Serbia ICT Cluster of Vojvodina, in Bulgaria several different clusters, etc.).

 

The previous development of IT industry in Bosnia and Herzegovina is not the result of strategic measures of government institutions, as it is the case in Romania or Bulgaria, but of the initiative of our private companies, with a particular contribution of diaspora by using an opportunity of the big demand for IT services on the world market. Despite the lack of institutional support, a serious branch of industry has been developed in B&H, but the fact is that the further growth and development of IT industry is not possible without institutional support of the system, which would certainly be a next step with the aim of reaching its full potential.

 

 

ABOUT IT MANIFESTO

 

IT Manifesto was preceded by a detailed analysis of the current condition of IT industry of Bosnia and Herzegovina and the countries in the region, as well as an integration of the adopted List of strategic priorities of Bit Alliance for the period 2019-2022, which represents, at the same time, a focal point of this document. A particular accent is on analysis of all strategic documents that have been written in the domain of IT industry in our region in order to define, through identification of elementary problems and challenges that slow down the growth and development of this industry, as precisely as possible, the ways in which they can be successfully overcome, with the vision of the future situation that has been described through concrete steps of accomplishment of strategic goals, respectively the strategic strengthening of IT industry in B&H.

 

With IT Manifesto, which is also a model of strategy of development of IT industry in B&H, three basic elements have been defined, respectively pillars that have been estimated as the most significant in further development of this industry, and synchronised with a concept by which Bit Alliance is guided – The Triple Helix Model (University-Industry-Government- Relation):

 

1) EDUCATION

2) LEGISLATION

3) ECONOMY

 

It is important to emphasise that a strategy of development of IT industry in B&H defined by Manifesto is compatible with the European Union 2020 Strategy of development, which foregrounds the development concept based on the smart (economy based on knowledge and innovations), sustainable (more efficient, cleaner and more competitive economy) and inclusive development (strengthening the economy of high employment, social and territorial cohesion). These three developmental priorities promote and induce employment, productivity growth and connecting of different actors. The developmental model planned this way is focused on accomplishment of goals that strengthen the education, legislation and economy as the pillars of development of IT industry in B&H defined by this Manifesto, and agreed upon by the most important actors of the industry. They are also overlapping, completely or partially through the global goals of sustainable development (SDGs).

 

As it has been already highlighted, these pillars of our IT industry lean on three basic focuses of action of Bit Alliance (cooperation with academic community, cooperation with the authorities, cooperation among the members), and in proportion to Triple-Helix Concept represent the platform on which strategic goals oriented toward development of IT industry will further be built and accomplished.

 

A focus that relates to cooperation with the academic community will be defined by the pillar of education by accompanying strategic goals and proposals for their accomplishment, and a focus relating to cooperation with the authorities will be defined by the pillar of legislation by accompanying strategic goals and proposals for their accomplishment. Furthermore, a focus relating to cooperation among the members will be defined by the pillar of economic prosperity, also by accompanying strategic goals and proposals for their accomplishment. We think that with the combined strengthening of these three pillars we create a formula of successful development of IT ecosystem in B&H. 

 

IT Manifesto identifies the key problems and the ways of their solving through proposals for the accomplishment of strategic goals of the further development of IT industry, which, we believe, will directly affect our ultimate goal – that B&H becomes one of the leading IT economies in the region.

 

In accordance with this document, which represents, at the same time, the first strategic manifesto of development of IT industry in B&H, the initiatives of Bit Alliance will act and will be realized through concrete activities presented by the Action Plan, which will clearly define specific projects and programs.

 

In specific segments of IT Manifesto experts in the relevant fields participated in order to offer concrete solutions for the development of IT industry in B&H through an identification of the key strategic priorities of action and accompanying measures. Besides the consultants for the development of IT strategy of Bit Alliance, a considerable contribution in the preparation of this document was made by the leaders of all member companies, as well as by the representatives of relevant partner institutions, organizations and associations.

 

This strategic document was written in line with the vision of digital economy development since we live in the digital era, and has been completed for the period 2019-2022, taking into account that rapid changes in the world of the information technologies demand constant revision of the proposed plans, the method of implementation and evaluation of strategy.

 

IT Manifesto was completed through 5 specific stages:

– In stage 1, the analysis of current condition of IT industry in B&H and the region was performed based on the research that had been done in the past ten years on this topic, in addition, the EU relevant strategies relating to further development of IT industry were also taken into consideration.

– In stage 2, additional analyses were performed through which the relevant elements for evaluation of internal and external factors that influence or will possibly influence the future development of IT industry in B&H were considered, and the first document draft was written.

– In stage 3, the draft was delivered to all member companies and relevant partners of Bit Alliance for revision with making constructive proposals for eventual changes and additions of particular parts of the document.

– In stage 4, the experts for strategy of development of IT industry of Bit Alliance revised the suggestions of other participants and integrated all relevant proposals in the final document that has been adopted.

– In the final stage, 5, IT Manifesto was signed by all member companies of Bit Alliance, and it will be presented to the legislative power of B&H and other relevant actors in IT ecosystem of Bosnia and Herzegovina.

 

PROBLEMS 1: EDUCATION

 

Explanation of the problems/analysis of the current condition

 

Strategic initiatives in the context of the future development of IT education in B&H expressed through IT Manifesto are of exceptional importance since the most prominent companies of IT industry are gathered around them, which with different but respectable experiences, with uniting the forces, unanimously expressed readiness to significantly contribute to improvement of IT education, and, in this way, to prosperity of our IT industry as well.

 

On the grounds of the previous analyses of IT-oriented faculties, it was concluded that a number of students that decide to study this field is insufficient for the needs of the market, and prior knowledge of those who choose to continue the studies is insufficient so that the duration of studies is extended. Based on the previous analyses of IT companies it can be concluded that there is a need, not only for a bigger number of IT experts than the one that is currently available in the labour market but also for more quality personnel that should have a better knowledge and ability to adapt to business environment in a short time.

 

The fact is that a lack of IT experts and related profiles of experts is one of the basic limitations for the development of our IT industry, so it is necessary to take strategic measures as soon as possible, both in the field of formal and informal IT education, and also through additional training/retraining and lifelong learning in order to influence the trend of increase in number and quality of new IT experts, which would contribute not only to development of IT industry, but also to prosperity of the entire economy in Bosnia and Herzegovina. Namely, our IT companies are often forced to refuse high profitable jobs due to limitations in the labour force, and in this way, the state also loses millions at the annual level. B&H shares the destiny of the region’s countries in the context of the expressed trend of migrating the existing IT personnel to foreign countries, but the problem is even more expressed considering the weakness of educational infrastructure and ability of teaching staff to make up for the leaving experts.

 

In addition, a lack of practical work during the education of IT personnel is also evident in the sense of discrepancy between the curricula and syllabuses, and extremely rapid development of new technologies, so that even a small number of those produced by the educational system requires additional education and professional improvement.

 

All these problems that our IT industry encounters can halt its further development. Replacement for the lost staff does not exist in the labour market in B&H, nor in countries of the region, so the only solution is to ‘produce’ the missing labour force. Accordingly, system of IT education ought to enable adoption of relevant knowledge and skills from the early age of new generations, so that the talents are recognized in time, and oriented further, and the others are lured to develop the interests for this promising field. Universities should become the centers for innovations and development, tightly connected with IT industry while the entire society should recognize information technology as one of the most promising fields for learning and work in the time of digital economy.

 

Manifesto of Bit Alliance, in the context of development of IT industry, sets, as one of the basic strategic goals, a more quality formal and informal IT education as a basic precondition for development of digital economy where the final result of implementation of the strategic measures would be a continuous increase in number and quality of knowledge of the future IT experts in B&H. These results would be achieved with implementing a series of important projects and activities, according to priorities of strategic action, planned and defined with detailed action plans.

 

 

STRATEGIC GOAL 1:

 

To connect educational system with IT industry for the purpose of synchronization of theoretical knowledge and necessary knowledge in practice

 

Proposal for realization:

 

Institutionalisation of the formal cooperation between the educational institutions and IT industry is extremely important in order to provide the secondary-school pupils and students with adequate programmes of scholarships and practical trainings, an access to modern technologies that are used in the economy for the teachers, and a concrete participation of IT industry in modifications of curricula and syllabuses according to the needs of labour market and the jobs in real sector. This connecting is particularly significant in the sense of transfer and exchange of knowledge and experiences between the experts in economy and the teachers, with a particular emphasis on connecting the teachers at schools with the mentors of practical trainings in the companies, so that pupils/students can perform in teaching what is of the current interest in practice and vice versa. The ideal places of connecting the educational system with IT industry would also be modern IT laboratories at the faculties, for organising events that are oriented toward an integration of theory and practise, teachers and experts, education and economy. Herewith model we are demonstrating to which extent is IT industry ready to associate with the educational system in order to build our joint, successful IT future.

 

STRATEGIC GOAL 2:

 

To strengthen the teaching staff in IT field of the educational system

 

Proposal for realization:

 

Insufficient skills of the teaching staff from computer studies to prepare the students for challenges in education and for the labour market, respectively the issue of education that does not follow the dynamics of IT field, can be solved through implementation of systematic and continuous training so that they are prepared to transfer the latest knowledge to their pupils/students, and, at the same time, to help them adjust curricula and syllabuses. One of the initiatives is opening the centres for education of teachers of computer studies’ subjects in specific geographic regions, which would be eliminatory for the lecturers in public educational institutions.

Additional problems are difficult social status and a lack of motivation of the teachers of computer studies in elementary and secondary schools, while the condition at the faculties is somewhat better because there are bigger opportunities for both financial and career promotion. Such unenvious position of the teaching staff of computer studies could be solved with additional involvements of the teachers in elementary and secondary schools on IT educational projects that are more and more present through the initiatives of the international institutions, and the state and nongovernmental organisations.

 

STRATEGIC GOAL 3:

 

To adjust IT education programmes with the needs of labour market

 

Proposal for realization:

 

As the curricula and syllabuses intended for those who educate themselves for IT occupations cannot follow the dynamics of trends in this field, students enter the labour market with little practical knowledge and also insufficiently prepared for the studying process, which influences the extension and giving up the studies at a big percentage. A long-term solution is that the curricula and syllabuses are adjusted with the needs of the labour market, so that a larger number of subjects and a number of teaching hours from IT field are introduced, also to increase the admission rate, respectively the number of classes and schools that prepare the pupils for working in IT field. A short-term solution is dedication to strengthening the formal education within the framework of existing curricula and syllabuses, as on the one hand, each teacher has an opportunity to adjust the curriculum and syllabus without formal changes, and the informal education on the other hand. An adjustment of educational IT programmes with the needs of labour market implies minimizing /removal of outdated segments in this field with the aim of profiling the occupations that will contribute to decrease in unemployment and future development of economy. It is necessary to ensure accelerated procedures of development of IT educational programmes so that bureaucratic and administrative barriers are eliminated in this process. One of the planned initiatives is that in the centres of education, in certain elementary, secondary schools and the faculties, revisions and modifications of curricula and syllabuses are performed experimentally, and that upon completion of the pilot stage of project this is applied on the rest of B&H with the aim of establishing the synchronisation of educational and economic sector, in accordance with development of curricula as per the EU standards.

 

STRATEGIC GOAL 4:

 

To improve IT education at elementary school level

 

Proposal for realisation:

 

The measures for improvement of IT field through the education need to be performed simultaneously at all levels, starting from the elementary school level. The overall purpose of education in computer science is that abilities of contemporary approach to solving the problems that implies using new technologies are acquired, which is enabled by new methods and ways of working. Such education is a common platform for those who will professionally deal with information technologies, and also for those who will have to use technology at work, in other words, for all members of new generations. It is extremely important that computer science is included even in the first grade of elementary school, because it is necessary to direct the children from the start, through education, toward using advantages of the world of information technologies in the best way possible. The elementary school period is essential for development of the basic digital competencies and skills, and the logical thinking development through using computers in solving the problems, which makes the children ready for more quality life in digital era.

 

STRATEGIC GOAL 5:

 

To improve IT education at the secondary school level

 

Proposal for realization:

 

Supporting the introduction of IT major courses, also the increase in number of existing IT classes in gymnasiums, technical and other secondary schools is one of the basic requirements for creating the platform on which young generations in IT field will further improve themselves. This platform implies the accompanying infrastructure that enables its development, which is made of modernly equipped computer laboratories in secondary schools. This is possible to achieve by supporting the projects that are intended for modernization of educational IT infrastructure. With connecting of the mentioned factors with strengthening the secondary school basis in IT knowledge, appropriateness for further schooling of the increased number of pupils in IT field, from year to year, is created.

With organising IT meetings, round tables, conferences, competitions and similar events, in cooperation with institutions and faculties, it is possible to contribute to raising awareness of pupils in choosing IT fields because at events like these they will have an opportunity to get the information on the trends and possibilities referring to development of the digital era and about the current global IT trends.

 

STRATEGIC GOAL 6:

 

To improve IT education at the university level

 

Proposal for realization:

 

One of the basic preconditions for development of IT industry is to work continuously on the increase in number of students who enrol the faculties with IT courses. An additional emphasis is on supporting an introduction of specialised two-year /three-year studies on these faculties for the purpose of profiling those who are narrowly specialised for specific segment of IT field for which there is demand in the labour market. It is also necessary to take measures for permanent improvement of quality and maintenance of optimum number of the teaching staff at the universities, and the improvement of spatial and technical capacities. One of the initiatives would be an inclusion of the experts from IT industry, respectively of the companies into the teaching process at the faculties in order to help strengthen IT personnel, respectively to eliminate its deficit, which is definitively one of the biggest problems.

 

STRATEGIC GOAL 7:

 

To strengthen the formal IT education with informal education

 

Proposal for realization:

 

The informal education, in an exceptionally dynamical IT field, can give the answers to many questions in the formal education in order to achieve, with the informal, what cannot be achieved with the formal. Therefore, it is important to support projects of implementation of cost-free schools of programming for the youth. A particular attention should be paid to those who have not yet made a decision on the future occupation, because young potentials are detected with the projects of IT informal education, and the significant number of the indecisive is directed toward the faculties with IT orientation.

On the grounds of the research on the informal IT education in B&H, it is evident that the duration of studies, as well as adaptation in IT companies, considerably shortened with the participants of these programmes. An essential result of such programmes is raising awareness in society on importance of information technologies, particularly among the young people and their parents.    

 

STRATEGIC GOAL 8:

 

To model lifelong education and additional trainings/retraining in IT field

 

Proposal for realization:

 

For all those having qualifications for which there is no interest in the labour market and who have knowledge and experiences that could be, with additional education and training, brought to the level sufficiently qualified for specific positions in IT industry, quality additional trainings /professional retraining, which would be supported by certification of the system, should be enabled. One of the initiatives would be an introduction of one-year/ two-year master studies for retraining the students who have already completed an undergraduate study, are registered at the Employment Bureau, and show an interest in further orientation toward IT fields.

 

STRATEGIC GOAL 9:

 

To permanently and statistically monitor the changes in IT Sector in the domain of education

 

Proposal for realization:

 

It is necessary to continuously, at least once a year; perform analyses that document the previously emphasised problems in the context of permanent changes in IT sector (data of IT Association at the Chambers of Economy on number of IT experts, data of the faculties with IT courses on the current number of students, data of Institutes of Statistics etc.). On the basis of these, the resource ministries would have the exact arguments for initiating the changes in IT field of education, so it would be necessary to further monitor efficiency of the implemented measures in order to be able to make more appropriate decisions in the future.

  

 

PROBLEMS 2: LEGISLATION

 

Explanation of problems/analysis of the current condition

 

Strategic initiatives in the context of the future development of IT legislation in Bosnia and Herzegovina expressed through IT Manifesto are extremely important, as the most prominent companies of IT industry are gathered around them, which with different, but respectable experiences, by uniting the forces, unanimously expressed readiness to significantly contribute to improvement of IT legislative framework, and thereby the prosperity of our IT industry.

 

With an initiative of Bit Alliance, an unfavourable legislative environment has already been identified as one od the basic constraints for IT business operations and further growth of IT industry in our country. Therefore, it is necessary to take strategic measures, as soon as possible, in order to influence the changes in legislation, respectively in the policies of the government that would be favourable for development of IT companies, which has a direct contribution not only to development of IT industry, but also to prosperity of economy in Bosnia and Herzegovina.

 

The fact is that a lack of institutional support to development of IT industry causes our significant lagging behind the countries in the region. The previous activities of institutions of the government of B&H (policy, strategy and the action plan for development of information society in B&H 2004-2010), made some progress in informatisation of society, but not in the context of support to development of IT industry. As a consequence of the lack of strategic documents, there was a failure in passing of the laws regulating IT sector. There is an obvious need for those making political decisions, who often do not understand the potential of development of IT industry in the context of a broader development of our entire economy, to be assured as soon as possible of the facts and numbers that clearly indicate that this is very important, and in accordance with these to modernise the existing legal framework. In the era of digital transformation we belong to, for further development of IT industry a more concrete and decisive institutional approach is necessary. Bit Alliance firmly believes that this is possible and considers the state institutions its main partner in this process. It was decisiveness in offering strategic support to IT industry in the countries of the region that made this industry more developed.

If we take, as an example, the exports of IT services in the context of share in total exports, currently all countries from the region rank better than B&H, which ranks the 77^th in the world, while the other countries rank as follows: Romania 18th, Albania 21st, Serbia 26th, Macedonia 37th, Bulgaria 41st, Montenegro 45th, Croatia 50th.

 

As the initiative, regardless of the approach or quality of participants cannot be a bearer of systematic changes,   we are aware that institutional competencies and capacities should be taken into account and the activities need to be agreed and coordinated by the resource ministries in order to ensure a complete integration of these in the process and legal framework of the system in B&H.

 

Manifesto of Bit Alliance, in the context of future development of IT industry, sets as one of the basic strategic goals the initiation of passing of the laws, respectively the institutional strategic solutions that regulate the key shortcomings, challenges and problems which this industry encounters. These results could be reached by implementation of a series of significant projects and activities, as per priorities of strategic action, envisaged and defined by detailed action plans.

 

STRATEGIC GOAL 1:

 

To initiate legal measures that would regulate IT industry more efficiently

 

Proposal for realization:

 

In finding legal measures, except for the competent representatives of relevant institutions, obligatory participation of Bit Alliance representatives and members as the relevant representatives of the economy, is recommended, which would considerably contribute to making the future legal measures for IT industry realistic and applicable in practice. It is important to take into consideration all agreements that have been signed with other countries, particularly with those more advanced from our nearest surroundings, as they are indicators of the next steps in the sense of good practice to us. In this way, we would not lose time, but should, as soon as possible, apply successful examples from the surrounding regions in solving the problems in IT sector, with possible adjustments with our system.

 

STRATEGIC GOAL 2:

 

To initiate new legal solutions that are supporting for digitalization of business and education

 

Proposal for realization:

 

The previous positive results of IT industry in B&H indicate to a need for the systematic support to this sector, as well as for creating a motivational ambient for the purpose of strengthening our IT ecоsystem. In this sense, initiating new legal solutions in the field of electronic documents and identification, digital signatures, security services in electronic business, electronic payments and alike, should result in improvement of the existing and establishment of new mechanisms as systematic legal frameworks for using electronic devices and information technologies in business operations. Parallel to the aforesaid, we deem the digitalization of educational institutions in all processes very important, from teaching to administrative, investing in application of information technologies through smart classrooms, laboratories, e-textbooks and alike. With this, all advantages of digital transformation, the fourth industrial revolution and modern age would approach everyone, and the platform for a broader social and economic development would be created.

 

STRATEGIC GOAL 3:

 

To initiate reforms in taxation policy relating to IT industry

 

Proposal for realization:

 

It is the fact that for Bosnia and Herzegovina a reform of taxation system is indispensable in order to stimulate additional development of IT industry. Some of our suggestions in the context of where the supporting taxation policy could be implemented, imply the incentives, reliefs or income tax exemption to all IT companies, and particularly to those that invest in research and development, support the projects in the field of education and science, invest in start-up project, develop personal products and alike. Namely, it is necessary to take into consideration the fact that costs of earnings of the employed people in IT industry make a dominant percentage in total percentage of expenditures of IT companies, which implies that taxes and contributions on wages and salaries are among the most important elements that affect the negative business climate in IT industry of B&H. It should be clear that KPMG revision analysis has shown that only Serbia is estimated as a country with a higher rate of burden per worker in relation to B&H. We appeal that there are examples of good practice of the countries in the region whose IT industries have considerably developed thanks to taxation reform, which fully or partially exempted IT companies from income taxation. Also, one of the initiatives in the context of the tax reform would relate to a new law on VAT, which should be adjusted with the EU legislation, where some of the proposals for improvement of this law, which are in the interest of IT companies, would be payment of VAT according to collected bill, extension of term of payment of VAT to the last day in a month and alike. Parallel to already mentioned, the initiative would go toward Tax Administration and ensure additional support by appointing tax advisors who will be responsible to give the answers for all ambiguities and problems the companies encounter in the domain of business operations in IT sector.

 

PROBLEMS 3: ECONOMY

 

Explanation of problems/analysis of the current condition

 

Strategic initiatives in the context of future economic prosperity in Bosnia and Herzegovina expressed through IT Manifesto are of exceptional importance as the most significant companies of IT industry are gathered around them, which with different, but respectable experiences, by uniting the forces unanimously expressed readiness to significantly contribute to strengthening of all capacities of IT industry, and thereby the prosperity of the overall economy as well.

 

A weak IT infrastructure, a lack of incentive to development and many other unfavourable business possibilities in IT sector have already been identified by the research of Bit Alliance as some of basic constraints for IT business operations and the further growth of IT industry in our country. Therefore, it is necessary to take strategic measures, as soon as possible, in a way that strengthening of IT industry influences the strengthening of economy in Bosnia and Herzegovina.

 

More and more complex conditions for business operations and the competition at global level demand a systematic approach to economic development, with maximum utilisation of all available resources. Development of information technologies, respectively an application of „smart solutions “ in the context of all segments of our life and work, represents a chance for development not only of IT sector, but also of all branches of industry, and thereby for overall economic development of our country, in which technologies of the future represent the basis for a rapid GDP growth. Today, each digital service is a potential global business with no need for significant, additional investments by the state, so the possibilities that IT industry brings are limitless.

 

It is necessary to use production and exports capacities of our IT industry for further contribution to our economy through improvement of the conditions of business operations of domestic IT companies, inducing an establishment of new IT companies and production of own products. It is particularly important to induce development of own products wherein the measures of support to our companies and business associations for appearance on foreign markets, in order to promote our IT industry, play the key role.

It should be additionally emphasised that thanks to the experience acquired during long-lasting work for the EU countries and the American market, on which the latest IT technologies are developed and applied, our IT engineers are by knowledge, experience and insight into IT trends often ahead of the colleagues from more developed countries.

 

It is the fact that Bosnia and Herzegovina is at the bottom of the world’s scale according to investing into research and development with 0.04% of GDP, while the world’s average is 2.7% of GDP. However, IT companies give significant contribution in this segment as well by earmarking annually even up to 10% of income for research and development of new products and services, besides the fact that they also invest significant resources into education of their personnel.  One of the indicators of how much we are lagging behind the world’s trends is the datum that there is only one technology park in B&H, while Germany had 32 as early as in 1992, so that, as a result of the planned development, Berlin alone numbers about 10,000 IT companies today, which make a profit bigger than 26 billion BAM, by employing almost 100,000 people.

 

For the comparison sake, in the countries that surround us the exports earnings of IT services have at least doubled, and in some of them even tripled in the past ten years. In Serbia, number of the employed people has been doubled from 10,000 (in 2006) to 20,000, and business revenues are doubled as well to more than EUR 1.5 billion, and the datum that more than 200 IT companies are established annually also speaks in favour of this.  According to research of BIT Alliance and those from the surrounding countries, IT industry is much more profitable than other branches of industry, and the need of the sector for resources is significantly lesser than in other branches of industry.

 

Accordingly, Manifesto of Bit Alliance, in the context of the future development of IT industry, sets as one of the basic strategic goals strengthening the entire economy of Bosnia and Herzegovina through strengthening of one of the most prosperous – IT industry, which is a basic precondition for development of the digital economy whereby the final result of implementation of specific strategic measures would be ranking of IT industry the 1st in B&H. These results would be reached by implementation of a series of important projects and activities, according to priorities of strategic action, envisaged and defined by detailed action plans.

Each successful strategy of economic development needs to be based on creating the business climate that would not only attract the investments that create new jobs but would also keep the existing companies and induce an increase in number of new entrepreneurs. Therefore, strategic goals that will enable a faster overcoming the challenges that IT industry in B&H encounters, and positioning it as a regional leader, have been defined.

 

Strategic goal 1:

 

To create better business opportunities in IT industry for domestic businessmen and investors

 

Proposal for realization:

 

In order to create better business opportunities in IT industry in the context of strengthening the motivation of employees through giving awards to the bests for the purpose of their retaining in domestic companies, one of the initiatives would be that a legal framework, which would enable allocation of specific amount of shares to the employed person, not only in the companies whose shares are traded in stock market, but in all of them, is established. In addition, we think that IT companies deserve subsidies in the form of grants for creating new jobs and improvement of business operations with regard to specificity of IT sector. One of the initiatives would also be passing of a law that enables free flow, respectively cross-boundary transmission of data in accordance with the EU regulation, in order to make business operations easier for IT companies based on cloud platform.

 

Strategic goal 2:

 

To support start-up ecosystem with an accent on supporting start-up companies and projects

 

Proposal for realization:

 

Supporting IT start-up ecosystem implies strengthening of IT cluster, start-up hubs, technology incubators and similar systems in order to increase the capacity for support to establishment and further development of as larger number of IT entrepreneurs as possible. It is possible, through various projects, to provide a financial support to start-ups that distinguish themselves according to results, and according to criteria that are essential for further development of IT industry, which implies development of new IT services and products. Such strategic measures are usually realised by provision of an incentive of risk capital investment. One of the initiatives would be establishment of technology centres in cooperation with units of local self-management and other relevant organs for the purpose of using these as infrastructures for development of IT start-up ecosystem. In such places young people of different profiles, who have potential to start new IT companies, would associate with ideas and skills in IT field.

 

Strategic goal 3:

 

To reduce unemployment rate by establishing mechanisms of employment in IT industry through creating new jobs and occupations  

 

Proposal for realization:

 

Process of digitalization, respectively of digital transformation, will influence the disappearance of at least 40% of occupations in the next 5-10 years, according to Oxford and many of the world’s researches, but at the same time a need will appear for development of new occupations, and thereby employment in the field that have not existed so far. Although young people leave B&H in search for better future, digital economy can turn this negative trend into positive, with orienting to generations living the 4^th industrial revolution. We have IT companies oriented toward the global markets while almost all business activities are performed inside B&H, so, in this way, new opportunities for employment are created. The dynamics of changes that characterise the digital industrial revolution will be extremely difficult for our country unless we keep pace with the time. Those societies that are unable to prepare new generations for jobs of the future will have young people who will not have jobs, which is already happening here, even in the most populated regions where an unemployment rate of young people is bigger than 70%.

 

Strategic goal 4:

 

To strengthen connections between domestic IT companies by initiating joint projects and events

 

Proposal for realization:

 

Considering the dynamics of changes in IT industry, even the strongest IT companies must seek partners who will help or, at least, make development easier, because it is more and more difficult to solve the complex IT challenges independently in order to timely enter the market with new IT products and services, or respond to requests of foreign clients and partners. In the era of the digital economy, a considerable added value is created also through cooperation of the companies that are market leaders and start-up companies that are leaders of ideas, because with their synergy new opportunities for innovative business operations are opened. One of our most essential goals is to lay foundations to successful future partnerships on which economic prosperity of our country will be based. In this context, connecting of our members through different projects and events is very important, which can certainly create a significant base of knowledge and experiences from which all members will benefit.

 

Strategic goal 5:

 

To develop IT industry through regional cooperation and connecting with other IT clusters

 

Proposal for realization:

 

One of the initiatives is that through the construction of science and technology parks and similar centers for development of our IT industry, transfer of knowledge and high technologies from developed EU countries and the world, and the countries in the region, is supported. The emphasis is on networking with regional leaders that includes institutions, academic community and IT companies where all of them would be involved together in regional projects of public-private partnerships created for the purpose of development of IT industry. In this context, we will work on strengthening the cooperation with similar clusters in a broader region, which enables an action out of B&H borders and collecting experiences and good practice in cluster operations, also of IT companies where the biggest potential is in participating in joint projects, professional events and conferences.

 

Strategic goal 6:

 

To strengthen capacities for using the EU resources and other funds for development of IT industry

 

Proposal for realization:

 

Considering the datum that in the period 2016-2020, the EU planned to direct about EUR 50 billion in development of digital infrastructure, through the funds, we think that it is an exceptional, but insufficiently used opportunity for B&H, which needs to focus its forces on building this infrastructure, which is one of the basic preconditions for development of IT industry.

In order to use the EU and other funds for development of our economy, with an emphasis to IT industry it is necessary, first of all, to strengthen our capacities for utilisation of these resources for which an adequate measure and, at the same time, one of the most significant steps would be the formation of the expert team for preparation and implementation of IT international projects, which do not have to be necessarily IT-oriented, but have to be leaned on information technologies. In this way, improvement of capacities of IT companies would be made possible, which would get an opportunity to use non-repayable earmarked funds from the international resources at which the mentioned expert team would be of help, as an advisory board for utilization of these funds. Additionally, this team would have a task to continuously inform IT companies and entrepreneurs on open invitations and grants.

 

Strategic goal 7:

 

To attract foreign investors through promoting B&H as an attractive country for IT investments

 

Proposal for realization:

 

Primarily, it is necessary to plan and implement promotive activities whose basic goal is representing B&H as a country from which quality IT products and services are coming, and as a good destination for development of IT companies. It is also important to highlight that there is an adequate business climate for the companies that are present in new technologies in B&H, for which some other countries do not have a suitable legal framework. The result of these promotive activities should be not only construction of B&H as a regionally recognised brand in IT industry but also a detailed information on business operations in and with B&H. One of the initiatives would be organisation of international conferences and fairs at which IT companies, entrepreneurs and investors would have an opportunity to connect, and the emphasis would be on attracting investments of risk capital of the leading investment funds (SAD and The Great Britain). Additionally, one of the strategic steps would be promotion of our IT companies through diplomatic missions, in order to have an easier approach to global market.

 

Strategic goal 8:

 

To put an emphasis on scientific-research work and technologic development in IT sector

 

Proposal for realization:

 

The cohesion of social development and knowledge is particularly noticeable in the past decade, so the successful future of the state’s economy is more and more associated with building a society of knowledge and learning, which marks a phenomenon of the culture of knowledge (education, innovation and cooperation) and the knowledge economy (production of new knowledge and competition in the global knowledge market). Knowledge and accompanying technologic solutions are the fundamental resource today, on which progress of some society is based, respectively the growth of its Gross Domestic Product (GDP), and depends, to a large extent, on successfulness of work of researchers that create, apply and transfer new knowledge to future generations.

 

One of the initiatives would be starting the scientific-research institutions from IT field, independent or at the existing faculties. It is appropriate to improve labour market with increasing the number of IT experts, but the real development of the digital society and creating a strong industry also requires excellent scientific and technologic knowledge and achievements. Without these, we will only remain a „plant nursery“of the labour force or a production plant for other countries. The indicators of the condition of scientific-research activity in B&H, in comparison with other countries in the world based on the data of the World Economic Forum on the GCI issue (Global Competitiveness Index) indicate to extremely weak connections between the scientific-research and economic sector, and to the fact that the condition of the scientific-research activity is far from satisfactory, which needs to be changed urgently. One of the initiatives would be networking of IT companies and faculties with IT courses through presenting the scientific-research work of the experts, which could be applied in real IT industry, to the economy.

 

 

Strategic goal 9:

 

To support an application of information technologies in the modernization of business operations in all branches of industry

 

Proposal for realization:

 

A broader application of the measures for inducing development of IT industry also includes increasing the level of application of information technologies with the aim of modernisation of business operations of all branches of economy. The idea of high technology company is not related only to those operating in the domain, but also to all those who base their models of operations on the use of modern technologies regardless of the branch of economy to which they primarily belong. One of the initiatives would also be an introduction of the support programmes to activities whose aim is an exchange of knowledge, experiences and positive practice on using information technologies as a support to mоdern mоdels of business operation in different branches of economy. With focusing on the indicated chances, members of Bit Alliance have potential to develop the programmes dealing with complex issues, respectively with particular high technologically oriented segments (Internet of Things, Machine Learning, Artificial Intelligence and alike) in order to enable progress of traditional branches of economy such as medicine, agriculture, automobile industry and alike, which are influenced by IT industry.

 

 

CONCLUSION

 

The final purpose of IT Manifesto, which represents the first document of this kind in Bosnia and Herzegovina, is concretization of solving the key challenges in the field of the educational, legislative and economic system of our country, which slow down or obstruct the dynamics of development of our IT industry. Behind this document are all members of Bit Alliance, who became a trademark for strength of IT industry in B&H, as a framework of digital ecosystem, which makes us a highly respected actor in the evaluation and taking strategic steps that are of exceptional importance for economic prosperity of our country in the digital world we live in.

 

The aim of Bit Alliance’s initiative was that a separate strategy of development is applied in IT industry due to specificities of the needs for its development, in line with good practices in the countries of the world and the region. Taking the competences of governmental institutions into consideration, Bit Alliance deems the public orientation at the state and entity levels of the authority indispensable for support to development of IT industry in B&H strategic.

 

Herewith IT Manifesto, through various thematic sessions, councils, specialized public events and alike, investments of the domestic IT companies into development of business operations would be induced, and the domestic and international public would be informed that IT industry is the future of economic prosperity in B&H. In a concrete operative sense, realization of a series of strategic directions of action, respectively strategic goals with proposals of the steps to follow once this document has been officially adopted has been envisaged by IT Manifesto.  After that, preparation of accompanying action plans with which realisation for each strategic goal would be further detailed separately has been planned.

 

Bit Alliance, as it has been presented by the Foundation Initiative, does not work only on identification of problems and proposing adequate solutions, it offers itself, in a full capacity, for cooperation with the competent institutions of the government both at B&H level, and the other levels, for concrete contribution in implementation of all plans and activities that would be envisaged by future policies, strategies and action plans for development of IT industry.

 

Therefore, this IT Manifesto represents a small step which, if understood in the right way, adopted and applied, can represent a big step forward for entire B&H, even for the region, in the context of bringing our society to a new strategic level of thinking and the concrete action in modern time of the digital transformation we belong to. Bit Alliance with its Manifesto indicates to a path of success by showing in which ways we can start living IT future today immediately, owing to the potential of our IT industry.

 

In the end, it is important to mention that many problems, which have been stated in this Manifesto, are too complex for Bit Alliance to solve them by itself, hence our activities are focused toward an establishment of close cooperation with all interested parties in our IT ecosystem, and the close IT ecosystems, in order to create, in synergy, a significant value for all, by reaching a considerable IT prosperity.

The complete IT Manifesto contains in its basis the „Triple-Helix Model“ by which the entire strategic orientation of Bit Alliance, all its members and partners, was guided, as we think that the only possible key of realization of potential of IT industry of Bosnia and Herzegovina is in the synergy ‘education –economy –government’, which has been propagandized by the aforementioned  concept.

 

Download IT MANIFESTO.