Will the government recognize the development opportunity that the IT industry offers?
20 Sep 2021
With close to 400 million in revenue in 2020, out of which 200 million come from outsourcing, the IT industry is one of the most powerful industries in the Sarajevo Canton, having the highest average growth rate for the past few years.
Only in the last three years, 1000 new jobs were created for the higher education workforce, and an almost 50% revenue growth was achieved, whereby IT remains the only industry that has reached such levels. Also, there are 100 IT companies only in Sarajevo whose revenues exceed a million, while the number of employees in the industry is almost 4,000.
The Sarajevo Canton conducted a development study for the IT industry in 2017 and the study was carried out by the Sarajevo Development Agency SERDA. The study confirmed that the IT industry in the Sarajevo Canton has huge potential and that recommendations were made to the Government and the Assembly of the Sarajevo Canton, which if implemented, would further empower the development of the IT industry.
Among others, the study suggests that the IT industry in the Sarajevo Canton can and should be treated as a strategic industry that can be further boosted through certain tax breaks. Similar recommendations were made in the recently adopted FBiH Development Strategy, which also recognizes IT as a strategic industry. Despite this, concrete activities and adoption of planned measures are still non-existent, indicating that the achieved development so far is a result of the efforts of young IT professionals.
It is high time
Edin Deljkić, the CEO of Klika and President of the BIT Alliance Board of Directors, the Association of IT Companies in BiH, emphasizes that it is high time for the competent authorities across different levels to start implementing strategic plans and documents to ensure the IT industry keeps developing at this level.
“Without urgent, comprehensive, and strategically aimed measures, the IT industry will miss out on further development opportunities available on the market, as well as new job creation opportunities, and the Sarajevo Canton and BiH will lose an opportunity for economic development in a significant area that is lucrative and harmless to the environment in the urban surroundings it operates in. Due to the ongoing trend of brain drain, if no interventions are made in the education and tax system, there is a real threat of stagnation, and looking medium term, significant decrease or partial disappearance of certain parts of this industry are also possible. It would have a very negative effect on the overall economic growth and development” Deljkić said.
While the implementation of planned measures is still awaited in BiH, EU countries, which are at the same time BiH’s competitors, continue to significantly invest in the IT industry and the digitalization process.
The EU Commission presented mid-year a comprehensive programme called “Digital Compass” which defines EU’s precise plans until 2030. EU’s ambition is to be digitally sovereign in an open and mutually connected world, and it has been concluded that at least 20% of the revenues within the Recovery and Resilience Facility will be available for digital transition, including SMEs. We are talking about billions of euros in support, and upon presenting this document, EU leaders issued a joint statement that “the key pillar for recovery from COVID-19 is digitalization by incentivizing new forms of growth and strengthening EU resilience.”
“Unfortunately, as opposed to global trends, where the process of digitalization and the development of the industry behind it are continuously encouraged, including policies, strategies and action plans for the development of the IT industry, the process remains very slow and limited in Bosnia and Herzegovina, subsequently slowing down the process of reaching full economic and developmental potential”, Deljkić said.