At the core of SME competitiveness is the knowledge and skills of the workforce. This cluster examines how these are developed across the lifecycle, starting with how education systems foster entrepreneurial skills and align practical training with SME needs. It then considers how SMEs access relevant skills, leveraging skills intelligence, upskilling and reskilling, and empowering women entrepreneurs. It also explores the role of the social economy and support for social enterprise development.
SME Policy Index for Western Balkans and Türkiye 2026 – Economy Profile for Bosnia and Herzegovina
Abstract
Labour markets and societies are undergoing deep structural shifts, transforming the nature of work and the skills it demands. Digital and green transitions, alongside demographic shifts, are reshaping business models and workforce needs alike. In Bosnia and Herzegovina, as elsewhere across the globe, small and medium-sized enterprises (SMEs) are at the centre of this transformation. Building readiness for these changes begins within the education system, which must move beyond subject-based instruction to cultivate transversal skills such as adaptability, problem-solving and teamwork while strengthening opportunities for practical, experience-based learning.
However, the pace of change in the labour market is outstripping that of education systems, with signs of strain already visible. Foundational learning outcomes remain weak: for example, according to the results of the latest International Results in Mathematics and Science (TIMSS), 4th grade students in Bosnia and Herzegovina scored an average of 447 points, notably below both the Western Balkans and Türkiye (WBT) regional and international averages (491 and 503 points, respectively) (von Davier et al., 2024[1]). At the same time, more than 40% employers in Bosnia and Herzegovina report that the skills taught in the education system do not meet the needs of their business (RCC, 2023[2]). Thus, to strengthen the productivity, resilience and competitiveness of SMEs in Bosnia and Herzegovina, education and training systems need to enhance learning quality while becoming more adaptive, preparing students with the skills and flexibility required to navigate an evolving labour market.
Accordingly, this section considers how the education system equips learners with entrepreneurial capabilities and how education and training pathways connect more effectively with SMEs to support labour market entry and firm-level skills needs.
5.1.1. Fostering entrepreneurial skills and mindsets through education
Within this broader transformation, nurturing entrepreneurial skills and mindsets among students is essential, especially as global trends indicate a growing demand for these skills, which are projected to increase by 32% in Europe alone by 2030 compared to 2016 (European Commission, 2024[3]). Yet entrepreneurial spirit among students tends to be very low in Bosnia and Herzegovina: in one survey, only 23% of individuals aged 15-30 expressed an interest in starting their own business (USAID, 2023[4]).
Bridging the gap between low entrepreneurial interest and labour market needs depends on coherent policies that promote entrepreneurial learning at multiple educational levels. As seen in Table 5.1, at the state level, Bosnia and Herzegovina has established a comprehensive policy framework recognising entrepreneurship as a key competence and promoting its integration throughout the education system, in line with the European Union’s (EU) respective framework (EntreComp). However, policy progress has largely remained at the level of formal recognition rather than operationalisation. While entity-level strategies include quantitative targets, such as the number of schools expected to implement entrepreneurial learning, they lack detailed implementation pathways or monitoring mechanisms. The absence of these operational components underscores a persistent gap between strategic intent and delivery, which weakens policy coherence and limits the systemic integration and transformative impact of entrepreneurial learning.
Notes: VET: vocational education and training.
Entrepreneurial learning is also covered in Republika Srpska’s Strategy on Adult Education 2021‑2031, but given its focus on adult education, has been excluded from this table.
Sources: Ministry of Civil Affairs of Bosnia and Herzegovina (2024[5]; 2021[6]); Federation of Bosnia and Herzegovina Federal Ministry of Development, Entrepreneurship and Crafts (2022[7]); Republika Srpska Ministry of Economy and Entrepreneurship (2021[8]); Republika Srpska Ministry of Education and Culture (2021[9]); Federation of Bosnia and Herzegovina Federal Ministry of Culture and Sports (2024[10]).
Entrepreneurship is formally recognised as one of the ten key competences in pre-university education under the designation “Self-initiative and entrepreneurship,” with guidelines of the Agency for Pre-Primary, Primary and Secondary Education (APOSO) specifying its integration as a cross-curricular competence.1 The curriculum adopts a dual approach, combining business-specific knowledge and skills (e.g. understanding business operations, financial literacy) with transversal competences like communication, problem-solving and initiative-taking. At the upper secondary level, this approach is complemented by dedicated subjects, such as “Fundamentals of Entrepreneurship” offered in vocational schools in Republika Srpska and Brčko District, and by mandatory entrepreneurship courses introduced in select vocational schools in the Federation of Bosnia and Herzegovina.
However, while this structure theoretically enables a systematic progression of entrepreneurial skills across grade levels (Table 5.2), its effectiveness is contingent on consistent implementation. Economy-wide targets aim to expand coverage to all primary and secondary schools by 2030, with an interim goal of 40% of schools by 2026 (Ministry of Civil Affairs of Bosnia and Herzegovina and ETF, 2021[11]). However, in practice, uptake of the APOSO guidance has been uneven, as its prescriptive (rather than binding) nature leaves implementation largely at the discretion of canton- and entity-level education authorities. For instance, in the Federation of Bosnia and Herzegovina, while some cantons such as Sarajevo, Tuzla and Zenica‑Doboj have developed ongoing programmes and initiatives, others, including Canton 10 and Posavina, report little to no activity in this area.2 In Republika Srpska, integration remains largely confined to VET (Ministry of Civil Affairs of Bosnia and Herzegovina, 2024[5]). As a result, given that education (and thus entrepreneurial learning) policy is primarily an entity- and canton-level competence, implementation gaps translate into uneven provision across the economy, limiting system-wide coherence and impact.
Pedagogical support for entrepreneurship education is developing but remains inconsistent across the system. Conceptually, the foundations are strong: the Common Core Curriculum provides guidance for integrating entrepreneurial competences across subjects such as mathematics, geography and history, while the Ministry of Civil Affairs has produced a teacher training manual3 for embedding entrepreneurial skills in primary and secondary education (APOSO, 2018[12]; Ministry of Civil Affairs of Bosnia and Herzegovina, 2024[5]). In practice, however, support remains largely project-based,4 focusing on raising awareness rather than providing teachers with practical methods for classroom implementation and assessment, leaving many uncertain how to foster and evaluate students’ entrepreneurial skills. Implementation is also highly variable across jurisdictions: for example, in 2023, in Zenica-Doboj Canton, teacher training on entrepreneurship as a key competence was actively organised, while in Canton 10 no initiatives to support entrepreneurial learning were planned or implemented (Ministry of Civil Affairs of Bosnia and Herzegovina, 2024[5]). Despite targets to train at least 30% of primary and secondary teachers by 2026 (Ministry of Civil Affairs of Bosnia and Herzegovina and ETF, 2021[11]), uneven delivery and limited institutionalisation continue to constrain the consistent development of entrepreneurial competences across schools.
Practical entrepreneurial experiences are still emerging within Bosnia and Herzegovina’s education system, providing valuable opportunities for students to gain hands-on experience in developing and managing business ideas. However, these provision of such offerings varies substantially between entities. In the Federation of Bosnia and Herzegovina, promising examples such as the new “Academy for Young Entrepreneurs” in Sarajevo illustrate growing interest in applied entrepreneurship, yet these efforts are ad hoc and rarely shared across cantons, limiting their broader impact. In Republika Srpska, these practical experiences are somewhat integrated at the vocational education level but remain a marginal feature at earlier stages of education. Moreover, in both entities, such activities are typically voluntary and delivered through extracurricular programmes, leading to participation that is largely self-selective and concentrated only among the most motivated students.
However, fully harnessing the benefits of entrepreneurial learning requires ensuring that all students, and in particular girls, are equally encouraged and empowered to participate. Data from TIMSS 20235 show that girls perform on par with boys in key science, technology, engineering and mathematics (STEM) subjects: at the fourth-grade level, boys scored only 4 points higher in mathematics (a difference that is not statistically significant), while girls outperformed boys by 5 points in science (von Davier et al., 2024[1]; 2024[13]). At the tertiary level, women accounted for 48.2% of graduates in STEM fields in 2023, notably exceeding the EU average of 33.5% (Eurostat, 2025[14]). These findings indicate that girls possess both the capacity, as evidenced by comparable test results, and the interest, reflected in graduation rates, to engage in STEM disciplines, underscoring the importance of sustaining equal encouragement and access throughout the education pipeline.
Nonetheless, gender stereotypes remain deeply rooted in Bosnia and Herzegovina. Research shows that teachers and parents consistently rate boys higher than girls in mathematical-logical abilities, reflecting persistent beliefs that men are more capable in STEM fields (Milic and Simeunovic, 2024[15]). These expectations, often internalised from an early age, begin shaping girls’ academic interests and self‑perceptions as early as primary school (Đapo et al., 2020[16]), influencing their educational and career choices. In response, initiatives such as the STEM – Schools of the Future initiative (Box 5.1) and Girls in ICT Days have been developed to support girls’ engagement in STEM by challenging stereotypes, providing hands-on learning opportunities, and showcasing female role models working in science and technology.
The “STEM – Schools of the Future” initiative in Bosnia and Herzegovina aims to modernise science, technology, engineering and mathematics (STEM) education in primary and secondary schools while actively challenging gender stereotypes and encouraging girls to pursue STEM-related pathways. Implemented by the United Nations Development Programme within the framework of the “Economic Governance for Growth” project and financed by the government of Norway, the initiative represents a deliberate shift from traditional subject-based instruction towards experiential, technology-rich learning. It combines investments in modern equipment with teacher training to create engaging, hands-on learning environments that make STEM education more inclusive and appealing to girls. By 2024, the initiative had reached around 29 schools, involving more than 500 students and 70 teachers.
Beyond classroom activities, the programme promotes visibility and engagement through public events. One event, “Schools of the Future – Imagination Day in Bosnia and Herzegovina 2024,” held in Sarajevo, brought together over 100 students and teachers for workshops and demonstrations designed to inspire greater participation of girls in science and technology fields.
The programme is particularly significant in empowering girls, as it directly challenges entrenched gender stereotypes in STEM and builds their confidence and skills in practical, future-oriented fields. By fostering early engagement and creating inclusive learning environments, it helps ensure that girls can pursue a STEM education and career, opening pathways into higher growth, higher paying sectors while simultaneously strengthening the economy’s talent pipeline.
Sources: UNDP (2024[17]); Council for Monitoring the Implementation of SDGs in Bosnia and Herzegovina (2023[18]); BH Futures Foundation (2024[19]).
5.1.2. Bridging the divide between education and training systems and SMEs
Equipping students with relevant skills is essential to support a smooth transition from school to work and to ensure they meet labour market demands, a factor reflected in youth employment trends. As of 2024, Bosnia and Herzegovina had one of the lowest rates of youth not in employment, education or training (NEET) in the WBT region at 14.7%, below the regional average of 20.5% but still slightly above the EU average of 9.1% (Figure 5.1). The gap with the European Union has been narrowing in recent years, with the youth NEET rate falling nearly 10 percentage points between 2020 and 2024, a decline that accelerated from 2021 onwards. However, this progress should be considered in the context of high levels of emigration among young people – over half of whom express an intention to leave the economy – which likely contributes to the observed reduction in the NEET rate (United Nations Bosnia and Herzegovina, 2025[20]).
Percentage of 15-24 year-olds
Note: Gender-disaggregated data were only available for Bosnia and Herzegovina for 2021-2024.
Sources: Eurostat (2025[21]); OECD (2025[22]).
Yet despite potential progress, limited exposure to practical training remains a central challenge, particularly for vocational education students, who benefit most from hands-on learning due to the applied nature of their occupations. In the 2023/2024 school year, only around 15% of vocational students participated in company-based, work-based learning, well below the 40% target set in the Reform Agenda for 2027, indicating the need for significant additional effort to reach this goal (OECD, 2025[23]). The lack of practical experience also contributes to labour market mismatches, with employers consistently reporting difficulties in hiring graduates who possess the skills and profiles required by the market (ETF, 2024[24]).
To address this challenge, Bosnia and Herzegovina has been piloting dual VET, in which practical training is conducted entirely within a company setting, systematically integrating workplace experience into the formal VET curriculum.6 Still in the early stages of implementation, the model reached an estimated 500 students across several select occupational profiles7 in the 2025/2026 school year. However, the number of participating companies cannot be reliably determined, as registers capturing employer participation are either not publicly available (as in Republika Srpska) or not yet operational.8
As the roll-out continues, a comprehensive legal framework will be essential to ensure consistent implementation. Approaches differ across levels of government (Table 5.3): some have adapted existing legislation while others are introducing new laws. Relying on amended frameworks carries a risk of misalignment, as dual VET is a distinct model with requirements that may not be fully accommodated by traditional regulations. Across the economy, however, these frameworks generally remain partial, incorporating only certain elements of dual VET and leaving key aspects insufficiently regulated; while they provide a starting point for further development, they fall short of the fully integrated model seen in EU member states. In Republika Srpska, these legal and regulatory developments are further reinforced by strong institutional support, notably through the dedicated Centre for Dual Education within the Chamber of Commerce.
Notes: In February 2026, a memorandum of understanding was signed between the government of Brčko District and GIZ, with the aim of strengthening elements of dual VET by improving collaboration between schools and the private sector. While this represents a positive step in advancing dual VET in Brčko District, it is a non-binding co-operation instrument and therefore does not fall within the scope of this table.
Sources: Adapted from OECD (2025[23]); inputs from local consultants.
The roll-out of dual VET seeks not only to broaden access to practical training but also to enhance its quality by increasing the time students spend in workplace placements, thereby strengthening skill acquisition. This focus responds to persistent concerns among VET students, many of whom report dissatisfaction with their education due to a “lack of sufficient practical training options” (ETF, 2024[24]). In practice, however, in-company work-based learning remains limited: in 3-year programmes, practical training accounts for around 40% of instruction time in the second year and increases to approximately 60% in the final year, while in 4-year programmes it remains consistently around 40%. Even the draft Law on Dual VET in Sarajevo Canton, which otherwise is a good practice (Box 5.2), reflects these relatively modest thresholds.
The draft Law on Dual Education of Sarajevo Canton, adopted by the cantonal government and currently undergoing public consultations, represents a strong example of EU-aligned design for dual vocational education and training (VET). The law is closely based on the European Framework for Quality and Effective Apprenticeships and incorporates a majority of the 14 quality criteria set out in the 2018 Council Recommendation,1 demonstrating a high degree of alignment with EU standards on quality, governance and learner protection.
Key good practice features of the law include:
Formalised roles, responsibilities and contracting arrangements. Distinct responsibilities are assigned to the Ministry of Education, the Ministry of Economy, the Chamber of Commerce, schools and business entities, reducing ambiguity in delivery. Two complementary contracts – school‑business (dual education contract) and business-student/guardian (work-based learning contract) – clarify obligations, working arrangements, termination conditions and continuity measures if placements collapse.
Robust entry conditions for participating businesses. Employer participation is conditional on meeting defined criteria related to equipment and workspace, occupational safety, mentor availability, and integrity checks. A formal verification process, time-limited certificates and electronic public register of authorised business entities provide a practical foundation for quality assurance and transparency.
Professionalisation of workplace mentoring. Clear mentor requirements, mandatory training (40 hours), licensing and periodic refresher training establish minimum standards for workplace supervision. Registers of licensed mentors and completed trainings support system oversight and workforce planning.
Facilitating small and medium-sized enterprise (SME) participation through flexible delivery models. The consortium model allows multiple smaller firms to jointly deliver the full curriculum, enabling SMEs that individually lack the technical, organisational or mentoring capacity to participate in dual VET provision. This design directly addresses a common bottleneck in employer engagement and supports broader sectoral coverage.
Targeted financial incentives for dual VET students. Students are entitled to a monetary reward linked to average net wages (increasing by grade), alongside meal provision or compensation and transport support, reducing financial barriers to participation.
Together, these provisions create a well-designed framework that balances learner protection with employer engagement and addresses most of the key building blocks for quality dual VET identified by the European Union and other international bodies. Overall, the draft Law on Dual Education of Sarajevo Canton offers a transferable model for other cantons and entities, demonstrating how dual education can be scaled through a single, coherent legal instrument that aligns education systems with labour market needs while maintaining transparency, equity and quality.
1. The 2018 Council Recommendation on a European Framework for Quality and Effective Apprenticeships.
Source: Government of Sarajevo Canton (2025[25]).
Extending practical training alone, however, is not sufficient without broader employer participation. While more than 40% of employers express interest in offering placements,9 only 8-10% of registered companies currently provide in-company training (OECD, 2025[23]). Practical constraints are particularly acute for SMEs: for example, in Republika Srpska, 70% of employers report lacking the capacity to offer placements due to insufficient mentors, equipment or workspace (Public Employment Service of Republika Srpska, 2024[26]). Moreover, in Republika Srpska and three cantons of the Federation of Bosnia and Herzegovina,10 employers are required to provide financial compensation to students in dual VET placements, an obligation that can place a disproportionate burden on smaller firms. Financial incentives can, therefore, play a key role in lowering the costs of training and increasing the attractiveness and feasibility of placements, particularly for resource-constrained SMEs (ILO, 2022[27]). Some measures are already emerging, such as preferential scoring in public calls for companies offering student placements and planned income tax exemptions on student remuneration.11 Once the dual VET framework is fully operational, it will be crucial to provide clear guidance for employers, as many remain unaware of their obligations and responsibilities (GOPA Worldwide Consultants, 2024[28]); to date, no level of government has developed a practical guide to make the legal framework more accessible to companies.12
Additionally, Bosnia and Herzegovina has made some (albeit slow) progress in facilitating young people’s entry into the labour market by developing and implementing the Youth Guarantee scheme. Piloting is planned for 2026 in selected locations, including Zenica-Doboj and West Herzegovina Cantons in the Federation of Bosnia and Herzegovina, Prijedor municipality in Republika Srpska, and the Brčko District, building on analytical inputs prepared by a working group within the Ministry of Civil Affairs (Kurta, 2025[29]). Data collected during the pilot phase will inform the design of the economy-wide roll-out. At this stage, however, it is too early to assess programme reach (e.g. urban-rural coverage, gender balance of participation) or the quality of offers, nor can it be determined whether participation leads to measurable improvements in outcomes for beneficiaries.
Implementation is likely to face persistent challenges, particularly due to the limited capacity of public employment services, which are responsible for providing personalised employment advice, training and financial support to NEET youth. Public employment services’ offices are already overstretched, with some of the highest caseload-to-counsellor ratios in the region: 1 160 registered unemployed persons per counsellor in the Federation of Bosnia and Herzegovina and 337 in Republika Srpska (OECD, 2025[23]). Early mitigation efforts, such as functional analyses of public employment services systems to map available training capacity and identify steps to support implementation, are underway (European Commission, 2025[30]), but stakeholders consistently emphasise that without additional funding and staffing, the capacities of public employment services will remain insufficient to deliver the scheme effectively (ETF, 2024[24]). These capacity constraints are further compounded by gaps in information provision: the absence of a co-ordinating office and of interactive platforms at the canton/entity level limit guidance for young people and potential in-company mentors. Without adequate mechanisms to provide information, even a well-designed scheme will struggle to reach those it is intended to support.
The way forward
Develop and scale up training and coaching programmes for teachers to deliver entrepreneurial learning across subjects, including STEM. Bridging the persistent gap between strategic frameworks and classroom practice requires a co-ordinated approach to pre- and in-service teacher training, particularly given the varying levels of development and institutional support across cantons and entities. Training should focus on entrepreneurial pedagogies, project‑based learning and practical tools for integrating entrepreneurial learning into STEM education. To be impactful, training should incorporate ongoing support such as in-classroom coaching, peer learning networks and access to resources. Emerging tools such as the Joint Research Centre-European Training Foundation Scaffold tool (Box 5.3) provide a useful reference for structuring teacher support around progression, reflection and assessment of transversal competences, including entrepreneurial learning.
Scaffold is an innovative pedagogical tool published jointly by the European Commission’s Joint Research Centre and the European Training Foundation in 2024. It helps teachers operationalise European competence frameworks in classroom practice. The tool integrates EntreComp with other European frameworks (e.g. DigComp, GreenComp and LifeComp) into a single, accessible planning system that supports competence-based learning across subjects.
Scaffold consists of a deck of 102 cards that guide educators step-by-step through lesson and assessment design. Cards structure the design process, from identifying learning outcomes to structuring assessment tasks, enabling practical and creative approaches to embedding key competences. By encouraging educators to combine cards across frameworks, the tool supports integrated learning activities that link, for example, entrepreneurial competences with digital learning or sustainability-focused challenges.
The tool offers a versatile method to design lessons individually or in teams, making it easier for teachers to adopt more ambitious, innovative pedagogical approaches. It helps shift from traditional knowledge-based lessons toward active, project-based learning that develops transversal skills and supports 21st-century teaching methods.
Scaffold is a noteworthy example of how European competence frameworks can be translated into implementable classroom practices. For Bosnia and Herzegovina, this tool provides a relevant model for bridging the persistent gap between strategic frameworks and delivery on the ground, supporting educators to align learning outcomes with curriculum reforms and to pilot innovative teaching and assessment methods.
Source: ETF (n.d.[31]).
Work towards comprehensive and harmonised VET legal frameworks across entities and cantons that fully regulate dual VET requirements. Once such frameworks are in place, they should be complemented by the development and widespread dissemination of implementation guidance: one such example would be the development of guidelines for companies engaging in dual VET. Such guidance could provide step-by-step instructions on key areas, including eligibility to offer dual VET placements, certification of instructors and evaluation of student performance, helping companies navigate their responsibilities more effectively.
Strengthen and expand dual VET co-ordination mechanisms to support SME participation. Given the limited administrative and organisational capacity of many SMEs, existing co-ordination structures – namely, the Centre for Dual Education within the Chamber of Commerce and Industry in Republika Srpska – could be further strengthened and scaled. At the same time, similar support mechanisms could be established in the Federation of Bosnia and Herzegovina, leveraging the Chamber of Commerce, VET centres or Public Employment Service, to serve as a single point of contact for employers. These structures could support firm-school matching, standardise contracts and documentation, provide templates and guidance on occupational safety and mentoring requirements, and offer ongoing troubleshooting during placement delivery. By reducing transaction costs and administrative burdens for SMEs, such mechanisms could help broaden employer participation and improve the consistency and quality of work-based learning provision.
Establish local dual VET co-ordination hubs to support SME participation. Given the limited administrative and organisational capacity of many SMEs, cantons and entities could set up dedicated dual VET co-ordination hubs – to be embedded within Chambers of Commerce, VET centres or public employment services – to act as a single point of contact for employers. These hubs could support firm-school matching, standardise contracts and documentation, provide templates and guidance on occupational safety and mentoring requirements, and offer ongoing troubleshooting during placement delivery. By reducing transaction costs and administrative burdens for SMEs, such hubs could help broaden employer participation and improve the consistency and quality of work-based learning provision.
Introduce monitoring and quality assurance frameworks for company-based learning. A structured system should include annual accreditation or renewal procedures for participating companies; systematic on-site monitoring visits by VET school or centre co-ordinators; and mandatory mechanisms to gather and review student feedback on learning conditions and outcomes. Clear protocols for addressing non-compliance and for suspending or terminating contracts where standards are not met would reinforce accountability, while transparent reporting on company participation and quality outcomes would strengthen confidence among learners and employers.
Strengthen the implementation of the Youth Guarantee through enhanced capacity of public employment services and a unified delivery and information framework. This should include targeted investment in public employment services to reduce counsellor caseloads and strengthen profiling, case management and follow-up for young people, particularly in pilot regions. In parallel, establishing a common, user-centred Youth Guarantee platform (which would be interoperable with entity and canton systems) would provide a single entry point for young people, employers and training providers; improve access to information on available offers and eligibility; and support co‑ordination across institutions.
Establish systematic tracking mechanisms for young people graduating from VET, dual education, higher education and Youth Guarantee pathways. This should include conducting tracer surveys 6-18 months after graduation to monitor employment outcomes, job quality and the labour market relevance of programmes, enabling evidence-based improvement of curricula and programme design.
Ensuring a skilled workforce for SMEs begins with education but it cannot end there. Rapid and complex changes in the labour market, particularly in the types of skills and occupations in demand, require workers to adapt to new roles or undergo significant shifts within existing jobs. By 2027, an estimated 60% of workers worldwide will need to undertake some form of training to keep pace with technological advancements (World Economic Forum, 2023[32]), highlighting the growing importance of continuous upskilling and reskilling to maintain employability, productivity and resilience.
This challenge is evident in Bosnia and Herzegovina, where employees and SMEs report persistent skills gaps. Over 40% of workers indicate high unmet learning needs, reflecting either insufficient preparation from education or limited access to training opportunities (Badescu, 2023[33]). From the employer perspective, 44.5% of firms in the Federation of Bosnia and Herzegovina and 37.4% in Republika Srpska report difficulties in hiring, with the most pronounced shortages in skilled, rather than unskilled or semi‑skilled, roles (Federal Employment Institute Sarajevo, 2026[34]; Public Employment Service of Republika Srpska, 2026[35]). Given that Bosnia and Herzegovina has a highly educated workforce, exceeding the EU average in advanced education attainment (81.3% vs. 77.4%) (OECD, 2025[22]), these challenges point to a structural mismatch between the skills produced by the education system and the competencies demanded by employers. This mismatch is further compounded by emigration of skilled workers, which constrains the domestic talent pool and entrenches skill imbalances across both entities (Figure 5.2).
Percentage
Sources: Federal Employment Institute Sarajevo (2026[34]); Public Employment Service of Republika Srpska (2026[35]).
This section focuses on improving the responsiveness and inclusiveness of the SME skills ecosystem through four interrelated dimensions: 1) more effective skills intelligence; 2) stronger adult learning provision; 3) targeted upskilling to manage the impacts of artificial intelligence (AI); and 4) dedicated measures to support women entrepreneurs.
5.2.1. Understanding and anticipating skills needs
Meeting the evolving demands of the labour market requires more than responding to changes as they occur; it involves anticipating future shifts by assessing current needs and imbalances and projecting how they are likely to evolve over time. Skills intelligence plays a central role in this domain, offering the insight needed to align education and training with real-world demand.13 It can guide SMEs’ recruitment strategies, shape the content of adult learning programmes, and ensure that individuals and enterprises are prepared to navigate ongoing technological and structural transformation.
Yet despite its potential to equip SMEs with relevant skills, Bosnia and Herzegovina’s skills intelligence framework remains underdeveloped (Table 5.4). At the entity level, existing frameworks emphasise skills assessment, such as identifying current gaps through training needs analyses. However, they largely lack forward-looking skills anticipation: neither entity has implemented mechanisms to forecast emerging skill needs. Weak linkages across related strategies further limit the system’s effectiveness. Employment strategies at the entity level recognise skills mismatches but offer few concrete tools to develop systematic skills intelligence. Republika Srpska’s education strategy mentions skills intelligence only in passing and at a conceptual level. Key state-level documents, including the Reform Agenda and the Economic Reform Programme 2025-2027, omit enterprise-level skills and skills intelligence entirely.
To date, the primary source of skills intelligence in Bosnia and Herzegovina has been employer surveys conducted by the employment agencies of each entity. While these surveys are not specifically targeted to SMEs, SMEs represent over 95% of respondents, providing a substantial picture of their labour market needs. The most recent editions were published in 2026 for both entities (Federal Employment Institute Sarajevo, 2026[34]; Public Employment Service of Republika Srpska, 2026[35]). Drawing on both qualitative and quantitative data, the surveys assess current labour market conditions, identifying the most in-demand occupations, planned hiring needs over the short term (through the end of the year or the following year), employer satisfaction with existing workforce skills and the most frequently reported gaps. A key strength of these surveys lies in their harmonised data collection methodology, which ensures that metrics included in both surveys are directly comparable and provide a consistent evidence base for policymaking. Furthermore, as of February 2026, the Labour and Employment Agency of Bosnia and Herzegovina is preparing a consolidated Employer Survey Report that integrates aligned data from both entities and Brčko District, which is to establish a common reporting framework at the economy level.14
Complementing these surveys, training needs analyses are emerging as a more targeted tool to identify sector-specific skills gaps and training priorities. These have been annually carried out by the Chamber of Commerce and Industry of Republika Srpska and, more recently, expanded through a 2024 joint initiative involving chambers of commerce across different levels of government (Box 5.4).
While employer surveys and training needs analyses provide valuable snapshots of current labour market conditions, they tend to be inherently reactive, capturing only immediate demand and offering limited insight into emerging skills requirements. This approach increases the risk that training and education programmes will be misaligned with structural shifts, particularly in rapidly evolving sectors such as ICT and green technologies. Complementary mechanisms, such as formal sector skills councils, could address this gap by convening employers, training providers and policymakers to identify evolving sector-specific needs and to translate these insights into actionable adjustments to curricula and workforce learning programmes. However, unlike most WBT economies, Bosnia and Herzegovina has yet to establish such councils.
Moreover, forward-looking quantitative approaches, including participatory forecasting and econometric modelling, are also largely absent, leaving the economy without a systematic way to generate medium- or long-term skills demand projections for use in policymaking. Existing efforts remain ad hoc and are often donor-driven rather than being embedded within state- or entity-level frameworks. The “TVET System Strengthening Project” and its planned skills barometer (with the first edition scheduled for publication by the end of 2026), which will assess skills needs every three years, illustrates the potential of institutionalised forward-looking tools.15 Its utility, however, will depend on sustained government ownership to integrate it into regular planning processes, ensuring that insights consistently inform policy and training programmes rather than serving as one-off analyses.
In 2024, the Foreign Trade Chamber, the Agency for Enterprise Development of Republika Srpska, the Chamber of Commerce of Republika Srpska and the Chamber of Commerce of Brčko District implemented a joint training needs analysis, with financial support from Sweden. The initiative was developed in line with OECD recommendations under Dimension 8a (“Enterprise Skills”) of the SME Policy Index, which highlighted the need to introduce regular, systematic surveys of enterprise skills and training needs in key economic sectors.
Between September and October 2024, a survey was conducted among 122 companies operating in Bosnia and Herzegovina’s leading sectors, including metal processing, wood processing, the food industry, plastics and IT. The survey gathered insights on employer satisfaction with workforce skills, priority training needs and firms’ readiness to invest in upskilling. The survey’s key findings include:
Employer satisfaction with employees’ general knowledge and skills varies significantly across sectors, with the highest levels reported in the IT sector and the lowest in the plastics industry.
Demand for training differs by sector, with consistently strong interest in digitalisation across all industries, while interest in areas such as artificial intelligence and energy management varies more significantly.
Willingness to co-finance training remains limited, with only around one-third of firms indicating readiness to cover up to 30% of training costs.
Looking ahead, the Agency for Enterprise Development has expressed readiness to transfer the survey methodology and lessons learnt to other institutions, such as chambers of commerce, to support regular implementation. Ensuring sustainability will require clear institutional ownership and commitment to embed such surveys within a broader skills intelligence system and to use the results to inform policy and programme design.
Sources: Enterprise Development Agency of Republika Srpska (2024[36]); OECD (2022[37]).
Demographic trends further highlight the urgent need to enhance Bosnia and Herzegovina’s skills intelligence, particularly to anticipate shifts in the future labour supply. The economy is experiencing a significant population decline: official statistics indicate a decrease from 3.53 million in 2013 to 3.42 million in 2023; World Bank estimates suggest an even steeper drop from 3.61 million to 3.16 million over the same period, representing a 12.5% reduction in just a decade (BHAS, 2024[38]; World Bank, n.d.[39]). Projections suggest this trend will continue, with population potentially decreasing by 55% by 2070 (Petke, Petzke and Garcia Čaušević, 2023[40]).
Several factors drive this decline. Persistently low birth rates, averaging 1.18 children per woman in 2023, and rapid population ageing (the average age is 42.5 years, with 22% of the population aged 65 or older) shrink the working-age population. These trends are compounded by sustained emigration: approximately 33.8% of the native population lived abroad in 2024,16 the highest rate in the WBT region (United Nations Population Division, 2024[41]). Businesses report that emigration and brain drain pose significant obstacles, with 50% indicating a moderate or major impact on growth in 2024 (RCC, 2024[42]). Consequently, the working-age population (25-64) has declined from 2.58 million in 2015 to 2.26 million in 2024, with a further reduction of around 92 000 expected over the next decade (BHAS, 2025[43]; 2016[44]; Petke, Petzke and Garcia Čaušević, 2023[40]). Together these trends reflect a shrinking talent pool, which in turn implies a changing composition of available skills, thus underscoring the importance of developing agile, forward‑looking policies.
5.2.2. Addressing skills needs of SMEs through adult education
Equally important to gathering skills intelligence is ensuring that the insights it provides guide the development and implementation of adult education programmes. Providing employed and unemployed individuals with access to relevant learning opportunities is critical for continuous reskilling and upskilling, particularly for SMEs, where employees often perform diverse roles and can benefit substantially from targeted training initiatives.
Yet adult learning rates in Bosnia and Herzegovina remain very low: in 2024, only 1.6% of adults aged 25‑64 had participated in training in the four weeks prior to the survey17 – half the WBT regional average (3.8%) and approximately one-tenth of the EU level (13.3%) (Figure 5.3). This is far below the objectives set by entity-level strategies; for example, the Federation of Bosnia and Herzegovina’s Employment Strategy 2023-2030 aims for 12% of adults to engage in training, reflecting a goal of convergence with EU levels. Achieving this target would require an increase of nearly 10 percentage points, yet the adult learning rate has actually declined by 0.5 percentage points since 2016, underscoring the need for substantial, sustained and transformative measures to reverse the trend.
Percentage of population aged 25-64
Note: Gender-disaggregated data are not available for Bosnia and Herzegovina.
Sources: Eurostat (2024[45]); OECD (2025[22]).
Low rates persist despite significant and growing needs within the workforce. In 2024, the unemployment rate stood at 12.6%, more than twice the EU average, though this figure likely understates actual labour market pressures, as emigration remains a key outlet for those unable to find employment (Eurostat, 2024[46]; World Bank, 2024[47]). Long-term unemployment is particularly acute: 73.2% of unemployed individuals have been without work for over a year, and half for four years or more (BHAS, 2025[48]). Importantly, nearly 70% of unemployed persons have a secondary education with vocational specialisation, suggesting that unemployment is not primarily driven by a lack of basic skills, but by a persistent mismatch between the qualifications workers possess and those sought by employers. Analyses by the public employment services of both entities and Brčko District confirm this imbalance, pointing to shortages in technical and skilled trade occupations alongside an overrepresentation of workers with qualifications misaligned with current labour market needs (Kurta, 2025[29]). Employers also report widespread hiring difficulties, with an estimated 11 814 vacancies in Republika Srpska and 5 601 in the Federation of Bosnia and Herzegovina left unfilled (Federal Employment Institute Sarajevo, 2025[49]; Public Employment Service of Republika Srpska, 2024[26]). Even among those in employment, 59% report unmet needs for further training and skills development (ETF, 2025[50]).
These trends reveal a paradox in which high unemployment co-exists with widespread labour shortages,18 underscoring a persistent structural mismatch between jobseekers’ skills and employers’ needs. Importantly, the intensity and nature of these mismatches vary significantly across sectors, with those more prominent in sectors undergoing technological change or higher skill requirements, such as manufacturing and ICT. Without stronger investment in adult education and lifelong learning, particularly opportunities for reskilling and upskilling tailored to sector-specific needs, the gap between labour supply and demand risks becoming further entrenched, constraining productivity growth and limiting SMEs’ ability to expand and compete effectively.
One key way to reduce barriers to participation is through the provision of financial incentives, although this support remains uneven19 and restricted in scope. Training costs range widely, from EUR 100 to EUR 3 500 per employee trained, averaging around EUR 750 (ETF, 2024[24]), yet there is no systematic framework to share these costs between the public sector and employers, resulting in weak employer co‑investment and continued reliance on donor-funded or temporary programmes. In 2023, the Federation of Bosnia and Herzegovina introduced a voucher-based training scheme for unemployed persons, allowing participants to select certified short-cycle programmes aligned with local market needs. While this initiative represents progress toward more demand-driven and individualised activation, its focus on the unemployed limits its potential to strengthen skills across the wider workforce. In Republika Srpska, financial incentives for training are available through the Regulation on the Procedure for Awarding Incentives for SMEs.20 Although some training is provided free of charge, most notably through chambers of commerce,21 other provision is not systematically supported by financial incentives, leaving employers, particularly SMEs, to bear the costs of workforce upskilling.
The restricted uptake of adult learning has implications for workforce (and thus SME) preparedness in the context of structural changes driven by the green and digital transitions. In terms of digital skills, while there has been progress in expanding digital upskilling opportunities (see Table 5.6), gains in basic digital literacy have been limited: in 2025, only 36.3% of adults in Bosnia and Herzegovina possessed at least basic digital skills, well below the EU average of 60.4% (see Cluster 3) (Eurostat, 2026[51]).22 This gap is significant because at least 87% of jobs in Europe now require basic digital competencies, leaving workers unprepared for local as well as regional labour market demands (CEDEFOP, n.d.[52]).
Moreover, the distribution of digital skills within the workforce is highly stratified, reflecting intersections of age, location and sector, which shape access to technology and the capacity to benefit from digitalisation. Advanced digital skills are concentrated among younger individuals, urban residents and those employed in the ICT sector, creating an overlapping group where talent and technological adoption are the highest. In contrast, older workers and rural populations, who are predominantly employed in agriculture, exhibit much lower levels of digital literacy. For example, only 8% of individuals aged 55‑64 have at least basic digital skills, compared with 44% in the European Union (Eurostat, 2024[53]). The sector’s low overall skill level (relative to the available digital solutions (ETF, 2024[54])) presents an issue in the context of the economy’s policy priority on digitalising agriculture, as outlined in the Strategic Plan for Rural Development 2023-2027 (Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina, 2024[55]). The uneven distribution of digital competencies thus limits the potential for technology adoption in agriculture and, more broadly, risks leaving key segments of the workforce behind in the digital transformation.
Equipping workers with skills for the green transition presents a similar challenge. Currently, “green jobs,” or roles related to energy efficiency, renewable energy, circularity and other environmentally sustainable sectors comprise only around 1.5% of total employment (see Cluster 2) (G-FEB, 2025[56]). Preparing for the green transition, therefore, depends less on training for new green occupations – although this remains important – and more on reskilling workers in sectors undergoing significant transformation, such as the mining sector. Indeed, the planned gradual phase-out of coal could directly affect up to 14 600 workers, with an additional 2 400 jobs in supporting industries at risk (World Bank, 2025[57]). By 2030, the sector could lose nearly half its workforce due to mine closures and downsizing as well as the decommissionning of thermal power plants, pushing local unemployment rates in mining-dependent towns toward 50%. Overall, approximately 23% of the labour force, or around 325 000 workers,23 face displacement or the need for reskilling due to the green transition (BHAS, 2025[48]; World Bank, 2025[57]).
Certain groups of workers are disproportionately concentrated in these most at risk roles. In the coal sector, 47% of employees occupy low-skilled positions, well above the economy average of 21%, and these workers face a higher risk of displacement, with 25% considered vulnerable compared with 10% of highly educated employees (World Bank, 2025[57]). Additionally, 55% of coal sector employees are aged 46-64 (Ferré et al., 2023[58]), but after decades in the sector, many are no longer competitive in the broader labour market. Both groups participate in adult learning at far lower rates than average: for example, participation among those aged 55-64 is roughly half that of 25-34-year-olds, further reducing their reskilling opportunities (ETF, 2025[50]). Consequently, without targeted reskilling and upskilling initiatives, these dynamics risk reinforcing existing inequalities and constraining the access of those workers the most at risk to emerging green sectors.
Recognising the importance of preparing the workforce, reskilling programmes for the green transition have been expanding (Table 5.5). Access, however, remains uneven and reflects pronounced territorial disparities. Coal phase-out impacts are geographically concentrated, particularly in Tuzla Canton and parts of Zenica-Doboj Canton, where a large share of affected workers live in rural or semi-rural communities. More broadly, around four-fifths of coal sector workers reside in rural areas (Ferré et al., 2023[58]). Conversely, most retraining and upskilling initiatives beyond the mining sector are concentrated in urban centres, notably capital cities. As a result, workers and SMEs in transition-affected sectors often face the greatest barriers to accessing green skills development, underscoring a growing territorial mismatch between skills provision and labour market need.
Sources: Chamber of Commerce and Industry of Republika Srpska (n.d.[59]); European Climate Initiative (2025[60]); World Bank (2025[61]); Caritas Switzerland (2025[62]); additional inputs from colleagues from the Foreign Trade Chamber of Bosnia and Herzegovina and GIZ.
In response to rapidly evolving labour market demands, particularly those driven by the twin transition, flexible adult learning solutions such as micro-credentials are gaining international recognition. Characterised by their short duration and adaptable delivery formats, micro-credentials enable individuals to acquire in-demand skills quickly, helping to bridge workforce gaps and thus address persistent skills imbalances (OECD, 2023[63]). However, in Bosnia and Herzegovina, the development and integration of micro‑credentials remain extremely limited. Current initiatives exist largely at the discussion stage, with no systematic approach to implementation and no explicit policy focus or commitment within state- or entity‑level education and training strategies.
5.2.3. Upskilling to support the adoption and use of artificial intelligence
AI is rapidly reshaping skill requirements across industries, with an estimated 32% of global professions expected to undergo significant transformation, making workforce upskilling essential for SMEs to remain competitive (European Commission, 2024[64]). In Bosnia and Herzegovina, 55% of workers report being ready to reskill in response to AI’s workplace impact, signalling broad recognition of the structural changes AI will bring to labour markets and occupational skill needs (Sarajevo Times, 2024[65]).
Training initiatives in this area generally fall into two categories: those that develop specialised AI expertise24 and those that equip workers with the general skills needed to use and interact with AI technologies, such as digital literacy, analytical thinking and creativity (OECD, 2023[66]). Both entities in Bosnia and Herzegovina have made notable efforts to expand the availability of such training, primarily through chambers of commerce and innovation centres (Table 5.6).
Sources: EUD to Bosnia and Herzegovina (2025[67]); Innovation Centre Banja Luka (2024[68]); Chamber of Commerce and Industry of Republika Srpska (2024[69]; n.d.[59]); CMBEBIH (2025[70]); Cvijanović, Milenković and Starčević (2025[71]).
Despite these positive developments, most training programmes remain largely generic, highlighting the potential to better tailor offerings to industries that are central to the economy and highly exposed to AI‑driven transformation, sectors where targeted upskilling could yield the greatest gains in productivity and competitiveness. Manufacturing exemplifies this dual dynamic. Manufacturing, which contributes roughly 12% of gross domestic product and employs around 19.5% of the workforce (World Bank, n.d.[72]; European Commission, 2025[73]), relies heavily on manual and routine tasks, leaving it particularly vulnerable to automation (OECD, 2023[66]).
On the one hand, the sector offers substantial opportunities for AI-enabled productivity gains. Globally, manufacturers adopting AI have achieved measurable efficiency improvements: enhanced quality control, predictive maintenance and data-driven process optimisation have led to significant cost savings and output growth. Moreover, automation could help alleviate Bosnia and Herzegovina’s persistent labour shortages, which are especially acute in manufacturing, where 60% of firms report difficulties hiring in 2025 (Labour and Employment Agency of Bosnia and Herzegovina, 2025[74]). By automating repetitive or hazardous tasks, companies could redeploy labour toward higher value activities such as supervision, programming and quality assurance.
On the other hand, these potential gains are unevenly distributed and come with risks. Workers in low‑skilled, manual occupations – those the most exposed to automation – are also least equipped to transition, as only 10.2% of low-educated individuals in Bosnia and Herzegovina possess at least basic digital skills, compared to 64.6% among the highly educated (Eurostat, 2026[51]). Participation in training is also markedly lower: workers with upper secondary education are half as likely to engage in training as those with tertiary education, reflecting a broader trend of limited self-directed upskilling (ETF, 2025[50]). Thus, without targeted measures to upskill these vulnerable groups, AI adoption risks deepening skill mismatches and increasing the likelihood of labour displacement, undermining the sector’s broader productivity potential.
While many AI-related training opportunities are free (Table 5.6), the absence of broader financial incentives remains a constraint. Free programmes enhance accessibility, but in practice, they predominantly reach workers who are already digitally literate and motivated, leaving a substantial portion of the SME workforce unserved. For most SMEs, the main barriers are consequently not direct fees but opportunity costs, such as production downtime or the need to reorganise shifts to release employees for training. These indirect costs, coupled with limited co-financing options for advanced, sector-specific programmes, can restrict smaller firms’ abilities to engage consistently in workforce upskilling. In both entities, SMEs can access general digitalisation incentives via public grant schemes, while in Republika Srpska, recent programmes25 have also introduced measures specifically supporting the use of AI in business operations. In principle, these instruments could also be used to support AI-related training. However, as they are not specifically designed to finance training activities, the extent to which firms use them for this purpose remains unclear. In practice, firms are more likely to prioritise foundational digitalisation needs, such as investments in infrastructure or technology, over skills development.
5.2.4. Improving talent availability by empowering women entrepreneurs
Persistent skills imbalances in Bosnia and Herzegovina are compounded by the underutilisation of women’s entrepreneurial potential, which continues to constrain efforts to build a highly skilled and inclusive workforce. Yet women remain markedly underrepresented in the labour market, with an employment rate of 41.0% compared to 66.5% for men,26 a disparity that exceeds 25 percentage points and is among the widest in the region (Eurostat, 2025[75]). Moreover, despite representing 52.4% of the population, women account for only 20% of all SME owners (World Bank, 2025[76]).
In response, governments across all levels have introduced frameworks that place a growing policy emphasis on supporting women’s entrepreneurship, although depth and coherence vary (Table 5.7). Republika Srpska demonstrates the strongest institutional commitment: the Women’s Entrepreneuship Development Strategy in Republika Srpska for the Period 2025-2031 links objectives to measurable outcomes and concrete projects across finance, skills and networking, while embedding women’s entrepreneurship within broader competitiveness goals. This approach is further supported by a dedicated Council for Women’s Entrepreneurship within the Chamber of Commerce and Industry, which contributes to strategy development by providing proposals and guidance to ensure alignment with the needs of women in the economy and to promote more systemic support measures. At the state level, the 2023-2027 Gender Action Plan provides an overarching framework, but its largely facilitative role (i.e. relying on entity-level implementation) limits its direct impact. In contrast, both the Federation of Bosnia and Herzegovina and Brčko District subsume women’s entrepreneurship under broader measures, namely those targeting youth and/or social entrepreneurship, diluting the policy focus.
Despite this growing attention, several weaknesses further constrain effectiveness. Co-ordination between the Gender Action Plan and entity-level SME strategies remains uneven, creating risks of duplication and incoherence, although institutional mechanisms in Republika Srpska have been introduced to support greater alignment.27 Continuity of targeted programmes is also limited: for example, the Federation of Bosnia and Herzegovina’s 2018-2020 Women Entrepreneurship Development Programme expired and has not been replaced. Moreover, while training and capacity-building are common features, deeper structural barriers, such as collateral requirements, discriminatory lending practices, and insufficient childcare and social infrastructure, remain largely unaddressed, limiting the sector’s ability to translate policy intent into tangible outcomes.
Sources: Federation of Bosnia and Herzegovina Federal Ministry of Development, Entrepreneurship and Crafts (2022[7]); Republika Srpska Ministry of Economy and Entrepreneurship (2021[8]); Ministry of Human Rights and Refugees Gender Equality Agency of Bosnia and Herzegovina (2023[77]); Government of Republika Srpska (2025[78]); Government of Brčko District (2020[79]).
Gender-disaggregated sectoral data are not available at the state level, in part because systematic data collection has not yet been established in the Federation of Bosnia and Herzegovina. Some indicative estimates have been generated by international organisations such as the United Nations, suggesting that women-owned enterprises tend to be concentrated in administrative and support services, wholesale and retail trade, and scientific and technical activities (UN Women, 2021[80]). A clearer picture emerges in Republika Srpska, which began collecting and reporting gender-disaggregated enterprise data in 2022. The distribution in Republika Srpska mirrors the UN estimates, with women-owned enterprises concentrated in trade (18.3%); services (17.5%); and professional, scientific and technical activities (16.9%) (Development Agency of the Republika Srpska, 2024[81]). These sectors generally offer lower entry barriers and flexibility but are typically less capital-intensive and lower growth, limiting opportunities for scale-up. This concentration likely contributes to the relatively modest contribution of women-owned SMEs to total SME net profits in Republika Srpska – 14.4% in 2023 (Development Agency of the Republika Srpska, 2024[81]).28
Thus, to increase women’s representation in entrepreneurship and support entry into higher growth sectors, structural barriers must be addressed, foremost among them access to finance. Across Bosnia and Herzegovina, women entrepreneurs consistently report that inadequate financing and limited investment options are their greatest challenges (Empow'Her Global, 2025[82]).29 Most rely heavily on personal funds (85%) or loans from friends and family (19%), while only 16% access bank loans, citing cumbersome procedures and inefficiencies. Government support mirrors these limitations, as respondants perceive many grants and incentives as overly complex, difficult to access or insufficiently promoted, reducing their effectiveness in addressing women’s financing needs (Empow'Her Global, 2025[82]).
Entity-level initiatives demonstrate both promise and ongoing challenges. In Republika Srpska, the planned Women’s Entrepreneurship Development Fund represents a positive policy commitment,30 but minimal progress has been made toward its operationalisation. Delays in the implementation of grants and subsidies in 2023 and 2024 demonstrate that, despite planned support measures, access to finance is not always delivered in a timely manner (Empow'Her Global, 2025[82]). In the Federation of Bosnia and Herzegovina, no grant line exclusively targets women-owned SMEs. Support is primarily channelled through the Self-Employment Co-Financing Programme, which focuses on unemployed or inactive women, framing entrepreneurship primarily as a tool for social engagement and inclusion rather than as a driver of broader economic growth or innovation. Furthermore, this approach leaves existing women-led enterprises with limited support for survival, development or scaling. At the cantonal level, some governments offer preferential treatment for women in grant schemes, yet these measures are largely ad hoc, vary across jurisdictions and remain insufficiently institutionalised to ensure consistent support across the economy (Kurta, 2025[29]).
Capacity building through training and mentoring remains a key pillar of support for women entrepreneurs, delivered by actors such as the Chamber of Commerce and Industry in Republika Srpska31 and non-governmental organisations like Women for Women International in the Federation of Bosnia and Herzegovina. While these initiatives, ranging from workshops and seminars to online courses and mentoring, provide important resources, they tend to focus on start-ups rather than supporting the scaling or growth of existing businesses, and coverage remains largely concentrated in major urban centres such as Sarajevo and Banja Luka.32 Additionally, evidence indicates that women entrepreneurs frequently report that these programmes fail to address their practical needs. This misalignment, coupled with limited outreach and low awareness, contributes to the low uptake of support services: for instance, despite the widespread availability of mentoring schemes, only 10% of women entrepreneurs reported having access to a mentor in 2025 (Empow'Her Global, 2025[82]). More positively, the December 2023 launch of the “Engage, Inspire, Empower – Women in Business” programme represents a targeted effort to broaden reach and provide more practical, scalable support (Box 5.5).
Launched in May 2023, the “Engage, Inspire, Empower – Women in Business” project aims to strengthen female entrepreneurship and promote women’s economic empowerment in Bosnia and Herzegovina. Operating under the Sustainable Economic and Migration Co-operation framework, the project runs until November 2027 with a budget of approximately EUR 7.6 million.
The initiative targets over 5 000 women, focusing on 3 demographic groups: 1) young women aged 16‑24 at all career stages; 2) women over 24 working in high-growth sectors such as ICT, energy, tourism, industrial food processing, services and creative industries; and 3) mid-career women aspiring to managerial or leadership positions.
Activities are designed to address key barriers to women’s entrepreneurship and career progression by:
developing entrepreneurial, business and digital skills aligned with market needs
encouraging women to pursue managerial and leadership roles
facilitating mentorship, counselling and networking through study visits, “idea-thons” and investment-readiness events.
The project not only enhances individual capacities, thereby helping women build confidence, access finance and markets, and move into leadership positions, it also strengthens the institutional capacity of support organisations. Additionally, it fosters regional and international networks of women entrepreneurs, creating a platform for knowledge exchange and sustained peer support. This combination of skills development, career advancement and network-building positions the initiative as a strategic example of integrated support for women’s entrepreneurship.
Sources: Swiss Federal Department of Foreign Affairs (2025[83]); Embassy of Switzerland in Bosnia and Herzegovina (2023[84]).
Yet finance and capacity-building initiatives alone are insufficient to fully support women’s entrepreneurship without addressing structural barriers, particularly those related to family obligations. In Bosnia and Herzegovina, women continue to shoulder the majority of unpaid care work, spending an estimated 6.5-8 hours per day on caregiving tasks (Empow'Her Global, 2025[82]), which restricts the time and flexibility needed to start or expand a business. While self-employed women are legally entitled to maternity benefits if they have contributed fully to social security for at least one year prior to leave, many pay only the minimum contributions due to financial constraints, resulting in substantially lower benefits than those available to women working as traditional employees (Obradović, 2022[85]). In the Federation of Bosnia and Herzegovina, fragmented and unclear procedures for claiming maternity benefits further undermine protection for self-employed women.
Limited access to affordable childcare exacerbates these challenges. Bosnia and Herzegovina offers no legal guarantee of early childhood education and care for children under five, and full-day preschool costs (ranging from BAM 300 to BAM 500 [EUR 150-250]) are prohibitively high for many families. Indeed, these fees represent roughly 20-35% of the average monthly net earnings (BAM 1 381,33 or EUR 700), posing a major barrier to access, particularly for lower income households. In contrast, one year of pre-primary education immediately before compulsory schooling is mandatory, yet access to earlier early childhood education and care remains scarce and uneven across the economy (Eurydice, 2025[86]). Expanding such access would bring both social and economic benefits: UNICEF estimates that broader preschool coverage could enable over 2 200 women to join the labour market annually, generating around BAM 500 million in economic value over 30 years (Popović, 2024[87]). Unless these foundational constraints on women’s time and economic participation are addressed, women entrepreneurship policies are likely to yield only limited and short-lived outcomes, as they do not alter the conditions shaping women’s capacity to participate fully in economic life.
The way forward
Introduce sector skills councils at the entity level to bring together employers, training providers and policymakers to help identify evolving sector-specific needs and translate them into actionable curriculum and workforce programme adjustments. Bosnia and Herzegovina remains the only WBT economy without such a council, which limits its capacity to systematically align training provision with labour market demand. Together with the skills barometer planned under the TVET System Strengthening Project, these can form a strong basis for skills intelligence for Bosnia and Herzegovina.
Develop a framework of financial incentives for adult training at the entity level that is consistently funded and extends beyond the unemployed to include employed workers, particularly those in SMEs. Mechanisms could include learning accounts (Box 5.6), training vouchers, employer tax credits and co-financing schemes, with priority placed on green transition, digital and AI skills development. Eligibility criteria should be aligned with sectors facing documented skills shortages and complemented by targeted rural outreach measures (e.g. mobile training provision, partnerships with local VET centres and public employment services, flexible delivery formats) to ensure reaching workers in rural and remote areas.
Establish coherent frameworks regulating for micro-credentials. Bosnia and Herzegovina would benefit from developing frameworks that define clear standards for micro-credential quality assurance, learning outcomes, recognition and portability across entities and cantons. These should draw on the EU Council Recommendation on a European Approach to Micro-credentials (2022), including provisions for transparency, modular design, stackability and alignment with national qualifications frameworks. To ensure coherence in implementation, these standards should be embedded in the relevant legislation, such as Laws on Higher Education or Laws on Adult Education at entity and cantonal level, and further specified through bylaws that set out practical requirements for higher education institutions, adult learning providers and non-formal training centres.
Develop sector-specific artificial intelligence training programmes aligned with priority economic sectors, such as manufacturing and agri-food processing (Box 5.7). Economy-wide initiatives could establish dedicated training modules through existing VET institutions or public employment services, while international collaboration and networking offer additional pathways. In particular, association with the Digital Europe Programme enables Bosnia and Herzegovina to access sectoral AI testing and experimentation facilities and to expand or establish digital innovation hubs providing tailored AI skills development for SMEs and their workforce. Complementary participation in EU programmes such as Erasmus+, Horizon Europe, and the European Institute of Innovation and Technology could further support curriculum development, trainer upskilling and cross‑border knowledge transfer.
Make the collection of gender-disaggregated data obligatory across government institutions and publicly funded initiatives to build a robust evidence base for women's economic engagement. Priority should be given to addressing existing gaps in the Federation of Bosnia and Herzegovina by introducing systematic data collection across key metrics already captured in Republika Srpska, such as business registration records identifying women-owned enterprises and property ownership registries, while ensuring harmonised methodologies across entities. At the same time, additional indicators should be developed across both entities, including education and labour market outcomes to track transitions from education to employment or entrepreneurship, participation in training and mentoring programmes, and financial sector data on loan approval rates and access to credit.
Austria’s Bildungskonto (“learning account”) is an example of a regional financial incentive mechanism that supports adult learning and helps broaden access to continuing education and training for employed and unemployed adults alike. Key features of the Bildungskonto approach include:
Individual-level cost support: Adults can claim public contributions to the costs of job-related education and training. For example, in Vienna, the “Bildungskonto für alle” reimburses up to 50% of eligible course costs (up to around EUR 500), with no upper income limit for potential beneficiaries.
Broad eligibility: Bildungskonto schemes typically support a wide range of adult learners, including employees, those in part- or marginal employment, self-employed individuals with a limited number of employees, and individuals on parental leave or in career transition. In Upper Austria, for instance, the scheme reimburses a share of training costs (e.g. 30% up to a set ceiling) for adults regardless of employment status, extending additional support to small business owners.
Relevance to labour-market needs: Training eligible for funding must be professionally oriented and linked to skills that improve employability, helping individuals adapt to labour market demands.
The Bildungskonto model shows how regional-level frameworks can deliver consistent, demand-driven financial incentives for adult training that benefit employed workers and small business owners, not only the unemployed. Tying such mechanisms to training that supports digital, green and other priority skills enhances their contribution to lifelong learning and workforce resilience. This example can inspire similar approaches in Bosnia and Herzegovina to encourage broader participation in adult learning across entities and cantons.
Sources: Vienna Employee Promotion Fund (n.d.[88]); CEDEFOP (2025[89]).
AgrifoodTEF is a European Union Testing and Experimentation Facility established under the Digital Europe Programme to accelerate the adoption of artificial intelligence (AI) and robotics in the agri-food sector. Launched in January 2023 with a budget of EUR 60 million, the 5-year initiative is co-ordinated by Fondazione Bruno Kessler and operates through national nodes in France, Germany and Italy, with satellite nodes in Austria, Belgium, the Netherlands, Poland, Spain and Sweden.
The facility provides small and medium-sized enterprises (SMEs) and start-ups with access to real‑world testing environments across seven sectors: arable farming, horticulture, tree crops, viticulture, greenhouse production, livestock farming and food processing. Its published catalogue (https://agrifoodtef.eu/catalogue-of-services) lists more than 200 AI services, over 50 of which are already being delivered. These range from audit services for explainability and ethics, predictive models for yield and weed detection to computer-vision-based quality assessment and training in AI governance. Services are modular and can be tailored to firm-specific needs.
Importantly, SMEs from Bosnia Herzegovina can access these services free of charge or at heavily subsidised rates under EU state aid rules (larger companies pay market rates). As Bosnia and Herzegovina participates in the Digital Europe Programme, SMEs in its agri-food sector can access the same subsidised support as EU-based SMEs. This offers a practical pathway to test and validate AI applications under real operating conditions and to develop workforce competences in AI and emerging technologies, without prohibitive cost barriers.
Source: European Commission (2025[90]).
In Bosnia and Herzegovina, the rapid pace of change in global markets has exposed limits in the ability of education and training systems to equip the workforce with the skills SMEs require. For smaller businesses, which often operate under financial and personnel constraints, strengthening social capital – the networks, trust and shared practices that support collaboration and resilience – is as critical as developing human capital.
The social economy34 provides a key avenue for SMEs to cultivate and draw on social capital. Engagement in these networks allows firms to access alternative knowledge, pool resources and co-create innovative solutions to economic and social challenges. While the social economy is well-established internationally, encompassing over 4.3 million organisations and accounting for 6.3% of Europe’s workforce (European Commission, 2025[91]), it is still emerging in Bosnia and Herzegovina, offering challenges and opportunities for expanded participation and integration.
Against this backdrop, this section examines the key building blocks for strengthening the social enterprise ecosystem in Bosnia and Herzegovina, focusing on improved mapping alongside the development of a more supportive legal and institutional environment.
5.3.1. Mapping the social enterprise landscape
Understanding the structure and scope of the social enterprise landscape is a necessary first step toward fostering the broader development of the social economy. Establishing dedicated registers for social enterprises is a key instrument in this process, as it allows public authorities to systematically identify, monitor and analyse the sector’s evolution.
Presently, only Republika Srpska has an operational social enterprise register. As of January 2026, six organisations (three enterprises and three agricultural co-operatives) have been formally granted social enterprise status, with one additional application pending.35 Government officials acknowledge that many more social enterprises are active but remain unregistered, though no official estimates exist, creating a substantial gap between the de jure and de facto size of the sector. The register, managed by the Ministry of Economy and Entrepreneurship, is not yet publicly accessible, limiting transparency and reducing its utility for policy planning and research.
In the Federation of Bosnia and Herzegovina, similar initiatives are planned but not yet operational. The Federal Ministry of Development, Entrepreneurship and Crafts is tasked with establishing an electronic register of social enterprises, but this cannot be implemented until parliament adopts the Law on Social Entrepreneurship, with the establishment of the register only expected in the second half of 2026. Until then, understanding the scope of social enterprises in the Federation of Bosnia and Herzegovina relies on rough estimates: the ministry currently suggests around 25 social enterprises are operating, although the basis for this figure is unclear.36
Whether using estimates based on entity-level administrative data (31)37 or external sources, such as the “Road Map of Social Enterprises,” which currently lists 25 operational social enterprises in Bosnia and Herzegovina (Youth Alliance – Krusevo, n.d.[92]), the number of social enterprises remains far below levels seen in neighbouring economies of similar size. For example, Croatia counts at least 526 registered social enterprises,38 highlighting the sector’s underdevelopment in Bosnia and Herzegovina and its potential for expansion under a supportive policy environment (European Commission, n.d.[93]). Yet despite the limited recognition and incomplete mapping of the sector, those businesses already operating as social enterprises in Bosnia and Herzegovina illustrate the value of socially driven business models through their positive impact in local communities (Box 5.8).
Social enterprises in Bosnia and Herzegovina demonstrate an increasingly diverse range of social missions, moving beyond traditional work-integration models to address broader societal and environmental challenges. This diversity reflects the adaptability of the sector and the potential for social enterprises to respond to gaps left by public and private actors.
Youth entrepreneurship: The Mozaik Foundation supports young social entrepreneurs by providing holistic assistance to individuals with entrepreneurial ideas, fostering skills development and empowerment among youth.
Labour market integration: Vaša Prava offers free legal aid to asylum seekers, refugees, migrants, displaced persons and minority groups, facilitating their integration into society and the labour market.
Sustainable local development: The co-operative Zadruga Budućnost produces organic, locally grown food, promoting sustainable agricultural practices while contributing to local economic development.
Renewable energy and energy efficiency: The Green Energy Cooperative harnesses local renewable resources (e.g. forest biomass, manure, wind) to construct solar systems. Members pool human, financial and material resources to invest in renewable energy projects that benefit their communities.
Collectively, these examples indicate that social enterprises in Bosnia and Herzegovina are beginning to expand the definition of social impact, integrating economic, social and environmental objectives. However, the sector remains small, fragmented and largely informal, highlighting the need for stronger institutional support, accessible registration processes and targeted incentives to scale these initiatives and maximise systemic impact.
Source: OSCE (2024[94]).
5.3.2. Creating an enabling environment for social enterprises
Building on the mapping of Bosnia and Herzegovina’s nascent social enterprise ecosystem, efforts to strengthen the enabling environment have focused on formalising the sector through legal and strategic frameworks (Table 5.8). Both Republika Srpska and the Federation of Bosnia and Herzegovina have developed broadly aligned legislation through dedicated social enterprise laws, which are flexible in terms of their legal form and the definition of a social mission, helping to avoid overly restrictive approaches that could hinder the growth of the sector. Social enterprises can operate in any legal form (e.g. companies, foundations, associations, co-operatives) and pursue a wide range of socially oriented activities. To qualify as having a “social mission,” enterprises may either employ hard-to-employ groups, such as the long-term unemployed, older workers or people with disabilities (Republika Srpska requires at least 30% of employees, while the Federation of Bosnia and Herzegovina does not set a minimum); or carry out or finance initiatives in areas such as social care, education or environmental protection. This broad scope allows for diverse models, rather than limiting the sector to traditional work-integration enterprises.
Strategic guidance is also recognised as essential for developing the sector. Both Republika Srpska and the Federation of Bosnia and Herzegovina have committed to developing dedicated strategies for social entrepreneurship, though progress remains uneven: in Republika Srpska, the strategy has been formally adopted; in the Federation of Bosnia and Herzegovina, strategy development has yet to begin. While these emerging legal and strategic frameworks provide an initial foundation for formalisation, their impact will hinge on consistent implementation, accessible registration procedures and systematic monitoring. In Brčko District, the Social Inclusion Strategy 2021-2027 also underscores the importance of a dedicated law on social entrepreneurship, yet, at the time of writing, no concrete steps had been taken to advance these commitments (UNICEF, 2020[95]).
Sources: Federation of Bosnia and Herzegovina Federal Ministry of Development, Entrepreneurship and Crafts (2022[7]); Republika Srpska Ministry of Economy and Entrepreneurship (2021[8]); Government of Brčko District (2020[79]); Government of Republika Srpska (2021[96]); adapted from information provided by the governments of the Federation of Bosnia and Herzegovina and Republika Srpska during the assessment period.
In tandem with these frameworks, efforts have also focused on strengthening institutional support for social enterprises, although to varying degrees of progress. In Republika Srpska, the creation of a Council for Social Entrepreneurship in 2025 marks a key accomplishment, bringing together a wide range of stakeholders: representatives from public institutions, the Chamber of Commerce, the Development Agency, the Employers’ Union, associations and organisations pursuing social missions, and social enterprises themselves. The council’s primary mandates are guiding sector development; co-ordinating initiatives; and ensuring dialogue between government, business and civil society actors. In the Federation of Bosnia and Herzegovina, a similar council is planned to support the development of the entity’s aforementioned Strategy for Social Entrepreneurship. However, no concrete steps have been observed toward its establishment. The absence of this institutional body delays the formulation of the strategy and slows the implementation of targeted support programmes. It also more broadly limits the government’s capacity to systematically analyse and respond to social enterprises’ needs.
Part of the low registration rates among social enterprises in Bosnia and Herzegovina reflects the voluntary nature of registration. In Republika Srpska, obtaining the official status of social enterprise from the ministry is voluntary and only required for those wishing to be formally recognised as such. Low uptake, therefore, likely reflects a limited willingness to register, given the relatively resource-intensive obligations involved – such as submitting detailed documentation to the Ministry of Economy and Entrepreneurship, including balance sheets, income statements, business plans, decisions on profit distribution (and, where relevant, reinvestment plans) and copies of employee opinions (Republika Srpska Ministry of Economy and Entrepreneurship, 2022[97]) –in the absence of accessible or well-targeted incentives to offset these costs. In the Federation of Bosnia and Herzegovina, the situation is more structural: a rulebook or ordinance governing registration procedures has not yet been adopted, meaning that social enterprises currently do not have a formal pathway to register.
The challenge is further compounded by the existence of separate registers across the two entities and Brčko District. Enterprises that operate across the economy likely will have to complete distinct registration processes unless an interoperable recognition system is introduced – an unlikely development given that registers are not publicly accessible online and the general business registers of the entities and the Brčko District are not interconnected (OECD, 2025[23]). This duplication increases administrative burdens, reduces efficiency and discourages formal registration when businesses can continue to operate as de facto social enterprises.
Although legal frameworks in both entities envisage incentives, such as tax and customs privileges for registered social enterprises, these measures are largely underdeveloped or inaccessible in practice. In Republika Srpska, social enterprises may theoretically benefit from incentives available for all SMEs,39 but these are not tailored to their dual mission of financial sustainability and social impact. As a result, critical needs (e.g. financing socially oriented activities, managing and reporting on social outcomes, complying with additional regulatory requirements, accessing impact-driven markets) remain largely unsupported. A dedicated fund for social innovations is planned to address this gap by introducing dedicated financing, but until it becomes operational, meaningful support remains limited. Financial constraints are compounded by the low scale of available funding: in 2023, funding specifically dedicated to supporting social enterprises in Republika Srpska amounted to only BAM 21 300 (approximately EUR 10 000) (Development Agency of the Republika Srpska, 2024[81]), while the Federation of Bosnia and Herzegovina does not have a dedicated budget line for social enterprises.
However, the most significant challenge in fostering an enabling environment for social enterprises is the absence of a systematic assessment of the ecosystem’s needs. To date, no comprehensive study or survey has been undertaken by relevant institutions – such as the entities’ Chambers of Commerce or ministries like Republika Srpska’s Ministry of Economy and Entrepreneurship or the Federation of Bosnia and Herzegovina’s Ministry of Labour and Social Policy – leaving policymakers without a solid evidence base. This lack of data hampers the identification of gaps in areas such as awareness, access to finance, regulatory frameworks and market opportunities, and prevents a proper evaluation of the effectiveness of existing support measures, including capacity-building programmes and fiscal incentives. Establishing such an assessment would also allow for measuring levels of awareness among social enterprises and gathering feedback on whether current interventions address their needs. Without this evidence, support risks remaining fragmented and insufficiently targeted.
The way forward
Strengthen institutional co-ordination and support structures. In Republika Srpska, the newly established Council for Social Entrepreneurship should be fully operationalised with adequate resourcing and a formal role in policy development, implementation monitoring and inter-agency co-ordination. In the Federation of Bosnia and Herzegovina, establishing the planned council is a necessary first step to steer strategy preparation, structure consultation with civil society and social enterprises, and provide a focal point for co-ordinating entity and cantonal efforts. Strengthening these institutional arrangements would help create continuity across initiatives and support more effective ecosystem development.
Conduct a systematic, evidence-based assessment of the sector. Respective entity governments should undertake a comprehensive mapping of social enterprises’ needs, including surveys on awareness, access to finance, regulatory barriers and market opportunities. This could be integrated into annual employer surveys with a focus on social enterprises or conducted as a dedicated study. A robust evidence base would enable policymakers to identify the most pressing gaps, ensuring that initial support measures are prioritised effectively given the sector’s limited resources and evolving needs.
Develop publicly accessible registers of social enterprises. Republika Srpska could ensure its register is fully online, potentially housed on the Ministry of Economy and Entrepreneurship’s website, while the Federation of Bosnia and Herzegovina could prioritise public availability as it develops and publishes its own register. These online registers would allow the government and customers to identify social enterprises operating across entities. Where feasible, interoperable registers could reduce administrative burdens, incentivise formal registration and provide policymakers with a clearer picture of the sector’s scope. In parallel, governments should work to actively communicate the benefits of registration, including potential access to incentives, enhanced visibility and credibility with customers, and eligibility for public procurement preferences, to encourage formalisation.
Introduce a coherent package of financial incentives to encourage the formalisation and scaling of social enterprises. This should include the operationalisation of dedicated funding mechanisms foreseen in entity-level legal frameworks, such as a social innovation fund in Republika Srpska and a dedicated budget line in the Federation of Bosnia and Herzegovina, alongside tailored grant, co-financing and loan instruments delivered through development banks. Making formal registration a prerequisite for accessing these incentives would help offset compliance costs and create a clearer value proposition for registration, supporting broader uptake. Experience from EU member states shows that linking benefits to formal social enterprise status can motivate formalisation and sustain growth pathways (Box 5.9).
Several European Union (EU) member states use financial incentives to encourage social enterprises to formalise and register for a dedicated legal status. In these systems, access to tailored grants, tax relief or subsidised finance is conditional on registration, creating a clear value proposition that offsets the administrative effort of compliance. Illustrative approaches include:
Bulgaria: Designated social enterprises can benefit from financial support packages, including subsidised vocational training for employees in specific categories, and dedicated access to adult learning programmes.
France: Enterprises holding an approved social enterprise label can access solidarity finance instruments, tailored support from development banks, preferential access to public procurement processes, eligibility for regional small and medium-sized enterprise (SME) support schemes, and participation in targeted funding calls.
Latvia: Registered social enterprises may access development grants and, where they employ persons with disabilities, certain tax reductions and preferential procurement treatment.
Romania: Work-integration social enterprises that obtain formal status qualify for local tax exemptions, hiring subsidies for workers from vulnerable groups and reserved access to social clauses in public procurement procedures.
These approaches illustrate how linking financial support to formal registration can strengthen incentives for enterprises to enter the formal social economy ecosystem, improve the visibility of the sector and enhance accountability for social impact. For Bosnia and Herzegovina, where registration remains voluntary and uptake low, introducing a coherent package of financial incentives tied to formal status would reinforce the rationale for registration, support scaling of mission-driven activities, and create a clearer entry point for public policy engagement at entity and cantonal levels.
Source: OECD/European Union (2025[98]).
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← 1. These guidelines are formally entitled, “Guidelines for the Implementation of the Common Core Curriculum for Cross-Curricular and Interdisciplinary Areas”. For more information, see: https://aposo.gov.ba/sadrzaj/uploads/Smjernice-kroskurikularno-2.pdf.
← 2. Information provided by colleagues from the European Training Foundation.
← 3. This manual, entitled the Teacher Training Manual for the Integration of Digital and Entrepreneurial Key Competences in Teaching and Learning, was developed within the framework of the Education for Employment project.
← 4. Examples of donor-assisted initiatives include the United Nations Development Programme’s Economic Governance for Growth 2 Project (https://www.undp.org/bosnia-herzegovina/projects/egg-2-project) and the EU for Vocational Education and Recognition of Skills in BiH project (https://eu4vet.org/index.php/about-us-menu/project-description).
← 5. Bosnia and Herzegovina has not participated in the OECD Programme for International Student Assessment (PISA) since 2018, limiting the OECD’s ability to compare performance and progress with the other economies in the WBT region.
← 6. Delivery to date has primarily been through donor-supported pilots, including those implemented under GIZ, Swiss-supported programmes, DualSci and the TVET BiH project, alongside emerging cantonal and entity-level initiatives.
← 7. These profiles include cutting machine operator, car mechatronics technician, plastic processing operator, car repair mechanic, CNC (computer numerical control)/machine tool operator, bank technician, and selected electrical and mechatronics profiles.
← 8. The exception is in the Zenica-Doboj Canton of the Federation of Bosnia and Herzegovina. See: https://www.pkzedo.ba/ba/obrazovanje_srednje/BAZA-PODATAKA-DVA-MJESTA-UCENJA-II2024-FINAL.xlsx.
← 9. This estimate is based on data from the European Training Foundation. It should be noted that the data refer to 2020 and may thus not fully reflect current business perspectives. They, nevertheless, provide a useful starting point for assessing the gap between expressed interest and actual commitment. See: https://www.etf.europa.eu/sites/default/files/document/Country%20Fiche%202020%20Bosnia%20and%20Herzegovina%20Education%20Training%20and%20Employment%20Developments_0.pdf.
← 10. These include the West Herzegovina Canton, Central Bosnia Canton and Bosnian-Podrinje Canton.
← 11. In the Federation of Bosnia and Herzegovina, proposed amendments to the Law on Income Tax would exempt employers from paying income tax on compensation paid to full-time students in work-based learning, using a progressive scale linked to the average net salary. In Republika Srpska, proposed changes would introduce an income tax exemption on student compensation up to a defined ceiling (e.g. 50% of the minimum salary) to incentivise employer participation in practical training.
← 12. In 2021, the “Guidelines for Improving Co-operation between Businesses and Vocational Schools at the Local Level” were developed by the Chamber of Commerce and Industry of Republika Srpska with the support of all regional chambers, member companies of the Chamber of Commerce and development agencies. However, this guide covers practical training rather than dual VET explicitly. See: https://komorars.ba/wp-content/uploads/2023/08/PK_Smjernice.pdf.
← 13. “Skills intelligence” can be defined as the “process of identifying, collecting, analysing, synthesising and presenting quantitative or qualitative information on skills and the labour market to: (i) identify key trends and demands in the labour market, (ii) assess, anticipate and forecast skills needs, (iii) address skills gaps and mismatches and (iv) adapt provision of education and training accordingly.” For more information, see: https://www.cedefop.europa.eu/en/tools/vet-glossary/glossary/kompetenzanalytik.
← 14. Information provided by the government of the Federation of Bosnia and Herzegovina during the assessment period.
← 15. This project is implemented by GOPA WorldWide Consultants and funded by the Swiss Agency for Development and Cooperation. The project will run from 2023 to 2029, with a total budget of EUR 3.5 million (CHF 3.3 million).
← 16. The emigration rate is estimated by dividing the number of emigrants originating from a given economy (Mi) by the sum of those emigrants and the total native population from that economy, whether residing domestically or abroad (Mi + Ni). To approximate the total native population (Ni), the number of foreign‑born residents (immigrants) – as reported in the United Nations Department of Economic and Social Affairs’ international migrant stock by destination – is subtracted from the economy’s total population. The data available in this database to calculate the regional average included: Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, Serbia, and Türkiye.
← 17. Participation is likely even lower in rural areas and among workers in traditional sectors such as agriculture, mining and low-value-added manufacturing, although no data are currently available.
← 18. Some measures have been undertaken to address high unemployment, especially among target groups (e.g. long-term unemployed, first-time job seekers, women, persons with disabilities, etc.). For example, in Republika Srpska, the Programme for Employment and Self-employment of Vulnerable Categories offers funding to either support job placement (via wage subsidies to employers) or enable self‑employment/start‑ups (via grants to individuals). See: https://zzzrs.net/vijesti/019c04ef-7af7-754d-afb0-0aefaa935de2.
← 19. Most cantons in the Federation of Bosnia and Herzegovina lack dedicated budget lines to support adult learning.
← 20. These incentives subsidise training provided either on company premises or through the Chamber of Commerce and the Development Agency.
← 21. This is primarily delivered through the Chamber of Commerce and Industry of Republika Srpska and the Foreign Trade Chamber of Bosnia and Herzegovina.
← 22. It is important to note that the new Eurostat methodology introduced in 2021 can reduce the comparability of trends.
← 23. This calculation comes from the Agency for Statistics of Bosnia and Herzegovina’s recent estimates that the labour force currently totals 1.41 million.
← 24. While there is no standard definition for what constitutes “specialised AI knowledge and skills,” this tends to involve computer programming, database management (especially for big data), and skills for data analysis and visualisation. It might also involve knowledge on specific AI models, tools or software. For more information, see: https://www.oecd.org/en/publications/oecd-employment-outlook-2023_08785bba-en/full-report/skill-needs-and-policies-in-the-age-of-artificial-intelligence_fe530fbf.html.
← 25. Specific support for AI is prescribed in Article 14 of a 2025 regulation (see: https://vladars.rs/sr-SP-Cyrl/Vlada/Ministarstva/mpp/pravniokvir/mspp/PublishingImages/Pages/default/Уредба%20конкурентност.pdf).
← 26. These figures refer to individuals aged 15-64.
← 27. A Co-ordination Board has been established at the level of the government of Republika Srpska to oversee the implementation of the Gender Action Plan 2023-2027. Chaired by the Centre for Gender Equity and Equality, the Co-ordination Board brings together representatives from all relevant ministries and is complemented by the centre’s participation in working groups for key strategic documents, such as SME and women’s entrepreneurship strategies.
← 28. It is important to note that these data only include legal entities (and consequently do not account for crafts).
← 29. This survey included 168 respondents. As a result, while it provides useful insights, the results may not fully reflect the experiences of the wider population of women entrepreneurs in the economy.
← 30. This is identified as an intended outcome of the Women’s Entrepreneuship Development Strategy in Republika Srpska for the Period 2025-2031.
← 31. The Council for Women’s Entrepreneurship within the Chamber of Commerce and Industry has, over its 15 years of operation, delivered more than 60 training sessions and workshops to more than 1 500 participants, organised more than 20 business missions and study visits to facilitate knowledge exchange, and hosted 8 conferences and 4 fairs to promote women’s entrepreneurship, alongside other targeted capacity-building activities.
← 32. One example from Banja Luka is a pilot initiative entitled “Through Creative Thinking to Women’s Entrepreneurship,” launched in 2022 and implemented by i-Diaspora in co-operation with the Centre for Gender Equity and Equality of Republika Srpska. The initiative aimed to support women’s entrepreneurship by providing a free 4-day training programme on “Design Thinking and Entrepreneurship” for 30 prospective women entrepreneurs. Following the training, grants were awarded to the three most promising business ideas, alongside three months of mentoring support. Financial support for the initiative was also provided by the Entrepreneurship Academy and the MI-BOSPO Microcredit Foundation. For more information, see: https://www.vladars.net/sr-SP-Cyrl/Vlada/centri/gendercentarrs/media/vijesti/Pages/Javni-poziv-projekat-e-platforma.aspx?fbclid=IwY2xjawJ8Ls1leHRuA2FlbQIxMQABHozfs086iP6GSftsaR5WeMKp2z2Hw3kuxo3oiDU8dVCQLtkFfxyks2VggeP9_aem_71QO0zC6DC8b0GATtBQdQg.
← 33. This represents the annual average of average monthly net earnings of employed individuals in 2024. For more details, see: https://bhas.gov.ba/Calendar/Category?id=13&page=8&statGroup=13&tabId=0.
← 34. The OECD defines the social economy as comprised of “a set of organisations such as associations, co‑operatives, mutual organisations, foundations, and, more recently, social enterprises. In some cases, community-based, grassroots and spontaneous initiatives are part of the social economy in addition to non-profit organisations, the latter group often being referred to as the solidarity economy. The activity of these entities is typically driven by societal objectives, values of solidarity, the primacy of people over capital and, in most cases, by democratic and participative governance.” For more information, see: https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0472.
← 35. Information provided by the government of Republika Srpska during the assessment period.
← 36. Information provided by the government of the Federation of Bosnia and Herzegovina during the assessment period.
← 37. There are currently not any social enterprises in Brčko District, although there are ongoing efforts to support the establishment of the first one. For more on these efforts, see: https://seibrcko.ba/en/focus-of-the-sei-project-establishing-the-first-social-enterprise-in-brcko.
← 38. Looking at 2024 population figures, Bosnia and Herzegovina has around 3.4 million residents, whereas Croatia has around 3.8 million.
← 39. For instance, social enterprises are eligible to apply for financial incentives for the purchase of equipment and digitalisation support, although this call via the “Decree for Improvement of Competitiveness” is not specific to these enterprises. See: https://vladars.rs/sr-SP-Cyrl/Vlada/Ministarstva/mpp/pravniokvir/mspp/PublishingImages/Pages/default/Уредба конкурентност.pdf.