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LocalAct is a methodology of harmonized local work on the development of small and medium-sized companies and entrepreneurs (SMEE) according to the principles and standards that are valid in the countries of the European Union. LocalAct is based on the localization of the European Small Business Act, as a framework of the EU policy focused on SMEs and Index of Policies for Small and Medium-Sized Enterprises (SMEs) and it presents a unique attempt in the European practice so far. It enables fast focusing and concentration of local resources on improvement of business environment and instruments of support for the SMEEs, which the companies consider important for their businesses and development, and which the local government considers feasible, from the point of view of their capabilities and resources. The methodology was developed within the CREDO Krajina Project and it has been tested until now in 18 cities and municipalities in Bosnia and Herzegovina.

Overview of Identified Priority Indicators /Measures /Instruments
from the Point of View of Sensitivity and Feasibility:

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LocalAct – Methodology of Localization of the Small Business Act

Based on the three published public calls for financing of projects, grants in the amount of BAM 1,639,131 were disbursed to the companies. Observed by business activities, the companies from the metal industry were paid grants in the total amount of BAM 700,131, the wood processing industry companies were paid grants in the total amount of BAM 519,881, the food industry companies were paid grants in the total amount of BAM 221,955 and the leather and footwear industry were paid grants in the total amount of BAM 197,226.

Structure of the allocated grants of the Development Fund of CREDO Krajina project by sectors (in BAM)

It is interesting to emphasize that, based on the approved BAM 1,639,193 grant funds from the CREDO Krajina Project Development Fund, the companies invested in their development projects additional BAM 5,993,874, so that, on average, an additional BAM 3.66 was invested on BAM 1 of the grant funds.

The structure of financing development projects by sectors (in BAM)

Based on the supported projects that the companies have already implemented, the total of 62 priority sector companies were supported through the grant funds, by which 489 new jobs were created. The wood processing industry created 171, the metal industry created 147, the leather and footwear industry created 121 and the food industry created 50 new jobs.

New jobs by sector

Planned and achieved new jobs

This way, the goal set in the project task to support opening of 200 new jobs was exceeded by almost two and a half times.

Not only the industrial companies were supported through the CREDO Krajina Project Development Fund but also two local self-governance units and seven non-profit organizations, whose projects were aimed at the improvement of the business infrastructure and environment, as well as capacity development and measures of support for the improvement of the companies’ competitiveness.

Supported projects of self-governance units and non-profit organizations

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–  Grant beneficiaries in the first public call – local language
–  Grant beneficiaries in the second public call – local language
–  Grant beneficiaries in the third public call – local language

Infographic with results of CREDO Krajina project:

Flood Recovery Fund

In May 2014, BiH was hit by severe floods that caused huge damages on business and industrial facilities, plants, raw materials and finished goods, in an estimated amount of EUR 346.55 millions. The Government of Sweden and Enterprise Development Agency Eda together with the Association NERDA, a partner in the implementation of the whole project, reacted fastest of all and for more than 50 companies hit by the floods, they approved grants in the amount of almost BAM one million for the construction works on the repair of their facilities, purchasing and repair of machines and equipment, and for purchasing of necessary raw and production materials. This was the first aid for recovery from floods that the companies received.

Video clip with statements on the subject of Workshops and the Voucher program:

In order to provide support to directors of companies in solving concrete problems which require specific knowledge, within the CREDO Krajina project, a Voucher Program for co-financing of consulting services was implemented. Through the Voucher Program of the project, the companies were awarded BAM 115,692 and the companies invested additional BAM 77,802. In this way, 21 companies successfully realized different business improvement projects. A significant number of consulting services was related to topics which were previously presented and discussed at workshops and trainings (e.g. consulting services for improvement of processes by using 5S system which companies Tri best and Spektra DMG used together after the workshop Improvement of processes and procedures in industrial enterprises).

Gallery of photographies of Workshops and consulting services from Voucher program:

At the initiative of directors, most sector board meetings were held in companies, which was an opportunity for other members of the sector board to get relevant information about the company which had a role of a host. The meetings have contributed to strengthening mutual trust, and after getting acquainted with production capabilities and available technologies, it happened quite often that spontaneous cooperation on concrete business operations was achieved. Also, during the project implementation, sector boards were recognized as an important mechanism for improving cooperation between companies and supporting organizations and institutions.

Video clip with statements on the subject of Sector Boards:

Study Visits

In accordance with concept of work of the sector boards, the second study visit was organized, when representatives of companies had an opportunity to learn on way of working of companies in the same sector in the region and the EU. Depending on interests and specific challenges faced by companies, the study visits included different companies, organizations, institutions, fairs etc.

The first study visit of the metal sector was organized in April 2014 and it included companies and organizations which have knowledge and experience in areas that are, according to preliminary analysis, underdeveloped in our enterprises. These are: Cimos dd/Cimat doo, Koper; Iskra mehanizmi, Kropa; Industrial Association of Toolmakers – TECOS, Celje; Cluster of Toll Manufacturers of Slovenia, Celje and Energetika Ruše, Ruše – Maribor. In order to gain insight into development of industrial technology and new trends, the second study visit was organized in April 2015 and it included a visit to the fair in Hannover and Volkswagen factory in Wolfsburg.

Representatives of sector board of wood processing industry, as part of the first study visit, visited HIZ Wood Innovation Centre in Zeltweg which operates within the wood processing cluster in Styria, as well as trade fair for wood processing equipment in Nuremberg. Within the second study visit in May 2015, visits to producers of furniture in Austria and Germany (Eham, TEAM 7, Daxenberger and sales center WEKO) and the University of Applied Sciences in Rosenheim were organized.

The first study visit of the food industry sector board was organized in April 2014 and included the following companies and organizations: Sugar Factory Crvenka, Zdravo Organic, DEM, Winery Kovacevic and Institute of Food Technology in Novi Sad. During the visit to the Institute, a model of cooperation between scientific institutions and enterprises was presented, which includes using resources of scientific institutions (e.g. modern laboratories, small food processing plants, etc.) aimed at economy development. The second study visit was organized in March 2015 and it included visit of the Anuga Food Tech fair in Cologne as well as visit of the Tönnies factory, which has the latest technology in meat processing and laboratory for quality control of the final products.

Representatives of the footwear sector board visited companies Planica and Haix from Slovenia in March 2014. In addition, contacts have been established with companies Slomatex from Murska Subota and Manatex from Varazdin, who also organized short presentations. The second study visit was organized in February 2015 and included a visit to the largest Italian footwear fair – MICAM in Milan. Also, meeting with representatives of the Italian Footwear Manufacturers’ Association – Assocalzaturifici and representatives of the European Confederation of the Footwear Industry – CEC was organized.

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In order to identify which economic sectors are the most competitive and which economic sectors can largely contribute to the improvement of the economy in the Krajina region, Baseline Analysis of Economic Sectors was prepared. Based on the analysis of data on income, export, productivity, employment and return on assets for more than 8,300 companies from the 36 municipalities covered by the project, we concluded that the most competitive are: metal, wood processing and food sector, as well as leather and footwear production, together with information and communication technology, and rubber and plastics as sectors that provide support to other sectors in improving their production and productivity. For this reason, the project activities were focused on the aforementioned sectors.

Summary of geographical distribution of companies:

Sector composite index of competitiveness:

Value Chain Analysis

In order to understand the challenges faced by companies in leading industrial sectors, based on a series of interviews with directors of companies, their suppliers, customers and supporting institutions, a value chain analysis for each of the sectors was prepared. Value chain represents a series of organizations and institutions involved in process of creating and delivering of product, i.e. value for consumer – from procurement, over production and distribution, to the final consumer. Conducting of the value chain analysis is important because of the fact that the competitiveness of a particular company is largely determined by competitiveness of its suppliers and customers, as well as relevant supporting institutions. The analysis provides insight in the weakest links in the chain whose strengthening leads to empowering chain as a whole, providing benefits to all participants in the value chain.

Value chain for poultry meat and poultry meat products:

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Value Chain Analysis of Key Economic Sectors
Value Chain Analysis for Meat and Meat Products
Value Chain Analysis for Hydronic Heating Boilers and Stainless Steel Water Heaters
Value Chain Analysis for Solid Wood Furniture
Value Chain Analysis for Shoes Production

Gap-Analysis

Based on the value chain analysis, the gap analysis of metal, food, wood and leather and footwear industry was prepared. It provides answers to the questions: where are we now (description of the current situation in respective sectors), where do we want to be (indicative sketch of the desired future situation in the sectors) and how should we get there (concrete measures to overcome gaps identified while working with the sector boards).

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GAP Analysis of Key Economic Sectors
GAP Analysis of the Metal Industry
GAP Analysis of the Wood Processing Industry
GAP Analysis of the Food Industry
GAP Analysis of the Leather and Footwear Industry

Business Environment Barometer of SMEs

Business Environment Barometer of small and medium enterprises presents a part of research activities that are implemented within the “CREDO Krajina” Project. The research deals with opinions and attitudes of SME representatives from selected economic sectors on the most important preconditions and characteristics of business. The research is performed two times a year, using identical procedure, while selected sample remains the same (panel research). The selected methodology enables following of trends, as the attitudes are monitored in comparison with the previous semi-annual periods, while questions are related both to internal environment (scope of production, financial results, employees, investments, etc.) and to external environment (business environment, available financial support, inclusion into initiatives or discussions about the improvement of business conditions, etc.). Benefits of the research are numerous for both, entrepreneurs and institutions dealing with economic development. In period from May 2014 to February 2016, four issues of the Business Environment Barometer of SMEs were prepared.

Inclusion into initiatives or debates on business environment improvements:

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Business Environment Barometer of SMEs, Edition 4 – local language
Business Environment Barometer of SMEs, Edition 3 – English
Business Environment Barometer of SMEs, Edition 2 – local language
Business Environment Barometer of SMEs, Edition 1 – local language