Those familiar with the specifics of creating and implementing SME development support policies in Bosnia and Herzegovina know that strategic planning is generally conducted with the support of projects financed by international and bilateral donors. This situation is also true for strategies in other areas, but we will focus on SME development support, noting that a similar review and findings can be made for other areas.
What is not so visible is that a good part of the implementation of these strategies takes place through such projects, which possess expert capacities and material resources often better and greater than those available in domestic support institutions. This situation has persisted for more than ten years and is likely to continue in the next decade. Therefore, the question makes sense: how much do these projects consider the implementation of relevant SME development strategies in BiH during the project’s implementation? This question is guided by two assumptions: (1) that projects do not pay enough attention to the implementation of strategies, and (2) that the effects for both sides, for the projects and the strategies, could be greater if this attention be more evenly distributed in favor of implementing strategies. Essentially: can we, and how, achieve a win-win situation?
Currently, we have a situation where both project teams and institutions responsible for supporting SME development, which are mainly at the entity and local levels, behave rationally in terms of the energy they expend. (Here, the term “energy” is used in its broader sense and includes the investment of effort, financial and other resources necessary for carrying out certain activities, in this case, the activities of planning and implementing strategies and projects.)
Domestic institutions, when it comes time to plan an appropriate strategy, usually seek assistance from an international project with which they have good cooperation. The project typically provides the requested support through the engagement of an expert in strategic planning and by covering logistical costs for document preparation (expenses for venue, refreshments, accommodation of participants, etc.). Along with inputs received from participants in the strategy development process (usually members of a working group formed by the minister), the expert incorporates appropriate interventions from the project that engaged him. More responsible experts also incorporate possible interventions from other international projects if they can access information without much additional effort. And that roughly concludes the first round of cooperation between institutions and projects regarding support to the strategy planning process. The second round begins when it’s time for institutions to prepare reports on the implementation of strategies. This leads to more intensive contacts aiming to collect information on what each project did in the reporting period and what from its activities and results can be used for preparing the report.
On the other hand, in planning international SME development support projects, usually greater attention is paid to the current program agenda of donors for the BiH area, or the Western Balkans region, which is increasingly the case. High on the current agenda are digitalization and green transition. The situation in which SMEs find themselves, their current orientation, problems, and capacities, usually remain in the background. Also often in the background are the priorities and measures defined in the existing SME development strategies. During implementation, project teams pay much more attention to achieving results and indicators contained in the logical framework of the projects’ they lead, than to implementing domestic strategies and creating affordances for systemic changes regarding the strategic orientation and capacities of SMEs, or gradually enabling the emerging and development of a new ecosystem, for example, for innovations. Some project teams attempt to ease their work by cooperating only with a single institutional partner, such as the Ministry of Foreign Trade and Economic Relations of BiH or the Foreign Trade Chamber of BiH, overestimating the mandate and capacities of these institutions and overlooking the complexity of BiH’s structure and the fact that most project interventions need to be implemented in cooperation with other levels, which have actual competencies for the areas of those interventions.
A slightly greater investment of energy from both sides and significantly greater benefits for both promise a somewhat different approach, “the road less traveled,” as the title of the famous psychological bestseller goes. Initial guidelines for such an approach could be outlined as follows:
- Significantly increased cooperation in planning and updating SME development support strategies – involve meetings/workshops of institutions responsible for creating strategies with donor program managers and leaders/teams of international projects that directly or indirectly relate to SME development. This implies at least three things: openness of domestic institutions to be initiators and hosts of such information exchanges, willingness of program managers and project teams to respond to such initiatives, regardless of the administrative level they come from, and good preparation and moderation of such meetings/workshops. The same applies to project planning: openness of donors and project teams to include the views of domestic institutions in the design of their programs and corresponding projects, as well as the priorities and measures from their strategies, but also the readiness of domestic institutions at various administrative levels to cooperate with each other on matters of common interest and to prioritize these interests in meetings/workshops with donors and project teams.
- Significantly improved cooperation in the implementation of strategies and projects – organize regular (semi)annual meetings/workshops of domestic institutions with leaders/teams of international support projects, preferably joint meetings of multiple levels (primarily state, entity, and Brčko District of BiH levels) and multiple support projects. This again implies at least three things: readiness of project teams to include the realization and updating of priorities and measures from domestic strategies in their work plans, as well as expanding the scope of attention to their indicators; readiness of institutions to support joint interventions and to sufficiently incorporate specificities related to the thematic and territorial area they are responsible for, and good preparation and moderation of such meetings/workshops.
We as Eda team see this as an opportunity and space for our action. The ‘SBA in BiH2EU’ project aims to contribute to the advanced implementation of the European Small Business Act in BiH, first through the creation of a harmonized strategic framework for SME development support (harmonized both externally with the EU and internally between different administrative levels), in the form of Strategic Guidelines for the Harmonization of SME Development Support at the BiH level, and SME and entrepreneurship development strategies in the Republika Srpska, the Federation of BiH, and the Brčko District of BiH. In addition to supporting the final adoption of all documents within this framework, part of the project team’s efforts is directed towards strengthening the interactions between domestic institutions and international support projects, in the form of (semi)annual joint workshops and regular annual conferences on SME development support in BiH. Both forms of exchanging information, experiences, and insights have proven their justification and potential to evolve so that the ‘road less traveled’ becomes the ‘road more frequently traveled’, contributing to the creation of synergistic effects between strategies and projects and systemic changes in terms of SME development in BiH.