Bosnia tops Europe for new start-ups but lags terribly on business climate

Vjekoslav Domljan, the lead for the Global Economic Monitor (GEM) team in BiH, expressed his disappointment that, even after three decades, the same fundamental issues persist due to a lack of real progress.

"Each February, the Global Entrepreneurship Monitor releases its findings. Their data reveals that Bosnia and Herzegovina leads Europe in the sheer number of new businesses (among those aged 18–64) per head of population. We've got the most entrepreneurial spirit, no doubt. Yet, when you look at the conditions that actually support entrepreneurship, we're dead last globally out of 56 economies," Professor Domljan pointed out.

BiH scores a meagre 3.4 on the index, placing it at the bottom of the pile, while the United Arab Emirates leads with a score of 7.1.

"The playing field is simply not conducive to new ventures. A lot needs sorting out. Too many early-stage businesses here fail to mature into established firms because they can't get a proper footing within the first three and a half years. In this respect, we're below the average of comparable countries. We desperately need better financial backing, more robust consulting and mentoring schemes – particularly for women who are starting businesses," Domljan added with concern.

GEM assesses 13 key conditions for entrepreneurship. Alarmingly, BiH only meets two of these to a satisfactory level, while a mere three countries worldwide manage to fulfil all 13.

Demographic trends are also casting a long shadow over Bosnia and Herzegovina's future.

"There's hardly anything worse for a nation than a shrinking population. It's not just that deaths are outstripping births – that's happening in over a hundred countries. Our added burden is this massive outward migration. Workers are leaving in droves, taking their families with them. In the last decade alone, we've lost half a million people. That's a huge chunk of our consumer base gone, hitting both production and consumption hard," Domljan warned starkly. He stressed that the only way forward is to significantly boost productivity, competitiveness, and exports.

Alisa Gekic, the Executive Director of the LINK Entrepreneurship Centre, offered a slightly more optimistic perspective, noting that not all the indicators are negative.

"The global report on entrepreneurship does show some forward movement. However, there's still a pressing need to improve the overall business environment. Regarding legal frameworks, we must continue the work of harmonising laws within BiH, both between the different regions and within them, as well as aligning our practices with those of the EU," Gekic concluded.

Bosnia and Herzegovina, entrepreneurship, new businesses, business conditions, GEM, Global Entrepreneurship Monitor, Vjekoslav Domljan, demographic trends, economic development, Alisa Gekic.