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In the autumn of each year, the European Commission adopts its “Enlargement package” – providing a detailed assessment of the state of play and the progress made by the enlargement countries on their respective paths towards the European Union, with a particular focus on implementing fundamental reforms, as well as clear guidance on the reform priorities ahead.
Separate chapters are developed for the knowledge economy, i.e. the areas that the Western Balkans Info Hub focuses: “Science and Research” (chapter 25) and “Education and Culture” (chapter 26 which includes also a focus on higher education) as well as the chapter “Enterprise and Industrial Policy” (chapter 20 which includes a focus on innovation in the business sector) are referenced below. Further chapters address topics including fundamentals such as the functioning of democratic institutions, rule of law, economic criteria, etc., intellectual property law, digital transformation, enterprise and industrial policy, green agenda and sustainable connectivity, agriculture, external relations and many more.
For the full report on Bosnia and Herzegovina see the Report and Country factsheet.
Chapter 25: Science and research
Bosnia and Herzegovina has some level of preparation on science and research. No progress was made. Research capacities remain very limited. The Commission’s recommendations from last year were not implemented and therefore remain valid. In the coming year, Bosnia and Herzegovina should in particular:
-> develop a new strategy and action plan for scientific development;
-> develop and adopt a smart specialisation strategy;
-> improve reporting on research and innovation statistics by reporting on at least 24 European Innovation Scoreboard indicators.
The EU provides significant support for research and innovation. All Member States can participate in the EU’s research and innovation programmes and benefit from them, especially where there is scientific excellence and a solid investment in research and innovation.
The legislative framework on research and innovation policy remains fragmented and needs to be improved. Bosnia and Herzegovina needs to develop and adopt a new strategy and action plan for scientific development. The estimated total allocations for research and innovation remain below 0.3% of GDP, which is far below the new priorities of the European research area. A smart specialisation strategy still needs to be developed and adopted. Bosnia and Herzegovina is included in the European Innovation Scoreboard with a score of 33.1% in 2024. The Country’s performance is below the average of ‘emerging innovators’ (48%) and the performance gap with the EU is increasing. Further progress should be made to ensure reliable and comprehensive statistics on research and innovation, useful for instance for the European Innovation Scoreboard and the European Research Area.
As regards international cooperation and framework programmes, Bosnia and Herzegovina takes part in Horizon Europe as an associated country. It received EUR 3.2 million in 2023, more than doubling the amount received in 2022.
Chapter 26: Education and culture
Bosnia and Herzegovina is at an early stage of preparation on education and culture. There was no progress in this area. The Commission’s recommendations from last year were not implemented and therefore remain valid. In the coming year, Bosnia and Herzegovina should in particular:
-> extend and update the action plan for the national qualifications framework (NQF);
-> ensure a fully functional system of (re–)accreditation of higher education institutions and study programmes across the country;
-> ensure continued participation in international assessment studies and implement findings to improve PISA results.
The EU supports cooperation in education and culture through funding programmes and the coordination of Member State policies through the ‘open method of coordination’. The EU and the Member States must also prevent discrimination and ensure quality education for children of migrant workers, including those from disadvantaged backgrounds.
On education and training, Bosnia and Herzegovina needs to move from a content-oriented towards a competency-based approach to education. Transformation and harmonisation of curricula is needed to ensure systemic regulation of learning and teaching process.
Bosnia and Herzegovina is partially participating in the 2023 ICILS and 2023 TIMSS assessments, as the Republika Srpska entity and the West Herzegovina Canton did not join them. The country dropped out of the 2021 PIRLS. After failing to participate in two PISA rounds (2022 and 2025), preparations to join the 2029 PISA need to intensify. No systemic measures have been taken to address the findings of the 2018 PISA and 2019 TIMSS. In the absence of a countrywide approach, some cantons have started reforming their curriculum based on student learning outcomes to improve quality in line with recommendations.
Although the legal framework is in place, there is still no mechanism to systematically measure or monitor the quality of education inputs, outputs or outcomes, and data does not feed into the policymaking process. Due to demographic changes, the number of students enrolled at almost all levels of education is gradually declining.
Regarding inclusiveness, the education of children with special needs remains a challenge, particularly in terms of ensuring the necessary infrastructure, provisions, transportation and school assistants to support both children and teachers. While some positive steps were undertaken through the roadmap for improving inclusive education, all education authorities should step up the implementation of the roadmap to ensure all recommendations are met.
There continued to be limited effort in supporting the digital transformation of education and training, including on digital skills without a countrywide coordinated approach. Authorities need to enhance their efforts towards effective, coherent and inclusive digital transformation of the education and training systems, including the capacity of the systems to develop digital skills, in line with the EU digital education action plan 2021- 2027.
A countrywide policy document on vocational education and training (VET) has been in place since 2021, based on the Riga conclusions. However, no noticeable progress followed. Preparations for joining the European Alliance for Apprenticeships (EAfA) should be accelerated. Measures to promote life-long learning of adults also need to be stepped up.
Bosnia and Herzegovina’s national qualifications framework (NQF) is not yet referenced to the European qualifications framework (EQF), nor is there a mechanism for the validation of prior learning. With the appointment of representatives from the Republika Srpska entity in October 2023, the inter-sector commission for the NQF was finally established. Cooperation further improved between the two accreditation agencies, one at state level and one in the Republika Srpska entity. However, accreditation of study programmes remains challenging. Bosnia and Herzegovina needs to further improve quality assurance in higher education.
Bosnia and Herzegovina benefits from the international dimension of the 2021-2027 Erasmus+ programme. The country is participating in all the working groups 2021-2025 of the European Education Area (Bologna Process). As part of the enhanced partnership with the region, Bosnia and Herzegovina can apply for the calls of the European Universities Initiative, and four Bosnian universities have been selected as partners in funded alliances.
On sports, Bosnia and Herzegovina continued to participate in the European week of sport.
In the area of culture, Bosnia and Herzegovina continues to implement measures under the UNESCO Convention on the protection and promotion of the diversity of cultural expression. The country still has to ensure a permanent solution to the legal status and financing for the seven cultural institutions of significance for Bosnia and Herzegovina. Bosnia and Herzegovina continues to participate fully in the Creative Europe programme.
The budget allocation for culture at all levels of government may be increased with longer-term, multiannual funding decisions to provide financial stability for cultural creation and operation. Bosnia and Herzegovina may benefit from establishing formal partnership structures enabling transparent and organised participation in cultural policy-making.
Chapter 20: Enterprise and industrial policy
Chapter 20: Enterprise and industrial policy Bosnia and Herzegovina remains at an early stage of preparation in the area of enterprise and industrial policy. Limited progress was made with the adoption of entrepreneurial legislation in the entities and Brčko District. The investment environment remains unsatisfactory in spite of limited progress. The Commission’s recommendations from last year were not implemented and therefore remain valid. In the coming year, Bosnia and Herzegovina should in particular:
-> adopt regulation allowing mutual recognition of licences and certificates between the entities and ensure that e registration of companies and business registries across the country are interconnected and fully operational, including e signature/e stamps;
-> adopt countrywide guidelines to harmonise SME support, aligned with the Small Business Act paying particular attention to implementing financial support to start ups and micro, small and medium sized enterprises in the innovation and digital sector;
-> accelerate improvements to the investment environment to attract sustainable investments that integrate with the domestic industrial tissue.
EU industrial policy strengthens competitiveness, facilitates structural change and encourages a business-friendly environment that stimulates small and medium-sized enterprises (SMEs).
During the reporting period, the entities and Brčko District continued to provide subsidies, tax relief and guarantees to alleviate the impact of negative economic trends caused by the shortages of raw materials, increased energy prices and disruption of supply chains.
In November 2023 the Federation entity adopted legislation on entrepreneurial infrastructure and on encouraging the development of small businesses, while in December 2023 the Brčko District adopted a law on entrepreneurial infrastructure. In January 2024, the Republika Srpska entity adopted a 2024-2027 action plan for SMEs innovation, and appointed a new SME development council. Bosnia and Herzegovina has not adopted countrywide guidelines for harmonisation of SME support in line with the Small Business Act, therefore the level of harmonisation of the legislation with the EU acquis remains to be assessed.
On enterprise and industrial policy principles, there is no countrywide development strategy and no state-level body promoting the consistency of policy with industrial strategies.
Limited steps were taken to improve the business environment and to attract investments. High barriers to starting a business, rules on taxes and para-fiscal (i.e. non-tax) charges and regulatory differences across various levels of government continue to be addressed. The Federation entity adopted the bylaws to introduce the electronic registration of businesses, which has started in Travnik. However, the systems of electronic registration of businesses are not yet fully functional and interoperable across the country, including all preconditions related to e-signature/e-stamp. (See chapter 10 – Digital transformation and media)
Bankruptcy proceedings are not resolved in a timely manner, with insufficient emphasis on companies’ rehabilitation and reorganisation.
The investment environment and the level of competitiveness remain unsatisfactory. The resolution of commercial disputes remains weak and arbitration weakly developed. Improving the patent application might contribute to raise the extremely low business investment in innovation activities. Oversight and governance of public enterprises still need to be strengthened to put public companies on an equal footing with other enterprises, contributing to improve the investment environment. The Republika Srpska entity still lacks a single register of public companies, and the Federation entity has not yet established oversight and management units. There is room to align alternative dispute resolution mechanisms with EU standards and best practices.
Preparations for the green and digital transitions, resilience, and global competitiveness of industry are at a very early stage. Energy diversification is slowly progressing but a greater focus on green investments is required, notably in manufacturing. The financial support for introducing innovations in green and digital sectors needs to be improved, in particular for SMEs, including start-ups. The forthcoming Sustainable Development Strategy for the period 2024-30 should ensure that the focus is increasingly on attracting high-quality investment conditioned on co-operation with domestic enterprises.
The severe drop in public support to business R&D needs to be reversed, as business expenditure on R&D is already very low. Higher value exports also declined as a result of reduced innovations in trademark applications and knowledge-intensive services exports. Government support needs to improve accountability for the use of public funds. The capacity and funding to perform monitoring and evaluations of enterprise and industrial policy measures are still limited, and the statistical data remain insufficient.
As for enterprise and industrial policy instruments, no progress was made in aligning with the EU acquis the legislation against late payments in commercial transactions.
Bosnia and Herzegovina participates in the SME pillar of the EU Single Market programme and signed an Association Agreement in July 2023.
As regards sectoral policies, the Federation entity adopted in October 2023 its tourism strategy valid until 2027. In January 2024 the Republika Srpska entity amended its Law on hospitality and the action plans to implement the industrial and SME development strategies. The level of harmonisation with the EU acquis and standards remains to be assessed for all adopted legislation in the sector.
For more information on other chapters see the Report and Country factsheet.