The opening address of the Republic of Srpska President Željka Cvijanović at the Jahorina Economic Forum under the title of ”New Age Economy – Innovation, Digitalisation and Communication Technology as Basis of Economic Development”
Dear Prime Minister of Serbia,
Prime Minister of the Republic of Srpska,
President of the Federation of BiH,
Honourable Ministers, Deputies and representatives of local authorities,
Ministers of the Republic of Srpska, Serbia, Federation of BiH,
All attending representatives of businesses, representatives of our endeavours to keep up with what the future holds for us, which is why we have gathered here today.
I wish to thank the organiser for setting up another obviously successfully organised forum, which gathers us all here every year and always brings forth some new ideas. We just recalled how we came to create a new ministry.
We can certainly all agree that we are living in a time that is greatly different from the times behind us. And this is logical. There is nothing unusual about it because with every new period, global society enters new stages of development.
Nonetheless, changes are so important and impressive that they simply force us to consider how to keep up with them just so we could know how to move on in the economic, social, administrative, security, and any other fields.
A few days ago, I read a fascinating forecast: that more changes will occur in the next ten years than took place in the past 250 years. This is promising, but, at the same time, worrying. It is fascinating, but it’s also terrifying.
Due to technological innovation, our future will look fundamentally different from anything that we are used to, and the fourth industrial revolution will radically change the world as we know it. The backbone of Industry 4.0 is technology that combines physical, digital and biological spheres. Practically, with the new technologies, everything on the planet will merge into and intertwine with functional networks and enable forms of communication that, until recently, were unimaginable.
Completely new areas of economy are thriving today, based on Artificial Intelligence, the internet of things, new materials, robots, autonomous vehicles, 3-D printing, energy and data storage, nanotechnologies, etc. Most former branches of industry are simply outdated.
Digital economy offers unimaginable opportunities for the development of new areas of business and significant economic growth. According to some estimates, the overall value of global digital economy will see great expansion in the coming period, to which we will have to adapt. Even though we are a small region, this suggests that digital economy is concealing huge potential for us and for our development.
The best way to develop the economy and increase the employment rate is to penetrate foreign markets, and the basic precondition for this is to create innovative and good quality products.
Private companies and the public sector that should fail to integrate innovation into their production and management processes and [fail] to encourage the culture of innovation which is necessary to improve the existing and create new products and services will find it very difficult to survive on the market and justify their own purpose.
The successfulness of organisations in future will be determined by their ability to look at the world with different eyes and turn this ability it into their comparative advantage.
It is clear to us all that contemporary knowledge is the key to success in the 21st century. However, even though we possess the necessary creative potential, our entire region is lagging far behind EU states in terms of innovation.
This is best illustrated by the fact that in 2017, there were almost 68,000 patents registered or in the process of registration in just the 15 “old” EU member states, while there were only 13 in all of the Western Balkan countries.
In order to catch up, we need enough specialists trained in completely new areas. Even 65% of today’s first-graders will have jobs in 20 years that do not even exist today! That is why it is necessary to make a big turnaround in the field of education to prepare young people and enable them to attain the skills that will make them competitive on the market.
That is why the main question is how to overcome the existing technological gap and create the best possible business environment for our social and economic development. In that I see the objective of our gathering here, to open certain topics and to give possible answers.
According to the Global Competitiveness Index 4.0 of the World Economic Forum, which covers 140 countries, Bosnia and Herzegovina is in 91st place. Unfortunately, of the twelve pillars covered by the Report, precisely in the area of innovation ability, she has the worst result and is at a humble 114th position. Particularly worrying is the fact that BiH is only at the 131st position in terms of facilitating co-operation of various actors, namely, the ability of the economy and innovators to achieve the necessary level of co-operation.
Which is why we need to think pragmatically and create solutions that will benefit us all. In order to be able to overcome these challenges, in the Republic of Srpska, as we have already heard, we created a new ministry, the Ministry of Scientific and Technological Development, Higher Education and Information Society as a mechanism to link up the needs of the society with the scientific and academic community and introduce tools for the development of digital economy .
This year alone, the Government of the Republic of Srpska will implement seven ambitious projects, worth over 6.6 million KM, through this Ministry, two of which are related to the scientific and technological development while five are in the area of digitisation.
Furthermore, we will soon launch the “Synergy” pilot programme, through which we will co-finance consortia consisting of teams of researchers and business entities. We want to encourage co-operation between scientists and the business sector, from which everyone could benefit.
In order to prepare young people to meet the demands of the labour market of the future, we have also launched a pilot programme that will provide additional training for unemployed persons with a higher education degree in occupations in demand at the labour market, in the field of information technology. So we have found a possible solution for those who are trained in professions that represent a definitive unproductive surplus in the market.
Furthermore, we are planning to establish a network of STEM Centres across the Republic of Srpska for young people to be able to acquire new and useful knowledge and technologies and more easily enrol technical faculties and find jobs.
The basic precondition for creating a digital economy is high-quality internet for a better global connectivity, which is why the government will finance, through the competent ministry, the project of covering regional centres in the Republic of Srpska with free wireless internet, as well as a project that will facilitate the procedure of registering children in the births register.
One of the adopted projects is also the “e-Mailbox”, the objective of which is to enable every single citizen and business entity in the Republic of Srpska to have access to a unique mailbox for communication with the e-government system. There is also a project that involves the creation of an application that will run the Integrated Billing System (SON), which will enable fast and efficient process of consolidated billing and payment by citizens and businesses of utility products and services: communal fees, water consumption, city cleaning, rubbish disposal, etc.
However, I think we should go a step further and not wait for our changes to knock at the door. It would therefore be useful to have an operational body made up of young, highly educated and dynamic people who could establish connections between domestic entrepreneurs and international funds. The money is there, but we need to find ways to attract and invest this money.
One of those ways is to promote business models that will be interesting to foreign investors. We need to systematically support young people to start small enterprises that will develop innovative solutions. An excellent example of support to start-ups is the Innovation Centre Banja Luka that could serve as a hothouse for similar enterprises in other communities.
Nevertheless, even the most progressive programmes sometimes offer no guarantee of success. The new industrial revolution also plants new demands, new ways of thinking, new skills and a new approach to development.
Problems that may seem impossible to resolve today could soon become something that we take for granted, such as mobile telephones. We can, nonetheless, presume that world-changing innovation will become accessible in a much shorter period than before. Which is why we will have to learn, figuratively speaking, to jump several stairs at a time instead of climbing stair by stair.
Industry 4.0 has the potential of improving quality of life and increasing economic growth of our whole region, technological innovation will increase productivity and efficiency of whole systems, reduce cost of services and commerce, open new areas of economy.
Yet, it will only happen in countries that are able to timely grasp the importance of transformation. All others will remain prisoners of their old customs and routines and therefore deprived of competitiveness, economic growth and development.
An economy based on industrial branches that earn small profits, in the long term, will push society into poverty. It is necessary to choose the most important areas and make targeted investments in them, which is a traumatic, but necessary step. Our Ministry of Scientific and Technological Development, Higher Education and Information Society will co-ordinate the preparation of the Strategy of Smart Specialisation that will identify a maximum of five areas that will become the engine of development of the Republic of Srpska in future. For now, we are considering the areas of food production, energy, metal processing and creative industry, together with Information and communication technologies, which are horizontally integrated in all those sectors.
We need to correct our attitude toward development and, in that sense, we all need to adapt. The education sector needs to innovate its approach. The business sector must follow trends that often require deep-seated changes. The public administration and regulatory agencies must closely co-operate with different sectors in order to timely understand changes and prepare a stimulating institutional framework and environment for development.
Shortly, it will be our common task in the forthcoming period to wisely build a system supportive of entrepreneurship through the application of world-class innovation that can be commercialised within our economy, but could also emerge as a partner to foreign entities.
This forum is a great opportunity for us all to get face to face with the tough issues affecting the future of us all and of the entire region; to exchange examples of good practices and to point each-others towards what really matters, but we might have missed seeing it, and, in the end, to help each others in the process of adapting to change. The Republic of Srpska is open to all types of good quality initiatives.
In the firm belief that this forum will also provide answers to certain dilemmas and challenges, I want to wish to all participants good fortune and a lot of success in the work and to thank all those who have contributed to the development of these important topics.
Finally, I want to emphasize one more thing in the end: listening today to the introductory presentation about drones that will do certain jobs, robots that will carry out some tasks, of course, one cannot but ask oneself, and what about the people? What about those who will lose their jobs that will be taken over by machines and devices? Well, the answer is train them the right way in such professions that will enable them to find jobs, stop training them for those [professions] that will become obsolete. Whatever angle we approach these problems from, in the end we always get to the education system because it is the key to the changes we have to make at an institutional level, even at the cost of facing strong resistance, and as a rule, whenever you start major reforms, you will face resistance. Therefore, regardless of the resistance we may find, we will have to change society and we are prepared, here, in the Republic of Srpska, to do just that and to thank all those business entities, businessmen and women who have been standing for many of years at the service, so to speak, of institutions in order to be able to start a new phase of development.
Thank you very much. I wish you a lot of success in your work!