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Baseline Report: Assessment of Competencies, Technical Skills and Needs in Bosnia Herzegovina's ICT Services Sector March 2014

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Baseline Report: Assessment of Competencies, Technical Skills and Needs in

Bosnia Herzegovina's ICT Services Sector

March 2014

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“The preparation of this document was made possible by the generous support of the People of the United States of America. The content is the responsibility of the author and does not necessarily reflect the opinion of USAID or the United States Government”

Baseline report: Assessment of Competencies, Technical Skills and Needs in Bosnia Herzegovina's ICT Services Sector Partnership for Innovation – www.innovation.ba USAID – http://www.usaid.gov/where-we-work/europe-and-eurasia/bosnia United States Agency for International Development Written by: Jusuf Tanović, Chief of Party, Partnership for Innovation project Tanja Madžarević, Business Development Manager, Partnership for Innovation project Adnan Mandžo, Director DDC Central Europe/ICT HR Expert March 2014

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TABLE OF CONTENTS

INTRODUCTION___________________________________________ 3

KEY FINDINGS____________________________________________ 4

ASSESSMENT, OBJECTIVES AND METHODOLOGY _______________ 5

Determining target SME and Youth population____________________ 5

SME’s line of business_________________________________________ 7

SME’s market orientation______________________________________ 8

Size of SMEs_________________________________________________ 8

WORKFORCE CHARACTERISTICS 9

Occupational structure_______________________________________ 9

Workforce Competitiveness____________________________________ 10

Workforce skillfulness________________________________________ 11

Current employees__________________________________________ 11

Future employees___________________________________________ 14

Education background________________________________________ 16

Gender_____________________________________________________ 17

CONCLUSIONS____________________________________________ 18

Appendix 1 - Questionnaire__________________________________________ 19

Appendix 2 – List of participating companies___________________________ 20

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1

The  successful  and  continuing  application  of   advanced   Information   and  Communication   Technologies   (ICT)   and  processes   is   one   the   critical   factors   for  the   ability   of   BiH   SMEs   to   effectively  compete   in   the   European   Union   and  global   marketplace,   attract   and  communicate   with   customers   and  modernize  their  business  processes.    Major  economic  challenges  facing  Bosnia  and   Herzegovina   (BiH)   at   present   time  include   high   unemployment   rates,  marginal   GDP   growth,   and   a   severely  contracted   domestic   and   global  market.    Creating  jobs  within  the  country  relies   greatly   on   strengthening   and  expanding   small   and   medium-­‐sized  enterprises  (SMEs)  of  all  industry  sectors,  but   particularly   SMEs   of   ICT   sector,   as  they  are  in  the  focus  of  this  assessment.        Key   challenges   facing   youth  include  challenges  in  obtaining  adequate  training  and   practical   experience   and   challenges  in   obtaining   jobs,   including   short-­‐term  opportunities.   Additionally,   youth   also  faces  challenges  when  launching  startups  including  the  lack  of  technical  or  business  mentorship  assistance  and   lack  of  access  to   sources   of   finance   especially   in   the  early  stages  of  business  development  due  to   underdeveloped   investor   culture   in  BiH  and  the  perceived  high  risks  involved  with  early  ventures.  

INTRODUCTION

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   USAID  Partnership  for  Innovation  (PI)  project  is  focused  on  two  areas  of  activities:      a) support  to  young  market  entrants  to  

improve  their  work  readiness  and  ICT  skills  and  exploit  new  employment  opportunities,  and  

b) support  to  SMEs  to  adopt  and  better  utilize  latest  ICT  technologies  and  processes  to  improve  their  efficiency  and  competitiveness.    

 A   demand-­‐driven   approach   underlies   all  PI   activities   and   project   ensures   that   all  programs   are   designed   and   modified  based   on   market   analysis   and   direct  feedback   from   SMEs   and   educational  partners.      This   assessment   represents   one   such  project   analysis   aimed   at   obtaining  critical  baseline   information  on   the   state  of   the   competencies,   skills   and   human  resource   needs   within   the   project  targeted  BiH   ICT   industry   subsector.    The  PI  targeted  subsector  excludes  large  state  owned  Telecoms,   SMEs   that   are   focused  on   hardware   assembly   processes   and  retailers   of   computer   equipment   and  software.      

Telephone  lines  (per  100  people):  23.46  Mobile  cellular  subscriptions  (per  100  people):  89.53  Fixed  Internet  subscribers  (per  100  people):  10.79  Households  with  computer:  39.80%    

BIH ICT profile (2013)

Country  population  (total,  million  ≈  3.8  Urban  population  (%  of  total):  43%    

BIH IN GENERAL

Sources:  Agency  for  Statistics  BiH,  ITU  

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Continued…

- Lorem Ipsum

 SME  Competitiveness  BiH  ICT  SMEs  reported  that,  in   line  with  global  trends,  their  competitiveness   is  completely  reliant  on  the  skills  and  knowledge  of  advanced  methods  and  programing  by  their  technical  staff.  Related  to  this  point,  close   to   two   thirds   of   SMEs   (64%)   reported   that  more   than  50%   of   their   technical   staff   are   not   skilled  enough  at  present  to  be  competitive  in  EU  and  global  markets.    Current  staff  Software  Developers   represent  36%  while  other   technical   jobs   (network  engineers,  web  designers,  data  base  developers,  quality  assurance  etc.)  represent  additional  29%  of  the  total  staff  at  ICT  SMEs.      Only  14%  of  employees  at  ICT  SMEs  represent  non-­‐technical,  non-­‐project  staff.                  Majority   of   SMEs   identified   their   staff   in   Software   Development   and  Project  Management   positions   as  those   with   most   needs   for   improvement   and   update   in   skills   and   industry   certifications.   Next   in   skills  shortage  were  Web  Designer  and  Network  Administrator  positions.      Top  deficiency  skills  and  certificates  identified  by  majority  of  BiH  SMEs  are  in  the  areas  of  Android,  Java  ,  iOS  and  Web  development  and  Scrum/Agile  methodologies.      SMEs  reported  intention  to  increase  their  workforce  by  20%  in  the  next  year.  

Youth  Workforce  Development  There  is  a  significant  unmet  demand  for  new  hires  in  technical  positions  in  the  BiH  ICT  services  sector.  Vast  majority   of   BiH   youth   with   college   level   ICT   education   have   considerable   deficiencies   in  technical/programming  skills   as   reported  by  SMEs  and  confirmed  by  youth   themselves.  All   stakeholders  also  reported  significant  deficiencies  in  business  “soft  skills”  for  the  majority  of  ICT  educated,  unemployed  youth.    

SMEs   identified   Java,   iOS   and  Android   programming   as   the  most  deficient  technical  skill  areas  for  newly  hired  youth.    Youth   identified   their   knowledge   in   Ruby,   SharePoint,  Solaris,   Java,  development   for  Android   and   iOS,  and  Oracle  SQL  programming  as  deficient.          SMEs  identified  sales  &  marketing  skills  as  well  as  team  work  experience  as  the  most  deficient  “soft  skills”  areas  for  newly  hired  youth.      SMEs   report   that   newly   hired   youth   possesses   above  average  skills  in  Microsoft  Windows,  HTML,  XML,  .NET,  C++,  C#  and  SQL  programming  languages  and  technologies.        49%   of   technical   staff   at   SMEs   are   graduates   from   5   state  owned   faculties  of  engineering  and   IT   from  Sarajevo,  Banja  Luka,  Mostar  and  Tuzla.      45%  of  technical  staff  at  SMEs  have  not  graduated  from  one  of  the  engineering  faculties  in  BiH.    

KEY FINDINGS

Newly  hired  staff  

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1 2 3 4

1  IDC  Adriatics  http://www.swot.ba/index.php?modul=vijesti&poziv=vijest&idr=21&idv=5357  2  http://ekapija.ba/bs/Vijest/kapital/gradevinci-­‐zarade-­‐350-­‐a-­‐it-­‐strucnjaci-­‐4000-­‐km/34228  3  Agency  of  statistics  BiH,  inforamtion  provided  directly  to  the  PI  project  4  ISIC  Rev.  4  or  NACE  Rev.  2

This   report   has   been   developed   through   the   collaborative   effort   by   Small   and  Medium   Size   Enterprises  (SMEs)   from  Bosnia  Herzegovina’s   (BiH)   ICT  sector   and   staff  and  experts   from  Partnership   for   Innovation  project.    The   main   goal   of   this   analysis   is   to   assess   the   current   deficiencies   in   experience,   skills   and   industry  certifications  at  BiH  ICT  SMEs  and  to  determine  immediate  staffing  skills  and  certification  needs  for  existing  staff   and   new   hires,   thus   providing   the   timely   and   specific   baseline   information   for   the   design   of   PI  workforce  and  SME  development  programs.    The  report  contains  an  assessment  of  trends  in  employment  and  skill  needs  and  supply  in  the  targeted  ICT  sub-­‐sector  and  ICT  occupations.  It  is  based  on  statistics  and  information  obtained  from  a  wide  ranging  data  gathering   and   consultation   exercises   and   represents   a   comprehensive   attempt   to   synthesize   all   available  evidence.      It  combines  top-­‐down  data  from  official  state  sources  with  bottom-­‐up  sector  level  intelligence  to  provide  a  consistent,   comparable   report   and   understanding   of   the   skills   priorities   within   the   PI   targeted   ICT   sub-­‐sector  across  Bosnia  and  Herzegovina.    

ASSESSMENT, OBJECTIVES AND METHODOLOGY

Determining target SME and Youth population

The   BIH   Information   and   communication   technologies   sector   contributed   277   million   dollars 1  to   BiH  economy  in  2012.  Measured  by  web  portal  plata.ba  per  employee  job,  the  ICT  sector  was  one  of  the  most  productive   in   the   BiH   economy   in   2013   at   an   average   of   43,200  KM   per   job2,   almost   four   times   the  BiH  average  for  all  sectors.      The  BiH  ICT  sector  in  2013  had  a  BiH  workforce  of  22,699,  4.41%  of  total  BiH  employment3.  The  majority  of  employment  (16.935  employees  or  75  %)  is  in  the  Telecommunications  sub-­‐sector  while  the  remaining  25%  of  employment  is  in  Software,  hardware  and  Business  Process  Outsourcing.  

ICT   sub-­‐sectors  are  defined  differently   by  various  organizations  and   in  various   capacities,   none   of   the   definitions   being   comprehensive   or  satisfactory.   For   the   purposes   of   this   report,   PI   uses   the   European  Commission’s   statistical   classification   that   segments   ICT   sector   into  following  general  categories4:    

1. ICT   manufacturing   industries   (Manufacture   of   electronic   components   and   boards;  Manufacture   of   computers   and   peripheral   equipment;   Manufacture   of   communication  equipment;   Manufacture   of   consumer   electronics;   Manufacture   of   magnetic   and   optical  media)  

2. ICT  trade  industries  (Wholesale  of  computers,  computer  peripheral  equipment  and  software;  Wholesale  of  electronic  and  telecommunications  equipment  and  parts)  

3. ICT   services   industries   (Software  publishing;   Telecommunications,   Computer  programming,  consultancy   and   related   activities;   Data   processing,   hosting   and   related   activities;   web  portals;  Repair  of  computers  and  communication  equipment)  

ICT sector classification

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5 6

5 Agency  for  statistics  –  information  provided  directly  to  the  PI  project 6 Market  analysis  of  ICT  sector  in  Bosnia  and  Herzegovina  and  Sarajevo  region,  SERDA,  April  2013  

European  Commission’s   classification   segments   the   ICT   sector   into  manufacturing,   trade   and   services   industries.  More   details   on   this  classification  is  provided  in  the  box  on  the  previous  page.    In  accordance   to  the  stated  goals  from  the  PI  Program  Description,  and   considering   the   fact   that   credible   ICT   manufacturing   industry  does  not  exist  in  BiH,  the  focus  of  the  PI’s  assistance  programs  and,  by  extension,  the  focus  of  this  assessment  had  to  be  centered  on  #3  -­‐   the   ICT   services   industries   sub-­‐sector.  Obviously,  as  PI   is   focused  on   SMEs,   the   large,   state   owned   telecom   operators   had   to   be  excluded  from  this  assessment.    According   to   the  BH  Agency   for   Statistics,   there   are   approximately  10885   companies   in   BiH   that   are   presently   registered   for   ICT  manufacturing,   trade   and/or   services.  However,   this   data   is   hardly  usable   for   PI   project   planning   or   other   purposes   as   the   current  business   classifications   allows   for   many   firms   to   be   listed   in   this  category,  although  their  core  business  is  not  sufficiently  ICT  focused  to  satisfy  EC’s  classification  standards  listed  above.      Therefore,  for  this  assessment,  PI  was  forced  to  analyze  and  edit  the  master  list  provided  by  the  Agency  for  Statistics  in  order  to  eliminate  all   non-­‐ICT  businesses   such   as   accounting   and   consulting   agencies,  engineering,   trade  and  construction  SMEs  as  well  as   internet/video  game   clubs   etc.   Following   this   exercise,   PI   was   able   to   reach   a  realistic  estimate  of  the  number  of  SMEs  that  populate  the  BiH  ICT  Services  Industry  (sans  State  Telecoms)  at  present,  and  that  number  is  estimated  at  approximately  250  SMEs.      The   main   data   gathering   was   completed   through   the   survey   and  interviews  that  were  conducted  between  October  2013  and  January  2014.   The   survey   was   distributed   to   more   than   100   SMEs   from  various   regions  of  BiH.  57  SMEs   (54%)   completed   the   survey  while  complimentary   data   and   general   feedback   was   received   during  direct   meetings   with   29   SMEs,   most   of   them   from   the   surveyed  group.  The  complete  list  of  all  surveyed  and  /or  interviewed  SMEs  is  provided   in   the   report   Appendix   2.   Therefore,   the   number   of  sampled   SMEs   appears   fully   representative   for   the   purpose   of  assessing  the  current  state  of  skills,  competencies  and  needs   in  the  targeted  BiH  ICT  services  industry  sub  component.        Based   on   PI’s   2012   Market   Assessment   and   the   recent   feedback  from  ICT  SMEs  about  education  and  skills   levels  of   their  new  hires,  the   PI   determined   that   the   final   year   students   of   engineering   and  technical   faculties   represent   the   primary   target   group   for   this  assessment   as   well   as   for   the   PI’s   subsequent   youth   workforce  development  programs.  The  data  on  present,  specific  technical  skill  knowledge  and/or   deficiencies  of  unemployed   youth  was  obtained  through  feedback  from  SMEs  and  survey  that  was  completed  by  102  youth   with   ICT   educational   background   –   mostly   senior   year  students  from  technical  faculties.            

SMEs reported a significant need for new staff with senior technical skills and practical experience, thus corroborating the reports from www.posao.ba, the largest online jobs portal in BiH, citing ICT programmers and developers as top in demand professions during the 2010-2012 period in BiH. Posao.ba also reported that only half of 1,000 advertised ICT jobs in 2012 were filled.6 SMEs reported that the deficiency of skilled and experienced programmers and certified technical personnel is consistently hampering their efforts to expand services and client base. Those focused on software development outsourcing services are particularly hurt as EU or US based clients often require dozens of skilled and certified programmers for longer term or recurring contracts.

GENERAL OBSERVATIONS

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SME’s line of business

Following   the  previously   listed  statistical   classifications   in  BiH   and  EU,   and   considering   that   ICT   SMEs   are  generally  divided  into  ICT  manufacturing  industries,  ICT  trade  industries  and/or  ICT  services  industries  the  companies  described  their  line  of  business  as  follows:    

 The  majority   of   surveyed   companies,  or  74%,   is   in   the  Software   publishing   and  more   than  67%   is   in   the  Computer  programming,  consultancy  and  related  activities,  showing  that  ICT  service  industries  subsector  is  dominant  in  BiH.  The  majority  of  surveyed  companies  are  registered  as  Limited  Liability  Companies  (LLC)  with   a   possibility   to   register   multiple   lines   of   businesses   under   the   same   category   or   even   various  categories.  Therefore  percentages  may  add  up  to  more  than  100%  in  a  given  category.    This  chart  shows  that  most  companies  work  mainly  in  2  ICT  subsectors:  ICT  trade  industries  and  ICT  service  industries.  

Table  1  Respondents  selected  more  than  one  option,  so  percentages  may  add  up  to  more  than  100  %  

Chart  1.  ICT  SMEs  line  of  business

PI   surveys  and   interviews   focused  on  assessing  SME  readiness   to  compete   in   international  arena,  state  of  technical   skills   for   their   current   staff   and   newly   hired   employees   as   well   identification   of   specific  programming  languages,  technologies  and  industry  certifications  that  their  existing  staff  and  new  hires  must  need  to  obtain  so  SMEs  could  become  more  competitive  in  local  and  global  markets.  

8

7

7  http://ec.europa.eu/enterprise/policies/sme/files/sme_definition/sme_user_guide_en.pdf  

SME’s market orientation

Respondents  were  asked  to  state  their  market  orientation,   in  terms  of  whether  they  operate  business  for  the  customers  who  reside  in  BiH,  defined  as  domestic  market,  or  they  operate  business  for  various  sets  of  customers  that  are  operating  outside  of  BiH,  defined  as  the  international  market.  The  results  showed  that  majority   of   surveyed   companies   are   primarily   oriented   towards   BiH   customers,   with   14%   operating  exclusively  for  local  clients  for  BiH,  while  the  additional  35%  of  companies  are  almost  completely  oriented  towards   BiH   market   in   majority   of   their   business   operations.  Only   25   %   of   surveyed   SMEs   reported   a  predominant  focus  on  international  markets.  

Size of SMEs

Surveyed  companies  were  classified  into  three  categories  following  the  EU  definition  for  Small  and  Medium-­‐sized   Enterprises   (SMEs)6.  The  biggest   numbers  of   surveyed  companies   (45  %)  are  small  enterprises   with   10   to   50   employees;   while   44%   are   micro   enterprises   with   less   than   10  employees;   11%   companies   are   classified   as   medium-­‐sized   enterprises   with   less   than   250  employees.      The   survey   showed  that  over  89%  of   the  BiH   ICT  SMEs  are  micro   and  small  enterprises,  which   is  similar  to  EU  experience.    

Chart  2.  ICT  SMEs  market  orientation

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Occupational structure

WORKFORCE CHARACTERISTICS In  order  to  determine  the  occupational  structure  in  ICT  service  sector,  PI  surveyed  SMEs  to  gather  specific  and   detailed   information   about   jobs   structure,   hierarchy   of   jobs,   whether   the   current   sector   staff   is  sufficiently  skilled  etc.    

The  respondents  were  first  asked  to  distribute  their  current  workforce  per  following  positions,  determined  as  core  jobs  that  are  prevalent  within  the  ICT  services  sector:    

1. Software  developer  (all  platforms)  2. Software  development  manager/lead  3. Database  developer  4. Project  manager  5. Business  analyst  6. Quality  assurance  7. Quality  assurance  lead  8. Network  engineer/System  administrator  9. (Web)  Designer  10. Other  

 As  evident  from  Chart  No.  3  Software  developers  represent  the  largest  occupational  group  in  targeted  ICT  sub-­‐sector  accounting  for  more  than  35%  of  workforce  of  surveyed  SMEs.  These  occupations  are  focused  on  developing   and   delivering   products   and   services   to   provide   technology   based   value   for   business   and  consumer   clients.   This   work   typically   includes   software   (including   web)   and   systems   design   and  development,   operations   (running  websites,   systems   and  networks),  and  user   support   (to   customers   and  staff).    

Chart  3.    Occupational  structure  at  surveyed  SMEs  

35%  

9%  6%  8%  

5%  5%  

2%  

9%  

7%  

14%  

Sorware  Developer  (all  plasorms)  

Sorware  Development  manager/lead  

Database  Developer  

Project  Manager  

Business  Analyst  

Quality  Assurance  

Quality  Assurance  Lead  

Network  Engineer/  System  Administrator  

(Web)  Designer  

Other  

10

Project  manager   and  Software   development  manager/lead   combined  comprise  17%  of   the   surveyed   workforce.   Many   are   functional   managers,   managing   networks,  products,   services   work   and   programs   of   work   as   well   as   those   who   have   more  traditional  managerial  duties  and  resource  responsibilities.  

Network   engineers/System   Administrators   comprise   9%   of   the   surveyed   workforce  and   are   responsible   for   the   day   to-­‐   day   running   of   computer   systems   and   networks  including   maintenance,   installation   and   the   preparation   of   back-­‐up   systems,   and   for  performing  regular  checks  to  ensure  the  smooth  functioning  of  such  systems.  In  the  ICT  sector  they  may  also  be  providing  technical  support,  advice  and  guidance  for  customers  or  IT  users  within  an  organization.    

Most  importantly,  only  14%  of  employees  at  ICT  SMEs  represent  non-­‐technical,  non-­‐project  staff.  

Workforce Competitiveness In   order   to   determine  whether   BiH   SMEs’   workforce   is   competitive   in   local,   regional  and   global   markets,   respondents   were   asked   to   determine   the   skill   level   of   their  workforce   accompanied   with   appropriate   industry   certifications/degrees   and  compared  to  current  market  place  standards.    

As   shown   in   the  Chart   4.,   only   11%   of   SME   respondents   reported   that   their   staff   is  100%   ready   for   the   global   competition,   stating   that   they   employ   skillful   workforce.  Additional  25%  answered   that  up   to  75%  of   their  employees  are  competitive  enough  

Chart  4.  ICT  SMEs  workforce  competitiveness  

Acquiring  relevant  competences,  and  thus  ‘skills’,  becomes  increasingly  important  for   ICT  workers’   job   prospects   in   the   European   labor  market   and   for   the   future  economic  development  of  Europe  (Stucky  and  Weiß,  2004).  

Source:  ICT  skills  certification  in  Europe,  CEDFOP  

Skills related fact

However,   the   remaining   65%   of   respondents   reported   that   at   least   50%   of   their  employees  do  not  posses  satisfactory  skill  levels  to  compete  in  the  global  arena.    

11

Workforce skillfulness

Chart  5.  Demand  for  skills  in  specific  job  positions

Respondents  were  asked  to  define  skills  and  certificates  that  are  highest  in  demand  for  current  and  future  employees  of  SMEs. Current  employees  

Software   development   in   BiH   has   considerable   gaps,   most   of   them   being   tied   to   limited   higher   quality  human  resources  in  mobile  applications  development  and  web  development  skills.  As  the  BiH  institutions  of  higher  education  effectively  create  large  number  of  entry-­‐level  programmers,  it  is  apparent  that  the  special  emphasis   shall   be   placed   on   creating   a   fairly   large   cadre   of   programmers   with   higher   quality   levels   of  industry  certifications  and  experience.  

According   to   respondents,   the   following   current   job   positions   at   BiH   ICT   SMEs   lack   necessary   skills   and  certifications  to  perform  competitively  in  local  and  international  markets:    

Software  Developer   skills  with  over  39%  of   respondents   indicating  skills   for   this  position  as  “the  most   in  demand”,  Project  Management  (41%),  Software  Development  Lead  skills  with  over  33%,  Business  analyst  (33%),  Web   Designer   (24%),  Network   engineer/System   Administration   (16%),  QA   and   QA   Lead   (16%),  Database  developer  (13%).  

12

SMEs  were  asked  to  rate  general  business  skills  of  their  newly  employed  workforce.  The  following    “soft  skills”  were  ranked  as  most  deficient:  Sales  and  Marketing  Analysis  and  Techniques,  Communication  and  Presentation  skills,  Teamwork  and  Problem  solving  skills  and  planning,  all  four  scoring  below  average  rate  “good”.    

The   survey   has   shown   that  most   of   the   employees   are   familiar  with   the   real-­‐life  work   setting   and   have  knowledge   in   operating   office   equipment   such   as   computer,   printer   etc.   (39%   respondents   rated   their  employees  as  “excellent”  in  this  category),  for  use  of  English  language  for  business  purposes  and  technical  correspondence,   37%   of   SMEs  marked   their   employee   skills   as   “very   good”,   while   the   professional  work  habits  are  somewhere  in  the  middle  being  indicated  as  “average”  among  employees  of  respondent  SMEs.      

Chart  7.  Average  mark  for  soft  skills  knowledge  among  newly  employed  staff  at  ICT  SMEs

13

0.00 1.00 2.00 3.00 4.00 5.00

J2ME

J2EE

Systems testing

Cisco networking

Network design

System administrator – UNIX/

Visual Basic

ASP

C++

Network implementation

Network administrator

Systems analysis

Systems design

Java

.NET

Network configuration

Internet and systems security

C#

Wireless technologies

MS SQL server

PHP

Database design & admin

MySQL

XML

Html

Windows Microsoft

Chart  8.  Rating  of  technical  skills  of  newly  employed  staff  at  ICT  SMEs

SMEs  were  also  asked  to  rate  technical  skills  of  their  newly  employed  workforce.  The  newly  employed  have  shown   best   knowledge/technical   skills   in   the   following   areas:  Microsoft   Windows   was   rated   as   “above  average”  with  a  rate  of  3.58  on  a  scale  from  1  to  5  (1  being  the  low  and  5  the  high  point  on  the  scale).  The  new  market  entrants’  knowledge  of  HTML  and  XML  was  rated  as  “above  average”,  with  rates  of  3.50  and  3.40  respectively.    

New  market   entrants   poses   good   knowledge  of   databases,   as   SME   respondents  marked   them   as   “above  average”  in  MS  SQL,  database  design  and  admin  and  MySQL.      

The   knowledge   of   newly   employed   in   Java,   Android,   .NET,   C++,   C#,   Cisco   Networking   etc.   was   rated   as  “below   average”,   while   it   was   earlier   determined   that   workforce   highest   in   demand   come   from   the  software  developer  occupational  groups,  especially  Android  and  iOS  mobile  developers.    

14

Education   output   was   also   assessed   by   youth   themselves,   mainly   senior   year   students   from   technical  faculties,  as  they  were  asked  to  rate  their  knowledge  in  specific  technologies  and  business  skills  on  a  scale  from  1  to  5  (1  –  Poor,  5  –  Outstanding).      Self-­‐assessing  surveys  completed  by  ICT  educated,  unemployed  youth  identified  a  number  of  programming  skills   where   youth   is  most   deficient.  Majority   of   skill   areas   identified  by   youth  were   virtually   identical   to  those  identified  by  surveyed  SMEs.        It  is  evident  from  the  Chart  9.  below  that  students  do  not  believe  that  they  posses  sufficient  knowledge  in  number  of  specific  platforms  like  Ruby  on  Rails,  and/or  software  programming  for  Android,  Windows  phone  or  iPhone  platforms.

Chart  9.  Youth  self-­‐assessment  in  technical  and  business  skills  

0 10 20 30 40 50 60 70 80 90 100

Business skills

Project Management

HTML

Sales

CSS

C/C++/C#

SQL Server

Web development

Java/JavaScript/JSP

Software development

Networking

PHP/MySQL

Internet Marketing

AutoCAD

ASP.NET

Microsoft Windows Server

Linux

Oracle DB Administration

Ajax

Google AdWords

iOS

Windows phone

Security

CRM systems

Oracle SQL Programming

Android

AIX/HPUX/Solaris

Sharepoint

Ruby on Rails

Poor

Unremarkable

Meets expectations

Better than expected

Outstanding

Future employees

15

Most   importantly,   the  surveyed  SMEs   reported   that   they  plan   to   increase   their  workforce  by  20%   in   the  next  year,  compared  to  their  current  employee  totals.  

SMEs   also   reported   specific   ICT   skills   and   industry   certifications   that   will   be   required   from   their   future  employees.   SMEs  stated   that   new  and   emerging   technologies   are   the  most   in   demand,   such   as  Android,  Java,  Web  technologies,  new  IT  project  management  methodologies  etc.    

Chart  10.  Percentage  of  SMEs  that  expressed  new  labor  need  in  specific  technology  skills

16

The  name  of  the  institution   Administrative  region  

Total  number  of  graduates  hired  by  ICT  SMEs  

Average  rating  (1  -­‐  extremely  

poor,  5  -­‐  excellent)  

Faculty  of  Electrical  Engineering,  University  of  Sarajevo  

Sarajevo   208   3.77  

Faculty  of  Information  Technologies,  Džemal  Bijedić  University  of  Mostar  

Mostar   109   4.04  

Faculty  of  Mechanical  Engineering  and  Computing,  University  of  Mostar    

Mostar   90   3.38  

Faculty  of  Electrical  Engineering,  University  of  Banja  Luka  

Banja  Luka   71   3.71  

Faculty  of  Electrical  Engineering,  University  of  Tuzla  

Tuzla   54   3.75  

Sarajevo  School  of  Science  and  Technology   Sarajevo   15   3.27  

Faculty  of  Science,  University  of  Banja  Luka   Banja  Luka   14   3.63  

Faculty  of  Science  and  Education,  University  of  Mostar  

Mostar   9   3.14  

Banja  Luka  College   Banja  Luka   8   3.43  

Faculty  of  Electrical  Engineering,  University  of  East  Sarajevo  

Lukavica   6   3.88  

University  of  Business  Studies   Banja  Luka   4   2.83  

Paneuropean  University  Aperion   Banja  Luka   4   2.60  

University  for  Business  Engineering  and  Management  

Banja  Luka   2   2.75  

Faculty  of  Science   Tuzla   1   3.50  

Technical  Faculty   Bihać   1   3.00  

American  University  in  Bosnia  and  Herzegovina   Sarajevo   1   2.75  

American  University  in  Bosnia  and  Herzegovina   Tuzla   1   2.67  

Economics  and  Information  Technology  College   Prijedor   1   2.60  

Faculty  of  Mechanical  Engineering,  University  of  Banja  Luka  

Banja  Luka   1   3.33  

Faculty  of  Information  Technology   Bijeljina   1   3.00  

Other  educational  institutions       496      

Education background Education   output   and   satisfaction   with   the   BiH   educational   institutions   was   assessed   by   each   SME   that  participated   in   the   PI   survey.   SMEs   were   asked   to   report   on   the   number   of   their   employees   that   have  graduated   from   each   of   the   listed   engineering   faculties   and   then   to   measure   the   “quality”   of   those  educational  institutions  based  on  their  experience  with  individuals  that  were  added  to  their  workforce.  The  survey   listed   27   educational   institutions   that   are   directly   or   indirectly   focused   on   producing   technical  professions  related  to  the  BiH  ICT  services  sector.  

Table  2.  Education  output  per  SMEs

17

8

8  http://ekapija.ba/en/Vijest/eu/eu-­‐tells-­‐women-­‐that-­‐the-­‐ict-­‐sector-­‐is-­‐the-­‐future/36772  

Gender

The   analysis   also   focused   on   assessing   the   workforce   characteristics   in   respect   to   gender,   trying   to  determine   the   number   of   female   employees   and   their   distribution   and   then   comparing   them   to   the  potential  “pool”   i.e.  the  number  of  female  graduates  from  technical  faculties   in  BiH  as  well  as  comparing  them  with  European  industry  standards.    

In  December  2013,  PI  conducted  a  separate  survey  of  8  largest  engineering  faculties  at  4  universities  from  various  BiH  regions  in  order  to  assess  the  percentage  of  women  graduates.  The  survey  showed  that  413  out  of  1,251  or  33%  were  women  graduates.    

67,00 %

33,00 %

M

F

Chart  6.  Gender  composition  of  BiH  graduates  from  Technical  faculties  –  Academic  year  2012  -­‐  2013

SMEs   reported   that   women   represent   36%   of   their   staff,   and   this   meant   that   BiH   SMEs   have   actually  managed   to   hire   a   higher   percentage   of   women   than   their   actual   share   in   the   pool   of   ICT   educated  unemployed  youth  in  BiH.    The  reported  percentage  is  above  current  European  trends.    Related  to  the  above  it  is  important  to  note  that  73%  of  women  at  surveyed  SMEs  are  employed  in  technical  positions.      

Only   nine   out   of   a   hundred   application   developers   are   women   and   they   make   up   less   than   30  percent  of  the  workforce  in  the  ICT  sector  in  Europe.    If   the   number   of   women   in   the   ICT   sector   was   in   equal   numbers   as   men,   European   GDP   could  increase  by  around  nine  billion  euros  a  year.  (Neelie  Kroes,  Commissioner  of  Digital  Development  of  EU,  2013)  7    

Gender related facts

18

CONCLUSIONS

Youth Workforce Development

There  is  a  significant  unmet  demand  for  new  hires  in  technical  positions  in  the  BiH  ICT  services  sector.  Vast  majority   of   BiH   youth   with   college   level   ICT   education   have   considerable   deficiencies   in  technical/programming  skills  as  reported  by  SMEs  and  confirmed  by  youth  themselves.  All  stakeholders  also  reported   significant   deficiencies   in   business   “soft   skills”   for   the   majority   of   ICT   educated,   unemployed  youth.    A   comprehensive   program   involving   trainings   in   specific,   advanced   ICT   programming,   trainings   in  general/soft  business   skills  and   internships   involving   real   life   ICT   projects   could  potentially   help   close   the  evident  skills  gap  for  BiH  youth  and,  as  a  result,  improve  competitiveness  and  efficiency  of  SMEs  from  the  BiH   ICT   services   sector.  PI   planned   programs  are  well   positioned   and   sufficiently   flexible   to   be   able   to  address  most  reported  immediate  deficiencies  and  gaps  related  to  youth  market  entrants.      Nevertheless,   a  considerable   effort   and   initiatives  have   to   be  undertaken  by   educational   institutions   and  regional   information   and   technology   centers   in   cooperation  with   private   sector   SMEs,   in   order   to   create  long  term,  sustainable  solutions  for  improvement  of  youth  technical  skills  and  practical  experience.    PI   project   and   its   internship  and  youth   training  programs  could   undoubtedly  help  set   standards  and  best  practices  for  the  systematic  approach  towards  the  process  of  upgrading  youth  skills  and  obtaining  practical  ICT  experience  to  meet  global  market  demands.  The  simultaneous,  PI  supported  capacity  building  activities  for  regional   information  and  technology  centers   should  be  able  to  help  create  sufficient  coordination  and  training/internship  execution  capacity  at  the  local  level.  

SME Competitiveness

BiH   ICT  SMEs   reported   that,   in   line  with  global   trends,   their   competitiveness   is   completely   reliant   on   the  skills  and  knowledge  of  advanced  methods  and  programing  exhibited  by  their  technical  staff.  Related  to  this  point,   close   to   two   thirds   of   SMEs   reported   that   more   than   50%   of   their   technical   staff   are   not   skilled  enough  at  present  to  be  competitive  in  EU  and  global  markets.    A  set  of  affordable,  globally  advanced   trainings   in   specific   technical  areas  could  potentially  help  close  the  evident,  current   skills  gap  in  the  ICT  Services  sector  and,  as  a   result,  quickly   improve  competitiveness  and  efficiency  of  SMEs  from  that  sector.  PI  planned  programs  are  well  positioned  and  sufficiently  flexible  to  be  able  to  address  most  reported  immediate  deficiencies  and  gaps  related  to  SME  staff  skills.    Nevertheless,  a  considerable  effort  and  initiatives  need  to  be  undertaken  by  BiH  training  providers  in  order  to  create  long-­‐term  mechanisms  for  surveying  and  addressing  immediate  staff  training  needs  at  local  SMEs  so   their   trainings   could   be   relevant,   timely   and   to   represent   a   good   value   for   SMEs.   PI   shall  make   every  effort   to   share   its   best   practices   with   local   training   providers   so   they   could   eventually   build   on   this  experience  and  create  sustainable  instruments  to  successfully  address  the  SME  skills  gap  on  the  long-­‐term  basis.          

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any entries for your table

of contents.

NAZIV KOMPANIJE COMPANY NAME

ADRESA ADDRESS

KONTAKT OSOBA CONTACT PERSON

KONTAKT TELEFON PHONE

KONTAKT EMAIL CONTACT EMAIL

GODINA OSNIVANJA KOMPANIJE YEAR OF COMPANY ESTABLISHMENT

OSNOVNA DJELATNOST KOMPANIJE COMPANY'S CORE BUSINESS

TRZISNA ORIJENTACIJA KOMPANIJE? DOMACE I INOSTRANO?

COMPANY'S MARKET ORIENTATION? DOMESTIC AND FOREIGN?

BROJ ZAPOSLENIH U VASOJ KOMPANIJI NUMBER OF EMPLOYEES KOJI JE PROCENAT ZAPOSLENIH ZENA U VASOJ KOMPANIJI? TAKODJER UPISITE ISPOD I TACAN BROJ ZENA NA TEHNICKIM I MENADZERSKIM POZICIJAMA

What is the percentage of women employed in your company? Also put the exact number of women in technical and managerial positions.

PRIKAZITE RASPORED ZAPOSLENIH PO POZICIJAMA U KOMPANIJI. IT POZICIJE

Distribution of employees by position in the company (IT positions).

KOJI PROCENAT TRENUTNO ZAPOSLENIH IMA POTREBAN NIVO VJESTINA CERTIFIKATA KAKO BI BILI KONKURENTNI NA eu I GLOBALNIM TRZISTIMA (PREMA VASEM MISLJENJU)

What percentage of currently employed have the required skill level and/or certifications in order to be competitive in the EU and global markets (in your opinion).

NA KOJIM VAM POZICIJAMA TRENUTNO NEDOSTAJE VJESTINA ILI CERTIFIKATA?

In which positions you are currently lacking skilled employees and/or certifications?

U SKLADU SA PRETHODNIM PITANJEM OZNACITI SVE VJESTINE I CERTIFIKATE KOJI SU TRENUTNO POTREBNI ZAPOSLENICIMA VASE FIRME

In accordance with prior question, mark all skills and certifications that are currently needed for your employees

GDJE SU SE OBRAZOVALI VASI ZAPOSLENICI? MOLIM UNESITE BROJ VASIH ZAPOSLENIKA DO IMENA FAKULTETA SA KOJEG SU DOSLI.

Where have your employees completed their education? Please match the number of your staff with the name of the faculties they came from.

RANGIRAJTE OBRAZOVNE USTANOVE PO KVALITETI KADROVA, MOLIM DA KORISTITE SAMO ISKUSTVO VASE FIRME

Please rank EDUCATIONAL INSTITUTIONS BY THE QUALITY OF PERSONNEL THEY PRODUCE, PLEASE USE THE EXPERIENCE OF YOUR COMPANY ONLY

OPISITE POSLOVANA ZNANJA I VJESTINE NOVOUPOSLENIH SA KOJIMA STE DO SADA IMALI PRILIKU RADITI

Describe professional knowledge and skills of newly employed with whom you've had a chance to work already.

OPISITE STANJE TEHNICKIH ZNANJA I VJESTINA KOD NOVOUPOSLENIH U VASOJ KOMPANIJI

Describe the level of technical knowledge and skills of new employees in your company

KOLIKO NOVOG TEHNICKOG OSOBLJA (PROGRAMERI, DEVELOPERI, INZINJERI...)PLANIRATE ZAPOSLITI U NAREDNIH GODINU DANA

How many technical persons (programmers, developers, engeniers..) you are planning to hire during next year?

MOLIM VAS OZNACITE IT VJESTINE I CERTIFIKATE ZA KOJE SMATRATE DA CE BITI POTREBNE VASOJ KOMPANIJI U BUDUCNOSTI

Please mark IT skills and certificates you will be needing in your company in the near future.

Appendix 1 – SME Questionnaire (B/H/S and English)

20

1.   ZIRA  LTD    

34.   Business  Software  Intelligence  -­‐  BSI  doo  

2.   Ping  d.o.o.    

35.   Promotim  doo  

3.   Green  River  Media  d.o.o.    

36.   CA  Design  d.o.o.  

4.   Authority  Partners  d.o.o.    

37.   MiaVision  d.o.o.  

5.   Atlantbh  d.o.o.    

38.   UNDO  design  

6.   Satwork  d.o.o.    

39.   M&I  Systems  d.o.o.  

7.   Codaxy  d.o.o.    

40.   Genel  doo  

8.   Teleklik  d.o.o.    

41.   Cicero,  agencija  za  inf.  djelatnost  

9.   BPS  d.o.o.    

42.   Euridika  doo  

10.   Eastcode  d.o.o.    

43.   Softing  d.o.o.  

11.   Martom  d.o.o.    

44.   Select  M  d.o.o.  

12.   Info  d.o.o.    

45.   Olivebh  

13.   Comtrade  d.o.o.    

46.   Teamwork  doo  

14.   Nites  d.o.o.    

47.   More  Screens  d.o.o.  Mostar  

15.   Nula  Jedan  d.o.o.    

48.   Core  Enigma  doo  

16.   Select  M  d.o.o.    

49.   Orka  

17.   X  soft  d.o.o.    

50.   e-­‐info  d.o.o.  

18.   Hera  d.o.o.    

51.   NITES  

19.   AVaCom  Group    

52.   QSS  d.o.o.  

20.   Neosoft  d.o.o.    

53.   DevLogic  

21.   Knok  d.o.o.    

54.   Agencija  Omnitask  

22.   Ipercast  d.o.o.    

55.   Lanaco  informacione  tehnologije  d.o.o.  

23.   AlfaNet  Informatika  doo    

56.   DVC  Solutions  

24.   Imel  d.o.o.    

57.   Satwork  d.o.o.  

25.   Net-­‐Pro  d.o.o.    

58.   Mistral  Technologies  

26.   Leftor  d.o.o.    

59.   COMPUTING  systems  d.o.o.  

27.   Source  Code  d.o.o.    

60.   Emerging  Markets  Consultants  d.o.o.  

28.   Procom  d.o.o.    

61.   COMP-­‐2000  

29.   Multicom  d.o.o.  Cpe    

62.   DDC  Central  Europe  

30.   King  ICT    

63.   Starting  Point  d.o.o.  

31.   Everest  Consulting  doo    

64.   A-­‐NET  d.o.o.  

32.   Personal  doo        

33.   Infomedia  doo        

Appendix 2 – List of participating companies