Breaking Through Barriers: Unveiling Innovation Challenges of SMEs in Bosnia and Herzegovina?

This chapter explores the intricate landscape of innovation challenges faced by Small and Medium Enterprises (SMEs) in Bosnia and Herzegovina, shedding light on the barriers that impede their growth and competitiveness. The study employs an input-throughput-output framework to dissect the multifaceted nature of these barriers, drawing on both a comprehensive literature review and exploratory interviews with 13 SMEs across the manufacturing, logistics, and IoT sectors. Key findings reveal significant challenges, including difficulties in securing highly qualified personnel due to brain drain and educational mismatches, financial constraints, and administrative burdens that hinder participation in innovation support programs. The chapter delves into the theoretical background, qualitative analysis, and discussion on social, political, organizational, and technological factors constraining innovation efforts within SMEs. It offers insights for policymakers and practitioners aiming to foster innovation in emerging economies, highlighting the need for a comprehensive support framework that goes beyond financial assistance. The study underscores the importance of bridging the gap between academia and industry, investing in programs that retain local talent, and creating an enabling ecosystem for SMEs. The analysis provides a nuanced understanding of the specific barriers faced by SMEs in Bosnia and Herzegovina, offering valuable insights for both academic and practical knowledge.