Innovative Entrepreneurial Ecosystems in Higher Education Institutions: Empirical Study of Bosnia and Herzegovina

Introduction

In high power distance cultures, people with less power expect to be told what to do, they do as they are told, and they are accepting of the power wielded over them. At the same time, it is difficult to compete through innovation when workers and managers expect to be told what to do and not to debate alternatives (Hoftede, 1980). Building an entrepreneurial culture is one of the most important long-term economic development factors. Economic growth and entrepreneurship development, according to Acemoglu and Robinson (2012), require the development of so-called inclusive political and economic institutions, centralized government, democracy, pluralism, and the free market. Protection of property as an additional factor enables the development of free entrepreneurship and the creative destruction that entrepreneurs bring with their innovations, which are widely used in the market. In post-communist countries such as Bosnia and Herzegovina, entrepreneurial culture is in the early stages of establishment and development.

The development of entrepreneurship is especially evident in small developing post-transition economies, such as the BiH economy. Unemployment, and especially youth unemployment, labels education, and especially higher education in BiH as one of the “causes” of high level of youth unemployment. Unemployment rate by ILO definition in BiH at the end of 2018 was 18.4% (Agency for Statistics of BiH, 2019), while according to the methodology of the World Labor Organization, the youth unemployment rate in Bosnia and Herzegovina is one of the largest in the world and it amounted to 67.5% in 2017 (The World Bank, 2017, as cited in Petković, Krneta, Alfirević, & Ivanović Đukić, 2018). There are no official statistics on youth unemployment but estimates from various sources show how alarming the situation is.

The consequences of such a large youth unemployment are unfathomable for the future of BiH, and are the result of global economic trends, the decline in the birth rate and the process of transition that the countries in the region have undergone in the past two decades, and which has recently reflected on the increasing migration of the younger population to developed European countries. Responsibility for poor economic indicators is also borne by public universities in BiH that are characterized by numerous remnants of the previous socialist system which entered the reforms in accordance with the requirements of the Bologna process, but which have not been substantially reformed in accordance with the needs of modern society in the 21st century. Responsibility is also borne by the authorities that have allowed expansion of private higher education institutions without clear ranking criteria for higher education institutions. Although low percentage of population have a university degree in BiH, an exceptionally high number of highly educated young people is still unemployed. One of the reasons for such a situation is an inadequately structured higher education in BiH, in which 46 Higher Education Institutions (HEI) operate, of which 10 is public and even 36 is private (Szanto, Komljenovic, Blagojevic & Stuart, 2017). Also, universities do not have built entrepreneurial ecosystems and cooperation with the economy is not systematically solved. Thus, in developed countries, modern universities encourage innovation, creativity, the development of the necessary skills of young people to enter the labor market and self-employment as a career option for students (Miller & Acs, 2017; Diaconu & Dutu, 2015). Self-employment contributes to the strengthening of the SME sector and economic growth, the reduction of “brain drain” and the emigration of young people from BiH. However, when starting a business, in addition to the general difficulties typical of the overall business and entrepreneurial environment in Bosnia and Herzegovina (Petković, 2017), young people are faced with a number of additional problems that include difficult access to funding sources (Hisrich, Petković, Ramadani, & Paul-Dana, 2016), facing with bad examples of the ruin of small and large businesses (Petković, Jeger, & Sašić, 2016) as well as insufficient preparedness for serious entrepreneurial engagement due to the lack of or insufficient quality entrepreneurial education in formal and non-formal education system.