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

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

Saša Petković (University of Banja Luka, Bosnia and Herzegovina)
DOI: 10.4018/978-1-7998-2708-5.ch009
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The education system at all levels in Bosnia and Herzegovina (BiH), in an emerging and small open transitional economy is still insufficiently focused on strengthening the entrepreneurial spirit of young people, as well as encouraging young people to self-employment as a career option. The purpose of the research is to analyze the development of the entrepreneurial ecosystem of University of Banja Luka (UNIBL) and to model the future contours of a reformed modern medium-sized public university in small developing economies, with the focus on building campuses as entrepreneurial ecosystems. From empirical research carried out in 2018 by using a factor and correlation analysis, it can be concluded that UNIBL does not have the characteristics of an entrepreneurial university and that it is necessary to transform the university. A modified model of the entrepreneurial ecosystem of the University of Chicago adapted to small transition emerging economies was proposed.
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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.

Key Terms in this Chapter

Entrepreneurial Infrastructure: Includes the facilities, business support institutions, educational institutions and services of financial and consulting nature present within a given geographic area which encourage the birth of new ventures and the growth and development of small- and medium-sized enterprises as well as knowledge spillover and encouraging the development of entrepreneurship

Small Developing Economies: Are countries with a less developed industrial base and a low Human Development Index (HDI) relative to other countries as well as GDP per capita less of $12,000 (unofficial threshold).

Innovation: Innovation is the ability to apply creative solutions to problems by innovating or modifying existing products, services, processes, business models or marketing solutions, and the ability to improve or enrich people’s quality of life by commercially implementation of such solutions.

Knowledge Spillover: Is an exchange of ideas among researchers’ individuals, higher education and research institutions.

Entrepreneurial Education: Entrepreneurial education and training may be a part of formal or non-formal educational system, but an informal one as well. It is a combination of academic and practical lectures and training aimed at raising entrepreneurial awareness, knowledge and skills and increasing the entrepreneurial intentions of students.

Entrepreneurial Intension: Intention to start a business within a certain period.

University Entrepreneurial Ecosystem: Logical interpretation of the so-called “university entrepreneurial university” refers to the development of university infrastructure necessary to help students to start their own business. Under the entrepreneurial infrastructure within the university we mean organizational and sub-organizational units established to provide entrepreneurial support to students, such as business incubators, business accelerators, project management centers, career centers, practical training centers, technology transfer centers and centers for the commercialization of innovations and similarly.

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