Growing a New Tech Hub

It’s Demo Day, and eight project teams supported by EDC’s USAID-funded Partnership for Innovation (PI) project have gathered at a technology park in the middle of downtown Sarajevo. This event could change their futures. Among them are Evergreenest, an online shop that connects artisans with local buyers, and FitPlace, an online platform for personalized fitness and healthy lifestyle programs. In front of them are investors from Bosnia and across Europe, each looking for the continent’s Next Big Thing. Seed money could be the difference between boom and bust.

This scene is common in San Francisco, Boston, and many other innovation hubs around the world. But Sarajevo? That’s new, and it’s in large part thanks to EDC.

Through supporting Bosnia’s growing innovation and technology sector, PI is helping Bosnia and Herzegovina emerge as Europe’s newest economic success story.

“Bosnia has many of the right ingredients to rapidly develop its economy and skills base,” says EDC’s Mike Tetelman, project director for PI. “So the main question is, how do you approach youth employability in a country where jobs are scarce but where there are a lot of good, exciting things going on?”

That’s the crux of the challenge in Bosnia. It’s a country blessed with a history of education but hobbled by a high unemployment rate—up to 44 percent, by some estimates—and an expansive informal economy. Further complicating PI’s mission is that Bosnia lacks an established startup culture.

But Bosnia’s workforce is young, and traditional industries, such as manufacturing, can only hire a small percentage of the available talent. Workforce development is critical—especially in the emerging innovation and technology sectors that hold so much promise here.

In response to this need, PI runs information and communications technology (ICT) trainings in four urban centers—Sarajevo, Mostar, Banja Luka, and Tuzla—to help young people develop technology and programming skills. As of October 2014, EDC had delivered trainings to more than 800 young people.

PI also offers trainings that are designed to help staff of small- and medium-sized businesses improve their productivity and collaboration. The trainings, which include topics such as Agile development methodology and deep dives into iOS and Adobe software programs, have proven to be quite popular.

“Innovators in the United States look to Silicon Valley and the Route 128 corridor. Bosnia doesn’t have that yet,” says Jusuf Tanovic, EDC’s chief of party for Bosnia. “PI is so important because it is helping to create a culture of innovation and investment almost from scratch.”

Creating a demand

Since supply can become surplus in the absence of demand, PI is also working to nurture employers’ interest for this new talent through Moja Praksa, a 10-month internship program that places trained youth into technology startups that need extra help. So far, 396 young people have gone through the program.

Moja Praksa benefits everyone: young people receive on-the-job experience, and emerging tech companies get an extra pair of hands to help them grow their businesses. This is important in Bosnia, where employers want to hire people with work experience, but where entry-level opportunities to develop that experience are limited. Tanovic describes this as a “vicious cycle” that keeps unemployment high.

“Moja Praksa is basically an on-ramp to the economy,” says Tanovic. “It helps young people get something on their resumes while also giving them real-life work experiences.”

PI’s work is generating a buzz in the region. In July, three former Moja Praksa interns created a Windows Phone-based app to help students learn about chemical compounds; they presented this app at a competition in Seattle. And this fall, Light Docs, a startup supported by PI, was featured at TechCrunch’s Disrupt conference in London, a top industry event for inventors and investors from across Europe. Light Docs was launched as an online legal services support platform for regional businesses.

By showing that young entrepreneurs and businesses can support each other in multiple ways, PI could become a regional model for promoting economic growth, helping Bosnia and Herzegovina to follow in the footsteps of Croatia and Slovenia—two other countries in the region that have found their niche in the European economy.

“I want to see a dynamic model where these providers are working with the private sector, and where youth are getting good opportunities for growth that keep reinforcing themselves,” says Tetelman. “A virtuous cycle.”