The framework Inclusive Green Growth
Digital Economy
By 2030, MSMEs and a circular, low-carbon economy compete through digital adoption and Industry 4.0.
Contributes to CPD outcome: Inclusive Green Growth
The reality and the drivers
Where we start
Infrastructure, Digital Literacy and the Use of Digital Technologies Limited in the Private Sector
BiH consistently ranks below the Western Balkan averages on the Digital Economy and Society Index (DESI). Based on the Digital Pulse findings, SMEs (which make up 98.9% of all businesses) significantly lag in adopting digital across all business areas (e.g., 28% have no web presence, 70% operate without any data backup systems, etc.).
Linear and Extractive Foundation
The current economy is de facto reliant on natural resource utilization and waste generation, leaving a high carbon footprint. Awareness of circular business models and sustainable lifestyles remains low among both consumers and businesses, with little participation in recycling (or repairing, refurbishing or repurposing) initiatives.
Digital Skills Mismatch
There is a profound discrepancy between the theoretical knowledge provided by the education system and the practical digital skills demanded by the modern labor market. The private sector lacks skills and funding for the utilization of various digital systems, innovating with digital business models, and adoption of Industry 4.0 technologies (AI, IoT, and smart manufacturing).
Key trends shaping change
What is driving the shift
Reform Agenda (2024-2027)
The Growth Facility identifies digitalization as a key enabler for private-sector productivity, and emphasizes shifting the private sector from extractive, linear models toward a regenerative, low-carbon economy where digitalization is one of the enablers (e.g., digital industrial symbiosis marketplace, energy consumption optimization through smart manufacturing, etc.).
Labor market is flipping from "high unemployment" to a critical labor shortage
Labor shortage makes digitalization less about saving money but more and more about augmenting missing workers to keep running. Smart manufacturing, new digital sales channels, and other automation initiatives help companies to scale their businesses instead of shrinking in the absence of workforce.
EU Nearshoring
As European companies nearshore production to the Balkans, seeking shorter, more resilient supply chains, they will increasingly demand digital integration of the supply chain that spans both the private sector (e.g., ERP-to-ERP integration) and the public sector (digital customs and e-transport) to guarantee the speed of the supply chain.
Our plan
What we will do, 2026-2030
5 areas of engagement where UNDP will work with partners to deliver this pillar.
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Business Development Support Organizations (BDSOs) digital service lines
Design and launch specific service lines that would drive the digital transition of MSMEs. Upskill BDSO staff to provide ongoing digital advisory services, reducing the high dependency on consultants.
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Support digitalization grants schemes
Support institutions at the entity, cantonal and municipal level to design policy measures that would drive digitalization, and support the process with deployment of the UNDP Grants Management System.
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Sustainable Tourism Sector Digital Transition
Support "Smart Destination" as part of the sustainable tourism ecosystem development (e.g., e-booking platformization, e-Payments, real-time visitor expectations management, ESG digital tools utilization, etc.) to maximize economic value while preserving natural assets.
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Women Digital Economic Empowerment
Support capacity-building programmes that would empower women, especially from regions with low employment, to work in digitally-enabled workplaces or engage in home-based online work.
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MSMEs Digital AI.ccelerator
Support development of a digital fellows/interns system for MSMEs (specifically in rural areas), to drive digital improvements (e.g., launch their social media presence with content generation, set up e-commerce stores on existing platforms, introduce e-Payments, etc.).
Partner with us on this
Let's deliver Digital Economy together
These areas are an invitation. If your organisation can co-design, co-fund or co-deliver any of them, we want to hear from you.