In the extreme circumstances, such as COVID-19 pandemic, companies, as every living organism, are adapting and finding a new way to survive. Unexpected and intense changes in the business environment lead to a market and business crisis, but then the survival instinct leads to business efficiency and innovation in products or processes. Numerous examples of creative response to business challenges due to the COVID-19 pandemic can be seen around the world from March until today, so BH companies are no exception.
In the two rounds of Economic pulse research conducted by UNDP, first one in April 2020 (with 1.023 respondents) the other one in June (with 379 respondents), show that on average 25% of companies reported new forms of collaborations during the COVID-19 pandemic. It is mainly with chambers of commerce, hence improving their capabilities, finding new ideas and ultimately leading the innovation into their business. Truth be told, at the same time, 48% of companies did not try to achieve any new cooperation in the market, but gave in to the crisis, which will of course have a significant impact on their market success and consequently on business results. These data are similar around the world, where ¼ of the companies finds a way to survive, while it is estimated that about 5% of companies will emerge stronger from the crisis and improve their business compared to the pre-crisis period by applying different innovations.
These data further give a potential opportunity for intervention and assistance to companies on the BH market. Thus, for example, international organizations, domestic and foreign chambers of commerce, or different levels of government in BH oriented to economic entities, can use some of the ideas related to future collaboration and innovation, and thus help the BH economy in a long-term manner with intensive and creative assistance. For instance, initiating cooperation and collaboration between business entities, domestic and international, through various match-making events, networking through existing instruments, such as the European Enterprise Network (EEN[1]), building the capacity of entrepreneurs to initiate, create and apply business innovations, and many others. There is, of course, the possibility of case-based learning with which companies in BH can get numerous ideas by following the activities of similar companies around the world and benchmarking their innovations to their own businesses. Of course, within these activities, special attention must be set to particularly vulnerable groups (women, youth, people with disabilities, etc.), as well as to particularly affected industries (tourism, hotels, services, etc.), and additional focus must be placed on them and on engagement to help them survive the period of crisis.
It is interesting to notice how companies in BiH have changed the paradigm in the business process from a short-term to a long-term philosophy. As the Economic pulse data show, only 10% of the BH companies entered the pandemics with long-term projects and secured orders, while 30% of companies have no guaranteed orders whatsoever. This is somewhat in line with popular belief that transition economies and developing economies, such as Bosnian and Herzegovinian, are having short term plans. Due to the turbulent environment, they have too many factors that prevent them from setting a clear visions and long-term strategies. But the crisis has shown them all downsides of such a short-sighted approach, which is likely to lead to a change in business reasoning in prone to the long-term plans and long-term business agreements.
Companies were generally more optimistic in June than in April and expected significant growth in business activity in September 2020. It will be interesting to follow their responses in the third research wave in September, when they summarize their final results after the summer season. Despite this so-called optimism, companies are disappointed by the slow and inconsistent reaction of the authorities in providing much-needed assistance. They have to deal with reduced activities, with almost non-existent demand, with numerous restrictions, and they are still left to alone in this process. But again, each story has two sides, so this situation has led to increased solidarity among companies, and to their orientation towards each other, which will follow with the above-mentioned collaboration and possible innovations in business.
In reality, one third of the companies operated at the same intensity during the pandemic (29% of companies in April and 34% of companies in June), and the pandemic did not affect their business volume or the number of employees. Moreover, there is an average of 5% of companies that reported business surplus during the COVOD-19 pandemic, i.e. they found their chance in the crisis. At the end, approx. 22% of companies state that they see the crisis as a chance, discovering new market segments, new business models and operating in a different mode. Therefore, on the example of economy in Bosnia and Herzegovina during the COVID-19 pandemics, it is a proven logic in the fact that the ‘crisis’ stands for both danger and the opportunity.
Author: Maja Arslanagić-Kalajdžić
[1] See more on thbe current activities of EEN in BiH on https://een.ba/
