Artificial Intelligence and the Future of Business: How Bosnia and Herzegovina Can Keep Up in the Age of Intelligent Innovation

Artificial intelligence has become a central element of our everyday life, shaping the economy, labor market, education, and everyday life of people around the world. The development of advanced algorithms, large language models (LLMs) and automation transforms the way companies operate, how they make decisions and create innovations. These changes and transitions do not exclude Bosnia and Herzegovina, although the pace of adopting new technologies is slower compared to developed countries. Despite challenges, the domestic IT sector and new generations show great potential to follow global trends and utilize the opportunities that AI brings.

The aim of this article is to explain how artificial intelligence affects the labor market, which competencies are becoming most important for young people and where Bosnia and Herzegovina currently stands in the global AI economy. Additionally, by closely observing key ethical aspects of AI technology application, it provides recommendations for the future development of the state, the education system and generations that are just entering the professional world, all from the perspective of a student. Students, as witnesses of this key turning point in time, become some of the key future actors. 

1. How AI Changes the Labor Market 

Artificial intelligence significantly changes the structure of the labor market, but not in the way often presented in popular media. The fear that machines will take over a large number of jobs has been present for years, but research shows that reality is much more complex. While earlier foundational studies, such as Frey and Osborne (2017), focused on the high probability of automation for specific occupations, contemporary research suggests a more nuanced integration. According to the McKinsey Global Institute (2023), generative AI has the potential to automate activities that currently occupy 60 to 70 percent of employees time, primarily by augmenting human capabilities rather than simple elimination (p. 3). 

Even in industries where automation will be most represented, such as manufacturing, logistics, and administration, most workers will not disappear from the process. Instead, their roles will be transformed and shift to tasks requiring technology supervision, strategic thinking, and decision-making. Furthermore, the World Economic Forum (2025) emphasizes that the labor market is entering a phase of "structural churn," where the emergence of new roles in the AI ecosystem will likely offset the decline of traditional positions. Their analysis suggests that the focus is no longer just on if a job will exist, but how the core tasks within that job will be redistributed between humans and machines (World Economic Forum, 2025). 

Technological change is simultaneously replacing existing work and creating new work, it is not eliminating work altogether. Successful workers of the future are not those who know everything, but those who know how to use technologies to solve problems and adapt. 

2. Competencies of the New Generation - How to Adapt and Stay Competitive? 

Entering the world of artificial intelligence requires young people to develop a combination of technical and interpersonal skills. The first group includes digital literacy, basic understanding of algorithms, working with AI tools, programming, data processing, prompt engineering and knowledge of cloud technologies. It is not about every young person needing to be a programmer, but about knowing how the systems that drive companies today function. Considering that programming languages are increasingly similar to human language, it is assumed that this skill will become common over time. 

The second group of skills refers to abilities that AI cannot replace such as creativity, teamwork, critical thinking, empathy and communication. It is assumed that in the future the most valued workers will be those who can combine these two dimensions, those who understand technology but at the same time have developed soft skills that are key for decision-making and project leadership. For young people in Bosnia and Herzegovina, a particular advantage is the availability of global learning resources. Online platforms, courses and educational communities make it possible to acquire high-value skills even without numerous formal opportunities. The role of universities and the education system should be to provide a basic framework and support, but the most important driver of development is individual initiative. One of the key conclusions is that the new generation must think flexibly, as flexibility becomes the most valued competence of the digital age. 

3. Where is Bosnia and Herzegovina in the AI Economy? 

The development of artificial intelligence worldwide created waves of changes affecting almost all industries, and Bosnia and Herzegovina is situated between the initial and developmental phase in the digital transformation process. In the last few years, there has been a noticeable growth of interest among domestic companies in applying AI technologies, especially regarding task automation and data analytics. This was also discussed at the Network 13 conference in Neum, where experts emphasized that local companies increasingly use tools such as ChatGPT, Copilot and Power BI solutions with embedded AI models. 

However, the digital landscape of BiH reveals a significant gap between potential and institutional readiness. According to the Government AI Readiness Index 2023 published by Oxford Insights (2023), Bosnia and Herzegovina is ranked 117th globally with an overall score of 36.49 out of 100 (p. 21 and p. 50). This ranking places the country significantly behind its regional neighbors, highlighting critical weaknesses in government digital capacity and data infrastructure. As noted in the index, countries in this bracket often struggle with the "Government" pillar, which measures the existence of strategic frameworks necessary for AI adoption (Oxford Insights, 2023, p. 22). 

Nevertheless, there are examples showing potential for accelerated growth. Companies such as BH Telecom, Authority Partners, and Ministry of Programming show that BiH has skilled personnel capable of creating products for the world market. One of the brightest examples of institutional progress is the recently opened Blum Institute for Artificial Intelligence of BiH, the first of its kind in the country. If the state succeeds in creating an environment where science, industry and education are connected, Bosnia and Herzegovina can become a competitive player in the regional AI economy. 

4. Challenges and Opportunities for Young Generations 

Entering the era of artificial intelligence represents one of the greatest turning points in modern education. While part of the public still fears job replacement, young generations have the opportunity to view this development as a chance, not a threat. The Internet provides a wide range of knowledge from machine learning (ML) to advanced prompt engineering and building one’s own AI agents. 

The International University of Sarajevo will soon welcome the first generation of Bachelors in Artificial Intelligence and Data Engineering, but most universities in BiH are only beginning to introduce AI modules. This means students must be proactive and seek knowledge beyond classical textbooks. It is particularly important to understand the difference between automation and augmentation. Automation represents the replacement of certain jobs by machines, while augmentation implies enhancing human work with technology. Young people who learn how to collaborate with AI rather than compete with it will have the greatest advantage. Ethics and responsible technology application also become key competencies, young engineers must understand risks such as model bias, data misuse and the need for human supervision. 

5. Ethics, the Human Component, and Responsibility 

The development of artificial intelligence cannot be separated from ethical principles. Artificial intelligence is not dangerous by itself. Danger arises when it is used uncritically, without adequate supervision and without understanding how models make decisions. One of the most important ethical challenges is bias. AI models learn from large datasets and if these data are biased, the model outputs will be equally biased. This may produce incorrect assessments in hiring, lending or health diagnostics. 

Transparency is the second key principle. AI systems are becoming increasingly complex and human supervision must remain at the focus of every system affecting people’s lives. 

Responsibility is the third pillar. The question of who is accountable for AI system decisions? The programmer, manager or company and it is still not fully regulated. Young engineers and managers must be aware that technology development should not be aimed solely at profit, but also at safety, transparency and the welfare of the wider community. Only ethically aware individuals can ensure that technology truly serves people. 

6. Conclusion and Recommendations 

Artificial intelligence represents one of the greatest technological breakthroughs of our time and Bosnia and Herzegovina has the opportunity to become part of the global innovation network. From a student's perspective, for Bosnia and Herzegovina to seize this opportunity, it is necessary to act in three key directions: 

• Investment in education and AI courses 

Young people need access to modern programs, from machine learning to prompt engineering. Universities could establish AI research centers and collaborate with global institutions. 

• Connecting industry, universities, and the state 

Creating a national AI strategy would provide a foundation for clear development guidelines. Collaboration between educational institutions and AI development centers (e.g., AI Institute, companies developing AI solutions) is key. 

• Support for the startup ecosystem and innovations 

Young innovators need access to funds, mentors, and incubators. BiH can create a wave of new AI startups in health, education, cybersecurity and analytics. 

Our future cannot be defined by the replacement of humans by machines. The future belongs to societies and individuals who recognize the importance of adaptation, innovative thinking and the ability to understand new technologies as a strategic partner, not a competitor. As Alvin Toffler said: “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” Significant changes will inevitably happen, it remains our responsibility as a society to decide how we will adapt. 

                                                                                               Dženana Tursunović, student 

References 

Frey, C. B., & Osborne, M. A. (2017). The future of employment: How susceptible are jobs to computerisation? Technological Forecasting and Social Change 

McKinsey Global Institute. (2023). The economic potential of generative AI: The next productivity frontier. https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-economic-potentialof-generative-ai-the-next-productivity-frontier 

Oxford Insights. (2023). Government AI Readiness Index 2023. https://oxfordinsights.com/wpcontent/uploads/2023/12/2023-Government-AI-Readiness-Index-1.pdf 

World Economic Forum. (2025). Future of Jobs Report 2025: Digest. https://www.weforum.org/publications/the-future-of-jobs-report-2025/digest/ 

Institute for Artificial Intelligence of Bosnia and Herzegovina. (2024). About the institute. https://iai.ba