Abstract:

In past years it is evident that economies in developed countries have become driven by activities based on knowledge creation and dissemination, creation of new technologies etc. Key sectors of developed economies are more dependant on knowledge creation and dissemination today compared to the past. Importance of knowledge in fostering economic growth is widely recognised among researchers and economists. Stocks of knowledge, R&D activities, innovation are in the focus of a knowledge economy. Research and development is considered to be the key driver of growth in western countries. But, recent research show that it is necessary to extend this concept with innovation due to the fact that developed economies have been looking into new growth models that are based upon innovation. Innovation is considered to be a key driver of the economy, since it leads to competitive advantage, higher productivity etc. Effective national innovation structure and innovation policy on national level are fundamental for developing a knowledge economy. Research shows that in countries with higher level of R&D activities and innovation advances in knoweldge economy development are obvious. Economic growth in Bosnia and Hercegovina from late 1990s was based on direct foreign investment, domestic demand, natural resources etc. Due to a worldwide recession a few years ago foreign investments decreased significantly which lead to a lower economic competitiveness in the country. Economic growth in Bosna and Hercegovina needs to be based on increased productivity, efficiency, competitiveness, domestic investments etc. Restructuring and modernisation in the industry is necessary. Developing a knowledge economy seems to be the right economic strategy. However, due to the fact that key pillars of a knowledge economy are R&D, innovation, modern ICT infrastructure, education and political an economic incentives and regime it is necessary to assess whether Bosnia and Hercegovina is ready to develop a knowledge economy. The aim of this resarch is to determin the level of „Research, development and innovation knowledge“ economy pillar based on World Bank KAM indicators, examination of level of R&D activities in enterprises in Bosina and Hercegovina and of the level of innovativeness in enterprises in Bosnia and Hercegovina based on research conducted by the authors. The results which are presented in this paper have been collected through research conducted in 2012. aiming to asses the country's readiness to develop a knowledge economy and determin a model for knowledge economy development as well as GEM research conducted in 2011 and 2012 in Bosnia and Hercegovina.

Keywords:

Knowledge economy, knowledge, R&D, innovation.