Determining Key Factors for Knowledge Economy Development in Bosnia and Hercegovina

The concept of „knowledge economy“ is based on the view that knowledge and information are at the center of economic growth and development. In today´s ever changing world knowledge has become a key factor for sustainable economic development and competitve advantage. This article looks at key factors for development of knowledge economy and addresses the challenges and imperatives in Bosnia and Hercegovina in the era of knowledge economy. Bosnia and Hercegovina being a transition country with poor economic performance an economic policy reform is much needed and overdue. A shift toward a knowledge economy might represent a road to better sustainable economic growth, prosperity and better quality of life. The aim of this paper is to determine key knowledge economy factors which have an impact on knowledge economy development in Bosnia na Hercegovina and economic growth of its national economy. Benchmarking process and factor analysis were used to determin the key factors among the four knowledge economy pillars (economic incentives and regime, education and training, ICT and research and development). Proposals and measures for enhancing knowledge economy development in Bosnia and Hercegovina have been made based on these results.