The role of institutions in the digital transformation of companies in transitional countries

Abstract

The digital transformation represents a crucial factor for the competitiveness
of companies both at the local and regional, and especially at the global
level. The aim of this paper is to assess the adequacy of the legislative
framework in Bosnia and Herzegovina (BiH) and to compare the level
of digitalization in BiH with other countries in the region. In measuring
the level of digitalization, the paper utilizes the DESI index, which
assesses four key areas: connectivity, human capital, integration of digital
technologies by the business sector, and digital public services. The author
provides an overview of the literature on the impact of institutions on
digital transformation in transitional countries, as well as a critical
review of current and future trends on this topic. BiH has an outdated
and underdeveloped legislative framework concerning the implementation
of digitalization at both the systemic and company levels, which is not
aligned with modern trends. Consequently, BiH ranks among the lowest
countries in Europe in terms of the degree of digital transformation
compared to other countries in the Western Balkans. While the legislative
framework is not the sole cause of BiH's low level of digital transformation,
it represents one of the significant factors. This paper also provides recommendations
to policymakers and managers on the possibilities and
importance of digital transformation for companies, thus making certain
contributions to the field.