INVESTMENTS IN ARTIFICIAL INTELLIGENCE AS A DRIVER OF SUSTAINABLE DEVELOPMENT OF SMALL AND MEDIUM-SIZED ENTERPRISES IN BOSNIA AND HERZEGOVINA

Abstract

Artificial intelligence (AI) is transforming small and medium-sized enterprises (SMEs) by enabling automation, predictive analytics and more informed, data-driven decision-making, thereby strengthening their competitiveness and long-term sustainability. In Bosnia and Herzegovina, where SMEs account for more than 60% of total employment and generate a substantial share of GDP, AI has the potential to support economic growth, improve environmental performance and create positive social outcomes, which is particularly important in the context of a transitional economy and EU integration.The paper examines the scale, structure and effects of investments in AI among SMEs in Bosnia and Herzegovina and their contribution to sustainable business models. Empirical data were collected through a survey of 40 enterprises from the trade, manufacturing and services sectors located in major urban centres. The questionnaire captured firm characteristics, types and amounts of AI investments, perceived economic, environmental and social benefits, as well as key barriers to AI adoption. The data were analysed in IBM SPSS Statistics using descriptive statistics, correlation analysis and multiple linear regression, complemented by two qualitative case studies of SMEs that have already implemented AI solutions.The results show that only 20% of the surveyed SMEs currently use AI tools, most frequently chatbots in customer support, customer-relationship systems with embedded AI functionalities and analytical platforms for process optimisation. Firms that invest in AI report a 10–20% reduction in operating costs, more efficient use of energy and materials, reduced waste and an improvement in service quality and customer satisfaction. Regression analysis confirms that both the amount of AI investment and the very use of AI tools significantly contribute to perceived cost reductions, while firm size plays a marginal role.
At the same time, the findings highlight a set of persistent obstacles that limit wider diffusion of AI among SMEs. The most pronounced barriers are high initial investment costs, a lack of in-house expertise and difficulties in accessing specialised external support, as well as limited use of available EU and national support programmes due to complex administrative procedures. The paper therefore proposes a set of policy measures, including targeted subsidies and tax incentives for AI projects, free or subsidised training for managers and employees, and stronger partnerships between SMEs, IT companies and innovation centres. The overall conclusion is that AI investments can become an important driver of technological upgrading and sustainable development of SMEs in Bosnia and Herzegovina, provided that public policies and support instruments are better aligned with the needs and capacities of the SME sector.