Human Capital Mobility and Strategic Foundations

for Economic Development of Society

A dissertation presented by Zoran Crncevic

to

The Faculty of Economics

in partial fulfillment of the requirements for the degree of

Master of Science in the subject of

Economics

University of Banja Luka Bosnia and Herzegovina

January 2012

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Dissertation advisor: Professor Jovo Ateljevic, PhD

Human Capital Mobility and Strategic Foundations

for Economic Development of Society

ABSTRACT

This dissertation explores the economic and societal factors within the living and

working environment which influence the choice of residence of knowledge and creative

workers currently living and working in Banja Luka, Bosnia and Herzegovina (BiH).

Economic development based on creativity and knowledge is the leading growth

strategy for both developed and developing economies. Human capital has become a sought

after resource. In recent decades a handful of metropolitan areas have experienced growth of

their knowledge and creative industries while many other cities have suffered a deterioration

of their pool of knowledge and skills. The majority of the world population, most key

patents and the most prominent scientists are concentrated in a limited number of

metropolitan regions.

Despite a growing amount of research into this phenomenon in developed economies,

a detailed review of the literature revealed that there is a lack of empirical research dealing

with human capital and its mobility in transitional countries. Our research reports on a

comprehensive survey of 420 creative and knowledge-equipped people in Banja Luka, and

four interviews with CEOs of SMEs working in knowledge and creative sectors. This study

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suggests that ties with family and friends are the most important factor when choosing a

place of residence and that culture, amenities, social diversity, and environmental quality are

less important in this regard. The results have also been compared with findings of similar

surveys conducted across the developed part of the EU. We have found that less than a

quarter of the respondents are almost definitely or very likely to leave the country to larger

EU cities – fewer than previously believed.

Keywords: human capital mobility, urban, knowledge economy, creative industry,

innovation, knowledge networks.

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TABLE OF CONTENTS

ABSTRACT ........................................................................................................................ II LIST OF TABLES ............................................................................................................. V 

ACKNOWLEDGEMENTS .............................................................................................. VI 1. INTRODUCTION .......................................................................................................... 1 2. LITERATURE REVIEW ............................................................................................. 10 

2.1. The Knowledge and Creative industries ........................................................... 12 2.2. Environmental factors of human capital accumulation .................................... 17 2.3. South East Europe ............................................................................................ 26 2.4. Conclusion ........................................................................................................ 33 

3. METHODOLOGY ....................................................................................................... 34 3.1. Hypotheses ....................................................................................................... 35 3.2. Variables ........................................................................................................... 37 3.3. Research methods and techniques .................................................................... 40 3.4. Focus group ...................................................................................................... 42 3.5. Survey ............................................................................................................... 43 3.6. The interview phase .......................................................................................... 52 3.7. Validity and Reliability .................................................................................... 54 3.8. Geographic location of the research ................................................................. 56 

4. RESULTS ..................................................................................................................... 60 4.1. Focus group results ........................................................................................... 60 4.2. Survey results ................................................................................................... 68 

4.2.1. Demographics .................................................................................... 69 4.2.2. Living in Banja Luka ......................................................................... 73 4.2.3. Demographics and likelihood of moving away ................................. 78 4.2.4. City features and likelihood of moving away .................................... 82 4.2.5. Basic employment features of the sample ......................................... 98 4.2.6. Work related factors and likelihood of moving away ..................... 101 4.2.7. Work related factors and likelihood of changing the place of work 105 

4.3. Factor analysis and binary logistic regression ................................................ 112 4.4. Results of interviews with entrepreneurs ....................................................... 117 

5. DISCUSSIONS ........................................................................................................... 128 6. CONCLUSIONS......................................................................................................... 144 BIBLIOGRAPHY: .......................................................................................................... 147 APPENDIX I - EQUATIONS ........................................................................................ 156 APPENDIX II – INTERVIEW TRANSCRIPTS ........................................................... 157 APPENDIX III – QUESTIONNAIRE ............................................................................ 174 

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LIST OF TABLES

Table 1: Qualifications of employed and unemployed workers in Banja Luka 46Table 2: Sample frame 47Table 3: How likely are you to move away from the city in the next 3 years? 51Table 4: How long do you plan to stay in current company/organization? 51Table 5: Demographic data 70Table 6: Household structure and size, time lived in the city, and previous residence 74Table 7: Local area of current residential address 75Table 8: Four most important reasons for living in Banja Luka 77Table 9: Age, monthly income, household size, commuting time and likelihood of

moving away 80Table 10: Social activities and likelihood of moving away from Banja Luka 83Table 11: Satisfaction with leisure amenities and likelihood of moving away 86Table 12: Satisfaction with public services and likelihood of moving away 88Table 13: Satisfaction with environmental aspects and likelihood of moving away 90Table 14: Issues of concern and likelihood of moving away 93Table 15: Cost of living and likelihood of moving away 96Table 16: Tolerance and likelihood of moving away 98Table 17: Status, category, and employment sector 99Table 18: Status, sector and category of employment and likelihood of moving away 102Table 19: Employment satisfaction and likelihood of moving away 104Table 20: Age, monthly wages, workweek hours, having second job and likelihood of

changing the place of work in the next 3 years 106Table 21: Sector, category, and status of employment and likelihood of changing the

place of work 107Table 22: The main reasons for changing the place of work 108Table 23: Employment satisfaction and likelihood of leaving the company 110Table 24: Bartlett's Test 114Table 25: Communalities 115Table 26: Total Variance Explained 116Table 27: Rotated Component Matrix 117Table 28: Variables 118

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ACKNOWLEDGEMENTS

First of all, I want to thank my mentor Professor Jovo Ateljevic, PhD, Faculty of

Economics, University of Banja Luka. I don’t know if this thesis would ever see the light of

day, if it wasn’t for his infinite patience and support.

I want to thank my wife Jelena, who helped me with the analysis of my data, and

cared for our daughter Marina all the hours of evenings, weekends, and holidays that I have

spent working on this thesis. As for Marina, she inspires and cheers us all.

I have received precious help from long term friends Vladimir Arnaut, Richard

Hensby, and Srdjan Dusanic. They might not know how much it mattered.

Darko Milunovic, MA, Faculty of Economics, University of Banja Luka provided me

with invaluable help and comments regarding my data, methodology, and analysis.

I would also like to thank the Head of the Study, Professor Dr. Nikola Vukmirovic,

Faculty of Economics, University of Banja Luka, who supported my interest in

entrepreneurship, creativity and innovation.

Not a customary acknowledgement these days, but all this would never have

happened without God's providence.

All errors are my own.

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1. INTRODUCTION

This dissertation is a contribution to understanding the impact of environmental

factors on the decision of place of residency and work by knowledge and creative workers in

the context of the development of the knowledge and creative economy in the city of Banja

Luka, Bosnia and Herzegovina.

Companies working in the knowledge and creative industries are more than ever

valued not according to their balance sheets, but to the value of their brand, their pool of

talent, patents, and the knowledge they possess or develop. In an open global economy,

intellectual capital (W. Miller 1999) has increasingly become a sought after resource for

economic and business development. Commercial value of products and services such as

high-tech manufacturing, software, financial services, consulting, video games, arts, the film

industry, interior design and literature, together with entertainment and communication

systems are increasingly related to intangibles1, above all to the knowledge and creativity

utilized in their production. The knowledge economy encompasses “production and services

based on knowledge-intensive activities that contribute to an accelerated pace of technical

and scientific advance, as well as rapid obsolescence” (Powell & Snellman 2004, p.199).

Global market competition has made policymakers aware that growth and prosperity is

made possible by acquiring the best and brightest talent there is. Human capital has become

the key economic resource, since business infrastructure and investment capital are

1 Intangibles – most commonly refer to legal intangibles (patents, copyrights, trademarks), but also to the brand perception, pool of talent company possesses, relations with customers and suppliers, organization processes.

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accessible elsewhere, and knowledge and creativity are becoming the only competitive

advantages in the long run.

Development of the Internet and related technologies boosted demand for innovative

ideas, creative solutions, and distinctive products with exhilarating sensory attributes.

Information and Communication Technologies (hereafter, “ICT”) revolutionized methods of

knowledge sharing and the creation of new knowledge. Firstly, ICT provided an

infrastructure for knowledge-sharing networks among scholars, R&D2 departments and

practitioners, and secondly, ICT processes an immense amount of information organized in

data storage, which are capable of providing research and analysis (David & Foray 2003).

Sharing of knowledge that can be codified, recorded, or visually articulated turned the

Internet into a massive knowledge accumulating platform. However, innovation is still very

much a process determined by the personal interaction and physical proximity of the people

involved. Transfer of skills and creation of new knowledge depend on a cognition which

stretches beyond experiences that can be sent via a communication infrastructure. People

depend on personal contacts and physical proximity to other people to disseminate and

develop ideas (Polanyi 1966; Z. Acs & Varga 2004; Jensen et al. 2007). Some knowledge is

easier to codify and transfer, such as software code, or written narrative, while other learning

processes are virtually inseparable from physical interaction, such as learning how to paint,

play a violin, dance, or conduct a laboratory experiment. The diversity of knowledge, skills,

available materials, equipment, crafts and skills accumulated in one geographical location

determines the breadth and depth of potential for the creation of new knowledge.

2 R&D - Research and development  

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Historically, cities with varied and complementing industries founded on a

diversified knowledge base have been at the core of economic growth (Jacobs 1970). Places

that manage to attract human capital on a larger scale have always been rare. Glaeser &

Redlick (2008, p.18) argue that there is “an increasing tendency of high human capital

people to move to high human capital places”. Perception of the living environment impacts

on urban growth, argue Glaeser & Redlick (2008), establishing a 53% correlation between

the perceived happiness of people and population growth. In recent decades, a handful of

metropolitan areas have experienced growth in the knowledge and creative industries, while

many other cities have experienced depletion of their stock of human capital. In this way,

development of the knowledge and creative economy increases the gap between rich and

poor, not only on the global, but equally on the local level, and even between regions within

the same national state (Weiming 2000). The majority of the highly educated world

population, the majority of patents, and the majority of the most prominent scientists are

concentrated in several metropolitan regions (Florida 2005). The World Economic Forum

Report (2011) highlights the need for a modern economy for an educated workforce, stating

that highly educated workers originating from other countries make up 2% of the European

labor market, 4,5% of the workforce in the United States, 8% in Australia, and 10% in

Canada. The report states that companies and countries, as a part of their development

strategies, continually struggle to attract the best and the brightest innovative and creative

people, with countries like China and Brazil likely to face a long-term problem of labor

shortages, especially among highly educated professionals and entrepreneurs. The EU has

recognized the strategic importance of new knowledge for its sustainable growth, and

consequentially the budget for strengthening research and technological potential, in terms

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of keeping domestic and attracting global scientific research personnel, amounts to 50

billion Euros for the period from 2007 to 20133.

Demand for relevant knowledge being high, workers in knowledge and creative

companies are in a position to demand a superior working environment, higher pay and

better career prospects. Companies working in knowledge and creative sectors cluster their

activities in a handful of urban regions (Porter 1998; Florida 2005), prime examples

nowadays being Oulu in Finland, Austin in Texas, or Silicon Valley in California. Creative

and buoyant urban environments boost the innovation and exchange of ideas, although not

all cities manage to enhance their innovative milieu and expand creative and knowledge

communities. Areas that attract human capital from around the world provide for the

creation of local learning networks. This ‘free’ talent, available in networks that extend

beyond the workplace, provides companies with a pool of knowledge necessary for their

innovative activities (Saxenian 1994).

Companies and countries are increasingly advertising the quality of the work and

living environment to lure top talent. Talented people are attracted to a work environment

open to varied approaches, collaboration, and the creation of innovative ideas and new

knowledge (Amabile 1998; Porter 2000; Gottschalk 2004; Florida 2002). Creative and

knowledge workers of non-conforming personal beliefs, original ideas and diverse lifestyles,

move to cities which are safe and welcoming to newcomers (Florida 2002). Creating an

entertainment component to city living has become a part of long term strategic planning

(Clark 2003b), but besides amenities, qualities of urban environment that relate to safety,

3 European Union, "EU 7th Framework Programme for Research" (PDF document), downloaded from the European Commission website, http://ec.europa.eu/research/fp7/pdf/fp7-inbrief_en.pdf , accessed April 24, 2011. 

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social security, public services, tolerance and openness seem to be very important to

globally mobile human capital. This brings issues of tolerance and openness to the fore of

research in economics.

Contrary to the findings of Florida (2002) that technology, talent and tolerance are

the key factors of human capital mobility, results of the ACRE research (Musterd et al.

2010) found that human capital in the EU is more likely to stay in the place of birth or study,

regardless of other factors, in what the authors of the ACRE study assign to the lower

general population mobility in Europe. As a part of the ACRE research, Dainov & Nachev

(2008) found that companies in Sofia, Bulgaria, are struggling to acquire and keep highly

qualified staff. Anecdotal evidence suggests that companies in cities in Bosnia and

Herzegovina are meeting similar obstacles. Towns and even larger cities in SEE4, are in

danger of losing their pool of talent which tends to migrate to more prosperous centers.

Evidence of shrinking village and small town populations, with simultaneous population

growth of bigger cities in SEE, show that human capital in the last 30 years moved from

provincial to capital cities and university centers, and further away to developed economies

in pursuit of opportunities in more affluent regions of the world (Katseli et al. 2006).

Statistical data for the period 2007 – 20105 shows that people in the Republic of Srpska, as a

part of Bosnia and Herzegovina, are migrating to larger cities and nearby towns, most

notably to Banja Luka and the smaller surrounding towns. According to the Global

Competitiveness Report (2010), based on the availability index of scientists and engineers,

Bosnia and Herzegovina, as a typical country in transition, is located in 115th place out of

4 SEE ‐ Southeast Europe 5 Republika Srpska Institute of Statistics. Demographic Statistics Statistical Bulletin 2010 No.14, p. 117-118. http://www.rzs.rs.ba/Publikacije/Demografija/Demografski_bilten_14.pdf. accessed September, 12th 2011.

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139 countries covered by the report. It is also one of the highest-ranked countries by the

number of educated and talented people leaving the country. In the context of the Western

Balkan countries, limited data suggests that over one fifth of the tertiary educated population

from, for example, BiH, Croatia, and FYR Macedonia are immigrants in the OECD

countries only (R. Lucas & Martin 2010), and that still more highly educated people from

these countries have settled in the USA, Canada and Australasia.

The research gap

Available studies conducted in developed countries address issues of human capital

mobility in the context of the living and working environment, while countries in transition

are being poorly represented in the literature about the knowledge economy and human

capital mobility. We found that there is a gap in research in terms of how likely knowledge

and creative workers in transitional economies are to move away from their place of

residence or place of work, in relation to the societal and economic factors of their living

and working environment. Reviewed literature does not address differences between

knowledge and creative workers who are more or less likely to move away from their

current place of residence, or leave their place of work, in terms of their perception of the

working and living environment. Also, there is a gap in the literature covering countries in

transition, regarding the question of whether proximity to family and friends impacts on

knowledge and creative workers` decisions when choosing a place of residence, despite the

lower wages and poorer educational and career prospects in transitional economies. The

value of our research is in analyzing the relationship between human capital mobility and

the societal and economic factors of the living and working environment in Banja Luka.

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Research focus

The focus of our research is the relationship between economic and societal factors

and human capital mobility in Banja Luka.

We test whether results from developed countries which show that knowledge and

creative workers have a preference for cities rich in amenities and leisure facilities, with an

abundance of work prospects, numerous opportunities for personal and professional

development, and a tolerant and safe working and living environment, are equally relevant

for countries in transition. To examine the findings of the ACRE research (Musterd et al.

2010) that knowledge and creative workers in the EU are more likely to stay in their place of

birth or study, we analyze how proximity to family and friends impacts on choice of

residence.

Overall Research Aim and Individual Research Objectives

Our overall research aim is to contribute to understanding the strategic impact of

factors within the work and living environment on growth of the knowledge and creative

economy in the context of human capital mobility in countries in transition.

In the course of addressing individual research objectives, we explore the strategic

relationship between human capital accumulation and the societal and economic factors of

the working and living environment, in terms of mobility of employees in the creative and

knowledge economy in countries in transition. Also, the research will contribute to

understanding how traditional social networks (proximity to family, friends, hometown,

place of study, etc.) impact on the decision of knowledge and creative workers in countries

in transition when choosing a place of residence. As an empirical framework we use

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employees in the creative and knowledge economy in Banja Luka, Bosnia and Herzegovina,

as typical of a city in countries in transition, and in context of the region of Southeast

Europe.

The main research question is that of determining the impact of economic and

societal factors of the living and working environment in terms of choice of residence and

place of work of knowledge and creative workers in Banja Luka, as being a typical urban

centre in SEE.

The quantitative part of the study answers sub-questions:

1. What is the significance of traditional social networks in regard to proximity of family

and friends in the choice of residence?

2. What is the significance of city features on the likelihood of moving away from the city?

3. What is the importance of economic factors on the likelihood of moving away?

4. What is the significance of amount of wages on likelihood of changing the place of work?

5. What is the importance of employment factors on the likelihood of changing the place of

work?

6. What is the importance of employment factors on the likelihood of moving away from

the city?

Qualitative approach allows knowledge and creative entrepreneurs to articulate their

thoughts and ideas in their own terms about the following issues:

1. What is the importance of human capital for the competitiveness of companies in Banja

Luka?

2. What is the role of traditional social networks for business start-ups?

3. What is the significance of city features for the business?

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Structure of the dissertation

The paper is structured as follows. After the introductory section, a comprehensive

review of the literature gives us insight into the development of theoretical and practical

understanding of the creative and knowledge economy, dissemination and generation of

knowledge, sources of innovation, human capital mobility, and factors that impact on the

mobility of knowledge and creative workers. Section three (Methodology) describes

methodology and the sample used for our research. Survey and interview results are

presented in Section four, followed by the discussion in Section five and conclusion in

Section six.

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2. LITERATURE REVIEW

Theoretical context of our research is rather broad as a number of topics are

associated with the research problem, and these include: the knowledge economy, creative

industry, innovation and entrepreneurship, the business/living environment and human

capital mobility. The following discussion will focus on: knowledge dissemination,

generation of knowledge, sources of innovation, human capital mobility and factors that

impact on the mobility of knowledge and creative workers.

Debate about the knowledge and creative industries has intensified in the past two

decades (Hartley 2005; Marcus 2005; Musterd et al. 2010; UNCTAD & UNDP 2008;

Florida 2002). Knowledge and creative industries significantly contribute to economic

growth, generating value by applying new knowledge to products, services and

organizational processes. Profit comes from the innovation of an entrepreneur who produces

a commodity with lower costs than the competition, selling it for the prevailing market

price, and keeping the “Entrepreneur`s Profit” (Schumpeter 1939, p.103). Our ancestors,

advocates Jacobs (1970), grew their economies by improving work processes and adding

new types of work. They innovated and grew not so much by specializing, but by

diversifying. Jacobs (1970, p.49) concludes that “economies that do not add new kinds of

goods and services, but continue only to repeat old work, do not expand much nor do they,

by definition, develop”. Economies grow when people find ways to use natural, man-made,

and human resources more sparingly or in new ways, improving old, or creating new

products and services when they add new value to existing assets (Schumpeter 1939; Jacobs

1970; Florida 2002; Romer 2007).

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With development of the knowledge and creative industries the economic paradigm

has shifted from tangible resources such as land, labor or capital to the intangibles. In this

context, Romer (1990) argues that population size is not the key prerequisite for economic

growth, since potential for new product development depends on knowledge and human

capital. Although coming into the fore of the research in economics only recently, the idea

that knowledge has a big impact on economic development is not new. Weber argued (2005,

p.xxxvii) that utilization of technical possibilities, funded on “natural sciences based on

mathematics and exact and rational experiment” had a strong influence on the development

of capitalism. Breaking apart from the neoclassical economic theory of diminishing returns,

in his study of data from 1909 to 1949, Solow (1957) found that 7/8 of the rise in

productivity is due to technological change, and only 1/8 of the growth was due to increased

capital per man hour. In this sense, neoclassical theory becomes a special case of

endogenous growth theory with the margin of innovation converging to zero (Aghion &

Howitt 2007). Building on the model of Solow, Lucas (1988) incorporated human capital,

identified as the production skill of a worker and its accumulation over time, marking human

capital as the main source of rising productivity, both of labor and physical capital.

Primarily, technological change comes as a method by which we manipulate raw materials,

becoming more sophisticated and getting more products from fewer resources (Romer

1990), meaning that “the old total or marginal cost curve is destroyed and a new one put in

its place each time there is an innovation” (Schumpeter 1939, p.85). Leaving behind old

ways of production depends on the rate of advancement of new, more resource-effective or

improved products and services. This process depends on the ability of people to

disseminate and create new knowledge.

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2.1. The Knowledge and Creative industries

Our focus on industries based on knowledge and creativity is driven by the

assumption that new knowledge is the key factor of economic development. The

demarcation line between the creative and knowledge industries has not been clearly drawn,

although there are several classifications in circulation. Throsby (2001) pointed to

differences between cultural and utilitarian industries, stating that cultural industries involve

some aspects of creativity, convey certain messages or meaning, and imply some form of

patent or copyright protection. According to this view, classical arts, design, and

multimedia, in general, classify as cultural industries, while scientific research, although

being creative and having a potential of being a property, would generally belong to the

functional end, focusing on practicality “rather than at the communication of symbolic

meaning” (Throsby 2001, p.4). According to UNCTAD6 & UNDP7 report (2008, pp.11–16),

concept of creative industries is new, evolving and based on their dynamics, without a single

definition for the creative economy, and with no consensus about activities that summarize

the sector. According to the report, these industries “constitute a set of knowledge-based

activities”, using “creativity and intellectual capital as primary inputs”, not necessarily

limited to the arts but rich in creative content, being on the crossroads “among the artisan,

services and industrial sectors”. For Gottschalk (2004), knowledge workers are classified

according to the skills and type of work they perform: lawyers in a law firm, engineers in

engineering firm, medical doctors in a hospital, product developers in manufacturing

company, professors in a business school, and planning staff in a government agency.

6 United Nations Conference on Trade and Development 7 United Nations Development Programme 

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Researchers for the ACRE project (Musterd & Murie 2010f; Musterd et al. 2010) adopted a

sector approach, classifying arts, media, entertainment, advertising, architecture, art and

antiques, computer games, crafts, design, designer fashion, film and video, music,

performing arts, publishing, computer software, and TV and radio production into the

creative sector, while jobs “heavily reliant on professional knowledge”, such as legal,

accountancy, business management consultancy, advertising, and R&D professions are

classified into the sector of knowledge-intensive business services. According to Florida

(2002), creative class is a class of people who “share a common creative ethos that values

creativity and individuality, whether they are artists or engineers, musicians or computer

scientists, writers or entrepreneurs”. Glaeser (2004) argues that Florida`s creative class

classification is not distinctively different from that of the human capital (Becker 1962;

Mincer 1981; R. E. J. Lucas 1988; Romer 1990; Jones 2004; Benhabib & Spiegel 2005; R.

E. J. Lucas 2009). What both groups have in common is an advance rate in which they

accumulate and share new knowledge in their everyday contacts, they are “a class of

educated people, thousands, now many millions of people who spend entire careers

exchanging ideas, solving work related problems, generating new knowledge” (R. E. J.

Lucas 2009, p.1).

We agree that a region’s creative and knowledge occupations cannot be “read off its

industrial structure” (Barbour & Markusen 2007, p.4). For our research we adopted a view

that creative industries, as an agglomeration of a very large number of complementing

professions, cover jobs such as: marketing and PR, advertising, architecture, trade with

antiquities, ICT services, creative crafts, music, visual arts, theater, newspapers – printed

media/publishing/web portals, video, film, photography, music production, and radio, while

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knowledge-based occupations are: legal and financial intermediaries and consulting

services, science, R&D, engineering, university faculties, and so on.

Human capital, innovation and knowledge

Present research on human capital and economic growth is closely associated with a

number of topics, including the generation of new knowledge, creativity and innovation.

Lucas (1988) defines human capital as a general skill level, while Mincer (1981) recognizes

human capital as capacities gained through education, training and experience. Human

capital does not only represent available knowledge embodied in people, or shared between

them, but also includes creation of new, economically relevant knowledge (Mincer 1981).

"Doing things differently in the realm of economic life” is considered by Schumpeter (1939,

p.80) to be an innovation. Creating something new, whether in a physical form or in a form

of mental imagery, is regarded by Vygotsky (2004) to be an act of creativity or imagination,

intrinsic to all human beings as their ability to process past knowledge and recombine it into

innovations. New knowledge is created at the boundaries of the old (Gottschalk 2004).

Innovation is built up on works of innovator`s predecessors, because “creation is a historical,

cumulative process where every succeeding manifestation was determined by the preceding

one.” (Vygotsky 2004, p.30). Innovation creates new value, regardless of whether it creates

new products, new markets or organizational structures (Schumpeter 1939). Creativity is a

process that precedes and fertilizes innovation. Economically relevant knowledge is

idiosyncratic to innovative people, as their ability to recombine existing resources creating

new products or services. Knowledge is not a duplicate of reality, according to Piaget (1971,

pp.9–16), it is a system of transformational structures which processes experience, giving it

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a more or less adequate set of “possible isomorphic models among which experience can

enable us to choose”.

Development of creative insight is determined by the process of social filtering

between individual's conscious knowledge, and subconscious processes that are responsible

for recombination of accumulated knowledge and different ideas (Csikszentmihalyi &

Sawyer 1995). In the context of a workplace environment, Amabile (1998) argues that

creativity of an individual depends on three components: expertise (knowledge), creative-

thinking skills, and motivation. Diversity of knowledge boosts up creativity, even when its

domains are not closely related, such as science vs. art, or finance vs. literature. Rich and

varied experiences add to a more potent imagination of an individual (Vygotsky 2004;

Simonton 1999). Creativity takes on different forms; it is “associated with a mind that

exhibits a variety of interests and knowledge” (Simonton 1999, p.207). Different forms of

creativity are interconnected, “not only do they share a common thought processes; they

reinforce each other through cross-fertilization and mutual stimulation” (Florida 2002, p.33).

Presence of creative stimulus is the key not only for development of great works of art and

scientific breakthroughs, but also for everyday incremental innovations which are crucial for

the rise in productivity of both human and physical capital. Novelty ideas could come from

convergence of random and varied stimuli, sometimes through collaboration of people from

exceptionally different domains (Csikszentmihalyi & Sawyer 1995; Nooteboom 2000).

New knowledge is created through interactions with others. Transfer of knowledge

between people is made possible if divergence of their cognitive processes, labeled cognitive

distance by Nooteboom (2000), is not too extreme. This means that it would probably take

longer for a Spanish painter and a Chinese nuclear physicist to create something together

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than for an Aboriginal didgeridoo player and Norwegian opera singer. If knowledge is only

varied, but lacks common attributes, internal communication in the group could be

damaged; otherwise, diversity of knowledge supports innovative processes and the ability of

an organization to absorb new knowledge to its absorptive capacity (Cohen & Levinthal

1990). Therefore, the amount of information that circulates around doesn`t predict the

ability of an enterprise to innovate. Transfer of knowledge depends on the quality of human

capital and a shared learning network (Fagerberg et al. 2010). It also depends on the quality

of knowledge that is being transferred. Knowledge that is easier to articulate and record in

the form of a script, audio or video recording is easier to transfer through space and time,

while knowledge that requires personal contact to be transferred is more difficult to share or

copy. Polanyi argued that “we can know more than we can tell”, meaning that “tacit thought

forms an indispensable part of all knowledge” (Polanyi 1966, p.20). Tacit knowledge could

be a mental process by which we recombine something we already know, such as

organizational, communicational or learning skills, or it could represent a skill that can only

be learned by practice; for example, how to operate a crane, draw a picture or provide a

medical diagnosis using a stethoscope. Also, knowledge that maintains functionality of

social networks is mainly tacit knowledge, such as “skilful human behavior (quarreling,

flirting, telling stories...) that may lose their social and economic functionality were they

transformed into codes” (J. Johnson & L. Lundvall 2001, p.7). Tacit and codified knowledge

are complementary and mutually dependent (Gottschalk 2004). Dissemination of codified

knowledge depends on acquired tacit knowledge, which exists in a form of practical

knowledge or knowledge that is still not completely developed (Z. Acs & Varga 2004;

Jensen et al. 2007).

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Besides being tacit or codified, some knowledge is inherently idiosyncratic,

determined by individual experience, specific skills, insights and access to information, so a

rich pool of existing knowledge does not automatically increase levels of economically

relevant knowledge (Z. J. Acs et al. 2003; Z. J. Acs et al. 2005). Knowledge of particular

entrepreneurial opportunities is available only to those who acquire it through specific

individual circumstances, related to their work and living arrangements (Z. J. Acs et al.

2003). Human capital is person-specific and represents a rival, excludable economic good

(Romer 1990; Jones 2004). Individual knowledge and skills cannot be duplicated, while

innovation can be replicated with or without added costs.

2.2. Environmental factors of human capital accumulation

Contemporary research on economic development underlines the importance of

human capital for growth in the knowledge and creative industries. The following chapter

will focus on factors of a working and living environment that most significantly impact on

human capital mobility.

Creative and knowledge workers: artists, scientists, writers, designers, architects, and

others who became successful by utilizing their creativity and knowledge, bring prosperity

to places where they work and live. Entrepreneurs depend on close friends (strong ties) and

casual acquaintances (weak ties) to acquire information, capital and knowledge; although an

impact of friendship and family ties on local entrepreneurial potential has not been

thoroughly researched (Greve & Salaff 2003). In this respect, social networks work as the

entrepreneurs` distribution, knowledge and support networks. Innovative communities

18

provide people with a trial and error testing ground, so they can find the best way to exploit

an invention or choose a more efficient technological combination (Schumpeter 2003).

Entrepreneurs are often educated above average, and a higher concentration of

university graduates may lead to higher number of enterprises (Glaeser et al. 2009).

Agglomerating to certain places, knowledge and creative workers not only increase their

productivity by reducing transport costs and being closer to natural resources and clients, but

also boost access to the ideas of their peers (Glaeser 2007). People introduce information,

personal contacts, specific experiences and personal insights from the outside world into

their work teams (Nooteboom 2000). Industries based on innovations utilize these

knowledge networks which spread outside the boundaries of the workplace (David B

Audretsch 1998; David B. Audretsch & Maryann P. Feldman 2004).

Places with an abundance of business, educational, cultural and self-actualizing

prospects are more likely to attract creative and knowledge workers than places where those

opportunities are scarce. Available research recognizes that knowledge and creative

industries agglomerate in a handful of cities, while other regions are experiencing depletion

of human capital (Florida 2005). However, Glaeser and Redlick (2008) argue that in

declining areas, with a net outbound human capital migration, people are probably more

likely to return to schooling in order to raise their chances to migrate, adding in that way to

the accumulation of human capital in the area. Authors also found that declining areas might

not experience decline in social capital, keeping networks between family and friends

strong.

19

Work environment

Literature on human resources management and psychology of motivation is broad

and varied, and within the scope of this work, in this chapter we focus on a segment of

human capital mobility in regard to the quality of a workplace.

The quality of work environment is the key factor in attracting younger creative

workers, who are more likely to move to companies which offer flexibility, job security,

decent pay, reasonable working hours, talented work colleagues and a dynamic work

community (Florida 2002). Vibrant places provide the setting for spontaneous interaction

between people and the development of creative communities, which become conduits for

new knowledge and innovative ideas. Environment is a catalyst for innovative processes, a

source of knowledge, enthusiasm and creative inspiration (Porter 1990). Quality of the

workplace environment determines the creative potential of knowledge and creative workers

and determines their ability to innovate (Amabile 1998; Amabile, Conti, Coon, Lazenby &

Herron 1996a). Social setting impacts on the creation and accumulation of knowledge,

creative-thinking skills and motivation. Challenge, organizational encouragement, work

group supports and supervisory encouragement may work favorably towards creativity and

innovation within an organization, while strategic misconceptions could discourage people

to be creative at work (Amabile, Conti, Coon, Lazenby & Herron 1996a). Regarding the

workplace environment and motivation, De Long and Fahey (2000) argue that there are four

ways in which organizational culture determines how knowledge is created, shared, and

used: culture shapes assumptions about which knowledge is important, culture embodies all

the unspoken norms or rules about how knowledge is to be distributed between the

20

organization and the individuals in it, culture creates the context of social interaction, and

culture shapes ways in which new knowledge is created and adopted. Mutual trust and

support, a diverse and a rich knowledge base, and tolerance towards new approaches foster

innovation and creativity of work teams. Nahapiet et al. (2005) argue that the collective

pursuit to excellence, rather than self-interest would mean larger innovative capacity of the

organization, higher knowledge share and individual satisfaction with the group. Otherwise,

competition at all costs, and focus on short-term rewards could be damaging for group

creativity.

Knowledge and skill equipped people are aware that they are competing on the global

market, and that they have to excel professionally, constantly updating their knowledge and

creative skills in order to keep jobs and maintain their standard of living. Florida (2002)

found that nine out of ten factors that make workplaces attractive are intrinsic: challenge and

responsibility of the work, flexibility of job and work environment, job security and work

environment without high levels of chaos, appropriate base pay and benefits, chances for

professional development, recognition among peers from the field, stimulating work

environment, exciting work substance, supporting and nourishing organizational culture, and

location and community. Knowledge and creative workers react to pay incentives in

choosing a place of work, but it seems other factors, such as access to new ideas and

knowledge, stimulating work culture and inspiring environment could play an important role

in human capital mobility. Clusters of the knowledge and creative industries enable local

talent to overcome “the inward focus, inertia, inflexibility... increase information flow, the

likelihood of new approaches, and new entry from spin-offs, downstream, upstream, and

related industries” (Porter 1990, p.151). Concentration of knowledge and creative workers, a

21

supporting workplace environment and attractive job opportunities are magnet for human

capital.

Living environment

Literature concerning the relationship between the quality of the living environment

and economic development has grown in scope recently. In this chapter we focus on the

segment dealing with factors of urban living in the context of human capital mobility.

Initial human capital is a strong indicator of the future city growth (Glaeser & Saiz

2003; Glaeser 2007). Cities with diverse work and lifestyle opportunities have been the

environment for the development of creative networks. Richness and diversity of social

networks and vicinity of people support knowledge spillovers, argue Audretsch and

Feldman (2004), since intensive social networking lowers marginal costs for transfer of tacit

knowledge. Cities with an abundance of business, educational, cultural and self-actualizing

prospects are more likely to attract creative and knowledge workers than places where those

opportunities are scarce. Adequate macroeconomic, political and legal frameworks

constitute a necessary, but not entire condition for successful exploitation of local firms’

structures and advantages of entrepreneurial micro-environment (Porter 2000). A successful

city is a nucleus of an atom (R. E. J. Lucas 1988) that attracts increasing labor inflows.

Throughout history, cities played a developmental role as regional craft, finance and

knowledge centers. Success of empires has always been closely linked to the rise of their

most important urban centers, argues Jacobs (1993), while their decline is followed by

economic and social decay. Mass-manufacturing centers of the developed world, such as

Detroit, Pittsburg, Manchester, and Liverpool experienced loss of human capital and the

22

deterioration of their economies. Likewise, it happened in mass-production regions of

countries in transition. On the other hand, cities that survived the decline of mass-production

did not have highly specialized manufacturing, but varied and complementing industries

founded on the diversified knowledge base (Jacobs 1970; M. P Feldman & D. B Audretsch

1999).

For a better chance of success, knowledge entrepreneurs prefer to settle in

entrepreneurial areas with higher levels of skills and affordable basic services (Glaeser et al.

2010). Creative and knowledge workers seek places with positive energy, artistic vibe and

hordes of like-minded people to mingle with. Glaeser et al. (2010) found a strong correlation

between the amenity index and level of employment in metropolitan areas, arguing that high

amenity places attract human capital with college degrees; therefore, industries that employ

them are also clustering in those cities. Also, people are willing to pay a higher price for

living closer to the city center (Glaeser 2007), because city centers are usually those places

where people roam around, stop and talk with strangers, introduce each other to new

acquaintances, and exchange new ideas in passing. This experience in communication,

gained in leisurely, unpretentious conversations help knowledge and creative workers to

share and generate new knowledge, and test their theories or viewpoints. Cities rich in

amenities offer a social context for initial contact and friendship in a variety of situations; in

art, sport, music events and venues, in clubs, art classes, lectures, bars, street performances,

opera houses, libraries or galleries. Florida argues that the creative class is drawn to places

with a flavor of strong local culture:

23

“The culture is “street-level” because it tends to cluster along certain streets lined with a multitude of small venues. These may include coffee shops, restaurants and bars, some of which offer performance or exhibits along with the food and drink; art galleries; bookstores and other stores; small to mid-size theaters for film or live performance or both; and various hybrid spaces–like a bookstore/tearoom/little theater or gallery/studio/live music space – often in storefronts or old buildings converted from other purposes. The scene may spill out onto the sidewalks, with dining tables, musicians, vendors, panhandlers, performers and plenty of passersby at all hours of the day and night ... It is not just one scene but many: a music scene, an art scene, a film scene, outdoor recreation scene, nightlife scene, and so on – all reinforcing one another.” (Florida 2002, p.183)

It is easier for people to approach other people in crowded streets, than in cities

where amenities are few and far between, or in neighborhoods poisoned with crime and

mistrust. Jacobs (1993, p.47) argued that “sight of people attracts still other people”, making

areas more attractive and safe. An urban planner William Whyte (2001), researching

circulation of people in downtown New York, was amazed to find that people follow certain

patterns of gathering in more crowded places, not avoiding, but looking for crowds, busy

streets and eventful plazas. Clark (2003b) considers some places to be cooler than other, in

relation to how young and mobile people perceive the quality and range of its amenities. The

level of coolness is determined by the number and importance of local entrepreneurs,

inventors, scientists, artists, musicians, sportsmen/women, and also on the aesthetics of the

built environment, sport and cultural events, festivals, etc. Glaeser et al (2004) argue that

there are four key city amenities: the range of available goods and services, aesthetic

features of the city, quality and range of public services, and the quality and speed of

transport and availability of jobs. Authors found that the number of local restaurants, live

performance theaters, attractive city dwellers, city architecture, superior schools, low crime

24

levels, good local weather, well-organized transport connections, and availability of jobs are

local factors that impact on future city growth.

High amenity places propel entrepreneurship and predict growth in cities (Glaeser et

al. 2004). However, amenities that serve the local community and facilitate knowledge

spillovers shouldn`t be confused with tourist amenities, although they often coincide. Funky,

but pricey, tourist attractions and urban renewal projects often cause a rise in housing costs

and price out key city staff such as teachers, nurses or police officers, as has been happening

in London, UK, since the nineteen eighties. On the city level, Florida (2005) noticed that

rising inequality, higher costs of housing, and social stratification posed a great threat to

future economic growth, preventing human capital with lower incomes to realize fully their

creative potential, focusing instead on mere survival. Higher fixed costs are also

discouraging entrepreneurship in metropolitan areas (Glaeser et al. 2010). If expenses are

too big, people are more likely to trade off their present chic and funky city lifestyle for less

glamorous places where it is easier to afford a decent standard of living with lower fixed

costs. City as an entertainment machine (Clark 2003b; Clark et al. 2003), and creative city

(Florida 2002) is a place of prosperous knowledge and creative economy and/or a place with

rising costs of living, struggling entrepreneurs and declining human capital. Glaeser (2003)

proposes that cities could lure human capital by providing good basic services, amenities

and high-quality public schools, ensuring in that way sustainable growth, because high skill

cities are more likely to succeed in reinventing themselves and overcoming economic crises.

Research undertaken in the EU found that there is no single city characteristic that is

important to creative-knowledge workers (Musterd & Murie 2010f; Musterd et al. 2010).

Policy makers, researchers and city planners must adopt a multi-factor approach, looking

25

into the history of a place, quality and diversity of social and business networks, transport

and communication infrastructure and quality and cost of housing. According to Musterd &

Murie (2010d) there are soft and hard conditions that determine how city dwellers grade

their city environment. Soft conditions (Musterd & Murie 2010d, p.25) include “urban

‘amenities’, such as the quality of life, urban atmospheres, housing market situations, levels

of tolerance, openness and the diversity of the population”, while hard conditions relate to

factors that are traditionally regarded as “playing the major role in explaining the

development of firms in urban regions: availability of capital and of labor with adequate

skills, proper institutional context, tax regimes, up-to-date infrastructure and accessibility”

(Musterd & Murie 2010a, p.7).

Contrary to the description by Musterd and Murie, we consider proximity of family

and friends, and other soft factors that support social networks, as societal factors. Our

economic factors are related to local hard factors which depend on the financial and political

decisions of the state and local authorities.

Proximity to friends or family most often determines where European creative-

knowledge workers settle or move to (Musterd & Murie 2010f) , what differs from Florida`s

(2002) findings, which argue that tolerance, openness and diversity are key factors in

choosing a place of residence for the creative and knowledge workers. This discrepancy

between Europe and USA could appear to be due to higher human capital mobility in the

USA, where knowledge and creative workers are less reliant on friendship and family

networks and more on easier integration into local community and professional and business

networks. This makes issues of tolerance, openness and diversity the key factors in attracting

and keeping entrepreneurial human capital (Florida 2002). Furthermore, the existence of

26

national boundaries, differences in citizenship rights and responsibilities, stronger

interventionist traditions and the welfare state are also likely to affect European human

capital mobility (Musterd & Murie 2010e, p.238).

Overall, it is apparent that human capital in developed countries is attracted to cities

with a superior quality of amenities, with diverse and rich social networks and a higher

number of new business ventures. It seems that pre-existing social networks are more

important in the EU than in the USA.

2.3. South East Europe

In this chapter we review available literature on human capital conditions and the

development of the knowledge and creative industries in SEE.

Countries in the SEE and CEE8 regions went through a long period of a socialist

planned economy, followed by a period of transition to the market economy. The Czech

Republic, Slovenia and Poland went through the transitional period more successfully, while

others, such as Romania, Bulgaria and most of the ex-SFRY9 republics are struggling to

consolidate their economies. The SEE countries have higher unemployment rates than the

EU average, ranging from more than 10% in Croatia to nearly 40% in Macedonia.

Unemployment rates in the SEE countries are particularly high for young people, with 60%

in FYR Macedonia and Bosnia and Herzegovina and 50% in Serbia (R. Lucas & Martin

8 CEE ‐ Central and Eastern Europe – countries of the former communist block 9 SFRY – The Socialist Federal Republic of Yugoslavia 

27

2010). In relation to their GDP - per capita (purchasing power parity), CEFTA10 countries

are still far behind the EU countries, apart from Croatia, which is the closest to the EU

average of USD32.400, with GDP - per capita of USD 17.700.

Development of knowledge and creative sectors in the CEE countries has been

limited in scope and depth. More potential for development has been in the software

industry, owing to lower barriers to entry, the available human capital base and easier

knowledge transfer due to higher proportions of codified knowledge (Radošević 2006).

Radošević et al. (2008) found that barriers to growth that software - producing entrepreneurs

experience in Central and Eastern Europe are primarily related to a limited domestic market

(78%), lack of public support (75%) and high costs of labor (71%). These authors interpret

high costs of labor as poor access to skills and knowledge. The research established that the

main sources of knowledge for entrepreneurs are in-house knowledge, customers and

suppliers, followed by fairs, exhibitions, patents, journals, and research organizations. The

Internet was mentioned by 85% of entrepreneurs as an additional source of knowledge, and

knowledge of domestic markets and networks are their biggest competitive advantages

(Radošević 2006). Also, links with foreign partners are considered more important than

links with local partners, while poor marketing, lack of programmers and designers, and

limited expertise in specific areas are seen as the biggest obstacles.

Knowledge-based entrepreneurs in the CEE countries are highly educated: 31% have

a BA or the equivalent, 44% a master’s degree and 19% a PhD, with only 4% of the CEO's

completing only secondary education (Radošević et al. 2008). Local entrepreneurs own 80%

10 CEFTA (Central European Free Trade Agreement) is agreement between non-EU countries in Central and The South East Europe. Member states are: Albania, Bosnia and Herzegovina, Croatia, Kosovo, FYR Macedonia, Montenegro, and Serbia. CEFTA countries have a combined population of 28 million people. 

28

of software companies in the CEE region, with a share of foreign ownership ranging from

15% in the Czech Republic to 28% in Bulgaria, while no foreign ownership is recorded in

this sector in Serbia (Radošević 2006). Growth in the number of employees in the CEE

sector for the 1999 - 2003 period increased by 37% in Bulgaria to more than 200% in the

case of Romania and 11% in Czech Republic (Radošević 2006). How ICT entrepreneurs in

the CEE region perceive their workplace appears to be very important, since the sector

recorded high mobility of employees, with a particularly high turnover in Romania (69%

leaving and 101% joining other firms), somewhat lower in Serbia, and the lowest in

Slovenia (11% leaving and 33% joining other firms).

Creative industries in SEE are mainly concentrated in the countries` capitals, with

high labor intensity and job insecurity for creative workers (Primorac 2006). Working

conditions are varied and it is much harder for creative than knowledge enterprises and

workers to maintain a sustainable level of paid work and annual income. Creative workers

are more likely to do project or contract work, with long working hours and unreliable

income. It is questionable whether “the freedom, self-actualization and self-governance”

related to the creative lifestyle could outmatch the negative factors of these jobs (Musterd &

Murie 2010c, p.342).

With insufficient funding from public institutions and lack of interest from private

companies, traditional arts and crafts are being constantly underfunded, while more

commercial creative sectors, especially design, architecture, pop music and the film industry

are often sponsored by privately owned companies with little or no concern for the greater

artistic or conceptual value. Fragmented markets, different languages and remaining

29

political tensions are obstacles for larger market penetration, diminishing returns on

investments, and with that, chances of survival for new creative business ventures.

Human capital in South East Europe

Literature on human capital mobility in SEE is rare and limited in breadth and depth

of research. The following discussion will focus on human capital mobility in terms of the

socio economic factors of the living and working environment in the region.

The SEE countries are facing high emigration rates to developed countries, especially

to the EU. Horvat (2004) argues that social as well as political factors play an important role

in outbound migration from the SEE countries. Since WWII, people from the countryside

and provincial towns have migrated to larger cities and metropolitan areas in their home

countries. Migration processes in Bosnia and Herzegovina, Croatia and Serbia, from the

periphery to urban centers and abroad, were exacerbated during the breakup of the former

Yugoslavia and by the 1991-1999 civil wars. Larger cities in SEE, the university towns,

regional urban centers and capitals have attracted younger and educated workers from the

region. There has also been strong trend of migration abroad. Anecdotal evidence suggests

that high numbers of people with tertiary education want to leave their home countries. The

situation is especially alarming in Albania where half the lecturers and researches from

universities left the country during the last twenty years (Horvat 2004; R. Lucas & Martin

2010). In regard to mobility of human capital, high unemployment rates could further propel

outbound migration to more developed EU metropolitan areas as soon as administrative

barriers are lifted. Currently there are still many obstacles to migration from SEE to other

parts of Europe/EU. Some of them are acknowledged by the Commission of the European

30

Communities (2007), mainly relating to legal and administrative obstacles, availability and

costs of housing, employment of spouses and partners, portability of pensions, linguistic

barriers, and issues on the acceptance of qualifications.

In Bosnia and Herzegovina, research confirmed that around 70% of young people

want to leave the country, mostly for economic or political reasons (United Nations WPAY

– Youth UNIT 2005). In the age of the Internet and globalization, knowledgeable and

skilled people are more likely to search for professional opportunities outside locally

available employment opportunities and often nepotistic state structures. Transparency

International (2010) reports much higher levels of corruption in SEE than in developed

countries, while sociological research emphasizes weaknesses of local governance:

“In order to sharpen the debate, it could be said that most talent leaves a country because they belong to a parallel, invisible and unwanted intellectual elite whose perception of governance is based on meritocracy. On the other hand, the present social elite in their domicile countries have emerged from the turbulence of transition often tainted with corruption and a wild, non-ethical capitalism which created an ‘oligarchic’ concept of state management that cannot be attractive. Under such circumstances, the reasons for emigration are primarily ethical. In this context, the brain drain phenomenon could be interpreted as avoidance of direct social conflict and some kind of silent revolution by those who want to be valued according to their merits and not ‘managerial’ capabilities that can be perceived as the base for implementing false-transition.” (Bozoki 2002, p.14)

High unemployment rates, bureaucratic obstacles, non-functioning legal systems, and

political instability disrupt accumulation of human capital and strategic development of the

knowledge and creative economy in the SEE countries. Knowledge and creative workers

from SEE are emigrating in pursuit of a better working and living environment. Over one

fifth of the tertiary educated population from Bosnia and Herzegovina, Croatia, and FYR

Macedonia are immigrants in the OECD countries (R. Lucas & Martin 2010, p.66), and still

31

more highly educated people from these countries have settled in the USA, Canada and

Australasia.

The ACRE research segment from Sofia, Bulgaria, reveals that policy makers are still

ignorant of soft environmental factors, since they are finding it impossible to tackle even

traditional, hard factors of urban development (Dainov 2008). Sofia, as the only

metropolitan area in the country, attracts creative knowledge workers regardless of their

satisfaction with the city because it is the only place in the country where they can find the

employment they want, argues Dainov (2008). Contrary to cities from more developed

countries of the EU, Dainov (2008) found that human capital in Sofia is more content with

soft factors, improvements based on efforts of individuals, while hard factors, such as

infrastructure, transportation, access to social and educational centers, security, events and

happenings which depend on the city authorities, are not satisfying. For entrepreneurs in the

ICT sector, the most important factor is that Sofia is the capital city, and as such it became

an agglomeration for skills, administrative authorities, ministries and agencies, and the

center of the regional market (Dainov & Nachev 2008). For the ICT sector in Sofia, hard

location factors (ease of access, levels of rent, parking facilities, access to major

thoroughfares) are most important “virtually to the exclusion of all other considerations”

(Dainov & Nachev 2008, p.50). Interviewed managers reported that quality of life could be

of great importance sometimes, because it “influences their personnel and the quality of

their performance and keeps them from being head-hunted and moving to another company

or city“ (Dainov & Nachev 2008, p.31).

32

The estimated unemployment rate was 43.1% in 201011, for the total working

population of Bosnia and Herzegovina, and the average net salary in the Republic of Srpska

in July 201112 was 811KM (EUR415). Migration data for the period 2007 – 201013 show

that people are migrating to larger cities and nearby towns within the Republic of Srpska, as

a part of Bosnia and Herzegovina, and most notably to Banja Luka and surrounding smaller

towns. We assume that migrations from the Republic of Srpska to the Federation of Bosnia

and Herzegovina, and vice versa, are still minor occurrences, due to the recent ethnic

conflict and post-war tensions. Research commissioned by the Ministry of Internal Affairs

of the Republic of Srpska14, on a sample of 1.296 primary school and 670 high school

students, found out that nearly 76% of primary and 87% of high school students have a

Facebook profile. According to the GfK survey, conducted in BiH in August 200915,

university students are the group that most of all (at least occasionally) use the Internet

(84%), followed by full-time employees, with about half of them using the service, while

about 60% of category managers, entrepreneurs, professionals, high school pupils and

students use the Internet on a daily basis.

11 CIA - The World Factbook, 2010, https://www.cia.gov/library/publications/the-world-factbook/geos/bk.html. Accessed: September 2011 12 Republika Srpska Institute of Statistics. July 2011 Monthly Report, http://www.rzs.rs.ba/Saopstenja/Rad/2011/Rad_Jul_2011.pdf . Accessed: September, 12th 2011. 13 Republika Srpska Institute of Statistics. Demographic Statistics Statistical Bulletin 2010 No.14, p. 117-118. http://www.rzs.rs.ba/Publikacije/Demografija/Demografski_bilten_14.pdf. Accessed: September, 12th 2011. 14 Source: “Nezavisne” newspapers, BiH, http://www.nezavisne.com/novosti/bih/Djecu-vreba-opasnost-s-Interneta-68409.html. Accessed: 17.09.2010. 15 „The GfK Group“ BiH: „A growing number of Internet users in BiH“: http://www.gfk.ba/public_relations/press/press/004443/index.ba.html. Accessed: 02.01.2011.

33

2.4. Conclusion

Literature on human capital mobility has not adequately addressed migration patterns

in SEE. Overall, available studies address issues of human capital mobility in developed

countries in context of the living and working environment, while countries in transition are

poorly represented in the literature on knowledge economy and human capital mobility. We

found that there is a gap in research in terms of how likely knowledge and creative workers

in transitional economies are to move away from their place of residence or place of work in

relation to societal and economic factors of their living and working environment. The

existing research does not address differences between knowledge and creative workers who

are more likely, or less likely, to move away from their present place of residence and work

in terms of their perception of the environment. Also, there is a gap in the literature covering

countries in transition, regarding the question of whether proximity to family and friends

influence knowledge and creative workers` decisions when choosing a place of residence,

despite lower wages and the poorer educational and career prospects of transitional

economies. In the context of the Western Balkan countries, limited data suggests that over

one fifth of the tertiary educated population are immigrants in the OECD countries only, and

still more highly educated people from these countries have settled in the USA, Canada and

Australasia.

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3. METHODOLOGY

Research methodology is a complete set of research techniques and practices; it

“involves the systematic procedures by which the researcher starts from the initial

identification of the problem to its final conclusions” (Singh 2006, p.79). “Research

methodology is a way to systematically solve the research problem” (Kothari 2004, p.8).

In our methodology, systematically means that we employ quantitative and

qualitative methods, one step at a time, to improve validity and reliability of our research

data. Quantitative methods were used to test hypotheses derived from the literature, with a

number of possible predetermined answers (Patton 2001). The resulting data was processed

by statistical software SPSS v.17 and SPSS v.19. In-depth interviews are used for the

analysis of the importance of environmental factors for creative and knowledge SMEs in

Banja Luka. Qualitative methods provide us with a view from the inside out (Flick et al.

2004). We use NVivo v.9 for interview data analysis and interpretation.

Researchers could pose three types of intellectual puzzles: developmental puzzle

(how and why did x or y develop?), mechanical puzzle (how does x or y work?), or causal

puzzle (what influence does x have on y, or what causes x or y) (Mason 1996). Due to lack

of relevant quantitative and qualitative research data for countries in transition, we use the

literature to address the developmental puzzle: how knowledge impacts growth, and why

environmental factors play a crucial role in human capital mobility. We do not have an

ambition to capture objective reality (Denzin & Lincoln 2005) of human capital mobility in

transition countries, nor to provide definite answers on how to strategically manage human

capital in countries in transition. However, the qualitative results we obtain are “inductive,

35

emerging, and shaped by the researcher's experience” (Creswell 2006, p.19). Despite a small

interview sample of entrepreneurs in knowledge and creative sectors, we believe that the

qualitative phase of the research has a capacity to describe an “essence of shared

experiences” (Patton 2001, p.106), giving us in-depth analysis of the processes that are

unfolding in the strategic management level.

Researchers have worked for several companies in marketing and finance sectors in

Banja Luka. Since researchers have “strong personal experience and intense interest” in the

phenomenon under study, the research process itself has strong elements of heuristics, as a

form of phenomenological inquiry, “that bring to the fore the personal experience and

insights of the researcher” (Patton 2001, p.107). Reflexivity of our perspective may shape

the research process (Creswell & D. L. Miller 2000; Patton 2001), and form methodological

bias if not addressed through reflexive inquiry and cross-checking of research findings.

To avoid serious discrepancies between our results and objective reality we use

quantitative analysis as a basis for the research, and qualitative research as a counter-balance

to address rigidity and limitations of the quantitative method. Triangulation is used to cross-

check results, since “surveys became more meaningful when interpreted in light of critical

qualitative information” (Jick 1979, p.608).

3.1. Hypotheses

Hypothesis is a research prediction of the relationship between variables, which is

tested through statistical analysis. (Creswell 2002, p.109). It is the “re-formalization of a

36

research question (grounded in theory and/or literature) to form a precise declarative

statement including a prediction of the outcome” (Somekh & Lewin 2004, p.223).

We use hypotheses testing to determine whether arguments from reviewed literature

hold true for knowledge and creative workers in economies in transition. Data collection

procedures and the sample distribution determine which statistical tools are used to test

relationships between variables.

Main hypothesis

The main hypothesis is that economic factors are more important than societal in

terms of choice of residence and work, and mobility of knowledge and creative workers in

countries in transition.

The main hypothesis is developed and tested through additional hypotheses.

Additional hypotheses

H1: Proximity to family and friends significantly impacts the choice of place of residence,

H2: City features do not significantly impact human capital mobility,

H3: Cost of living significantly influences the decision to change residence,

H4: Salary significantly affects the expectation for leaving the place of work,

H5: The employment satisfaction factors significantly affect the decision of moving away

from the city,

H6: The employment satisfaction factors significantly influence the decision to change the

place of work.

37

3.2. Variables

In order to address differences between knowledge and creative workers who are

more and less likely to move away from their present place of residence or place of work, in

respect of their perception of the working and living environment, we have two dependent

variables. The first one determines how likely respondents are to move away from Banja

Luka in the next 3 years, and the second relates to how long respondents plan to stay in the

current company/organization.

Respondents were answering the following questions:

How likely are you to move away from Banja Luka in the next 3 years? (Possible

answers: almost certainly, very likely, somewhat likely, not very likely, not likely

at all), and

How long do you plan to stay in current company/organization? (Possible

answers: less than 1 year, between 1 and 3 years, more than 3 but less than 5

years, between 5 and 10 years, more than 10 years, I do not know).

Independent variables for the quantitative part of the research are divided into four

groups:

1. Reasons for living in Banja Luka

2. Economic and societal factors of the living environment

3. Work related factors

4. Demographics – background data.

38

Reasons for living in Banja Luka

The first group of variables is dealing with the length of time respondents live in

Banja Luka, the structure of the household, and reasons why respondents live in Banja Luka.

Respondents answered the following questions:

How long have you lived in Banja Luka?

Have you moved to Banja Luka and where have you lived before moving to your

current address?

Rank the four most important reasons why you are currently living in Banja Luka.

Which categories best describe the household where you currently live?

In addition to the ACRE questionnaire, we added a living with parents category to

our survey, and this proved to be appropriate.

Economic and societal factors of the living environment

This section of the questionnaire deals with the respondents’ living environment.

Variables relate to the respondents` leisure and social activities, satisfaction with amenities

and services provided in the city, and cost of living in Banja Luka.

Respondents answered the following questions:

How often do you practice the following activities (leisure and social activities)?

What is the most relevant to you and your household (partner or you finding a job

in the city)?

How satisfied are you with the following leisure amenities that are offered in

Banja Luka?

39

How satisfied are you with the following public services and facilities in Banja

Luka?

How would you rate the following environmental aspects of Banja Luka?

How much are you concerned about the following aspects of life in Banja Luka?

Cost of living in Banja Luka?

How long on average does it take you to get to work?

To what extent do you agree with statements regarding tolerance?

Work related factors

This part of the questionnaire deals with aspects of job and work related factors.

Variables relate to job status, employer category, profession, contractual status at the current

job, and various aspects of the working environment.

Respondents answered the following questions:

What is your current status?

What is your profession?

Who is your employer/where do you work?

What is the contractual status of your current job: are you are employed or

self-employed?

Including you, how many people are employed at the place where you usually

work or have worked?

How many hours per week do you usually work at your main job?

Do you have a second job?

How satisfied are you with different aspects of your work?

40

If you expect to leave the company / organization in the following year, rank two

most important reasons.

Demographics – background data

The last set of variables provided us with background information about respondents.

Variables relate to the respondents’ gender, number of people living in the dwelling unit, the

highest level of education, monthly income, and age.

Respondents were answering the following questions:

Please indicate your gender.

Specify the total number, including yourself, of people living in your

apartment/house.

Name of the local area which your current residential address belongs to.

What is your highest achieved level of formal education / training?

Please, state the amount of your net average monthly income expressed in Bosnia

and Herzegovina Convertible Mark (BAM, KM).

Please, select the range that best describes your age.

3.3. Research methods and techniques

Research methods and techniques are methods researchers use in the process of a

study (Kothari 2004); methods used to collect data, statistical techniques to establish

relationships between variables, and methods used to evaluate results of research. Available

literature usually discusses one of the two approaches to empirical research, either

41

qualitative or quantitative. The quantitative study explains relations through statistical

analysis and the qualitative method completes in-depth analysis of the phenomenon

(Creswell 1999; Creswell 2002). We follow an opinion of Glaeser (2007), who claims that

an overwhelming focus on quantitative tools of economics leaves economics poorly

equipped to make sense of cities. While he was studying different countries with their

specific development trajectories and growth determinants, Lucas (1988, p.13) noted that

economic growth depends not on one or several specific, but a multitude of “economic and

cultural peculiarities” which cannot be easily observed in cause-effect relations without

quantifiable economic studies. “Economic analysis cherishes the illusion that one good

reason should be enough, but the determinants of complex processes are invariably plural

and interrelated. Monocausal explanations will not work” (Landes 2000, p.3).

The research process will be conducted in three phases. For the start of our research

we used focus group method to test validity and adjusted a questionnaire we borrowed from

the ACRE16 research. The focus group filtered the most important factors of the

respondents` living and work environment.

In the second phase, we used the questionnaire to collect data on four aspects of

working and living conditions, as well as demographics.

During the third and final phase of the research we use four in-depth interviews to

gain deep and complex all round views of people who own or manage companies in the

creative and knowledge sector.

16 http://www.acre.socsci.uva.nl/

42

3.4. Focus group

We used focus group interviews to test the questionnaire. The questionnaire used for

this research was borrowed from the EU research ACRE17. The focus group provides social

research context where participants can question their own “views in the context of the

views of others” (Patton 2001, p.386).

For the focus group we have chosen 11 people from the creative and knowledge

economy. Out of eleven people contacted, nine accepted our invitation. We deliberately

choose people with varied educational, professional and life backgrounds.

We had three female and six male participants. Several members of the group knew

each other prior to interview while others were acquainted on the day. Three of them came

to the city during the war while in their twenties, and one moved to Banja Luka because of

their job.

Members of the focus group:

1. Economist, Director of a corporate banking unit, male

2. PR manager in microcredit organization, female

3. Computer Programmer; database developer, working for a foreign company,

male

4. Programmer; system administrator for the local bank, female

5. Architect, senior architect in The Bureau for Civil engineering, also working as a

freelance architect, male

6. Actress for The National Theater, female

17 ACRE - Accommodating Creative Knowledge – Competitiveness of European Metropolitan Regions within the Enlarged Union, http://acre.socsci.uva.nl/

43

7. Graphic designer, working for the national mail company, also working as a

freelance designer, male

8. Director of a 3D design and animation studio, working for international clients,

male

9. Owner of a small company designing and supplying fitted kitchens and furniture,

male.

10. Moderator for the focus group was a docent at the Faculty of Philosophy,

Department of Psychology, at the University of Banja Luka, male.

The focus group was held on Saturday, 9th of October 2010, in a meeting room of the

City Development Agency Banja Luka (CIDEA).

3.5. Survey

The survey technique was used for testing the hypotheses with a set of predetermined

variables. Responses of knowledge and creative workers provide a measure of variables

relating to their living and working environment. “A "survey" is a systematic method for

gathering information from (a sample of) entities for the purposes of constructing

quantitative descriptors of the attributes of the larger population of which the entities are

members” (Groves et al. 2004, p.2).

There are three issues important for the quantitative part of the research. Firstly, it is

the questionnaire's design. We satisfied this concern by using the questionnaire which was

developed for the ACRE research, and testing it in the focus group interview. The

44

questionnaire was then sent to a group of 25 respondents, who completed it on-line. They

gave their comments on the clarity of the questions and technical issues.

The second issue that we considered to be very important was the sampling method,

and the third was the statistical tools and methods we use to analyze data.

The survey sample

We determined the survey sample in accordance with the methodology and addressed

the following concerns, that Fowler (1984) argues are the five key issues related to

sampling:

1. Determining the sample frame,

2. The choice whether or not to use a probability sample,

3. The size of the sample,

4. The sample design and data collection method,

5. The rate of response,

Determining the sample frame

“The sample frame” is the collection of units from the total population “with a

chance to be selected”, using the chosen selection method (Fowler J. 1984, p.19). The

sample frame for our research comprises knowledge and creative workers living and

working in Banja Luka, as a typical city in SEE.

Florida (2002) researched mobility of mainly younger workers and recent college

graduates. This is not applicable in our case, since there is significant participation of

managers, university staff, professional researches and consultants in the knowledge and

45

creative economy in SEE who are more than 35 years old. The ACRE research project,

which was undertaken in 13 EU cities in 2007 on a sample of 2.646 respondents, had, for the

main target group, workers under 35 years old, and generally with less than 10 years of

professional experience in the creative and knowledge industry. Only in Amsterdam,

Barcelona and Milan did the sample have more workers who were older than 35 years and

with more than 10 years of professional experience (Musterd & Murie 2010b).

Our sample frame includes all employees working in the knowledge or creative

sector according to the classification presented in the review of the literature. Knowledge

and creative entrepreneurs are difficult to sample since they are difficult to identify. Their

population is usually very small and proprietary databases are either incomplete or non-

existent because of the populations` dynamics (Neergaard 2008).

To determine the sample frame size we approached The Institute of Statistics of the

Republic of Srpska and The Employment Bureau. Both of these institutions could not

provide us with the data we requested. Without the appropriate statistical data and contacts,

knowledge and creative workers turned to become a hard to reach population. As a result we

were unable to determine the sample frame in a timely and cost-effective way.

The population was not hidden, in a sense set by Heckathorn (1997), since it is not

involved in stigmatized or illegal behavior, but traditional survey methods such as household

surveys would not provide adequate results. Our financial means were not sufficient to pay

for incentives to respondents for filling in the questionnaire (a primary reward), or for

recruiting others into the research (a secondary reward) (Heckathorn 1997). However, we

relied on social approval of friends and peers as a method to boost our response rate, and it

worked well.

46

The total sample frame in our research represents the total number of employed and

unemployed workers in Banja Luka with the appropriate educational level. Total numbers

are shown in Table 1 and table 2.

Table 1: Qualifications of employed and unemployed workers in Banja Luka18

Level of education

2000 March 2009 Employment

index 2009/2000

Number of

employed

Structure (%)

Number of

employed

Structure (%)

Number of unemployed

Structure (%)

Phd 247 0.6 470 0.9 0 0.0 190.3 MA, MSc 233 0.5 530 1.1 5 0.0 227.9 University degree 5,285 12.5 10,126 20.2 1,173 7.1 191.6 University's non-degree

3,382 8.0 3,546 7.1 406 2.5 104.8

High school 4 years

13,430 31.7 21,419 42.7 5,090 30.8 159.5

High school 3 years

3,599 8.5 2,289 4.6 342 2.1 63.6

Skilled worker 9,341 22.0 7,039 14.0 5,772 35.0 75.4 Semi-skilled worker

2,907 6.9 1,638 3.3 445 2.7 56.3

Unskilled worker 3,981 9.4 3,100 6.2 3,273 19.8 77.9 Total 42,405 100.0 50,158 100.0 16,506 100.0 118.3

We determined the sample frame as a sum of employed and unemployed workers

with the minimum of 3 years of high school education or above. The total sample frame is

45,396 people or 68.1 % of the total number of employed and unemployed workers in Banja

Luka. So, with caution, taking data from Table 1, the sample frame is determined as shown

in Table 2.

18 Source: Feasibility study for the Technological Business Park Banja Luka. p.38, Table 3.3. Used with permission from CIDEA - City Development Agency, Banja Luka. (Wim Systems Varaždin 2010)  

47

Table 2: Sample frame

Level of education 2009

Number of employed Number of unemployed Phd 470 0 MA, MSc 530 5 University degree 10,126 1,173 University's non-degree 3,546 406 High school 4 years 21,419 5,090 High school 3 years 2,289 342 Total 38,380 7,016

The choice whether or not to use a probability sample

We could not determine the sample frame for knowledge and creative workers in

Banja Luka. Also, we could not acquire the list of companies and workers from the

knowledge and creative sector. Therefore, we decided to settle with the non-probability,

snowball sampling method.

We made every effort to reach as wide a population as possible, but there is a large

element of self-selection in the data collection process. We reduced selection bias by

expanding the sample size. The sample we obtained represents solid ground for the

statistical analysis. However, since we are not using probability sampling, we face two

sources of bias. The first one is our choice of initial subjects, and second is the volunteerism

in responding (Heckathorn 2002). Therefore, we are not able to determine how credible our

statistics are for the characteristics of the population as a whole (Fowler J. 1984).

The size of the sample

Although, we do not use probability sampling, we calculate the approximate sample

size by the typical statistical formula. This gives us an overall clue as to how big a sample

should be if we were to employ a probability sampling procedure. By using Equation 1 from

Appendix I on the population of 45,396, we calculated a sample size of 381 people.

48

Our sample should include only workers from the knowledge and creative sectors.

Therefore, we used elementary variable and open question fields in the questionnaire to

eliminate unwanted responses:

1. "What is your profession?" – This is a drop-down list of creative and knowledge

occupations to choose from, with an option `other`,

2. “Enter your current occupation / current job (If you are unemployed enter your

previous occupation)” – this is an open question for a written answer,

3. “Please briefly describe the content of your work / predominant occupations.” –

this is an open question for a written answer.

We checked all responses during the data collection process and deleted 42 responses

which did not belong to the required sample of the knowledge and creative workers.

The sample design and data collection method

Knowledge and creative workers in Banja Luka are a population that is hard to reach.

We decided to use the Internet and the web platform Survey Monkey19 as a way to distribute

the questionnaire. There is inconclusive evidence that internet sampling could lead to

overrepresentation of males and a wider age range (Hewson et al. 2002). However, we

supposed that creative and knowledge workers in Banja Luka are equally concerned about

their living and working environment, regardless of gender and age. We were concerned that

respondents could belong to a group of people who are overrepresented on the Net, “the

lonely, the deluded, the obsessive” (O`Dochartaigh 2001, p.18) and decided not to use

public web portals and mass media to advertise our research in order to avoid this bias.

19 http://www.surveymonkey.com/ 

49

Instead, we used email and social networks to contact respondents. Our initial group had 100

contacts. Several of them are long-term friends, and others are acquaintances from work,

university, school, and leisure activities. Also, it is considered that older people are less

likely to use the Internet, and that people under the age of 30 who grew up with the web and

ICT, are more likely to be overrepresented on the Internet (Sapsford & Jupp 2006). The

sample frame predominantly consists of people in Banja Luka under the age of 35, and

people in managerial or other decision-making positions, who are found to be well

represented on the Internet.

People we contacted directly or through friends` networks were very responsive. This

surprised us. The most active propagators were female friends who are holding managerial

positions in web-based media houses. We collected data from the population employed in

the knowledge and creative sector and decision makers in these sectors in Banja Luka who

are 20 years or older. We did not have an upper age limit.

The rate of response

The survey has 58 questions,16 of which are questions that consist of a group of

variables and/or responses. The average completion time for respondents in the test group

was 20 minutes. Considering that the questionnaire is time consuming we expected

difficulties in motivating people to complete the survey. Fortunately this was not the case.

The link was sent three times to the initial list of contacts, asking them to complete the

questionnaire (if they hadn’t already done so) and forward the link to their list of friends and

acquaintances. We believed that the sense of obligation of friends and acquaintances would

50

increase the response rate. This turned out to be true. People were very willing to take part in

the research, partly due to social approval of their peers.

We assume that all the people who received the link via email or from internet social

tools (Facebook, Skype, and Twitter) opened the questionnaire web page. Every single visit

to the page was recorded as a single IP address. Some people reported starting the survey at

work and finishing it at home. This would show as two people visiting the questionnaire

page from two different IP addresses.

Until May 7th 2011, the total number of people who followed the link from unique IP

addresses was 684, and of those 464 people completed the questionnaire. The response rate

was 67.8%. We deleted 42 responses that did not fulfill our specific requirements regarding

occupation. Therefore, the final response rate is 642 responses with 420 completed

questionnaires - making the final response rate 65.42%. Although some people accessed the

web page twice, from different IP addresses, we regard this response rate as fairly good.

Data Analysis

To evaluate the relationship between variables by using the data acquired with the

questionnaire, we used a non parametric Chi-square test and factor analysis included in the

SPSS software package, version 17 and 19. The Chi-square test was chosen because

collected data is non-numerical, consisting of, to a large degree, nominal and ordinal data,

and distribution of data on population does not fit the normal distribution parameters

(Gravetter & Wallnau 2007).

To get the necessary cell count for the Chi-square test, using results from Table 3, we

grouped respondents who answered somewhat likely, very likely and almost definitely to

51

move away from Banja Luka in the next three years into the first group, and respondents

who are `not too likely to not likely at all` to move away from Banja Luka in the next three

years into the second group. We use the term `mobility subgroups` to describe these two

groups.

Table 3: How likely are you to move away from the city in the next 3 years? How likely are you to move away from the city in the next 3 years?

Response Percent

Response Count

Almost definitely 7.4% 31 Very likely 13.6% 57 Somewhat likely 22.9% 96 Not very likely 43.6% 183 Not likely at all 12.6% 53

answered question 420 skipped question 0

To get an appropriate cell count for the Chi-square test, we use results from Table 4

to divide respondents into two employee’s subgroups, in response to how long they expect to

remain at their place of work.

Table 4: How long do you plan to stay in current company/organization? How long do you plan to stay in current company/organization?

Response Percent

Response Count

less than 1 year 6.6% 23 between 1 and 3 years 21.9% 76 more than 3 but less than 5 years 11.5% 40 between 5 and 10 years 7.2% 25 more than 10 years 9.5% 33 I do not know 43.2% 150

answered question 347 skipped question 73

Respondents who expect to leave the company in less than 3 years belong to the first

employees` subgroup, and respondents who expect to stay in the company more than 3 years

belong to the second employees` subgroup.

52

We used factor analysis and binary logistic regression in addition to the Chi-square

test in order to determine which factors, be they economic or cultural/societal in terms of

issues of concern, would most significantly impact on the respondent's decision to move

away from Banja Luka in the next three years.

To use binary logistic regression we modified the dependent variable from Table 3:

"How likely are you to move away from the city in the next 3 years?”, by reducing 5 options

(almost definitely, very likely, somewhat likely, not too likely, and not at all likely) to 2

options (1 and 0), where option “1”= “YES” and represents answers “almost definitely” and

“very likely”, while option “0”= “NO” and represents answers “somewhat likely”, not too

likely”, and “not at all likely”. This allows the calculation of equations expressing the

relationship between the binary outcome and impact of different factors.

After conversion, our dependent variable (likelihood of moving away from the city in

the next 3 years, Table 3) is dichotomous. We use binary logistic regression analysis for

expressing the relationship between the binary outcome and impact of several factors as

predictors (seven linear combinations that we get after the factor analysis). In this way, we

are able to predict whether the probability of the dependent variable is the function of

independent variables. Likelihood of moving away from the city is calculated by the

Equation 2 (Appendix I).

3.6. The interview phase

We used semi-structured interviews in the qualitative phase. Quantitative research is

used to obtain a general overview of the sample characteristic, while we pursue interview

53

methods in order to “elucidate and explain complexity” of entrepreneurship (Neergaard

2008, p.256) in Banja Luka, as a typical city in SEE. Interviewing assumes that perspectives

of others, which are elucidative in terms of the research inquiry, could be made explicit

(Patton 2001). Impact of interviewer's perspective is also significant. Since we are not

neutral collectors of information about social phenomenon, through qualitative research

methods we generate, rather than collect data (Mason 1996). Personal involvement and

knowledge of the field not only leads to a bias, but allows researchers to more successfully

carry out the interview process. According to Patton (2001), there are four main reasons for

using standardized open-ended interview that we were using:

1. the interview structure could be repeated elsewhere,

2. it is easier to minimize variations in approach among different interviewers,

3. the interview process is done more time-efficiently,

4. responses are easier to find and analyze.

We followed the ACRE interview strategy, modifying it to the local perspective, and

asked knowledge and creative entrepreneurs to address the following issues in their own

terms:

1. What is the importance of human capital for the competitiveness of the company?

2. What is the role of traditional social networks for the company?

3. What is the significance of city features for the company?

Guidelines for the interview included the following topics:

History and business of the company,

Interviewee's role in the company,

Clients and location of the company,

54

Cooperation with other organizations / companies,

Links with educational institutions, municipal and state agencies and institutions,

Issues of finding and hiring personnel (contract, temporary, permanent, freelance),

Education and training of employees / associates,

Locational factors (infrastructure (transport, internet, etc.), administration, quality

of life, leisure activities, culture, sub-culture),

Future prospects and possibility of moving away from Banja Luka.

Interviews with managers from the creative and knowledge sector clarify the

importance of economic factors in the living and working environment on the mobility of

human capital and their impact on the development of the knowledge and creative economy.

3.7. Validity and Reliability

There are usually two approaches to issues of validity and reliability. The first one is

quantitative, focused on internal and external validity (generalization), while the other,

qualitative method of research, is primarily concerned with internal validity (Mouton &

Marais 1988). Newman and Benz (1998) argue that validity cannot exist without reliability,

because “validity estimates the extent to which the test or set of data or design actually

measures, reflects or produces what it is supposed to measure, reflect, or produce” (Newman

& Benz 1998, p.32).

Internal validity supports the claim that “a study has generated accurate and valid

findings of the specific phenomena which have been studied” (Mouton & Marais 1988,

p.50). After determining internal validity, a further step is to determine external validity, or

55

how well research findings apply to the wider population. We use triangulation, as a process

of validation, whereby “researchers search for convergence among multiple and different

sources of information to form themes or categories in a study” (Creswell & D. L. Miller

2000, p.126). Research instruments are borrowed from the ACRE research project and tested

with focus group interviews and trial groups of respondents. Data from the ACRE research

project and the rest of the literature is compared and contrasted with our own qualitative and

quantitative data.

We confronted several issues that could lead to a bias. We contacted and visited

relevant institutions and authorities, specifically The Institute of Statistics of the Republic of

Srpska and The Employment Bureau, but were unable to get relevant data to determine the

sample frame. Therefore, the sample frame was not determined, and probabilistic sampling

could not be applied. Like the ACRE research project, we used a snowball sampling method

to select respondents for the questionnaire. Respondents answered the questionnaire in a

large proportion voluntarily. We reminded our initial group three times to send the link to

their contacts.

Our selection method on the Internet implies a large degree of volunteer sampling.

We cannot claim population validity, but our sample is fairly large to minimize this bias, and

the number of completed questionnaires is compared with the number of visits to the web

site (Sapsford & Jupp 2006). We also introduced variables whose sole purpose is to exclude

respondents who do not correspond to the sample frame. In addition to our procedures to

reduce bias and support validity and reliability, repeated research in SEE countries could

add to the analysis in this respect.

56

3.8. Geographic location of the research20

Due to our financial and time constraints, sampling of the population employed in the

creative and knowledge economy is limited on respondents who live in Banja Luka.

Banja Luka is a typical city in a transitional country in SEE. The city is located in

north-western Bosnia and Herzegovina, in a valley at an altitude of 163 meters, and at the

junction between the Dinaric Mountains in the south and Pannonian Basin in the north.

Through the city flows the river Vrbas with three smaller tributaries. Banja Luka has a

moderate continental climate with cold winters and warm summers from the prevailing

influence of the Pannonian basin. The city area covers 1.232 km2, which represents 4.9% of

the territory of Republic of Srpska, or 2,4% of the territory of Bosnia and Herzegovina. Out

of the total area, 53% is agricultural land, while 39% of the area is covered by forests. Banja

Luka is the capital, administrative and economic center of the Republic of Srpska, and one

of two political entities in Bosnia and Herzegovina. There are 20 other municipalities in

Banja Luka region.

20 Information source: Feasibility study for the Technological Business Park Banja Luka. Used with permission from CIDEA - City Development Agency, Banja Luka. (Wim Systems Varaždin 2010)

57

Picture21: Regional location of the city of Banja Luka

The last census in Bosnia and Herzegovina was in 1991, and this poses a serious

problem for establishing all statistical indicators. Bosnia and Herzegovina has been seriously

affected by the civil war that took place in the former Yugoslavia from 1991-1995. A large

number of former residents of Banja Luka left the city in that period, and an even larger

number of newcomers settled in the city during the war and post-war period.

According to the data of the last census, Banja Luka had a population of 195,692.

Republic of Srpska Institute of Statistics made an assessment in 2008, indicating the total

number as 223,641 inhabitants. According to an assessment from 2005, women represent

51.3% of the city total population. The average estimated population density in 2008 was

181 people per km2.

21 Feasibility study for the Technological Business Park Banja Luka. p.33, Used with permission from CIDEA - City Development Agency, Banja Luka. (Wim Systems Varaždin 2010)  

58

Before the war, Banja Luka played the role of the regional economic, educational,

and cultural center. The city was a hub of electronic, chemical and mechanical industry, and

the seat of several of big-business systems. In terms of development, the city was well above

other cities in the former Bosnia and Herzegovina but carried the burden of an

underdeveloped regional environment. The city exceeded the industrial framework of the

former Bosnia and Herzegovina. It was one of the main centers in the former Yugoslavia,

with distinctive electronic, chemical and mechanical industries. Industrial development was

facilitated by knowledge exports and licensing arrangements. Local companies were training

personnel from the less developed countries. Large systems dominated the industry, and

individual production units had on average 550 workers per unit.

After the war, the industrial infrastructure of the city was severely depleted in

comparison with the last two decades of the 20th century. Many plants closed, and their

products disappeared from the market. On the other hand some production processes relying

on lower technology outputs designed for local needs, have survived, although the number

of manufacturing jobs has been significantly reduced. Today the power sector, which

includes transmission and distribution of electricity, produces a larger gross value than the

total manufacturing industry. In terms of exports today the only export products from the

pre-war period are paper and paper products.

According to the City Administration of Banja Luka, the largest number of

enterprises in 2008 belonged to the manufacturing industries (821 firms), followed by

wholesale and retail (622 companies), transport, storage and communications (653

companies) and agriculture, hunting and forestry (599 companies). Together, they comprise

59

65.3% of active enterprises in the city. However, these indicators are not relevant in terms of

micro, small and medium companies.

Banja Luka is a university city with over 30,000 students at one state and several

private universities. This brings in a significant and continuous influx of young and skilled

people and provides significant income for the city.

In August 2011, property prices in Banja Luka varied from 2,400KM per square

meter for apartments in the city center, to 1,600KM per square meter for properties in areas

more than 3km away from the central city square. The estimated unemployment rate of the

total working population of Bosnia and Herzegovina in 201022 was 43.1%.

22 CIA - The World Factbook, 2010, https://www.cia.gov/library/publications/the-world-factbook/geos/bk.html. Accessed: September 2011 

60

4. RESULTS

We start the analysis of collected data with the results of focus group interviews,

followed by quantitative analysis of the survey data, and end with qualitative analysis of in-

depth interviews. The structure of quantitative results loosely follows the organization of the

questionnaire. We analyze key data from the survey in regard to:

1. Demographic characteristics of respondents,

2. Living in Banja Luka,

3. Economic and social aspects of city life,

4. Job and work environment.

Results of the quantitative data are accompanied by tables. Analysis of the

quantitative results start with descriptive analysis, followed by statistical methods of

enquiry.

4.1. Focus group results

Focus group interviews followed the structure of the ACRE questionnaire which is

divided in four parts:

1. Living in Banja Luka,

2. Satisfaction with the job and work environment,

3. Satisfaction with the neighborhood and dwelling,

4. Demographics – background data.

We used focus group interviews to check the validity of the questions for knowledge

and creative workers in Banja Luka, and whether people understood how to correctly answer

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them. The second issue was especially important since the questionnaire was distributed via

the Internet, without an option for respondents to have technical help via a toll-free phone

line or internet messaging. Focus group participants gave their comments on a translated

version of the original ACRE questionnaire for Dublin23.

Living in Banja Luka

We found that the way to answer question A3) from the original questionnaire:

“Please rank the 4 most important reasons why you currently live in Banja Luka (1 being the

most important and 4 the least important – please choose only four reasons)” was not clear

enough to several of our interviewees. When asked if it was clear that a total of four answers

are needed for the entire question, several respondents answered that it was not clear.

“No, it is not clear. Only in the first column personal connection, job, location...we need four.”

“The first column serves more to you, where, in fact...to which group the answer belongs to.”

For the question A5) from the original questionnaire: “How often are you involved in

any of the following activities?” we had a suggestion to insert a column with the answer

“none of the above”. It was brought to our attention that the scale (every day, at least once a

week, less often, never, and don’t know) does not correspond to the usual frequency of visits

to the theater, with a proposal to introduce an option “once a month”.

23 ACRE ‐ Accommodating Creative Knowledge –  Competitiveness of the European Metropolitan Regions within the Enlarged Union. Questionnaire Survey. http://acre.socsci.uva.nl/results/documents/WP5_questionnaireDublin.pdf. Accessed: September, 18th 2011.    

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“Once a month I missed too, because it was somehow foolish to write ... rarely”

“The reality is that you visit them (amenities) more or less often.”

“No one goes to the theater every day, except those who work there.”

“Same for the museum...”

Regarding the question A6), “How satisfied you are with the following leisure

activities offered in Banja Luka?” participants questioned whether the “Quality of shopping

areas” belongs to standard leisure activities. It was suggested that a question regarding spas,

fitness centers, libraries, should be included in the questionnaire.

In response to the question A7), “How satisfied you are with the following public

services offered in Banja Luka?”, there was a suggestion to separate the regular police force

from the community police force, which is in charge of maintenance of public order, traffic

control, protection of environment, cultural property, streets, public buildings and the

preservation of city property.

For the question A8), “How would you rate the following environmental aspects of

Banja Luka?”, there was a question as to whether to have the river Vrbas, which runs

through the city, mentioned there.

“I do not know whether the river is important to add here...river banks?”

Regarding the question A9), “How worried are you are about the following issues in

Banja Luka”, participants briefly discussed the list of issues mentioned in the questionnaire,

and suggested more of them.

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“All that bothers residents of the city is important.”

“Maybe there should also be option “other” (to write down).”

“Illegal construction, as an issue important for Banja Luka,... I think we should...”

“How frustrating these posters are, advertising...large posters that go on the wall, I do not know...it's so beginning to take place in Banja Luka that it is scary... For me, personally, it is a disgrace.”

“Medical services...”

“But it could be in A9, as someone said, traffic culture, uncivilized...”

On the subject of tolerance, A16-A20, we first explained in more detail the purpose

of this part of the questionnaire. Participants concurred that the issue of visible minorities is

not particularly relevant to Banja Luka, for example, members of the Roma population are

not a visible minority in that respect, since they are not easily differentiated from other

groups.

“Question is whether these issues are generally relevant to Banja Luka?”

“Those are ethnic minorities, it means.”

“We don't have minorities, we are...”

“We have minorities, but...the problem is that we have no animosity towards minorities, but towards the majorities...”

“They have separate questions for gay and lesbian population.”

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“We can put homosexuals...it is the burning issue right now, over here, in Belgrade...”

In response to the question “To what extent do you agree with the statement that

Banja Luka is a place with tensions between people of high income and low income

levels?”, we were suggested to change it into “tensions between rich and poor”.

“I think this is more a question between rich and poor... I guess it is more related to that.”

“It crossed my mind, whether in the questionnaire to include those who can endanger...Jehovah's Witnesses, beggars...they are also minorities”

Satisfaction with the job and work environment

It was agreed to have the option “unemployed” in question B2), “What is your

current employment status?”

In B3, “What is your contract status in your current job?”, it was suggested that the

formulation should be changed from “On an unlimited permanent contract” to “Contract for

an indefinite period”.

“Over here, it is more likely called Contract for an indefinite period...”

For the question B5), “Including yourself, about how many people are employed at

the place where you usually work/worked?”, it was suggested to add an option of “only

employee”.

“I think that there should be an option for only one employee, it is important...”

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In response to the question B9), “How satisfied are you with the following aspects of

your job?” it was suggested we have “Respect for workers' rights” in the questionnaire.

“Maybe respect for workers' rights...for example, I worked for a TV company in direction, working 8 hours a day, but you should be doing 5 hours maximum, behind monitors...”

“I recently heard `the great` case...when the girl revealed that she is pregnant to her boss, he fired her.”

“Respect for workers' rights...holidays, working hours...”

With regard to profession and occupation, discussion was short, mainly related to

music and video production.

“Video, film and photography go together, but music not entirely...“

Satisfaction with the neighborhood and dwelling

Regarding the question C1), “Would you consider the area in which you live to be...”

it was suggested we ask respondents where they live, and not to rely on their perception of

the distance from their dwelling to the city center.

“Very often someone says from Banja Luka, and it turns out...”

“Very often they do not know whether it is center or...”

Regarding the specific questions about issues dealing with neighborhood, participants

discussed whether we need them, since they are the same as questions in the first part, which

deal with those issues on the city level.

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“C3 and A8 are the same, just take and copy...parking, garbage”

“Very often people will respond the same, if dissatisfied with their (neighborhood), what they care about the center...”

“Instead of the neighborhood to put area...”

Participants discussed events important for the neighborhood mentioned in the

question C3), “How satisfied are you with the following aspects of life in your

neighborhood/area?”

“It is great when something is happening in the neighborhood interesting to me... scheduled...”

“Honestly, more and more, we are turning into a society where you don't care what happens in the neighborhood, because you only sleep and stay there, and you look for events where they take place.”

Regarding question C5), “How important were the following factors in your decision

to move to your current residence?“, participants agreed that distance and the time to get

work are both important.

“It is presumed here... this is very important that if someone had a choice... (there should be an option)...I could not choose”

Issues of new building developments were also raised, in terms of infrastructure,

illegal construction, parking spaces.

“I do not know how important it is, development of city estates, construction, and...specifically in my neighborhood ... they are building two huge buildings without parking lots...my estate is currently pretty, and I am happy at the moment

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and all, but in 2-3 years it will be...to insert in section C where all that development is going to.”

Demographics – background data

In response to monthly income, question D6); “Please indicate the range that best

describes your monthly income after taxes (Euros).”, respondents argued that “after tax”

could mislead respondents.

“After tax makes sense in the West, because they are constantly watching, monitoring taxes in their countries...it does not matter over here because employers pay net salary, and everyone calls it salary...it is enough net monthly income”

The question is raised about differences between degrees gained in pre-Bologna

process, and later, in terms of numbers of years of study for a degree.

“Some people complete their primary studies, but they are not called graduated...Some of them will graduate after three, other after five years...”

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4.2. Survey results

We start our quantitative research by determining two groups of respondents in terms

how likely are they to move away from their present place of residence or place of work, in

terms of their perception of the working and living environment. For this purpose we used

two dependent variables, the first one determining how likely respondents are to move away

from Banja Luka in the next 3 years, and the second one to establish how long respondents

plan to stay in the current company/organization.

Respondents answered the following questions:

How likely are you to move away from Banja Luka in the next 3 years? (Possible

answers: almost certainly, very likely, somewhat likely, not very likely, not likely

at all)

How long do you plan to stay in current company/organization? (Possible

answers: less than 1 year, between 1 and 3 years, more than 3 but less than 5

years, between 5 and 10 years, more than 10 years, I do not know)

Likelihood of moving away from Banja Luka

To determine how likely respondents are to move away we asked them to answer the

following question:

How likely are you to move away from Banja Luka in the next 3 years?

Results in table 3 show that 44% of respondents are almost definitely, very likely and

somewhat likely to move away from Banja Luka in the next 3 years. 56% of respondents

choose not very likely and not likely at all.

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Likelihood of leaving the place of work

To determine likelihood of respondents leaving their place of work we asked them to

answer the following question:

How long do you plan to stay in current company/organization?

Results in table 4 show that 28.5% of respondents are planning to leave the company

in the next three years. It is worth noting that 43.2% of respondents choose answer I do not

know, and 73 out of 420 respondents skipped the question. Only 6.6% of respondents choose

the answer less than 1 year, and 21.9% selected between 1 and 3 years.

4.2.1. Demographics

Variables relating to demographic characteristics of the sample give us data on net

monthly salary/income, age, gender, the highest level of education, period of time lived in

Banja Luka, and the place of residence prior to current address. Besides demographic data,

results in Table 5, also show us data on the significant differences between gender groups in

terms of job sectors and net monthly incomes.

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Table 5: Demographic data Net monthly

salary/income Response Percent

Response Count

Age Response Percent

Response Count

< 500 12.90% 54 < 24 7.90% 33 500 - 999 21.20% 89 25-34 59.50% 250

1.000-1.999 41.70% 175 35-44 27.60% 116 2.000 - 2.999 8.30% 35 45-54 3.30% 14 3.000 – 3.999 1.90% 8 55-64 0.70% 3 4.000 – 4.999 1.00% 4 65-78 0.20% 1 5.000 – 5.999 0.20% 1 78-84 0.00% 0 6.000 – 6.999 0.50% 2 > 85 0.00% 0

7.000 < 0.00% 0 no answer 0.70% 3 don't know/ don't want to

answer 12.40% 52

Gender percentage Total count Male 46.9% 197

Female 53.1% 223 Level of education of respondents

High school 3 years 0.50% 2 High school 4 years 2.40% 10 Completed one or more years of university degree 15.20% 64 Completed degree - 3 years 12.40% 52 Completed degree - 4 years 41.70% 175 Completed degree - 5 years 12.60% 53 Specialist postgraduate course 2.40% 10 Master of Science or Magister (Mg, Ma, Mag, MSc) 9.80% 41 Doctorate (e.g. a Doctor of Philosophy (Ph.D.)) 3.10% 13

Gender Net monthly income/salary (BAM)

Total count <500 500 - 999

1.000 – 1.999

2.000 – 2.999

3.000<

male 28 40 75 22 11 176

15.90% 22.70% 42.60% 12.50% 6.30% 100.00%

female 26 49 100 13 4 192

13.50% 25.50% 52.10% 6.80% 2.10% 100.00%χ² (4, n=368)

= 9.459, p ,051

54 89 175 35 15 368

14.70% 24.20% 47.60% 9.50% 4.10% 100.00%

Gender job sector

total χ² df Asymp. Sig.(2-sided) p

creative jobs

knowledge jobs

Male 80 117 197

3.137 1 0.077

40.60% 59.40% 100.00% Female 72 151 223

32.30% 67.70% 100.00% Total 152 268 420

36.20% 63.80% 100.00%

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Gender

Overall, our total sample is very close to being evenly distributed between female

and male knowledge and creative workers. Results coincide with the participation of gender

groups in the city wide population (in 2005, women represented 51.3% of the total city

population). Results also show that female respondents are better represented in the creative

economy, although we cannot claim that this difference is statistically significant for our

sample.

Age

Results show that 67% of the sample falls within 25-34 age group, 27.6% of

respondents belong to 35-44 group, and fewer than 10% of respondents are less than 24

years old. Only 4.2% of respondents are older than 44. Chart 1 displays age distribution of

the sample, illustrating positive skewness:

Chart 1: Age distribution

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Highest achieved level of formal education

Although our selection criteria was primarily focused on occupation, and not on

highest achieved level of formal education, it is worth mentioning that 66.7% of respondents

completed a degree, and 15.3% of respondents completed postgraduate studies. Respondents

who completed one or more years of university education comprise 15.2% of the sample,

and 2.9% of respondents finished high school.

Monthly income

Results show that 12.9% of respondents receive net monthly income of less than

BAM 500, and 21.2% of respondents have monthly income from BAM 500 to BAM 999.

It draws our attention to the fact that 41.7% of respondents receive net monthly

salary/income between BAM 1,000 and 1,999 (EUR 500 – EUR 1,000), 8.3% of

respondents have monthly income between BAM 2,000 and BAM 2,999, 1.9% have income

between BAM 3,000 and BAM 3,999, and only 1.7% of respondents have monthly income

above BAM 4,000 (2,050 EUR). Chart 2 displays the income distribution of the sample:

Chart 2: Income distribution for net monthly income

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Data in Table 5 illustrates income differences between gender groups. Statistically,

the obtained Chi-square value χ² (4, n 420) = 9.459, P 0.051 is just under the critical table-

value of χ² (4, ) = 9.49, P 0.05 (Gravetter & Wallnau 2007, p.711). In our sample, females

earn more than males in lower income levels, up to BAM 2,000, while males earn more in

higher income levels, over BAM 2,000. Results show that 52.1% women have monthly

income between BAM 1,000 and BAM 1,999.

4.2.2. Living in Banja Luka

Variables represented in Table 6 deal with responses to structure and size of

households, length of time lived in the city and neighborhood, and previous residence, while

Table 7 provides data on the city area where respondents live. Table 8 shows results

regarding the most important reasons why respondents are living in Banja Luka.

Length of time lived in Banja Luka and neighborhood

Results in Table 6 show that 86% of respondents have lived in Banja Luka for 10

years or longer, 9.3% have lived in Banja Luka between 5 and 10 years, 2.9% between 2 and

5 years, and only 1.9% of respondents have lived in Banja Luka less than 2 years.

Data also show that 21.4% of respondents have been living on the same address all

their life, an additional 29% of respondents have lived at a different address in Banja Luka,

and 32.4% have lived in another place in Bosnia and Herzegovina.

It is worth mentioning that 50% of all respondents have spent their entire life in

Banja Luka, that only 16.9% of people had a place of residence outside BiH, and only 0.2%

respondents have lived outside Europe.

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Table 6: Household structure and size, time lived in the city, and previous residence

Household structure Response Percent

Response Count

One person 12.40% 52 Living with parents 25.70% 108 Husband and wife /cohabiting couple 17.90% 75 Husband and wife (or cohabiting couple) with children 26.00% 109 Lone Father / mother and children 2.40% 10 Husband and wife (or cohabiting couple) and other persons 1.00% 4 Husband and wife (or cohabiting couple) and children and others 2.10% 9 Lone Father / mother and children and others 1.40% 6 Two family units 1.40% 6 Non-family household containing relatives or non-relatives (friends) 6.00% 25 Other 3.80% 16

Number of people living in the apartment/house (household size) Response Percent

Response Count

1 11.90% 50 2 26.40% 111 3 28.80% 121 4 24.50% 103 5 5.00% 21 6 or more 3.30% 14 Length of time lived in Banja Luka Place of residence prior to current address

< one year 0.2% 1 Never moved 21.4% 90

1 to 2 yrs 1.7% 7 In the city, but different address

29.0% 122

2 to5 yrs 2.9% 12 Another city in BiH 32.4% 136 5 to 10 yrs 9.3% 39 Outside BiH 16.9% 71 >10 years 86.0% 361 Outside Evrope 0.2% 1

Household structure

Results for the household structure show that 17.9% of households consist of a

husband and a wife (cohabiting couple), and another 26% are husband and wife (or

cohabiting couple) with children. Therefore, 43.9% of respondents live as cohabiting

couples with or without children, and single people living on their own represent 12.4% of

the sample. It is notable that respondents in our sample who live with their parents make up

25.7% of our sample, and those who live with their friends or relatives are a minority of 6%.

Single parents make up 1.4% of the sample.

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Results show that households are relatively modest in size, with only 8.3% of

respondents living in households comprising 5 or more members. 11.9% of respondents live

on their own, and 26.4% live in households of two people, leaving 38.3% of respondents

living alone or with one other person. There are 28.8% of respondents who live in

households of 3 people, and 24.5% living in households of 4.

Local area of current residential address

Results in Table 7 show that 77% of respondents choose to live in the central part of

the city, less than 2 km from the city center. The highest proportion of respondents, 16.7%,

live in the city center, and 16.4% of respondents live in Stračevica.

Table 7: Local area of current residential address Answer Options Response

Percent Response Count

Ada 1.0% 4 Borik I 7.4% 31 Borik II 5.0% 21 Bulevar 1.4% 6 Centar I 6.9% 29 Centar II 9.8% 41 Česma 1.4% 6 Debeljaci 0.5% 2 Drakulić 0.5% 2 Kočićev vijenac 6.4% 27 Kuljani 0.5% 2 Lauš I 1.7% 7 Lauš II 0.5% 2 Lazarevo I 2.1% 9 Lazarevo II 3.3% 14 Nova Varoš 5.2% 22 Obilićevo I 9.8% 41 Obilićevo II 2.6% 11 Paprikovac 4.0% 17 Petrićevac 2.1% 9 Pobrđe 0.2% 1 Priječani 0.2% 1 Rosulje 5.7% 24 Šargovac 1.0% 4 Srpske Toplice 0.5% 2 Starčevica 16.4% 69 Verići 0.2% 1 Vrbanja 0.5% 2 Zalužani 2.1% 9 Other: 1.0% 4

answered question 420

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Reasons for living in Banja Luka

Ranking the four most important reasons for living in Banja Luka, respondents gave

the highest importance to personal connections. In the questionnaire, reasons were ranked

from 1 to 4, the reason marked with number 1 being the most important, and the reason 4 the

least important. We converted the values for our calculations, giving value 4 to the previous

value 1, value 3 to the previous value 2, and so on.

According to results in Table 8, the highest score has a variable the family lives here,

25.57% of the total sum of scores, 14.8% is the score for born here, 12.68% for proximity of

friends, and 11.6% for studied here.

Apart from links to family and friends, the relatively high response rate of 7.71% of

the total sum of scores was given to size of the city. Employment related reasons for settling

in Banja Luka cumulatively represent 14.28% of the total score, and individually: moved

here because of my job represents 4.38% of the total sum of scores, good employment

opportunities 4.23%, higher wages 2.99%, and moved here because of my partner’s job

represents 2.68% of the total sum of scores.

City-related economic reasons together represent 3.94% of the total score,

comprising good transport links 0.64%, housing quality 2.45%, housing affordability 0.62%,

and housing availability 0.23%.

Variables related to safety, openness and tolerance of the city cumulatively represent

4.03%, with 1.45% of the total sum of scores for openness and tolerance. Individually:

openness to different types of people (in terms of race, ethnicity) represents 0.67%, open

minded and tolerant 0.57%, and tolerant to gay/ LGBT represents 0.21% of the total sum.

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Table 8: Four most important reasons for living in Banja Luka Reason N Range Min.

value*Max.

value**Sum of

scores

Mean Std. Error

Std. Deviation

σ

Sum of scores /

Total sum x 100

Family lives here 296 3 1 4 992 3.35 0,05 0.86 25.57%

Born here 181 3 1 4 574 3.17 0.08 1.10 14.80%

Proximity to friends 221 3 1 4 492 2.23 0.06 0.86 12.68%

Studied in Banja Luka 182 3 1 4 450 2.47 0.08 1.07 11.60%

Size of city 146 3 1 4 299 2.05 0.08 0.96 7.71%Moved here because of my job

52 3 1 4 170 3.27 0.15 1.05 4.38%

Good employment opportunities

69 3 1 4 164 2.38 0.12 0.97 4.23%

Proximity to natural environment

66 3 1 4 120 1.82 0.10 0.82 3.09%

Higher wages 46 3 1 4 116 2.52 0.16 1.07 2.99%Moved here because of my partner’s job

37 3 1 4 104 2.81 0.18 1.10 2.68%

Safe for children 47 3 1 4 100 2.13 0.15 1.03 2.58%

Housing quality 54 3 1 4 95 1.76 0.12 0.87 2.45%

Weather/climate 53 3 1 4 89 1.68 0.12 0.85 2.29%Openness to different types of people (in terms of race. ethnicity)

14 2 1 3 26 1.86 0.23 0.86 0.67%

Good transport links 14 2 1 3 25 1.79 0.24 0.89 0.64%

Housing affordability 12 2 1 3 24 2.00 0.25 0.85 0.62%

Open minded and tolerant 13 3 1 4 22 1.69 0.31 1.11 0.57%

Housing availability 6 1 1 2 9 1.50 0.22 0.55 0.23%

tolerant to gay/ LGBT 6 1 1 2 8 1.33 0.21 0.52 0.21%Language (able to communicate with foreigners)

0 0.00%

Overall friendliness of city 0 0.00%Diversity of leisure and entertainment facilities

0 0.00%

Cultural diversity 0 0.00%Diversity of the built environment

0 0.00%

Presence of good universities

0 0.00%

Presence of good schools 0 0.00%

Total SUM 3,879 100.00%* 1 - the least important (minimal value on the scale 1 to 4), ** 4 – the most important (maximal value on the scale 1 to 4), N Number of respondents who choose a given variable on a scale 1 to 4

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Cumulatively, 64.65% of the total sum of scores belongs to: respondents having

family in Banja Luka, being born in the city, proximity to friends and studied in Banja Luka:

as is graphically illustrated in Chart 3.

Chart 3: The most important reasons for living in Banja Luka

4.2.3. Demographics and likelihood of moving away

Results in this section provide us with basic demographic characteristics of the

sample in relation of how likely respondents are to move away in the next three years.

We use the term mobility subgroups to describe groups of respondents who are

somewhat likely to almost definitely to move away from Banja Luka in the next three years,

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and respondents who are not too likely to not likely at all to move away from Banja Luka in

the next three years.

Results shown in Table 9 provide us with data on age, monthly income, household

size, and commuting time in terms of how likely respondents are to move away from the city

in the next three years.

Age and likelihood of moving away

Results show that significant variation exists in observed and expected values

between mobility subgroups in terms of the respondents` age with χ² (3, n=420) = 17.457,

p< .01. Respondents who are somewhat likely to almost definitely to move away from Banja

Luka in the next three years are in higher percentages younger than 34 years, and their age

has a medium effect on the likelihood of them moving away from Banja Luka Cramer`s V

(3, n=420) = .204, p< .01.

Monthly income and likelihood of moving away

There is a significant variation between mobility subgroups in relation to their

monthly income, with χ² (3, n=420) = 10.713, p< .05. It is noteworthy that 42.4% of

respondents from the more mobile subgroup have wages below 999KM, and only 27.5%

from the less mobile subgroup have wages in that bracket.

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Table 9: Age, monthly income, household size, commuting time and likelihood of moving away Age

Likelihood of moving from Banja Luka in the next three years?

Less than 24

25-34 35-44 More than 45

χ²

Somewhat likely to almost definitely 10.9% 65.8% 21.7% 1.6%

17.457** Cramer`s V 0.204

Not too likely to not likely at all 5.5% 54.7% 32.2% 7.6%

Total 7.9% 59.5% 27.6% 5.0%

df = 3. N = 420, **p < 0,01

Monthly income

Likelihood of moving from Banja Luka in the next three years?

Less than 999KM

1000- 1999 KM

1999 - 2999 KM

more than

3000KM χ²

Somewhat likely to almost definitely 42.4% 37.5% 7.6% 12.5% 10.713*

Not too likely to not likely at all 27.5% 44.9% 8.9% 18.6% Total 34.0% 41.7% 8.3% 16.0% df = 3, N = 420, *p < 0,05 Household size

Likelihood of moving from Banja Luka in the next three years?

One person

Living with

parents

Nuclear or

single parent family

extended family

Non-family

household (relatives, friends,

flatmates)

χ²

Somewhat likely to almost definitely

16.5% 29.0% 38.1% 7.4% 9.1% 15.14** Cramer`s V

0.194 Not too likely to not likely at all

10.1% 25.0% 55.7% 5.3% 3.9%

Total 12.9% 26.7% 48.0% 6.2% 6.2%

df = 4, N = 420, **p<0.01

Commuting time - going to work

Likelihood of moving from Banja Luka in the next three years?

I work from home

Less than 15 min

More than 30

min χ²

Somewhat likely to almost definitely 12.0% 73.4% 14.7% 8.446*

Not too likely to not likely at all 5.5% 84.3% 10.2% df=2, N=420, *p<0.05

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Household size and likelihood of moving away

Results show that the size of the respondent's household significantly affects the

likelihood of respondents moving from Banja Luka in the next three years; χ² (4, n=420) =

15.14, p< .01.

Figures reveal that 55.7% of respondents who are not too likely to not likely at all to

move away from the city, live in nuclear or single parent families. Data show that 16.5% of

respondents from the more mobile subgroup live on their own (10.1% from the less mobile

subgroup), 29% live with their parents (25% from the less mobile subgroup), and 16.5%

live in extended families or with their friends or relatives (12.4% from the less mobile

subgroup).

Household size has a medium effect on the likelihood of respondents moving away

from Banja Luka: Cramer`s V (4, n=420) = 0.194, p< .01.

Commuting time and likelihood of moving away

Since Banja Luka is not a geographically dispersed city and most of our respondents

live less than 4 kilometers from the city center we aggregated answers 15-29 min, 30-44

min, 45-59 min, 60- 90 min, and more than 90 min into a single response: more than 30 min.

Results show that 73.4% of respondents from the more mobile, and 84.3% from the less

mobile subgroup commute less than 15 minutes from home to work. However, there are

significant differences between mobility subgroups in regard to commuting time χ² (2,

n=420) = 8.446, p< .05. The more mobile subgroup is more likely to work from home, or to

travel longer to their work.

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4.2.4. City features and likelihood of moving away

This chapter provides an overview of the features of the city in relation to the sample

breakdown in two mobility subgroups: respondents who are somewhat likely to almost

definitely to move away from Banja Luka in the next three years, and respondents who are

not too likely to not likely at all to move away from Banja Luka in the next three years. We

consider those respondents who are somewhat likely to almost definitely to move away from

Banja Luka to belong to more mobile group and respondents who are not too likely to not

likely at all to move away from Banja Luka to belong to the less mobile subgroup.

We use the Chi-square test in order to assess whether results for given variables

significantly vary from the expected values, under the presumption of their independence.

Social activities and likelihood of moving away

Results in Table 10 show that the most popular social activities for more than half of

all respondents, at least once a week, for both mobility subgroups are: going out to the

pub/bar, visiting coffee shops (during the day), walking around city center, going to city

parks and visiting friends. Very popular in both groups is spending time with friends, and

this is practiced at least once a week by 64.1% of respondents from the more mobile

subgroup, and 66.9% from the less mobile subgroup.

Without statistically significant differences, results show that 74.5% of respondents

from the more mobile, and 69.5% from the less mobile subgroup are going to a movie,

theater and/or concert at least once a month, while 63.1% of respondents from the more

mobile subgroup, and 69.5% of the less mobile subgroup visit restaurants once a month.

83

Table 10: Social activities and likelihood of moving away from Banja Luka Likelihood of moving from Banja Luka in the next three years?

Almost never

At least once a year

At least once a month

At least once a week

Every day

χ²

Going out to the pub/bar Somewhat likely to almost definitely 3.3% 8.2% 34.2% 51.1% 3.3%

4.224 Not too likely to not likely at all 5.9% 11.4% 36.0% 44.5% 2.1%

Visiting coffee shops, during the daySomewhat likely to almost definitely 2.7% .5% 16.3% 52.7% 27.7%

2.754 Not too likely to not likely at all 3.0% 2.1% 13.1% 51.7% 30.1%

Eating outSomewhat likely to almost definitely 11.4% 25.5% 48.4% 14.7% .0%

4.638 Not too likely to not likely at all 6.4% 24.2% 51.7% 17.4% .4%

Going to movie, theatre and/or concertsSomewhat likely to almost definitely 6.5% 19.0% 58.7% 15.8% .0%

2.249 Not too likely to not likely at all 5.9% 24.6% 56.8% 12.7% .0%

Going to museum and/or art gallerySomewhat likely to almost definitely 23.9% 37.0% 32.6% 6.5% .0%

13.813**Not too likely to not likely at all 27.1% 50.0% 19.9% 3.0% .0%

Walking around city centreSomewhat likely to almost definitely 3.8% 6.0% 21.7% 45.1% 23.4%

8.946 Not too likely to not likely at all 2.1% 3.0% 14.4% 49.6% 30.9%

Excursions in parks or peripheral green areasSomewhat likely to almost definitely 4.9% 16.8% 40.8% 35.9% 1.6%

3.461 Not too likely to not likely at all 2.5% 17.8% 37.3% 39.0% 3.4%

Going to a night clubSomewhat likely to almost definitely 16.8% 23.4% 45.7% 14.1% .0%

8.707* Not too likely to not likely at all 28.4% 23.7% 36.0% 11.9% .0%

Going to sport eventsSomewhat likely to almost definitely 41.8% 33.7% 17.9% 6.5% .0%

7.423 Not too likely to not likely at all 29.2% 42.8% 20.3% 7.6% .0%

Going to city parksSomewhat likely to almost definitely 5.4% 12.5% 37.5% 37.5% 7.1%

2.473 Not too likely to not likely at all 6.4% 9.3% 33.5% 43.2% 7.6%

Going to a festival (when happening in the city) Somewhat likely to almost definitely 13.0% 36.4% 18.5% 15.2% 16.8%

11.174* Not too likely to not likely at all 11.0% 40.3% 20.8% 20.8% 7.2%

Visiting friendsSomewhat likely to almost definitely .0% 3.8% 32.1% 55.4% 8.7%

3.742 Not too likely to not likely at all 1.3% 2.1% 29.7% 57.2% 9.7%

Participating in Resident’s associationsSomewhat likely to almost definitely 50.0% 20.7% 10.3% 9.8% 9.2%

3.265 Not too likely to not likely at all 55.1% 19.5% 12.3% 6.4% 6.8%

Participating in Religious activitiesSomewhat likely to almost definitely 64.7% 24.5% 8.7% 2.2% 10.241* Not too likely to not likely at all 51.7% 27.5% 14.4% 6.4%

Participating in community workSomewhat likely to almost definitely 67.4% 22.8% 5.4% 2.7% 1.6%

11.338* Not too likely to not likely at all 55.1% 24.6% 14.4% 4.2% 1.7%

Participating in political activities (trade union, political party, etc) Somewhat likely to almost definitely 87.5% 8.2% 2.7% .0% 1.6% 6.700 Not too likely to not likely at all 87.7% 5.5% 2.1% 3.0% 1.7%

(df=4, N = 420), p< .05, ** p< .01

84

Respondents from both mobility subgroups almost equally, with little over 78%,

make excursions in parks or peripheral green areas at least once a month.

The Chi-square test shows significant variations between mobility subgroups for

observed and expected scores for variables: going to a museum and/or art gallery χ² (4,

n=420) = 13.813, p< .01, going to a night club χ² (4, n=420) = 8.707, p< .05, going to a

festival (when happening in the city) χ² (4, n=420) = 11.174, p< .05, participating in

religious activities χ² (4, n=420) = 10.241, p< .05, and participating in community work χ²

(4, n=420) = 11.338, p< .05. Respondents from the more mobile subgroups more often go to

a museum and/or art gallery, go to a night club and go to a festival (when happening in the

city), while respondents from the less mobile subgroup more often participate in religious

activities and in resident’s associations.

It draws our attention to the fact that nearly 90% of respondents from both mobility

subgroups never participate in political activities, and over 50% of all respondents almost

never participate in religious activities or community work.

Leisure amenities and likelihood of moving away

In the distributed questionnaire there were 13 independent variables relating to

satisfaction with leisure amenities offered in Banja Luka, with a scale of five choices: very

satisfied, satisfied, neither, dissatisfied, and very dissatisfied. For our analysis, we

aggregated scores of five into three choices: very satisfied to satisfied, neither, dissatisfied to

very dissatisfied. In that way we were able to use Chi-square to test the significance of the

relationship between the mobility of respondents and their satisfaction with leisure

amenities.

85

Results in Table 11 show that more than 50% of all respondents are very satisfied or

satisfied with the quality of public spaces (plazas, parks, etc), the quality and range of

restaurants, quality of bars and cafés, and quality of cinemas. Highest scores of very

satisfied to satisfied respondents are variable: with quality of cinemas, 63.0% of respondents

are from the more mobile, and 74.2% from the less mobile subgroup, while for the variable

quality of bars and cafés 46.7% of respondents from the more mobile, and 62.3% from the

less mobile subgroup are very satisfied to satisfied.

The largest percentage of dissatisfaction is recorded for the city architecture/relevant

monuments, with 60.3% respondents from the more mobile subgroup, and 39.8% of

respondents from the less mobile subgroup being dissatisfied to very dissatisfied.

Statistically confirmed differences between two mobility subgroups are identified for

observed and expected values for variables: quality of public spaces (plazas, parkas, etc) χ²

(2, n=420) = 12.621, p< .01, quality and range of art galleries/ museums χ² (2, n=420) =

9.096, p< .01, quality of bars and cafés χ² (2, n=420) = 10.295, p< .01, quality of cinemas χ²

(2, n=420) = 6.716, p< .05, quality of shopping areas χ² (2, n=420) = 10.108, p< .01,

architecture of city/relevant monuments χ² (2, n=420) = 17.437, p< .01, and quality and

range of fitness centers χ² (2, n=420) = 7.028, p< .05, with the more mobile subgroup being

in larger percentages dissatisfied to very dissatisfied.

86

Table 11: Satisfaction with leisure amenities and likelihood of moving away Likelihood of moving from Banja Luka in the next three years?

Dissatisfied to very

dissatisfied

Neither Very Satisfied to

satisfied

χ²

Quality of Public spaces (plazas, parkas, etc)

Somewhat likely to almost definitely 33.7% 25.5% 40.8% 12.621**

Not too likely to not likely at all 18.6% 29.2% 52.1%

Quality of sport facilities Somewhat likely to almost definitely 32.6% 48.4% 19.0%

3.705 Not too likely to not likely at all 24.2% 55.1% 20.8%

The quality and range of festival events and cultural activities Somewhat likely to almost definitely 31.5% 41.8% 26.6%

2.441 Not too likely to not likely at all 26.3% 40.7% 33.1%

The quality and range of art galleries / museums Somewhat likely to almost definitely 42.9% 39.1% 17.9%

9.096** Not too likely to not likely at all 28.8% 49.6% 21.6%

Quality and range of libraries Somewhat likely to almost definitely 29.3% 41.3% 29.3%

2.933 Not too likely to not likely at all 22.0% 45.8% 32.2%

Quality and range of restaurants Somewhat likely to almost definitely 12.5% 35.3% 52.2%

2.697 Not too likely to not likely at all 10.6% 29.2% 60.2%

Quality of bars and cafés Somewhat likely to almost definitely 20.1% 33.2% 46.7%

10.295** Not too likely to not likely at all 13.1% 24.6% 62.3%

Quality of cinemas Somewhat likely to almost definitely 14.1% 22.8% 63.0%

6.716* Not too likely to not likely at all 8.1% 17.8% 74.2%

Quality of shopping areas Somewhat likely to almost definitely 39.1% 32.6% 28.3%

10.108** Not too likely to not likely at all 29.7% 27.1% 43.2%

Architecture of city/relevant monuments Somewhat likely to almost definitely 60.3% 25.5% 14.1%

17.437** Not too likely to not likely at all 39.8% 37.7% 22.5%

Number of associations/ organizations for social activities Somewhat likely to almost definitely 42.4% 41.3% 16.3%

5.567 Not too likely to not likely at all 31.8% 51.7% 16.5%

Quality and range of fitness centers Somewhat likely to almost definitely 15.8% 47.8% 36.4%

7.028* Not too likely to not likely at all 8.1% 47.5% 44.5%

Quality and range of saunas, spa and wellness centres Somewhat likely to almost definitely 28.3% 54.3% 17.4%

5.172 Not too likely to not likely at all 24.2% 49.2% 26.7%

df = 2, N = 420, *p < .05, **p < .01

87

Public services and likelihood of moving away

When it comes to public services, results in Table 12 show that the highest

percentages of respondents, 85.9% from the more mobile, and 80.1% from the less mobile

subgroup, are dissatisfied to very dissatisfied with the number of bicycle lanes, while 82.6%

of respondents from the first, and 72.5% from the second subgroup are dissatisfied to very

dissatisfied with the quality of tourist attractions. High percentages of dissatisfied to very

dissatisfied responses are also recorded for social security (69.6% for the more, and 53.4%

for the less mobile subgroup), quality of health services (65.8%, and 50.8%), quality of the

university education (60.9%, and 45.3%), safety on the streets (56.0%, and 50.4%), police

services (57.6%, and 43.2%), the quality of the high school and elementary school education

(50.5%, and 39.4%), and municipal police services (46.7%, and 39.4%).

Statistical significance is confirmed by the Chi-square test for differences between

the more mobile subgroup and the less mobile subgroup regarding quality of the public

transportation system χ² (2, n=420) = 6.650, p< .05, police services χ² (2, n=420) = 8.969,

p< .01, number of bicycle lanes χ² (2, n=420) = 6.268, p< .05, quality of tourist attractions χ²

(2, n=420) = 7.216, p< .05, social security χ² (2, n=420) = 11.500, p< .01, quality of health

services χ² (2, n=420) = 9.969, p< .01, quality of university education χ² (2, n=420) =

15.219, p< .01, and quality of high school and elementary school education χ² (2, n=420) =

15.020, p< .01, with the more mobile subgroup being significantly more dissatisfied to very

dissatisfied with the public services offered in the city, than the less mobile subgroup.

88

Table 12: Satisfaction with public services and likelihood of moving away Likelihood of moving from Banja Luka in the next three years?

Dissatisfied to very dissatisfied

Neither Very Satisfied to satisfied

χ²

Quality of public transportation system Somewhat likely to almost definitely 34.2% 32.6% 33.2%

6.650* Not too likely to not likely at all 22.9% 37.7% 39.4%

Transport within the City – all types Somewhat likely to almost definitely 39.1% 32.6% 28.3%

4.118 Not too likely to not likely at all 30.9% 32.6% 36.4%

Connectivity between city & periphery Somewhat likely to almost definitely 33.2% 39.1% 27.7%

3.907 Not too likely to not likely at all 24.6% 42.4% 33.1%

Safety on the streets Somewhat likely to almost definitely 56.0% 19.0% 25.0%

4.998 Not too likely to not likely at all 50.4% 28.4% 21.2%

Police services Somewhat likely to almost definitely 57.6% 31.5% 10.9%

8.969** Not too likely to not likely at all 43.2% 39.8% 16.9%

Municipal police services Somewhat likely to almost definitely 46.7% 35.3% 17.9%

2.454 Not too likely to not likely at all 39.4% 38.6% 22.0%

Number of bicycle lanes Somewhat likely to almost definitely 85.9% 8.7% 5.4%

6.268* Not too likely to not likely at all 80.1% 16.5% 3.4%

Quality of tourist attractions Somewhat likely to almost definitely 82.6% 14.7% 2.7%

7.216* Not too likely to not likely at all 72.5% 20.3% 7.2%

Social security Somewhat likely to almost definitely 69.6% 23.9% 6.5%

11.500** Not too likely to not likely at all 53.4% 35.2% 11.4%

Quality of health services Somewhat likely to almost definitely 65.8% 27.2% 7.1%

9.969** Not too likely to not likely at all 50.8% 36.4% 12.7%

Quality of the university education Somewhat likely to almost definitely 60.9% 26.1% 13.0%

14.219** Not too likely to not likely at all 45.3% 28.0% 26.7%

Quality of the high school and elementary school education Somewhat likely to almost definitely 50.5% 33.2% 16.3%

14.020** Not too likely to not likely at all 39.4% 28.4% 32.2%

df= 2, N=420 *p<.05, **p<. 01

89

Environmental aspects and likelihood of moving away

Results in Table 13 show that the highest percentage of respondents, 75.5% from the

more mobile, and 75.4% from the less mobile subgroup, are dissatisfied to very dissatisfied

with the of use of bicycles as a means of transport, while 64.7% respondents from the first,

and 67.4% from the second subgroup are dissatisfied to very dissatisfied with tidiness and

cleanliness of rivers and river banks.

With regard to environmental aspects of the city, high percentages of dissatisfied to

very dissatisfied respondents are also recorded for the recycling collection services (65.8%

for the more, and 59.7% for the less mobile subgroup), traffic congestion (64.1% and

65.7%,), availability of parking space (59.2%, and 62.7%), quality of children’s playgrounds

(56.5%, and 56.8%), pavement condition of city streets and sidewalks (47.8%, and 44.9%),

and air pollution (47.3%, and 38.1%).

Statistically significant difference between mobility subgroups is recorded only for

tidiness and cleanliness of rivers and river banks, where the less mobile subgroup is more

dissatisfied with a state of riverbanks and cleanliness of rivers, χ² (2, n=420) = 5.841, p< .05.

90

Table 13: Satisfaction with environmental aspects and likelihood of moving away Likelihood of moving from Banja Luka in the next three years? Dissatisfied to

very dissatisfied Neither

Very Satisfied to satisfied

χ²

Pavement condition of city streets and sidewalks Somewhat likely to almost definitely 47.8% 22.8% 29.3%

.575 Not too likely to not likely at all 44.9% 25.8% 29.2%

Condition/cleanliness of city streets and sidewalks Somewhat likely to almost definitely 12.0% 15.8% 72.3%

.794 Not too likely to not likely at all 11.9% 19.1% 69.1%

Recycling collection services Somewhat likely to almost definitely 65.8% 20.7% 13.6%

2.170 Not too likely to not likely at all 59.7% 26.7% 13.6%

Quality of drinking water Somewhat likely to almost definitely 19.0% 26.1% 54.9%

5.317 Not too likely to not likely at all 13.1% 21.2% 65.7%

Garbage/waste collection Somewhat likely to almost definitely 8.7% 16.8% 74.5%

1.019 Not too likely to not likely at all 7.2% 20.3% 72.5%

Cleanliness of facilities in city parks Somewhat likely to almost definitely 6.0% 14.1% 79.9%

3.711 Not too likely to not likely at all 9.7% 18.2% 72.0%

Care of trees and city parks Somewhat likely to almost definitely 25.5% 22.8% 51.6%

5.711 Not too likely to not likely at all 16.1% 25.8% 58.1%

Traffic congestion Somewhat likely to almost definitely 64.1% 25.5% 10.3%

.112 Not too likely to not likely at all 65.7% 24.6% 9.7%

Availability of parking space Somewhat likely to almost definitely 59.2% 23.4% 17.4%

.780 Not too likely to not likely at all 62.7% 19.9% 17.4%

Levels of use of bicycles as a means of transport Somewhat likely to almost definitely 75.5% 16.3% 8.2%

3.569 Not too likely to not likely at all 75.4% 20.3% 4.2%

Levels of noise in the city Somewhat likely to almost definitely 35.9% 42.4% 21.7%

.197 Not too likely to not likely at all 37.7% 41.9% 20.3%

Air pollution Somewhat likely to almost definitely 47.3% 34.2% 18.5%

5.427 Not too likely to not likely at all 38.1% 45.3% 16.5%

Quality of children playgrounds Somewhat likely to almost definitely 56.5% 33.7% 9.8%

.585 Not too likely to not likely at all 56.8% 31.4% 11.9%

Tidiness and cleanliness of rivers and river banks Somewhat likely to almost definitely 64.7% 19.0% 16.3% 5.841* Not too likely to not likely at all 67.4% 23.7% 8.9% df= 2, N=420, *p<0.05

91

Issues of concern and likelihood of moving away

In the distributed questionnaire there were 26 independent variables relating to issues

of concern about societal and economic factors of the living environment, with a scale of

five choices: not worried at all, not worried, not particularly worried, somewhat worried, and

very worried. For our analysis, in order to use the Chi-square test to determine significance

in the relationship between mobility of respondents and their concern with the societal and

economic factors of the living environment, we aggregated answers from five to three

choices: not worried at all to not worried, not particularly worried, and somewhat worried to

very worried.

Generally speaking, results in Table 14 show that respondents from both mobility

subgroups are very much concerned about most of the issues regarding living in the city.

The highest rate was the somewhat worried to very worried category respondents gave to

availability of jobs, 94.6% from the more mobile, and 94.1% from the less mobile subgroup,

while 84.8% respondents from the first, and 77.5% from the second subgroup are somewhat

worried to very worried with the quality of university education.

Results demonstrate that, regarding issues of concern, high percentages of somewhat

worried to very worried respondents are also recorded for the quality of medical services

(85.9% for the more, and 77.1% for the less mobile subgroup), behavior of traffic

participants (81.5% for the more, and 78.4% for the less mobile subgroup), drug problems

(81% and 76,3%), aggressive/anti-social behavior (80.4%, and 76.3%), lack of bicycle lanes

(81.5%, and 72.9%), the quality of secondary and elementary education (78.3%, and

69.1%), lack of sidewalks (76.1%, and 69.9%), homelessness (70.1%, and 61.0%), illegal

92

construction (77.7%, and 55.9%), availability of recreation for children (67.4%, and 58.9%),

the quality of kindergartens (62.5%, and 61.0%), and air pollution (60.3%, and 57.2%).

Statistical significance is confirmed by the Chi-square test for differences between

the more mobile subgroup and the less mobile subgroup for issues of concern regarding:

illegal construction χ² (2, n=420) = 21.920, p< .01, availability of affordable housing χ² (2,

n=420) = 15.655, p< .01, availability of recreation for seniors χ² (2, n=420) = 11.039, p<

,01, availability of recreation for teenagers χ² (2, n=420) = 9.465, p< .01, appearance of

building facades and shop windows χ² (2, n=420) = 9.087, p< .01, lack of sidewalks χ² (2,

n=420) = 8.116, p< .05, maintenance of trees and green areas χ² (2, n=420) = 7.858, p< .05,

amount of graffiti χ² (2, n=420) = 7.227, p< .05, quality of medical services χ² (2, n=420) =

6.069, p< .05, with the more mobile subgroup being significantly more somewhat worried to

very worried, than the less mobile subgroup.

93

Table 14: Issues of concern and likelihood of moving away

Likelihood of moving from Banja Luka in the next three years?

Not worried at all to Not

worried

Not particularly

worried

Somewhat worried to

Very worried

χ²

Amount of crime in the city Somewhat likely to almost definitely 4.3% 17.4% 78.3%

.194 Not too likely to not likely at all 4.2% 19.1% 76.7%

Safety Somewhat likely to almost definitely 7.1% 19.6% 73.4%

4.335 Not too likely to not likely at all 8.5% 27.5% 64.0%

Availability of Recreation for teenagers Somewhat likely to almost definitely 9.8% 17.9% 72.3% 9.465** Not too likely to not likely at all 10.6% 30.5% 58.9%

Availability of Affordable Housing Somewhat likely to almost definitely 10.3% 14.7% 75.0%

15.655** Not too likely to not likely at all 12.3% 30.1% 57.6%

Availability of recreation for seniors Somewhat likely to almost definitely 8.7% 20.1% 71.2%

11.039** Not too likely to not likely at all 11.9% 32.6% 55.5%

Availability of jobs Somewhat likely to almost definitely 1.6% 3.8% 94.6%

.454 Not too likely to not likely at all 2.5% 3.4% 94.1%

Quality of university education Somewhat likely to almost definitely 5.4% 9.8% 84.8%

3.718 Not too likely to not likely at all 6.8% 15.7% 77.5%

Quality of secondary and elementary education Somewhat likely to almost definitely 7.1% 14.7% 78.3%

5.196 Not too likely to not likely at all 12.7% 18.2% 69.1%

Quality of kindergartens Somewhat likely to almost definitely 13.0% 24.5% 62.5%

.435 Not too likely to not likely at all 11.9% 27.1% 61.0%

Availability of public transportation Somewhat likely to almost definitely 17.9% 37.0% 45.1%

5.638 Not too likely to not likely at all 24.6% 41.1% 34.3%

Availability of recreation for children Somewhat likely to almost definitely 9.8% 22.8% 67.4%

5.113 Not too likely to not likely at all 16.9% 24.2% 58.9%

Amount of graffiti Somewhat likely to almost definitely 41.8% 32.1% 26.1%

7.227* Not too likely to not likely at all 33.1% 44.9% 22.0%

94

Table 14 (continued)

Drug problems Somewhat likely to almost definitely 8.2% 10.9% 81.0%

2.769 Not too likely to not likely at all 7.2% 16.5% 76.3%

Homelessness Somewhat likely to almost definitely 10.3% 19.6% 70.1%

3.767 Not too likely to not likely at all 13.1% 25.8% 61.0%

Aggressive/anti-social behaviour Somewhat likely to almost definitely 6.5% 13.0% 80.4%

1.486 Not too likely to not likely at all 6.4% 17.4% 76.3%

Prostitution on streets Somewhat likely to almost definitely 23.4% 38.0% 38.6%

.491 Not too likely to not likely at all 26.3% 37.3% 36.4%

Behavior of traffic participants Somewhat likely to almost definitely 5.4% 13.0% 81.5%

.987 Not too likely to not likely at all 5.1% 16.5% 78.4%

Air pollution Somewhat likely to almost definitely 12.0% 27.7% 60.3%

1.601 Not too likely to not likely at all 9.7% 33.1% 57.2%

Maintenance of trees and green areas Somewhat likely to almost definitely 23.4% 29.9% 46.7%

7.858* Not too likely to not likely at all 27.1% 39.4% 33.5%

Demonstrations in the streets Somewhat likely to almost definitely 40.8% 41.3% 17.9%

1.143 Not too likely to not likely at all 44.5% 41.1% 14.4%

Illegal construction Somewhat likely to almost definitely 6.5% 15.8% 77.7% 21.920**

Cramer’s

V =0.228 Not too likely to not likely at all 14.8% 29.2% 55.9%

Lack of bicycle lanes Somewhat likely to almost definitely 6.5% 12.0% 81.5%

4.809 Not too likely to not likely at all 7.6% 19.5% 72.9%

Lack of sidewalks Somewhat likely to almost definitely 4.3% 19.6% 76.1%

8.116* Not too likely to not likely at all 12.3% 17.8% 69.9%

Quality of medical services Somewhat likely to almost definitely 4.3% 9.8% 85.9%

6.069* Not too likely to not likely at all 4.7% 18.2% 77.1%

Presence of smugglers, dealers Somewhat likely to almost definitely 18.5% 31.5% 50.0%

4.964 Not too likely to not likely at all 16.9% 41.9% 41.1%

Appearance of building facades and shop windows Somewhat likely to almost definitely 9.2% 25.5% 65.2%

9.087** Not too likely to not likely at all 15.3% 33.9% 50.8% df= 2, N=420, *p< .05, **p< .01

95

Cost of living and likelihood of moving away

In the distributed questionnaire there were 6 independent variables relating to cost of

living in Banja Luka with a scale of five choices: very expensive, expensive, average, cheap,

and very cheap. For our analysis, we aggregated scores of five choices into three: cheap to

very cheap, average, and very expensive to expensive.

Results in Table 15 show that the overall perception of all respondents is that Banja

Luka is either a very expensive or expensive city for all basic facilities and services listed. It

is remarkable that for the variable general cost of living not a single respondent from either

mobility subgroup choose the option cheap to very cheap.

The highest proportion of respondents, 97.3% from the more mobile, and 92.4% from

the less mobile subgroup, perceives housing cost (mortgage, rent) to be very expensive to

expensive, while 94% of respondents from the first, and 82.2% from the second mobility

subgroup perceives general cost of living to be very expensive to expensive.

Regarding costs of living in the city, other costs are also perceived to be very

expensive to expensive: cost of food and beverages (basic consumables)(86.4% for the

more, and 75% for the less mobile subgroup), cost of basic services related to the house

(water, electricity) (84.2%, and 78%), cost of leisure activities (63%, and 53.8%), cost of

education and training (59.8, and 47%), and transportation costs (54.3%, and 36.9%).

96

Table 15: Cost of living and likelihood of moving away Likelihood of moving from Banja Luka in the next three years?

Cheap to very

cheap

Average Very expensive

to expensive

χ²

Housing cost (mortgage, rent)

Somewhat likely to almost definitely 0% 2.7% 97.3%

Not too likely to not likely at all .4% 7.2% 92.4%

Cost of basic services related to the house (water, electricity) Somewhat likely to almost definitely .5% 15.2% 84.2%

Not too likely to not likely at all 3.0% 19.1% 78.0%

Cost of leisure activities Somewhat likely to almost definitely 1.6% 35.3% 63.0%

4.954 Not too likely to not likely at all 4.2% 41.9% 53.8%

Costs of education and training Somewhat likely to almost definitely 6.0% 34.2% 59.8%

6.862* Not too likely to not likely at all 8.9% 44.1% 47.0%

Transportation costs Somewhat likely to almost definitely 2.7% 42.9% 54.3%

12.956**

Not too likely to not likely at all 4.7% 58.5% 36.9%

Cost of food and beverages (basic consumables) Somewhat likely to almost definitely .5% 13.0% 86.4%

Not too likely to not likely at all .8% 24.2% 75.0%

General Cost of Living Somewhat likely to almost definitely 0% 6.0% 94.0%

13.096**

Not too likely to not likely at all 0% 17.8% 82.2%

df= 2, N=420, *p<.05, **p<.01

Results show that the more mobile subgroup perceives certain costs of living higher

than the less mobile subgroup. Statistical significance is confirmed for variables: costs of

education and training χ² (2, n=420) = 6.862, p< .05, transportation costs χ² (2, n=520) =

12.956, p< .01, and general cost of living χ² (2, n=420) = 13.096, p< .01, with the more

mobile subgroup perceiving those costs very expensive to expensive in larger percentages.

The most striking result is that not one respondent from the more mobile subgroup

perceives housing costs as being cheap or very cheap, and that 94% of respondents who are

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somewhat likely to almost definitely to move away from Banja Luka considering them as

being very expensive to expensive.

Tolerance and likelihood of moving away

In the distributed questionnaire there were 5 independent variables relating to issues

of tolerance, with a scale of five choices: strongly agree, agree, neither, agree, and strongly

disagree. For our analysis, we aggregated scores of five choices into three: strongly

disagree/disagree, neither, and agree/strongly agree.

The results for the total sample, Table 16, show that 67.4% of respondents from the

more mobile subgroup, and 61.4% from the less mobile subgroup, strongly disagree to

disagree that the city accepts the gay population, and 55.4% from the more, and 54.7 from

the less mobile subgroup of respondents strongly disagree to disagree that the city accepts

the minority religious and ideological groups.

There is a significant difference in responses between members of the more and less

mobile subgroups for three variables: agreeing that city is welcoming place to people from

other countries, agreeing that the city accepts all ethnic groups, and agreeing that the city

accepts the differences between rich and poor. Respondents whose answers were somewhat

likely to almost definitely to move away from Banja Luka in the next three years also

significantly more disagree and strongly disagree in respect to statements of tolerance of the

city.

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Table 16: Tolerance and likelihood of moving away Agreeing with statements

regarding issues of tolerance

Likelihood of moving from Banja Luka in the next three years?

Strongly Disagree/ Disagree

Neither Agree/ Strongly

Agree

χ²

Agreeing that city is welcoming place to people from other countries

Somewhat likely to almost definitely 19.0% 20.7% 60.3% 11.658**Not too likely to not likely at all 8.1% 20.3% 71.6%

Agreeing that the city accepts all ethnic groups

Somewhat likely to almost definitely 37.0% 29.3% 33.7% 8.981** Not too likely to not likely at all 23.7% 33.1% 43.2%

Agreeing that the city accepts the gay population

Somewhat likely to almost definitely 67.4% 26.6% 6.0% 1.603 Not too likely to not likely at all 61.4% 31.8% 6.8%

Agreeing that the city accepts the minority religious and ideological groups

Somewhat likely to almost definitely 55.4% 32.6% 12.0% 1.986 Not too likely to not likely at all 54.7% 28.8% 16.5%

Agreeing that the city accepts the differences between rich and poor

Somewhat likely to almost definitely 51.1% 28.8% 20.1% 11.971**Not too likely to not likely at all 34.3% 38.1% 27.5%

df = 2, N= 420, *p< 0,05, **p< 0,01

4.2.5. Basic employment features of the sample

Results in Table 17 show basic characteristics of our sample in response to their

status, category, and employment sector. Because of high levels of unemployment in BiH,

we introduced a status unemployed creative and knowledge workers, i.e. respondents who

are temporary out of work, but have experience in one of these sectors.

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Table 17: Status, employer`s category, and employment sector Employment status Response

Percent Response Count

Employed 74.0% 311 Self employed / freelance 11.7% 49 Unemployed 14.3% 60 Employer`s category Response

Percent Response Count

Government / state-owned company 36.2% 136 Privately owned company 32.7% 123 NGO (non-governmental organizations) 12.8% 48 Owner/ partner in the company 2.9% 11 Freelance / contract work 8.5% 32 Student 6.9% 26

answered question 376 skipped question 44

Employment sector

Answer Options Response Percent

Response Count

creative workers

Marketing and PR, advertising 7.9% 33 Architecture 3.3% 14 Art galleries, dealers in arts and antiques 0.5% 2 Arts: music, fine art, literature, theatre 4.5% 19 Design, applied arts 4.8% 20 Creative crafts 0.7% 3 Newspapers, printed media / publishing, books, web 6.4% 27 Video, film, photography 1.0% 4 Music production 0.7% 3 TV and radio 2.1% 9 ICT (Information and communication tech.) - software 4.3% 18 TOTAL CREATIVE 152

knowledge workers

ICT (Information and communication tech.) - hardware 0.5% 2 Financial intermediaries 10.5% 44 Legal and other business services 10.0% 42 Management, consulting 15.5% 65 New product development 0.7% 3 Engineering, new technologies, processes, R&D 15.5% 65 College, university and HE teaching professionals 11.2% 47 TOTAL KNOWLEDGE 268

other (specify) 0.0% 0 answered question 420

Employment sector gender creative

jobs knowledge

jobs total χ² df Asymp. Sig.

(2-sided) p Male Count 80 117 197

3.137 1 0.077

% within gender 40.60% 59.40% 100.00% Female Count 72 151 223

% within gender 32.30% 67.70% 100.00% Total Count 152 268 420

% within gender 36.20% 63.80% 100.00%

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Employment status and category

Results show that 14.3% of respondents are unemployed, 11.7% are self employed /

freelance, and 74.0% are employed.

In order to adjust the ACRE questionnaire to the local specifics, we asked

respondents to state their employers category (government/state-owned company, privately

owned company, NGO (non-governmental organizations), owner/ partner in the company,

freelance / contract work, and student).

Results show that 36.7% of respondents have the government as an employer, 32.7%

work for a privately owned company, 12.8% of respondents work in NGO (non-

governmental organizations), 8.5% are freelancers, 6.9% students, and 2.9% of respondents

are owners/partners in their companies.

We can notice that the NGO sector is a significant employer, with more respondents

working in this sector than being freelancers or doing contract work.

Employment sectors

In the segment of job sectors, we used other in the questionnaire as a control variable

to exclude unwanted participants from the sample.

Results in Table 17 show that 63.8% of respondents work in the knowledge sector,

while 36.2% of respondents work in creative industries. Respondents who work in

engineering, new technologies, and research and development (R&D) make up 15.5% of the

sample, the same as those working in management and consulting jobs. College, university

and higher education teaching professionals make 11.2% of the sample, workers in financial

intermediaries 10.5%, legal and other business services 10.0%, marketing, PR, and

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advertising 7.9%, design, applied arts 4.8%, arts: music, fine art, literature, theater 4.5%,

ICT – software 4.3%, architecture 3.3%, TV and radio 2.1%, new product development

0.7%, creative crafts 0.7%, newspapers, printed media / publishing, books, web 6.4%, video,

film, photography 1.0% , music production 0.7%, and art dealers and ICT professionals

working in the hardware sector represent 0.5% of the sample, each.

There is no statistically significant difference between genders in terms of

employment sectors.

4.2.6. Work related factors and likelihood of moving away

We use this section to analyze aspects of the work and working environment on

human capital mobility in terms of the likelihood of moving away from Banja Luka.

Status, sector and category of employment and moving away

In this chapter, we focus on variables relating to status, sector and category of

employment, as shown in Table 18. Results show that significant differences in current

employment status exist between mobility subgroups χ² (2, n=420) = 13.376, p< .01.

Respondents who are somewhat likely to almost definitely to move away from Banja Luka

are in higher percentages of unemployed or self employed and work freelance (15.2% of

respondents from the more mobile subgroup work freelance, and 19.6% are unemployed),

while 80.9% of respondents from the less mobile subgroup, and 65.2% from the more

mobile subgroup are employed.

There are no significant differences between respondents in creative and knowledge

occupations regarding likelihood of them leaving Banja Luka in the next three years. A

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higher percentage of respondents from the more mobile subgroup work in the creative

sector, while a higher percentage of respondents from the less mobile subgroup work in the

knowledge sector.

Table 18: Status, sector and category of employment and likelihood of moving away Employment status

Likelihood of moving from Banja Luka in the next three years?

Employed Self employed/ freelance

Unemployed χ²

Somewhat likely to almost definitely 65.2% 15.2% 19.6% 13.376**

Not too likely to not likely at all 80.9% 8.9% 10.2% df=2, N = 420, **p< .01

Employment sector

Likelihood of moving from Banja Luka in the next three years?

Job in creative economy

Job in knowledge economy

χ²

Somewhat likely to almost definitely 40.2% 59.8% 2.299

Not too likely to not likely at all 33.1% 66.9% df=1, N= 420, p not significant

Employer category

Likelihood of moving from Banja Luka in the next three years?

state-owned

company/

government

private company

NGO sector

Owner / co-owner

of the company

freelance/

contract work

student χ²

Somewhat likely to almost definitely 26.5% 34.8% 16.1% 2.6% 11.6% 8.4%

13.503*Not too likely to not likely at all 43.0% 31.2% 10.4% 3.2% 6.3% 5.9%

Total 36.2% 32.7% 12.8% 2.9% 8.5% 6.9% df=5, N= 420, *p< .05

Data demonstrates that their category of employment significantly impacts the

mobility of our respondents, χ² (5, n=420) = 13.503, p< .05. Results show that 43% of

respondents from the less mobile subgroup, and 26.5% of respondents from the more mobile

subgroup work for state-owned companies/ government, 34.8% of respondents from the

more mobile, and 31.2% from the less mobile work for private companies, 16.1% from the

first, and 10.4% from the second work in the NGO sector, 2.6% of respondents from the

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more mobile and 3.2% from the less mobile subgroup are owners/co-owners of companies,

11.6% of respondents from the more mobile group, and 5.9% from the less mobile

subgroup do freelance/contract work. There are also 8.4% of respondents in the more

mobile, and 5.9% in the less mobile subgroup who are students.

Employment satisfaction and likelihood of moving away

In the distributed questionnaire there were 15 independent variables relating to job

satisfaction, with answers on a scale of five: very satisfied, satisfied, neither, dissatisfied,

and very dissatisfied. For our analysis, we reduced the number of variables to 12, and

aggregated scores of five into three choices: very satisfied to satisfied, neither, dissatisfied to

very dissatisfied. We use the Chi-square to test the significance of differences between

observed and expected response values for each variable.

Results from Table 19 show that the highest percentage of respondents from both

mobility subgroups are almost equally (25.7% from the more, and 24.0% from the less

mobile subgroup) dissatisfied to very dissatisfied with training they receive. Results also

show that most of respondents (70.9% from the more, and 73.9% from the less mobile

subgroup) are very satisfied to satisfied with the friendliness of the work environment,

69,3% from the more, and 75.5% from the less mobile subgroup are very satisfied to

satisfied with the facilities in the workplace, as well as with the intellectually stimulating

aspect of their job (64.3% from the first, and 69.1% from the second mobility subgroup),

the amount of holiday time/paid leave (59.7%, and 74.0%), the sense of achievement they

get from their work (56.7%, and 64.7%), the scope for using their own initiative (58.2%, and

61.0%), the amount of influence they have over their job (56.7%, and 64.7%), the training

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they receive (51.4%, and 42.6%), the amount of pay they receive (46.8%, and 53.9%), the

ability to meet and network with professionals from the same field (61.0%, and 57.8%), the

ability to balance their professional and personal (family, friends) life (54.6%, and 64.7%),

job security (43.6%, and 60.5%)

Table 19: Employment satisfaction and likelihood of moving away

How satisfied are you with the following aspects of your job?

Likelihood of moving from Banja Luka in the next three years?

Dissatisfied to very

dissatisfied

Neither Satisfied to very

satisfied

χ²

The sense of achievement you get from your work Somewhat likely to almost definitely 20.6% 22.7% 56.7%

9.779** Not too likely to not likely at all 8.8% 26.5% 64.7%

The scope for using your own initiative Somewhat likely to almost definitely 24.1% 17.7% 58.2%

11.061** Not too likely to not likely at all 11.7% 27.3% 61.0%

The amount of influence you have over your job Somewhat likely to almost definitely 20.6% 22.7% 56.7%

9.779** Not too likely to not likely at all 8.8% 26.5% 64.7%

The facilities in the workplace Somewhat likely to almost definitely 15.0% 15.7% 69.3%

3.232 Not too likely to not likely at all 8.8% 15.7% 75.5%

The intellectually stimulating aspect of your job Somewhat likely to almost definitely 15.0% 20.7% 64.3%

3.757 Not too likely to not likely at all 8.3% 22.5% 69.1%

The friendliness of the work environment Somewhat likely to almost definitely 14.9% 14.2% 70.9%

3.946 Not too likely to not likely at all 8.4% 17.7% 73.9%

The training you receive Somewhat likely to almost definitely 25.7% 22.9% 51.4%

4.616 Not too likely to not likely at all 24.0% 33.3% 42.6%

The amount of pay you receive Somewhat likely to almost definitely 30.5% 22.7% 46.8%

5.412 Not too likely to not likely at all 19.6% 26.5% 53.9%

The amount of holiday time/paid leave Somewhat likely to almost definitely 19.4% 20.9% 59.7% 9.069**

Not too likely to not likely at all 9.8% 16.2% 74.0% Job security

Somewhat likely to almost definitely 30.7% 25.7% 43.6% 12.657**

Not too likely to not likely at all 16.0% 23.5% 60.5% The ability to balance your professional and personal (family, friends) life

Somewhat likely to almost definitely 26.2% 19.1% 54.6% 7.858* Not too likely to not likely at all 14.2% 21.1% 64.7%

Ability to meet and network with professionals from the same field Somewhat likely to almost definitely 19.9% 19.1% 61.0%

8.695* Not too likely to not likely at all 11.3% 30.9% 57.8% df = 2, N = 345, * p < .05, ** p < .01

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However, despite high scores for job satisfaction for both mobility subgroups, results

show that significant variations exist for mobility subgroups in regard to variables: job

security χ² (2, n=345) = 12.657, p< .01, the scope for using their own initiative χ² (2, n=345)

= 11.061, p< .01, the sense of achievement they get from their work χ² (2, n=345) = 9.779,

p< .01, the amount of influence they have over the job χ² (2, n=345) = 9.779, p< .01, the

amount of holiday time/paid leave χ² (2, n=345) = 9.069, p< .01, the ability to meet and

network with professionals from the same field χ² (2, n=345) = 8.695, p< .05, and ability to

balance their professional and personal (family, friends) life χ² (2, n=345) = 7.858, p< .05.

4.2.7. Work related factors and likelihood of changing the place of work

Results in this section evaluate differences between two employees’ subgroups in

regard to employment-related variables: those respondents who expect to leave the

company/organization in less than 3 years, and respondents who expect to stay in the

company/organization for more than 3 years,

Age, monthly wages, workweek hours, having a second job

Results in Table 20 show that the age of respondents does not significantly affect

variations between observed and expected values in terms of the likelihood of leaving the

company/organization in the next 3 years.

Wages for respondents who expect to stay less than 3 years in the

company/organization and those who expect to stay in the company for more than 3 years do

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not vary significantly. It is notable that even for wages lower than 999KM results between

employee’s subgroups do not vary much (29.3% and 28.2%).

Results show that no significant difference is confirmed between employee’s

subgroups in relation to a number of workweek hours. Also, differences between

employee’s subgroups for having a second job are not significant.

Table 20: Age, monthly wages, workweek hours, having second job and likelihood of changing the place of work in the next 3 years

Age How long do you expect to remain in the company?

Less than 24

25-34 35-44 More than 45

χ²

Less than 3 years 5.1% 62.6% 26.3% 6.1% 100.0%

2.917 More than 3 years 3.2% 55.6% 35.1% 6.0% 100.0%

Total 3.7% 57.6% 32.6% 6.1% 100.0%

df = 3, N = 347, p not significant

Monthly wages How long do you expect to remain in the company?

Less than 999 KM

1.000 – 1.999KM

2.000 – 2.999 KM

More than

3.000 KM

χ²

Less than 3 years 29.3% 45.5% 10.1% 15.2% 0.549

More than 3 years 28.2% 49.6% 9.3% 12.9% Total 28.5% 48.4% 9.5% 13.5% df = 3, N = 347, p not significant

Workweek hours How long do you expect to remain in the company?

Less than 20 hours

per week

21 - 30

31 - 42

43 - 55

More than 55

hours per week

Varies from week

to week

χ²

Less than 3 years 2.0% 11.2% 43.9% 26.5% 10.2% 6.1% 5.60

More than 3 years 6.4% 8.1% 45.3% 25.8% 5.9% 8.5% Total 5.1% 9.0% 44.9% 26.0% 7.2% 7.8% N= 334, df = 1, p not significant Having a second job How long do you expect to remain in the company?

With second

job

Without second

job

χ²

Less than 3 years 36.4% 63.6% 1.80

More than 3 years 29.0% 71.0% Total 31.1% 68.9% N= 344, df = 1, p not significant

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Sector, category of employer, and status of employment

Results in Table 21 show that a higher percentage of respondents in creative jobs are

expecting to remain in the company for less than 3 years, and confirmed by the Chi-square

test χ² (1, n=347) = 3.674, p< .05.

Table 21: Sector, category, and status of employment and likelihood of changing the place of work Employment sector

How long do you expect to remain in the company?

creative jobs

knowledge jobs

χ²

Less than 3 years 44.4% 55.6% 3.674*

More than 3 years 33.5% 66.5% Total 36.6% 63.4% df = 1, N = 347, *p < .05 Employer`s category How long do you expect to remain in the company?

Government / state-owned

company

Privately owned

company

NGO (non-governmental organizations)

Freelance / contract

work

χ²

Less than 3 years 24.7% 47.4% 20.6% 7.2% 17.219**

More than 3 years 47.8% 32.6% 11.3% 8.3% Total 41.0% 37.0% 14.1% 8.0% df = 3, N = 327, **p< .01

Employment status

How long do you expect to remain in the company?

Employed Self-employed/ freelance

χ²

Less than 3 years 88.8% 11.2% 0.031

More than 3 years 89.4% 10.6% Total 89.2% 10.8% df = 1, N= 344, p not significant

With regard to category of employer, in the distributed questionnaire we had

variables: government/state-owned company, privately owned company, NGO (non-

governmental organizations), owner/ partner in the company, freelance/contract work, and

student. We kept only four categories (government / state-owned company, privately owned

company, NGO (non-governmental organizations), and freelance/contract work) in order to

use the Chi-square test. Results show significant variation in respondents expectation of how

long they expect to remain in the company, χ² (1, n=327) = 17.219, p< .01 in terms of

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category of employer, where less mobile employees more often have the state as an

employer, while more mobile workers are more often freelancers or work for privately

owned companies. In respect to status of employment, differences between employee’s

subgroups for observed and expected values are not confirmed by the Chi-square test.

The main reasons for changing the place of work

Results in Table 22 show the answers of respondents who expect to remain in the

company for less than 1 year. Respondents chose 2 answers among 8 available, where

reasons were ranked 1 and 2, with number 1 being more important, and reason 2 less

important. We converted values for our calculations, giving value 2 to the previous value 1,

value 1 to the previous value 2.

Table 22: The main reasons for changing the place of work If you expect to leave the company/organization in the next year what are the main 2 reasons in order of priority?

N Range

Min. value*

Max. value**

Sum of

scores

Mean Std. Error

Std. Deviation

σ

Variance Sum of

scores / Total sum x 100

To seek better pay 137 1 1 2 218 1.59 .042 .493 .243 41.76

To seek a more interesting job 85 1 1 2 131 1.54 .054 .501 .251 25.10

To seek better conditions

70 1 1 2 105 1.50 .060 .504 .254 20.11

To seek a less stressful job 49 1 1 2 68 1.39 .070 .492 .242 13.03

My work contract will be over 0

I am moving out of Banja Luka

0

I am leaving the country

0

* 1 - less important (minimal value on the scale 1 to 2), ** 2 – more important (maximal value on the scale 1 to 2), N Number of respondents who choose a given variable on a scale 1 to 2

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Results show that to seek better pay is the highest ranked reason why respondents

expect to change the place of work in the next year, with 41.76% of the total sum of scores.

Environmental and intrinsic aspects of work: to seek a more interesting job, to seek better

conditions, and to seek a less stressful job are a significant factor for respondents who

expect to leave the company in the next year, adding up to 58.24% of the total sum of

scores.

Employment satisfaction and likelihood of leaving the company

In the distributed questionnaire, there were 15 independent variables relating to job

satisfaction, with answers on a scale of five: very satisfied, satisfied, neither, dissatisfied,

and very dissatisfied. In Table 23, we aggregated scores of five into three choices: very

satisfied to satisfied, neither, dissatisfied to very dissatisfied. We used the Chi-square test to

check the significance of variation between expected and observed values between

employee’s subgroups for 15 economic and social variables.

Results show that most respondents (74.7% from the more, and 72.4% from the less

mobile employees’ subgroups) are very satisfied to satisfied with the quality of the working

environment (appearance, air-conditioning, toilets), 69.7% from the more, and 74.1% from

the less mobile employees’ subgroup are very satisfied to satisfied with the friendliness of

the working environment, as well as with the facilities in the workplace (67.7% from the

first, and 67.1% from the second employees’ subgroup), respect for the rights of employees

(vacation, sick leave, overtime, etc.) (60.6%, and 73.8%), the amount of holiday time/paid

leave (61.2%, and 71.2%), the amount of influence they have over their job (57.6%, and

63.1%), and the sense of achievement they get from their work (57.6%, and 63.1%).

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Table 23: Employment satisfaction and likelihood of leaving the company How long do you

expect to remain in the company?

Dissatisfied to very

dissatisfied

Neither satisfied or dissatisfied

Satisfied to very

satisfied

χ² N

The sense of achievement you get from your work Less than 3 years 22.2% 20.2% 57.6%

8.901** 343 More than 3 years 10.2% 26.6% 63.1%

The scope for using your own initiative Less than 3 years 22.2% 22.2% 55.6%

3.172 343 More than 3 years 14.3% 23.8% 61.9%

The amount of influence you have over your job Less than 3 years 22.2% 20.2% 57.6%

8.901** 343 More than 3 years 10.2% 26.6% 63.1% The quality of the working environment (appearance, air-conditioning, toilets)

Less than 3 years 12.1% 13.1% 74.7% 0.803 342

More than 3 years 10.7% 16.9% 72.4% The facilities in the workplace

Less than 3 years 13.1% 19.2% 67.7% 1.169 342

More than 3 years 9.9% 23.0% 67.1% The intellectually stimulating aspect of your job

Less than 3 years 30.3% 17.2% 52.5% 17.262** Cramer's V = 0.223

342 More than 3 years 11.9% 26.3% 61.7%

The friendliness of the working environment Less than 3 years 17.2% 13.1% 69.7%

5.545 342 More than 3 years 8.6% 17.3% 74.1%

The training you receive Less than 3 years 30.3% 29.3% 40.4%

2.883 342 More than 3 years 22.2% 29.2% 48.6%

The amount of pay you receive Less than 3 years 28.3% 21.2% 50.5%

2.129 343 More than 3 years 21.7% 26.6% 51.6%

The amount of holiday time/paid leave Less than 3 years 20.4% 18.4% 61.2%

5.898 341 More than 3 years 10.7% 18.1% 71.2%

Your job security Less than 3 years 31.6% 26.5% 41.8%

9.735** 338 More than 3 years 17.9% 23.8% 58.3%

The ability to balance your professional and personal (family, friends) life Less than 3 years 30.3% 21.2% 48.5%

12.323** 343 More than 3 years 14.8% 19.7% 65.6%

Ability to meet and network with professionals from your same field Less than 3 years 20.2% 24.2% 55.6%

3.451 343 More than 3 years 12.3% 27.0% 60.7%

Respect for the rights of employees (vacation, sick leave, overtime, etc.) Less than 3 years 24.2% 15.2% 60.6%

15.122** 343 More than 3 years 8.6% 17.6% 73.8%

Overall satisfaction with the job Less than 3 years 21.2% 26.3% 52.5%

17.124** 342 More than 3 years 7.0% 21.8% 71.2% df=4, N varies, **p<0.001

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Regarding the scope for using their own initiative, 55.6% respondents from the more,

and 61.9% from the less mobile employees’ subgroup consider to be very satisfied to

satisfied, 55.6% from the more, and 60.7% from the less mobile employees’ subgroup are

very satisfied to satisfied with the ability to meet and network with professionals from the

same field, the intellectually stimulating aspect of the job (52.5%, and 61.7%), the amount

of pay they receive (50.5%, and 51.6%), the ability to balance their professional and

personal (family, friends) life (48.5%, and 65.6%), the job security (41.8%, and 58.3%), the

training they receive (40.4%, and 48.6%). Regarding the overall satisfaction with the job,

52.5% of respondents from the more, and 71.2% from the less mobile employees’ subgroup

are, overall, very satisfied to satisfied with their job.

However, despite high scores for job satisfaction for both mobility subgroups in the

very satisfied to satisfied domain, results of the Chi-square test show that significant

variation exists between employees’ subgroups in regard to overall satisfaction with the job,

χ² (4, n=342) = 17.124, p< .01, and for the variables: the intellectually stimulating aspect of

the job, χ² (4, n=342) = 17.262, p< .01, and Cramer's V = 0.223, respect for the rights of

employees (vacation, sick leave, overtime, etc.) χ² (4, n=343) = 15.122, p< ,01, the ability to

balance their professional and personal (family, friends) life χ² (4, n=343) = 12.323, p< .01,

job security χ² (2, n=338) = 9.735, p< .01, the amount of influence they have over the job χ²

(4, n=343) = 8.901, p< .01, and the sense of achievement they get from their work χ² (4,

n=343) = 8.901, p< .01.

Other employment factors: the scope for using your own initiative, the quality of the

working environment (appearance, air-conditioning, toilets), the facilities in the workplace,

the friendliness of the working environment, the training you receive, the amount of pay you

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receive, the amount of holiday time/paid leave, and ability to meet and network with

professionals from the same field, are not significant in the context of how long respondents

expect to remain in the company.

4.3. Factor analysis and binary logistic regression

We divided issues of concern listed in Table 14 (Issues of concern and likelihood of

moving away) into two groups of factors, cultural/societal factors, which represent social

milieu of the city, and economic factors, which are more directly influenced by the amount

of public funding. We use factor analysis and binary regression analysis in order to

determine which factors, economic or cultural/societal, in terms of issues of concern shown

in the table, most significantly impact the respondent`s decision to move away from Banja

Luka in the next three years.

Binary logistic regression analysis is used for one categorical dependent variable, and

seven continuous independent variables - predictors (seven linear combinations that we get

after the factor analysis). In this way, we are able to predict whether the probability of the

dependent variable is the function of independent variables.

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Cultural/Societal Factors:

1. Amount of crime in the city

2. Safety

3. Amount of graffiti

4. Drug problems

5. Homelessness

6. Aggressive/anti-social behavior

7. Prostitution on streets

8. Behavior of traffic participants

9. Air pollution

10. Demonstrations in the streets

11. Illegal construction

12. Presence of smugglers, dealers

13. Appearance of building facades and

shop windows

Economic factors:

1. Availability of jobs

2. Availability of recreation for teenagers

3. Availability of affordable housing

4. Availability of recreation for seniors

5. Quality of university education

6. Quality of secondary and elementary

education

7. Quality of kindergartens

8. Availability of public transportation

9. Availability of recreation for children

10. Maintenance of trees and green areas

11. Lack of bicycle lanes

12. Lack of sidewalks

13. Quality of medical services

Results in Table 24 show that Bartlett's Test for the null hypothesis (correlations

between variables equal to zero) is significant for given variables, therefore we proceed

to extract factors which encompass independent variables.

Table 24: Bartlett's Test Bartlett's Test

Bartlett's Test of Sphericity Approx. Chi-

Square

4058.725

df 325

Sig. .000

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Table 25 displays communalities matrix data, with the amount of variability

explained by the specific factors of the original variables (column Extraction).

Table 25: Communalities

Communalities

Initial Extraction

Amount of crime in the city 1,000 .807

Safety 1.000 .819

Availability of recreation for teenagers 1.000 .703

Availability of affordable Housing 1.000 .569

Availability of recreation for seniors 1.000 .704

Availability of jobs 1.000 .596

Quality of university education 1.000 .743

Quality of secondary and elementary education

1.000 .763

Quality of kindergartens 1.000 .598

Availability of public transportation 1.000 .446

Availability of recreation for children 1.000 .652

Amount of graffiti 1.000 .525

Drug problems 1.000 .574

Homelessness 1.000 .613

Aggressive/anti-social behavior 1.000 .565

Prostitution on streets 1.000 .690

Behavior of traffic participants 1.000 .565

Air pollution 1.000 .512

Maintenance of trees and green areas 1.000 .453

Demonstrations in the streets 1.000 .605

Illegal construction 1.000 .601

Lack of bicycle lanes 1.000 .675

Lack of sidewalks 1.000 .712

Quality of medical services 1.000 .487

Presence of smugglers, dealers 1.000 .579

Appearance of building facades and shop windows

1.000 .612

Extraction Method: Principal Component Analysis.

Results in Table 26 show components 1 to 7 that can be considered for future

analysis. The first three columns (Initial Eigenvalues are data for all factors, and in the

other three (Extraction Sums of Squared loadings) are data for those factors that meet the

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criteria to be retained. The first factor explains almost 28% of the total variability of all

26 original variables, the other 9%, and so on. Important information is that all seven

factors explain about 62% of the total variability.

Table 26: Total Variance Explained Total Variance Explained

Comp-onent

Initial Eigenvalues Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Total % of Var.

Cumul. %

Total % of Var.

Cumul. %

Total % of Var.

Cumul. %

1 7.277 27.988 27.988 7.277 27.988 27.988 2.719 10.458 10.4582 2.345 9.017 37.005 2.345 9.017 37.005 2.688 10.339 20.7973 1.561 6.005 43.010 1.561 6.005 43.010 2.503 9.626 30.4234 1.419 5.456 48.466 1.419 5.456 48.466 2.483 9.551 39.9745 1.353 5.205 53.671 1.353 5.205 53.671 2.211 8.505 48.4796 1.151 4.429 58.100 1.151 4.429 58.100 2.059 7.920 56.3997 1.061 4.080 62.181 1.061 4.080 62.181 1.503 5.782 62.1818 .917 3.526 65.706 9 .846 3.256 68.962 10 .813 3.126 72.088 11 .748 2.878 74.966 12 .701 2.696 77.662 13 .627 2.411 80.073 14 .579 2.225 82.298 15 .560 2.153 84.451 16 .520 2.000 86.450 17 .463 1.780 88.231 18 .455 1.749 89.979 19 .412 1.586 91.565 20 .388 1.491 93.056 21 .362 1.391 94.448 22 .346 1.331 95.779 23 .319 1.228 97.007 24 .303 1.167 98.174 25 .262 1.008 99.182 26 .213 .818 100.000 Extraction Method: Principal Component Analysis.

Seven factors shown in Table 27 correlate to specific independent variables.

Therefore, we find that individual factors are mostly correlated with:

Factor 1 (Fac1_antisocial) with: drug problems, homelessness, prostitution on streets

Factor 2 (Fac2_recreation): availability of recreation for teenagers, availability of recreation for seniors

Factor 3 (Fac3_education): quality of university education, quality of secondary and elementary education

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Factor 4 (Fac4_cycling&walking ): lack of bicycle lanes, lack of sidewalks Factor 5 (Fac5_revolt): amount of graffiti, demonstrations in the streets Factor 6 (Fac6_safety): amount of crime in the city, safety Factor 7 (Fac7_architecture): illegal construction, appearance of building facades

and shop windows

Table 27: Rotated Component Matrix Rotated Component Matrixa

Component Fac1 Fac2 Fac3 Fac4 Fac5 Fac6 Fac7

Amount of crime in the city .183 .152 .046 .064 .045 .859 .066 Safety .204 .136 .055 .077 .069 .862 .053 Availability of Recreation for teenagers

.011 .770 .216 .102 .102 .207 .003

Availability of Affordable Housing

.042 .666 .058 .105 -.051 .054 .323

Availability of recreation for seniors

.157 .789 .074 .112 .087 .085 .158

Availability of jobs .345 .361 .187 .008 -.212 -.068 .511 Quality of university education

-.001 .133 .807 .116 .007 .035 .243

Quality of secondary and elementary education

.070 .185 .828 .035 .072 .094 .151

Quality of kindergartens .105 .294 .646 .114 .215 -.009 -.156 Availability of public transportation

.040 .346 .287 .318 .348 .122 -.070

Availability of recreation for children

.095 .612 .366 .263 .198 .035 -.161

Amount of graffiti .216 .029 .054 -.002 .687 -.009 .051 Drug problems .691 .060 .083 .142 .199 .159 .035 Homelessness .730 .139 -.031 .140 .177 .092 .000 Aggressive/anti-social behaviour

.501 .087 .082 .195 .105 .447 .225

Prostitution on streets .729 .068 .100 .046 .342 .156 -.036 Behavior of traffic participants

.441 -.014 .154 .539 .050 .219 .072

Air pollution .311 -.044 .278 .460 .196 .290 -.034 Maintenance of trees and green areas

.104 -.007 .321 .357 .439 .134 -.039

Demonstrations in the streets .209 .090 .040 .123 .730 .050 .036 Illegal construction -.032 .132 .116 .465 .232 .160 .523 Lack of bicycle lanes .115 .232 .058 .752 .030 -.064 .184 Lack of sidewalks .124 .256 .053 .782 .070 .066 .085 Quality of medical services .359 -.043 .397 .270 -.142 .054 .321 Presence of smugglers, dealers

.346 .140 .007 .002 .527 .112 .386

Appearance of building facades and shop windows

-.085 .144 .164 .226 .366 .187 ,580

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 14 iterations.

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Values of Exp B    ebi,  represent the ratio of the likelihood that someone leaves

and stays in their city. Ratios greater than 1 represent the motivating factor for leaving

their city, with given statistical significance. Therefore, our analysis returned three

statistically significant variables (Table 28): Fac4_cycling&walking, Fac6_safety, and

Fac7_architecture in relation to likelihood that respondents leave or stay in their city.

Table 28: Variables Variables

B S.E. Wald df Sig. Exp(B) 95% C.I.for EXP(B) Lower Upper

Step 1a FAC1_1 -,073 ,123 ,351 1 ,554 ,930 ,730 1,184 FAC2_1 ,137 ,127 1,162 1 ,281 1,147 ,894 1,472 FAC3_1 ,152 ,133 1,313 1 ,252 1,164 ,898 1,509 FAC4_1 ,405 ,138 8,552 1 ,003 1,499 1,143 1,966 FAC5_1 ,079 ,122 ,420 1 ,517 1,083 ,852 1,376 FAC6_1 ,262 ,127 4,282 1 ,039 1,300 1,014 1,667 FAC7_1 ,312 ,131 5,641 1 ,018 1,366 1,056 1,766 Constant -1,433 ,131 119,360 1 ,000 ,239

a. Variable(s) entered on step 1: FAC1_1, FAC2_1, FAC3_1, FAC4_1, FAC5_1, FAC6_1, FAC7_1.

4.4. Results of interviews with entrepreneurs

In this section we present the results of four interviews with entrepreneurs whose

companies are located in Banja Luka. Interviews were held from September to November

2011. The companies in questions belong to sectors within the knowledge and creative

economy; one being involved in the movie business, the second in animation, the third in

renewable energy sources and the third in developing software platforms. Interviewees

were asked a set of questions after which they were free to answer them in their own way,

sometimes not in the order presented here. Transcripts for all four interviews are given in

the Appendix II. Questions were:

1. Your (interviewee`s) role in the company,

2. History and business of the company,

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3. Clients and business locations,

4. Cooperation with other organizations/companies,

5. Links with educational institutions, municipal and state agencies and institutions,

6. Questions of finding and hiring staff (contract, temporary, permanent, freelance),

7. Education and training of employees / hired people,

8. Locational factors (infrastructure (transport, internet, etc.), administration, quality

of life, activities leisure, culture, sub-culture)

9. Plans for the future

We interviewed entrepreneurs from small companies with fewer than 10

employees, since those companies are not under state patronage or running exclusively

on the state funded projects. Also, all these companies are working in the knowledge and

creative industry, not as an additional business activity, but as their primary objective.

Interviewee`s role in the company

All interviewees are owners and CEOs of their companies, and beside their

management role they are actively involved in day to day business activities.

“My role in the company, I am the director, and besides fulfilling those legal duties and jobs of a director, of a private company, of a LTD company in our country, I, in principle, coordinate all those things, from bookkeeping, legal affairs, strategic decisions, agreements and negotiations of a future existence, i.e. financial existence of the company.”

The company working in the cultural sector is facing a problem of retaining its

human capital base. It is said that after cultural workers reach certain age, when they

think of starting a family, getting their first property, etc., they start thinking of moving

from the creative, to some other, more profitable, industries.

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“I am the director of the company...and at the moment I am the single owner...that is...I would call it a one man show, although it is not like that.. I think when you come to an age, for example, the beginning of thirties, or even earlier, and when you really start to deal with existential issues, at that time you leave this job. It's the only real reason why this is happening...But generally, that existential moment that occurs as a light bulb, starts to dissipate a moment of enthusiasm which had hitherto functioned and dominated, and they leave the sphere of cultural workers and become employees of the state administration, other private companies, or establish their other jobs where the money, wages at the end, are more solid.”

History and business of the company

All the companies in question are less than five years old. This is not unusual for

knowledge and creative companies, considering that those industries are quite new in the

SEE region, especially in countries of the ex-SFRY. These companies have mostly

started as an initiative of several people focused on a common objective.

“(The company) was established about one and a half years ago. Although, we are relatively young company, all the people, our team which has got together, got together from the project... was initially created as a company which will be technical support, in a sense of creation of texts, multimedia content for portal, e-portal, internet portal.”

“Characteristics of our company is that we are registered for research in technical and technological sciences, the goal ... was to transform one patent, one good idea into industrial product ...and at the end, from a small idea, a small family who was dealing with innovation, myself... to make a company.”

Those companies are still trying to position themselves on the market, and focus

their activities on several major projects. Entrepreneurs we interviewed employ less than

ten people, whereas one company, from the creative sector, is formally a one-man band,

employing temporary staff and freelancers on a project basis.

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“At one point, when we founded the company...three of us founded the company...but in the meantime, people, very realistically and rationally, found another job and funded a ....that has a real income and that, when you draw the line at the end of the day, can feed their families...they got out of the company...“

Clients and business locations

All companies involved in the interviews are working for domestic and foreign

clients from private and state sectors, and state and private funds.

“Well, we have three types of clients. The first type are foreign, those are all commercial, mainly we work for foreign, 60% of the company business is for foreign clients, via the Internet, second type is local, commercial part, which we do sporadically, depending from projects. The third part is local, but of a non-commercial nature.”

“...the donor was (name of the country) government, which means, they were our direct client. Considering that the implementer was...nongovernmental organization, so some of the money was coming from that side.”

One of those companies, working in the art sector, also works for individual artists

who require a place where they can cooperate with others and generate new ideas.

“When I say clients, my clients are...they, essentially, find the company as a place where they can generate, where they can execute their ideas, and it is so, so it is envisaged.”

Cooperation with other organizations / companies

Interviewed entrepreneurs prefer working with local partners, organizations, and

freelancers if they can meet their business demands. The reasons for this are diverse, such

as convenience, local patriotism, etc., and interviewees state that they wish to form

business and support clusters within the local community.

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“Art demands outsourcing of many other people...and I can name many of them, who are the company, but they are not on the paper undersigned... They are all from Banja Luka, there are few of them from Laktaši... we are trying to make a team with whom we are going to grow and to identify ourselves... the team that works within the company, or with the company, or besides the company, someone who is from Banja Luka, because it is common early days, some common point...but the bottom line is that it is most comfortable to work with people who are local... we build our own capacities...local network.”

“(Freelancers) are mainly from here, very rarely from abroad, very rarely via the Internet. Because, mainly, those things that need to be done can be completed here, and I try, if there are two same or similar to give an advantage to someone here, it is rare that we look for someone over the Internet.”

Interviewees are actively working on the expansion of their B2B24 network, trying

to educate and encourage people to join them in their line of work.

“I want to infect as many people as possible with animation, and I want to transfer that knowledge to them, because if they develop, I develop with them.”

“We had, with many companies from (the center), who are tenants of (the centre), we had before, and have now, cooperation, we work on joint projects, what is one of benefits of (the centre), networking, outsourcing. “

Links with institutions, agencies and institutions

According to the interviewees, links with educational institutions, municipal and

state agencies and institutions are usually good, but not very supportive in terms of their

requirements for human capital.

“Regarding that academic part of the environment, I am not happy with the Academy of Arts, I have a small problem with that, the problem is, it seems that they approach their work as something that is there no matter what happened, and there is now a kind of casualness...”

24 B2B – business to business 

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Apart from lack of funding and subsidies for companies working in the knowledge

and creative industries, a lack of cooperation with the state and municipality is not

considered to be an obstacle.

“That is, it is little complicated, we have a Ministry, .., which has a budget line for development of ... What is unstable in all this is that there are discretionary rights of the Minister,..., who give very large amounts of money for some other projects...”

“We have a cooperation with the Ministry of science and technology in several segments, and we are pleased with that, but we are not pleased with that the Ministry does not have adequate budgets, adequate programs, does not have adequate...with a small budget that they have they help a little, that little is nothing long-term, temporary it means something.

Rigid legislation and administrative rules represent obstacles for the development

of the knowledge economy in Banja Luka, especially in terms of procedures required for

raising financial capital for new business ventures.

“Surely, they (obstacles) exist, in comparison to the West, developed countries. It is obvious, that they are on that level of development, and we are on this level of development, and that there are some reasons for that, to be honest. Through this business, and by working with the administration, I have found many obstacles, many problems.”

Acquiring human capital

When it comes to the education and training of employees/hired people, the

interviewees are unanimous that they lack the human capital to develop their companies

in the required direction. Regarding the questions of finding and hiring people (contract,

temporary, permanent, freelance), interviewees state that well educated and trained

employees in sectors of IT and creative industries are particularly hard to hire. It is said

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that universities and academic institutions are lacking in their role to enable the

accumulation of knowledge and skills in the disciplines required for the development of

the knowledge and creative economy in Banja Luka

“First of all, people from the university don`t come as really educated, really people who could straight go to work, people who can quickly become competent at work. We train them, big part of the time, up to half a year, and then they become capable to work on something... But, the quality of teaching, lectures, I had a chance...to see tests from that department. I think, assistant professors who teach that should not teach in that way, with such a low level of knowledge...”

“At the Academy (of Arts) they do not have the department that we need... but at the moment all people that work here are self learners, they learned via the Internet, tutorials... and it is very hard to get human resources, good human resources...”

“We were acquiring human resources by giving scholarships. In that process, while working for us, and having a stipend, gaining knowledge, and in that way they were doing a favor to themselves and us, as a company.”

Education and training

According to interviewees, graduates lack the required knowledge and skills that

are necessary for them to be able to work in specific fields. After hiring a number of

people with basic skills the interviewees are still having to teach and train them in the

required skills and knowledge. However, they do give an opportunity to students to come

and work for them, while still at the college.

“...when we talk about real knowledge, real experience, there comes the problem, because it is difficult to find someone who is, in small companies like ours, always, multidisciplinarity is something that is always looked for...IT human resources, creative human resources are completely in deficit.”

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“We are seven and a half, because we have one student. Laughs. We are seven...There are many people who would try something, we give an opportunity to all of them, we train as well, sporadically, there is no regular training or something, but it is still new sector of industry, so it will eventually appear. It is hard to get human resources...”

“At the moment, we have two students from (name of the Faculty), department of design and multimedia, and one student form (name of the Faculty) who is in training, in the software, IT department. So, we have that communication with students, new generations constantly. At any time we have one, two, or three students who are here on a practice.”

Locational factors

Regarding locational factors (infrastructure, transport, internet, etc.),

administration, quality of life, activities leisure, culture, sub-culture), interviewees

responded differently regarding their need for certain facilities within the urban

environment and available infrastructure. Good internet connection is mentioned as the

most important infrastructure by three out of four interviewees. Size and architecture of

the city does not seem to be important to the interviewees, while they note the advantages

of Banja Luka being the capital of the Republic of Srpska.

For a company focused on R&D, a lack of flight connections to major global

centers could pose a problem in the future.

“When we were choosing location, the most important thing...the Internet link ...”

“...Banja Luka is the centre of Republic of Srpska, the capital, and regarding hotels it is excellent. We do not have ultra-luxury hotels; I think that no one is expecting that. The infrastructure is solid, well connected, location of (the centre) is direct with..., there are really, really, no problems, because, as I said, our main communication is via the Internet, via Skype conference, emails, brochures, sales, etc...”

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In the future period, the flight connection will be a problem. You have to travel to Belgrade, Sarajevo, Zagreb. The airport in Banjaluka, which, unfortunately, does not have the capacity to have some more serious airlines, would be much needed to us.... Banja Luka - Gradiska motorway would...mean a lot to us...”

Two of the interviewees whose companies are doing most of their work via the

Internet are less disapproving of the city environment, in terms of amenities and urban

culture, while two entrepreneurs from companies whose work is in fields of art and R&D

are more concerned with available amenities and cultural milieu, since they are more

dependent on employees, clients, and partners who need to stay in Banja Luka for a

shorter or longer period of time. Also, culture is mentioned as a key issue in attracting

expert workforce to the city.

“If you want to invite an expert to come to work for you. Is he going to come to the city where his child cannot play tennis, swim at the swimming pool, where there is no cultural amenities, where there is no gym, where there is no quality gym, where there is no that sort of, not to number?”

“When we talk about cultural events, I presume that the question is how we feel in the cultural milieu of Banja Luka, as a city, and what we have to offer, many people come from other places... and how they feel here. Somewhere, I am always unhappy with the way the city treats this issue...There is a shortage, definitely, that it is not well defined... it is the general concept of a society in which we live, and we as a society, as individuals, we do not recognize the importance of this, and we do not give back to ... what it gives to us.”

Being a part of the community and local network, through work and leisure

activities, is important for the interviewees and their work colleagues. Also, it is

recognized that the quality of local transport connections and proximity to the city center

matters to the knowledge and creative entrepreneurs.

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“Of course, it is convenient if people can arrive by bus, or something. And then, after that, to be close to the center was important, simply to do some things more practically... Our present location...is the best. We are in the center of the town in five-ten minutes; by foot...Only thing why it is important is because we like to follow on cultural events...it is only that we want to feel as a part of the community and surroundings we like to be somewhere close. In this way, it often happens, OK, we have finished, we are getting there, let`s go to the Theater, let`s go here or there, let`s go to bowling...”

Plans for the future

The interviewees see Banja Luka as a satisfactory environment for their present

business needs, while they find ICT infrastructure important for development of their

companies.

“Depends on how you look at it. Of course, if we were in New York, we would have more work, and we would be paid better, but we would have better competition as well. Thanks to modern technologies, we do not have to be at the place of the work ... We are specific, we only depend on the good Internet, and nothing else.”

The interviewees are acknowledging factors that pose a threat for their future

development. Salaries paid to employees and housing costs are mentioned to be the most

important. To attract human capital, these companies are competing with the state and

other sectors that are paying bigger salaries and offer higher job security.

“I say to you, as long as the private sector does not overtake the state sector (in salaries), we will have a lag in technical development, in technological development, in knowledge, and, therefore, economic power will decline, and the best human resources will migrate abroad, because abroad salaries are abnormally higher than in the state sector...”

“That is the only chance, otherwise, they either are already working and have good wages, or they work for the State where they have some security, so the only way is to train people before they come to work with us.”

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“At one point, when we founded the company...three of us founded the company...but in the meantime, people, very realistically and rationally, found another job and funded a ....that has a real income and that, when you draw the line at the end of the day, can feed their families...they got out of the company, and at the moment I am the single owner...”

Costs related to buying an apartment are mentioned to be the decisive factor for

younger cultural workers who even give up their careers in creative sectors in order to

have better prospects to buy their first property, and achieve security for their families.

“I think in this case it is not like that, rent for the apartment, money needed to finance the family, one or two holidays per year, a car, and what else is considered as usual lifestyle, a mobile phone, represent a limitation in doing this work, and that is definitely the reason why people are leaving and cease doing it anymore...People want to buy an apartment, to them, it is as an idea... I understand those people who want to have that kind of security, to invest in that flat, so it works as usual...the flat is the most important... that is the experience of people from my circle.”

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5. DISCUSSIONS

In this chapter, we give an overview of our results, and compare it and contrast

with the literature.

Awareness that human capital has the key impact on the economic development is

not new (Weber 2005; Schumpeter 1939; Jacobs 1970). However, ways in which

accumulation of human capital affects productivity, in the context of new knowledge,

was not the focus of research in economics until recently (R. E. J. Lucas 1988; Romer

1989). We believe that economic research needs to incorporate other approaches,

especially those from sociology, psychology and history (Glaeser 2007; R. E. J. Lucas

1988). So far, reasons why human capital migrates from place to place are being

researched from behind, after the occurrence has happened and using historical data, in

what is an approach that lacks validity and purpose in the fast changing environment.

Regarding individual perception of satisfaction and mobility, Glaeser & Redlick

(2008) found a 53% positive correlation between perceived happiness and future urban

growth. Florida (2002) argues that the key factors of human capital mobility are:

technology (concentration and size of the high tech industries), talent (concentration of

highly educated people), and tolerance (tolerance to ethnic, racial, sexual, and other

minorities), while the ACRE research (Musterd et al. 2010) found that human capital in

the EU is more likely to stay in cities closer to family and friends, regardless of other

factors. We used quantitative and qualitative methods to test established theories and

available research findings. Our principal aim was to answer the main research question

relating to the strategic impact of economic and societal factors of the living and working

environment in terms of the choice of residence and place of work for knowledge and

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creative workers in Banja Luka. We accomplished this by testing hypotheses, in order to

determine whether arguments from reviewed literature hold true for knowledge and

creative workers living and working in Banja Luka.

Results of factor analysis and binary logistic regression show that issues which are

more directly influenced by the amount of public funding, such as lack of bicycle lanes

and lack of sidewalks, as well as factors related to social milieu, such as the amount of

crime in the city, safety, illegal construction, and appearance of building facades and

shop windows are the most important factors of concern to the knowledge and creative

workers surveyed in Banja Luka.

H1) We find that the proximity to family and friends significantly influences

respondents` choice of place of residence. Our findings show that: the proximity to

family and friends, being born in the city, and studied in Banja Luka represent 64.65% of

the total sum of responses, and only 14.28% of responses are job-related. Our findings for

knowledge and creative workers in Banja Luka diverge from arguments that amenities

are the main factor for creative and knowledge workers when deciding on their place of

residence (Florida 2002; Clark 2003a).

In line with that, it is notable that 86% of respondents live in Banja Luka for 10

years or longer, and that 25.7% of respondents still live with their parents. Also, it seems

that, in general, knowledge and creative workers in Europe are generally more likely to

settle in the city where they were born or where they studied, in the near vicinity of their

family and friends, even when faced with lack of professional opportunities (Musterd &

Murie 2010f; Dainov 2008). This diverges from the findings of Florida (2002), who

claims that technology, talent, and tolerance are the three most important environmental

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factors for the creative class to settle in a city. This discrepancy between knowledge and

creative workers in Europe and the USA could be related to generally higher mobility of

the population in the USA. Since knowledge and creative workers in the USA change

their place of residence more often, they move to places with lower barriers to entry and

tolerant cities open to newcomers (Florida 2002).

H2) We reject the hypothesis that the city features do not significantly impact

human capital mobility.

In common with the previous argument, our findings support the argument that

knowledge and creative workers have a preference for places with a large variety of

amenities and leisure facilities, with an abundance of work prospects, numerous

opportunities for personal and professional development, and a tolerant and safe working

and living environment (Clark et al. 2003; Florida 2002; Florida 2005; Glaeser et al.

2009; Glaeser et al. 2010). We find valid, the arguments of Glaeser et al. (2004) that four

key city amenities for human capital are: range of available goods and services, aesthetic

features of the city, quality and range of public services, and the quality and speed of

transport in terms of accessibility to services and jobs.

Social activities

Since income in countries in transition is usually not sufficient to support more

expensive hobbies or membership in exclusive social clubs, hanging out with friends

takes in lower cost activities, such as visiting coffee shops and pubs/bars, spending time

in the city center and parks, and visiting each other’s homes. Our findings support the

argument of Jacobs (1993) and Florida (2002) that people are attracted to colorful places

buzzing with life, local streets and eventful plazas (Whyte 2001), rich in street-level

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culture and small scale events, places where kids run around, and cafe goers enjoy small

talk and socializing with no previously made arrangements.

Our results show that respondents who are more likely to leave the city tend to

spend less time with their friends, what supports the argument of Glaeser & Redlick

(2008) that people who are considering moving away tend to decrease their investments

in social capital. However, they are significantly more frequent visitors to museums and

art galleries χ² (4, n=420) = 13.813, p< .01, night clubs χ² (4, n=420) = 8.707, p< .05, and

festivals χ² (4, n=420) = 11.174, p< .05. They are, however, less likely to participate in

religious activities χ² (4, n=420) = 10.241, p< .05, and community work χ² (4, n=420) =

11.338, p< .05. We also found that the vast majority, nearly 90% of our respondents, do

not participate in political activities.

Environmental aspects

Surveyed creative and knowledge workers in Banja Luka are not satisfied with the

quality of the environment. Our findings show that 75% of respondents are dissatisfied

with levels of the use of bicycles as a means of transport, while around 65% of

respondents are dissatisfied with the tidiness and cleanliness of rivers and river banks.

Regarding environmental aspects of the city, more than half of all respondents are

dissatisfied with the state of recycling collection services, traffic congestion, availability

of parking space, and the quality of children playgrounds.

Creative and knowledge workers who are more likely to leave the city are

significantly more displeased with the tidiness and cleanliness of rivers and river banks χ²

(2, n=420) = 5.841, p< .05.

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Leisure amenities

Our results show that city amenities significantly impact on the mobility of

surveyed knowledge and creative workers in Banja Luka, despite the fact that more than

50% of all respondents are satisfied with plazas, parks, city restaurants, bars, cafés, and

cinemas. The most significant dissatisfaction of respondents is recorded for the city

architecture and monuments χ² (2, n=420) = 17.437, p< .01, in line with the argument of

Glaeser et al. (2004) that aesthetic features of the city are one of the key amenities.

Satisfaction with leisure amenities impacts on the likelihood of departure by creative and

knowledge workers from Banja Luka. The key city amenities, especially the quality of

public spaces (plazas, parkas, etc) χ² (2, n=420) = 12.621, p< .01, quality and range of art

galleries/ museums χ² (2, n=420) = 9.096, p< .01, quality of bars and cafés χ² (2, n=420)

= 10.295, p< .01, quality of cinemas χ² (2, n=420) = 6.716, p< .05, quality of shopping

areas χ² (2, n=420)= 10.108, p< .01, architecture of city/relevant monuments χ² (2,

n=420) = 17.437, p< .01, and quality and range of fitness centers χ² (2, n=420) = 7.028,

p< .05, are significantly more disappointing to those who are more likely to leave the

city.

Public services

Our results positively corresponds with arguments of Glaeser et al. (2004) that one

of the key amenities for human capital is the quality and range of public services. We

also find the argument of Clark (2003) and Florida (2002) that creative cities are

increasingly becoming tourist places for their own citizens to be germane to the

knowledge and creative communities in Banja Luka. Knowledge and creative workers

who are more likely to leave the city are significantly more dissatisfied with the quality

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of university education χ² (2, n=420) = 15.219, p< .01, high school and elementary school

education χ² (2, n=420) = 15.020, p< .01, social security χ² (2, n=420) = 11.500, p< .01,

quality of health services χ² (2, n=420) = 9.969, p< .01, police services χ² (2, n=420) =

8.969, p< .01, quality of tourist attractions χ² (2, n=420) = 7.216, p< .05, quality of public

transportation system χ² (2, n=420) = 6.650, p< .05, and the number of bicycle lanes χ²

(2, n=420) = 6.268, p< .05.

Glaeser et al. (2004) argued that in less prosperous regions, with a net outbound

human capital migration, people are probably more likely to return to schooling in order

to raise their chances to migrate. To test validity of their finding for countries in

transition, we expanded the ACRE questionnaire used in Dublin with questions related to

the quality of public education in Banja Luka. Our results confirmed findings of Glaeser

and Redlick (2008) that the quality of university and schools available in the city are

important factors for human capital mobility. This contradicts the argument of Clark

(2003) that vicinity of good schools is not relevant, but that facilities for recreation and

consumption have the major impact on human capital mobility.

Tolerance

Our results show that over 60% respondents perceived that the gay/LGBT

population is not well accepted in the city, and over 50% consider that that the city does

not accept the minority religious and ideological groups. Results of the ACRE research

from Dublin (Murphy et al. 2008) show that Dublin is a more, but not entirely,

welcoming place for visible minorities, gay, and lesbian people. Tolerance is not directly

or widely discussed in literature regarding human capital mobility. Some authors note

that highly educated workers are attracted to a workplace environment which supports

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pluralism of thought (Amabile, Conti, Coon, Lazenby & Herron 1996b; Amabile 1998;

Porter 1990; Porter 2000; Long & Fahey 2000; Glaeser 2007; Gottschalk 2004), but

mainly presume that other people are tolerant to new knowledge and new ideas. Porter

(1990, p.151) recognizes that concentration of highly skilled workers in clusters provide

for overcoming “inward focus, inertia, and inflexibility”, while Jacobs (1993; 1970)

discusses issues of diversity in knowledge and production capacities as important

economic features, cultured in cities throughout the history. Only Florida (2002) places

tolerance among the three most important city features that impact human capital

mobility, since innovative ideas, new knowledge and different lifestyles are more likely

to take roots in environments which are tolerant to new ideas and not prejudiced towards

developing trends, especially regarding changes in culture and personal lifestyles.

Our results show that respondents who are more likely to leave Banja Luka are

significantly more critical towards statements that the city is a welcoming place to people

from other countries, χ² (2, n=420) = 11.658, p< .01, agreeing that the city accepts all

ethnic groups χ² (2, n=420) = 8.981, p< .01, and agreeing that the city accepts the

differences between rich and poor χ² (2, n=420) = 11.971, p< .01, therefore, our results

confirm that issue of tolerance could represent an obstacle for the future human capital

development in Banja Luka.

H3) Results confirm that the cost of living significantly influence the decision of

change of residence.

Respondents perceive cost of living in Banja Luka as either very expensive or

expensive for all basic facilities and services. Regarding personal worries that might

increase respondents` mobility, our findings support the arguments of Florida (2005) and

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Glaeser et al. (2010) that lack of affordable housing and higher fixed costs have a

negative impact on creative class build up and entrepreneurship in metropolitan areas.

We need to mention that for the general cost of living, and for the cost of housing, not a

single respondent perceives it as being cheap. Respondents who are more likely to move

away from the city perceive significantly higher costs of education and training χ² (2,

n=420) = 6.862, p< .05, transportation χ² (2, n=520) = 12.956, p< .01, and general cost of

living χ² (2, n=420) = 13.096, p< .01 than respondents who are less likely to change the

place of residence.

Our quantitative and qualitative results confirm that property prices are the

greatest burden for knowledge and creative workers in Banja Luka. Housing costs are

perceived to be very expensive by 94% of knowledge and creative workers, and by

97.3% of those who are more likely to move away from Banja Luka. As of July 2011, the

average monthly salary in Republic of Srpska is 811 KM (EUR 415), while property

prices in Banja Luka range from 1,600 KM to 2,400 KM per square meter (EUR 820 to

EUR 1,230 per square meter). Household structures of the sample show that nearly 1/2 of

respondents are cohabitating couples with or without children, and that single people

living on their own make up little over 1/10 of the sample, while over 1/4 of respondents

still live with their parents. The relationship between their income and expenses,

especially housing costs, could be the reason why. Unlike respondents in the ACRE

research, respondents in our sample who live with their friends or relatives represent an

insignificant minority.

The most expensive properties are situated in the city center. In addition to survey

results, our qualitative data also confirms that the city center is the most popular area for

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creative and knowledge workers, since it is where the entire city buzz is, and where most

events take place. Findings that more than 3/4 of respondents to the questionnaire choose

to live in the central part of the city, less than 3km from the main city square, and that

interviewed entrepreneurs also prefer a central city location, are in line with the

arguments of Glaeser et al. (2004) that city centers are the most desirable living places for

skilled workers. Our results confirm that urban amenities, and street culture attract

knowledge and creative workers (Florida 2002; Florida 2005; Clark 2003a; Glaeser et al.

2004), since crowds of people attract still more people (Jacobs 1970; Whyte 2001). To

quote a focus group participant: “Honestly, more and more, we are turning into a society

where you don`t care what happens in the neighborhood, because you only sleep and stay

there, and you look for events where they take place.”

H4) Regarding economic factors and choice of employment, we accept the

hypothesis that salary significantly affects respondents` expectation for leaving the

place of work.

Our results show that to seek better pay is the highest ranked reason for leaving a

place of work, with 41.76%, of the total sum of scores recorded for surveyed knowledge

and creative workers considering leaving the company/organization within the next 12

months. Other work-related factors: to seek a more interesting job, to seek better

conditions, and to seek a less stressful job add up to 58.24% of the total sum of scores for

respondents who expect to leave the company in the next year. Therefore, we conclude

that factors other than wages are more important for knowledge and creative workers

when deciding to change their place of work. Our results confirm arguments that it is

professional achievement, fairness, support, and entrepreneurial opportunities that in the

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longer term make workplaces attractive for knowledge and creative workers (Glaeser et

al. 2009; Glaeser et al. 2010; Florida 2002; Porter 1990).

However, the amount of pay could indirectly impact the respondents` decision to

leave their place of work. We found that salaries are a significant reason for knowledge

and creative workers in Banja Luka to change their place of residence, and consequently

their place of work. Our results show that mobility significantly decreases according to

the rise in monthly income. This is understandable, since over 75.8% of our respondents

have income below EUR 1,000, which is significantly lower than salaries for equivalent

jobs in the EU countries. For example, the largest proportion of creative and knowledge

workers in Dublin earn between EUR 2,000 - 2,999 per month (Murphy et al. 2008,

p.44), while in Sofia 29.5% of respondents earn between EUR 500 - 999 per month, and

28.5% earn between EUR 1,000 - 1,999 per month (Dainov 2008, p.28).

H5) We find that the employment satisfaction factors significantly affect the

decision of change of residence.

First of all, our results show that 14.3% of respondents are unemployed, and this is

significantly lower than the estimated unemployment rate of 43.1% of the total working

population of Bosnia and Herzegovina in 2010. This could be due to higher than average

educational levels of knowledge and creative workers, and greater than average labor

market in larger cities in countries in transition (Dainov 2008). Respondents who are

more likely to leave the city represent a higher percentage of unemployed, self employed,

and freelance workers, regardless of whether they work in the creative or knowledge

economy. Job security is also important for knowledge and creative workers in Banja

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Luka, and people who work for the state or private companies on a permanent contract

are less likely to consider leaving the city.

Our results confirm arguments that access to new ideas and knowledge from peers

influence human capital mobility (Glaeser 2007), most notably the ability to meet and

network with professionals from the same field χ² (2, n=345) = 8.695, p< .05.

Respondents, who are more likely to move away from Banja Luka, significantly more

value the sense of achievement they get from their work χ² (2, n=345) = 9.779, p< .01,

the chance to use their own initiative χ² (2, n=345) = 11.061, p< .01, and the influence

they have over the job χ² (2, n=345) = 9.779, p< .01 more than those who are not

contemplating leaving the city. We also confirm that surveyed knowledge and creative

workers are looking for the right balance between their work and personal lives, in terms

of the amount of holiday time/paid leave χ² (2, n=345) = 9.069, p< .01, and the ability to

balance their professional and personal (family, friends) life χ² (2, n=345) = 7.858, p<

.05. Overall, our findings confirm the argument that human capital moves towards places

with the right work-pleasure balance and supportive work environment, with

opportunities to meet and network with professionals from the same field (Florida 2002).

H6) Results of our research show that the employment satisfaction factors

significantly influence respondents` decision to change the place of work.

Overall job satisfaction significantly affects the issue of how long knowledge and

creative workers expect to remain in the company/organization. Our findings correspond

with arguments of Florida (2002) that the quality of the work environment is the key

factor in attracting younger creative workers, who are more likely to move to companies

which offer flexibility, job security, decent pay, reasonable working hours, talented work

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colleagues and a dynamic work community. How knowledge workers in countries in

transition perceive their workplace seems to be very important for the mobility of

employees, argues Radošević (2006). We find that work related factors such as: the sense

of achievement you get from your work, the intellectually stimulating aspect of your job,

and the amount of influence you have over your job have the key role in attracting

surveyed skilled workers to companies/organizations in Banja Luka. Our data also

confirm the findings of Glaeser (2007) that human capital agglomerates to certain places

to increase the access to ideas of their peers. Surveyed knowledge and creative workers in

Banja Luka highly value the sense of achievement, challenge, organizational

encouragement and work group support, which helps them to reach their full creative and

intellectual potential (Amabile, Conti, Coon, Lazenby & Herron 1996b; Nahapiet et al.

2005).

Regarding employment satisfaction factors, results show that the intellectually

stimulating aspect of the job, χ² (4, n=342) = 17.262, p< .01 (Cramer's V = 0.223),

respect for the rights of employees (vacation, sick leave, overtime, etc.) χ² (4, n=343) =

15.122, p< .01, the ability to balance professional and personal (family, friends) life χ² (4,

n=343) = 12.323, p< .01, job security χ² (2, n=338) = 9.735, p< .01, the amount of

influence they have over the job χ² (4, n=343) = 8.901, p< .01, and the sense of

achievement they get from their work χ² (4, n=343) = 8.901, p< .01 make a significant

impact on respondents` perception of the work environment, and their decision to change

the place of work.

Our findings illustrate that the key issue of concern for surveyed creative and

knowledge workers, with 94% of respondents being somewhat worried to very worried,

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is availability of jobs. This is very different from findings of the ACRE results from

Dublin (Murphy et al. 2008), where knowledge and creative workers are, by far, less

worried about this aspect of their workplace. The ACRE results from Sofia (Dainov

2008) show that the categories of holidays and job security are those most represented by

the answer satisfied.

Results show that respondents who are more likely to move away from Banja

Luka are in a higher percentage of unemployed, self employed and freelance workers χ²

(2, n=420) = 13.376, p< .01, and the mobility is significantly lower for respondents who

work for state-owned companies or government χ² (5, n=420) = 13.503, p< .05. This

finding positively relates to the qualitative results that knowledge and creative workers

consider state jobs more secure, and better paid: “...they either are already working and

have good wages, or they work for the State where they have some security...”. It is also

found that a higher percentage of respondents in creative jobs are expecting to remain in

the company for less than 3 years χ² (1, n=347) = 3.674, p< .05. Weak legal protection of

workers` rights in countries in transition has a negative effect on issues such as overtime

work, paid vacation, etc., and significantly impacts on employees` perception of the

workplace. We also believe that the ability to balance professional and personal (family,

friends) life matters to workers in transitional economies since social capital might be

very important for their professional success.

Discussions in regard to the qualitative data

Our qualitative data confirms arguments that local agglomeration of human capital

is the key factor in the development of the knowledge and creative economy in cities

(Porter 1990; Saxenian 1994; Porter 1998; Glaeser 2007; Glaeser et al. 2010).

141

Interviewed entrepreneurs from Banja Luka emphasized the importance of human capital

for the development of their businesses. At the same time, they argued that the lack of

adequate human resources pose the biggest problem for their current and future business

activities.

Well educated and trained employees in sectors of IT and creative industries are

particularly hard to hire. Interviewees state that universities are not playing a sufficient

role in the accumulation of knowledge and skills in disciplines required for the

development of the knowledge and creative economy in Banja Luka. One interviewee

summoned it up:

“First of all, people from the university don`t come as really educated, really people who could straight go to work, people who can quickly become competent at work. We train them, big part of the time, up to half a year, and then they become capable to work on something... But, the quality of teaching, lectures, I had a chance...to see tests from that department. I think, assistant professors who teach that should not teach in that way, with such a low level of knowledge...”

To solve that issue, all interviewees are attempting to create local support

networks of skilled people, who would become a pool of knowledge and skill for the

development of their business sector. To achieve that, they are working on the expansion

of their local B2B network, trying to encourage others to join them in their line of work.

Interviewees prefer to work with local partners, organizations, and freelancers if they can

meet their business demands. In that respect our findings confirm arguments of Greve &

Salaff (2003) that entrepreneurial human capital maintains social networks as their

distribution, knowledge and support networks.

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Similar to the situation in other transitional countries institutional frameworks do

not sufficiently support development of the knowledge and creative economy (Bozoki

2002; Dainov & Nachev 2008), and lack of funding and subsidies is considered to be a

major obstacle for long term growth of the knowledge and creative economy in Banja

Luka, especially business activities that depend on R&D and new technologies. The big

problem for emerging companies working in the knowledge and creative sector in Banja

Luka is that they have to compete with the State to attract quality human resources, which

is probably typical for countries in transition and countries with oversized bureaucratic

apparatus.

“I say to you, as long as the private sector does not overtake the state sector (in salaries), we will have a lag in technical development, in technological development, in knowledge, and, therefore, economic power will decline, and the best human resources will migrate abroad, because abroad salaries are abnormally higher than in the state sector...”

Our qualitative data supports the findings of the quantitative part of our research,

and reviewed literature in terms that locational economic and societal factors greatly

impact the development of the knowledge and creative economy (Jacobs 1970; Florida

2002; Clark et al. 2003; Glaeser 2007; Glaeser et al. 2010). Interviewed entrepreneurs

emphasized the Internet infrastructure as the main communication channel for their

companies, and this is in line with findings of Radošević (2006).

Regarding other locational factors, interviewees responded differently depending

on their business activities. Entrepreneurs whose business depends solely on good

internet networks are less disapproving of the city environment, in terms of amenities and

urban culture, while others, who require expert workforce or partners to come to work in

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Banja Luka, emphasize the importance of sport and cultural amenities to fulfill the needs

of city newcomers.

In accordance with our quantitative results, interviewees stated proximity to the

city centre as important for their business, not solely in terms of proximity to their clients,

banks, and other necessary facilities, but also in regard to being closer to cultural events

and city life.

Those interviewed are unanimous that local networks are crucial for the

development of their businesses, and this supports the argument of Florida (2002) that

people are attracted to local venues where people have an opportunity to meet and create

friendship-business networks.

The threat for companies working in creative industries in Banja Luka lies in the

fact that those jobs are not very financially awarding, therefore, people tend to move to

other industries when they start planning families and buying their first home, usually

when they reach their thirties.

“At one point, when we founded the company...three of us founded the company...but in the meantime, people, very realistically and rationally, found another job and funded a ....that has a real income and that, when you draw the line at the end of the day, can feed their families...they got out of the company...“

In the sense of living costs, this supports our quantitative findings and the

arguments of Florida (2005) and Glaeser et al. (2010) that lack of affordable housing and

higher fixed costs have a negative impact on entrepreneurship in urban areas.

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6. CONCLUSIONS

Our research journey started with the recognition that the growth of the knowledge

and creative economy represents the main strategy for the development of competitive

advantage in the global market for developed as well as transitional countries. Reviewed

literary sources led us to the conclusion that an economy based on intellectual capital

thrives on locally available human capital, since transfer and creation of new knowledge

that cannot be codified depends on physical proximity of knowledge and skill equipped

people. However, existing literature relating to the development of the knowledge and

creative economy largely relates to developed countries, while sources on countries in

transition are scarce. To the best of our knowledge there has not been research which

would elucidate the strategic impact of accumulation and mobility of human capital in

Bosnia and Herzegovina on future economic development.

Our main intention for this thesis is to contribute to the understanding of the

impact of environmental factors on the choice of place of residence and work by

knowledge and creative workers in the context of the development of knowledge and

creative sectors in the city of Banja Luka, Bosnia and Herzegovina. In the course of our

research, we found that proximity to family and friends has the biggest impact on the

decision of surveyed knowledge and creative workers to settle in the city. Our results

support the stance that perception of quality of life, in relation to the place where

knowledge and creative workers live and work, is an important issue for strategic

planning for countries in transition, especially those faced with prolonged and increasing

emigration to metropolitan areas in developed countries. Collected data confirmed that

sampled knowledge and creative workers have a preference for places with a large

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variety of amenities and leisure facilities, with abundance of work prospects, numerous

opportunities for personal and professional development, and tolerant and a safe working

and living environment. In this respect we analysed research questions related to the

impact of economic and societal factors of the living and working environment on human

capital mobility in the context of Banja Luka, as being a typical city in the SEE region.

Amenities that offer socializing opportunities are popular with surveyed

knowledge and creative workers. Quantitative and qualitative data confirm arguments

that diverse and vibrant social environments attract human capital and support knowledge

spillovers (David B. Audretsch & Maryann P. Feldman 2004). Our findings further

support the argument that knowledge and creative workers are drawn to places with rich

local, street level culture, since art venues, bars, clubs, cafes, museums, or galleries offer

context for initial contact and friendship in a variety of situations. We have also found

that institutional support for entrepreneurial startups in Banja Luka is frequently not

adequate and that knowledge and creative entrepreneurs depend on their social networks

to get ahead in their profession and business.

Considering the most popular socializing activities, our results show that Banja

Luka is a café culture city; cafes being the most popular daily meeting place. Also, most

of the creative and knowledge jobs are located in the city centre. Although property

prices and rents drop sharply further away from the center, it seems that our respondents

rather live with their parents than further away from the center on their own. It seems that

sharing a dwelling with friends is still culturally undesirable for knowledge and creative

workers in Banja Luka, unlike in Dublin (Murphy et al. 2008).

146

As a general conclusion, we support the findings reviewed from available

literature that, besides good public services, leisure amenities, and developed

infrastructure, an abundance of talented people, modern technologies and a tolerant and

open society are factors that predispose future growth of Banja Luka. Our results show

that the characteristics of the city are vital for attracting and maintaining human capital

(Florida 2002; Glaeser & Redlick 2008). Therefore, in the context of Banja Luka,

attention has to be given to mobility of human capital, especially young and highly

educated people. In the context of the country, Bosnia and Herzegovina has slim chances

to compete on the EU and worldwide markets if it fails to strategically develop its human

capital base. Previous research shows that nearly 2/3 of young people want to leave

Bosnia and Herzegovina, although “only” 1/5 of our respondents are almost definitely or

very likely to leave the country. Outbound migration of the best and brightest would

considerably increase once the SEE countries join the EU and further deplete the current

inadequate pool of knowledge.

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APPENDIX I - EQUATIONS

Equation 1

n0 n = ------------------------- = 381 people

(n0 - 1) 1+ ---------------

N

z2 * p * q for: n0 = -------------------

Me2

N – size of the population = 45.396 z - 1.96 p - 0.5 q - 0.5 Me - 0.05 (5%)

Equation 2

Greater the odds of an event, the greater the probability that the event occurs,

where,

In the case of multiple predictors, as in our example, the equation for p is:

 

bi – a measure of association between the predictors and the equation (log (odds)) for the occurrence of an event that interests us.

bi > 0 – positive association bi = 0 – no association bi < 0 – negative association

p

podds

1

p

p

1logoddslog

......xbxbb

......xbxbb

22110

22110

e1

ep

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APPENDIX II – INTERVIEW TRANSCRIPTS

Interview 1

We, as a company, at the moment...I am the director of the company...unfortunately, a part of the team who initially founded the company couldn’t endure it...that problem...not them but the surroundings... they could not find enough of the interest zone to do that. At one point, when we founded the company...three of us founded the company...but in the meantime, people, very realistically and rationally, found another job and funded a ....that has a real income and that, when you draw the line at the end of the day, can feed their families...they got out of the company, and at the moment I am the single owner...that is...I would call it a one man show, although it is not like that...I am the only one who is going to bad and gets up thinking about the company, like about something which needs to be developed, but besides me there are, and... Art demands outsourcing of many other people...and I can name many of them, who are the company, but they are not on the paper undersigned..., above all (names of the people)... people who are creative and technical part of the team are somehow the company...it is that kind of power...

They are all from Banja Luka, there are few of them from Laktaši...I am willing to say, that I am in that sense local-patriotically orientated, although I think that there is one problem that we are a small community, undefined, and that there is a gap between Zagreb, Sarajevo and Belgrade as environments that produce serious...in continuity, in serious numbers,...their approach and their experience is larger than ours, therefore, we are trying to make a team with whom we are going to grow and to identify ourselves... the team that works within the company, or with the company, or besides the company, someone who is from Banja Luka, because it is common early days, some common point...

The (industry) is, otherwise, full of creative people who have a bit of egoism, thinking of themselves greater than the reality is, or not, I cannot assess that, but when you talk with someone from Banja Luka..., we all know each other, we know what are our abilities, we know what are our advantages and minuses, and then that cooperation is simpler. It often happens that we, when it comes to... a half of the team was from Serbia... it was good, I cannot complain...but the bottom line is that it is most comfortable to work with people who are local...I think that is it, sometimes we explore but simply we build our own capacities, we as a company and them, as individuals who work with us, so that is the route of least resistance...local network.

Regarding that academic part of the environment, I am not happy with the Academy of Arts, I have a small problem with that, the problem is, it seems that they approach their work as something that is there no matter what happened, and there is now a kind of casualness. On the other hand, when you enter the Academy of Arts you wish to orientate in a business sense, and those people who are potentially ... or have become, and are the products of the Academy...I cannot call them clients, I think it is too hard in this work I am doing, are our most frequent consumers. People from the Academy, students from the Academy, and those who graduated are the people that I most often work with, on the one hand, and on the other hand the Academy as an institution and the quality part

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of the Academy is not derived from the concept of the Academy, but the enthusiasm of these people that there are, essentially, and love of ... that is often higher than love that students of law have towards law. Somehow they put it into the context of those existential matters, while here we have; they put in an additional effort to be good in what they do. When talking about the Academy, it is interesting for us, because it's a place where ideas are generated and people created who are of good quality. But I think; one unnamed colleague who is now becoming well known, once said: The Academy is great because we all meet each other over there, we have a name, a place where we work, where we have some interests, but as a place where we learn and discover, where we acquire knowledge of things that we are supposed to do, it's not the case.

When we talk about business-oriented, about entrepreneurship in general, there is a company with a product and service, and then it (the company) offers it to its customers, clients are people who buy bread at the store, we do not know their names. When we talk about the actual case, in the context of (our company) these are people who are present in the company, in a way that is different from how they are perceived when they send express mail, I don`t know, via FedEx. We are much closer to each other and spend much more time (together), on top of what we call work, than they do in other industries...When I say clients, my clients are... ( professionals of different skills I work with )...I see that from that side...they, essentially, find the company as a place where they can generate, where they can execute their ideas, and it is so, so it is envisaged. When talking about the Academy, an institution as such, I have no relation with them. This is the place to educate people, and somehow, my zone of interest, the only zone of interest is that they are educated as good as possible, because I do not make an influence on their educational process, I couldn`t, it is too hard, too closed...I want from there to come out as good as possible, ..., because it creates, when talking about clients, people who come to the company and realize their ideas

We have, right here in ... we managed to define, and we have two types of clients. One type of our clients is funds, who give us money to realize our... sometimes those are the private and sometimes state funds, more often state funds. We essentially apply for these funds by making a project, idea, which is realized later. On the other hand, we have clients who are consumers of our final products. The audience ... and that is essentially what is considered the general social class which ... there are many of them, that is not so narrowly specific... When we talk about the funds, those are Ministry of Education and Culture, City of Banja Luka... These are places that have money and finances to fund projects such as... and those are people who are specialized in ..., those who make decisions; those are mostly competitions that are resolved with three, five, people who make decisions, and within that they, it seems to me, in the best possible way recognize what is the quality of ... that is another type of the clientele.

As for private funds, for now, besides some not clearly defined relationships, we didn`t have a lot of contact. For example, we are just planning to see what the Electro power sector can do, as one who, by law, is required to give 10% of their profits to cultural and sport activities... In any case, we are looking for openings with some private investors, which are extremely few, at least in part to finance our projects.

That is, it is little complicated, we have a Ministry, we have the Ministry of Education and Culture of the Republic of Srpska, which has a budget line for development of ..., and it defines how much money will be invested in development of ...

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What is unstable in all this is that there are discretionary rights of the Minister, the Prime Minister, and others, who give very large amounts of money for some other projects, which are non-budget oriented, and these are from some other, now I do not know how to call them, funds, so to speak, that bag from which they take the money from, where it is located. In terms of a part defined by the budget, this is something that we apply for. What's the catch is that the last year in December the budget was approved in which the budget item was zero, and they started to shut it down, it is very problematic. On the other hand, our experience says that we, some discretionary rights, in a conversation with the Minister, if we get to convince him, he will find some money with which they would finance it. So do the events, since they are also under the same... When we talk about Sarajevo, there is the Foundation for ... of the City of Sarajevo, I think it is called like that, and they have, and now I am not exactly sure, for example, ... thousands of Euros, which is twice a year, through the competition, distributed to ... projects which are proposed. The city of Banja Luka also has a small fund, it is small, around ... thousands Marks... in other cities ... there are budget lines for culture... those funds are small... considering how much it costs, it's not the happiest situation... And if we are talking about a leader in the region, Serbia is something like that; that concept, the enthusiasm, the way the ... makers come up with finance is more successful in the Serbian milieu, than on the other side (Croatia). In our case, it is the state fund, and that`s what we are talking about, and it seems to me, in fact I am sure, that we will have to turn to other funds that come from the city of Banja Luka, Republic of Srpska, Bosnia and Herzegovina, which are not taxpayers` money. We cannot call it a fund; we can call it, as I said, partially from the Electro power sector, which has some money, or the Telecom, something like that to realize a project. They are not easy (on money). We call this first part the soft money. It is the money that might not be hard to get, but is relatively friendly to authors, and those revisions are not big, we are trying quite easily, although, those are never sufficient to realize ..., we quite easily manipulate between all this, unlike these others which are, firstly, very controlled, if ... bank gives you the money, than it is important...

As for this first one, when you have a good eye, and when you have a good concept... As for Banja Luka, and regarding climate I think we haven`t had some big problems for now, and generally, I think that architecture of Banja Luka, it is not specific for something, and just, somehow, for me it is difficult to draw some, if we talk about beautiful, or universally beautiful, when we talk about the architecture... if you have an idea, if you have something that is the context of the... you will find it very easy to locate it in space. I think, around Banja Luka there are very nice exteriors, which may be interesting, I think in Banja Luka, there are interiors which are not problematic for... , I think this is not a limiting factor. What is the limiting factor for us is that we do not have infrastructure that can operate... there are very few places where we can plug in our (equipment)... but I still consider that this is not something that is the decisive... we find answers to that...

When we talk about cultural events, I presume that the question is how we feel in the cultural milieu of Banja Luka, as a city, and what we have to offer, many people come from other places... and how they feel here. Somewhere, I am always unhappy with the way the city treats this issue, and since I am a cultural worker I try to analyze things that surround me, and to see what the real offer is. I think that the city, as such, is very

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limited. I do not know whether it is the lack of ideas or people do not want to deal with that, because it does not have a financial benefit. Somehow, we always return to that issue that we must live on something, or it is, as we said at the beginning, environment without ideas. I do not believe in this scenario, I don`t believe it is without ideas. I believe that people do not deal with the culture because it is, perhaps, because everything is directed towards the financial part, making money, and the culture is not the place where you can do that, when selling pirate discs in the street you can earn more than when you organize ...When you draw the line, that problem, or lack of culture, seems to me to reside there. There is a shortage, definitely, that it is not well defined. Yesterday, I heard information that ... is ceasing to exist. It is devastating. When you have an idea which has been recognized in the region... I personally get emails from some people from the region, who say that if I could talk to the people (organizers), like I'd love to be part of... it is great reference for me, and then at some point the environment has no understanding, really environment is the correct address, ... as someone who is business oriented, they draw the line and said there was no reason for us to do that. And goes out one brand, the brand is not just profit of the ... it is the general concept of a society in which we live, and we as a society, as individuals, we do not recognize the importance of this, and we do not give back to ... what it gives to us. I think, almost as a rule, that things happen in a similar way with other cultural activities, and except for some boxing matches that are being sold to us as culture, because there comes a singer and sings, we will be reduced to a minimum.

I think when you come to an age, for example, the beginning of thirties, or even earlier, and when you really start to deal with existential issues, at that time you leave this job. It's the only real reason why this is happening. It is not a thought: I can contribute in other sectors much better, and I will make along the way, as a byproduct, a lot more money or I'll buy an apartment, it is simply a feeling that you cannot dictate this work, and that is reality. My example is that I live with my parents, I am in thirties, I drive my father`s old car, when he doesn`t need it, for someone who is in thirties, speaks a foreign language, has a degree, and has... (several very large and smaller projects)... behind, in some developed countries, I wouldn`t, maybe, own a flat, but I would certainly have my own car and 25 days on the coast. But generally, that existential moment that occurs as a light bulb, starts to dissipate a moment of enthusiasm which had hitherto functioned and dominated, and they leave the sphere of cultural workers and become employees of the state administration, other private companies, or establish their other jobs where the money, wages at the end, are more solid. I do not see that there is a justification like, or not justification but the reason, for example: I realized, I'm not creative enough, I lost power in that, Everything I said I said, I no longer have reason to do, and some other descriptions. Maybe in some other countries it works in a different way, so someone says, until being 25, 35 plays the guitar in a band and earns well, to become a dentist afterwards. I think in this case it is not like that, rent for the apartment, money needed to finance the family, one or two holidays per year, a car, and what else is considered as usual lifestyle, a mobile phone, represent a limitation in doing this work, and that is definitely the reason why people are leaving and cease doing it anymore.

People want to buy an apartment, to them, it is as an ideal, I want to own my own apartment, and are even capable of neglecting those other needs to buy flat. Flat is purchased from the loan... you put housing problem to the fore. I have no need for

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something like that, since I believe that renting a flat is something completely rational, but I understand those people who want to have that kind of security, to invest in that flat, so it works as usual...the flat is the most important... that is the experience of people from my circle.

Banja Luka, if we talk about relationships, should not strive to be a big city. It has 250, 300 thousand people, I don`t know, and it should be a medium sized city like it is, and to make the most of it. That is a serious problem. When we talk about relations between the two environments we have a serious inferiority complex. And Belgrade has inferiority complex... that story I was somewhere, I saw something, represents an advantage in this hermetic environment, although there are people who go, and return more stupid than they were before. But, generally, the need to go somewhere, not to define things in their own backyard, becomes a problem.

I have a few thoughts in my head. Not for the company. I wouldn`t go to Macedonia to establish a company, although they have a good fund, a good center for..., but I could be an individual who could work. i think for doing this work you do not have to have a company, but to be.... is in fact individual knowledge and skill, therefore, if I was going from here, although so far there is no such thing, I would go on invitation, and would probably not worked as a company but as... (name). I, like most others in this town, do not know how things work out there..., such knowledge is a challenge for me and the burden...that period of going somewhere, getting to know the place, starting something similar that I have here...

I very rarely think about some of the negative connotations of the work that I am doing. When I say the market is unstable or funds are small, it is only the issue which needs to be resolved, not something that should be abandoned. Within that, I have to define, I think I will in the future work on projects and now...generally, there are authors... who have the quality to do that. In the future, we will turn to them. We will try to, in the system, give importance to our existence, to tell them that it is necessary, that we were players in the regional, European market, to allocate some money to finance all that. We will also begin to turn to some funds that are not national, not taxpayers' funds, and to find there some additional funding. I think when it comes to big issues, shut down or not to shut down, I think, in any case, survival, or life of the company is very certain, and I hope that major turbulence will not happen, and that we will achieve our goals.

Interview 2

My role in the company, I am the director, and besides fulfilling those legal duties and jobs of a director, of a private company, of a ltd company in our country, I, in principle, coordinate all those things, from bookkeeping, legal affairs, strategic decisions, agreements and negotiations of a future existence, i.e. financial existence of the company.

Characteristics of our company is that we are registered for research in technical and technological sciences, the goal of our establishing was to transform one patent, one good idea into industrial product in order to sell it as a finished product, as an integral part of some applications, and as a license to manufacture products, and at the end, from a small idea, a small family who was dealing with innovation, myself, my ..., to make a company.

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Of course, we all had felt that it was going to happen tomorrow, in a couple of days, or couple of months. With time, by seeing how companies are created, how enterprises are developed, how a product is released to the market, what are the problems, what are the problems of a technical nature, what are external problems, we saw, and we were told from other companies, that process it takes5 to 10 years, depending on a country, product, market, and many other internal and external factor.

We actually invented a new principle of energy production from renewable-energy sources, and that is the innovative (product), which is the basis for that application. Since the beginning, we managed to make the first (product) for powering ..., in the world. Together with our partner companies, we would never be able to do it on our own. We made, together with the partners, ..., (product) , and generally, thanks to this advanced system, any ... Any company can ...

There is the exact economic projection, which we proved, in effect, that for (client), it is cheaper; there is an investment repayment period of two to three years if they do that, and it is a lot better for the environment, and now we are making our way in that segment of the market

We are finding new obstacles. Those are lobbying groups for diesel generators, aim of CEOs to have good current financial results, to avoid capital costs, regardless of the significantly higher operating costs, for him, it is important to have good balance sheets, etc., etc.. Therefore, there are some of these, so to speak, tricks, which we are facing now, and that we are aware of, which is, maybe, our advantage, and in the future period we are planning to solve all this, and push it through. Today, we have several companies interested in buying us... somewhere else to continue to work to fund us, to sign partnership agreements, and so on.

In all these negotiations that I am doing, of course, you have to be careful, like in any other job, and, of course, all those negotiators from all sides want to extract the maximum benefit, for themselves and for their company, and me, during the last five six years during which I am doing this job, I am learning myself, gaining tremendous knowledge, tremendous experience, I travel around the world, I fight, survive in this country. Nobody sane could think that it is possible in this country, or in countries in this region, to develop a company that will be equivalent to global companies. Because, if it was possible, they would exist by now. We do not consider ourselves to be the smartest, the most capable, and the richest ones. We are the people who work hard. We face problems, we solve them by thinking in the technical way, lots of work, effort.

We finance our operations by barely surviving. We are not adequately paid, simply, other companies, around the world who are doing this work like us, and we, when we compare with them; the investments, the wages, the balance sheets, the equipment; there is a significant difference, and it is a miracle that we reached this level, and what will happen in the future I don`t know, we will reach the certain level when we decide whether to stay here and continue in this way or worse, or to move to another more developed country, which will offer us a better human resources, better financing, better work conditions, better living conditions, better conditions for professional development, better equipment, etc. There are many factors that may influence our decision, but so far we managed to stay here, to survive, to work, to compete with other companies worldwide, to go to (name of the city) to get some award ..., to reach the finals in ...

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Our clients now are (companies from specific sector), someone who is a ...who wants to buy a power system, or an individual, a private house which wants to have an independent power supply. Our products and all other products around the world are abnormally expensive in comparison with the electrical energy which is being sold. The price of electrical energy will go up. Of course, likewise, the fuel price which will go up. Of course, in order to save fuel, to save the energy, to reach the environmental awareness...the price has to go up...Our systems like all our competitor`s systems are unrealistically expensive in comparison with what they provide, they entail an investment of 10 to 20 years, depending on the application, and there is a huge competition because you have the product, everything, before its time. And simply, it is not profitable to buy it in advance, there are other countries where it is profitable, but again, there are lobbies in those countries, but again, I say, it was difficult to push the pilot project through. It was difficult to make the first commercial product, and then the second one, and they all say they would start ordering in series when we reach five, ten. That is a normal process, and that we are aware of, and which is very difficult to deal with from this country.

We were acquiring human resources by giving scholarships. In that process, while working for us, and having a stipend, gaining knowledge, and in that way they were doing a favor to themselves and us, as a company. Since we don`t have a serial production, we do not have the ability to employ dozens of people who would only work in R&D, that is impossible for even the biggest companies that do some profitable jobs, let alone for us. In principle, most of these people are our associates, but we have one huge problem, and it is that for us, the private sector, the main competitor in a run for human resources is the state. When you have the situation that, when you offer, as a private company, a realistic opportunity to employ someone, and when the state offers to employ someone, 99,9% of them will choose to work for the state sector, because one have bigger salary, more secure salary, fewer duties, fewer responsibilities, less work, etc., etc. More security to survive, to stay, and in the private sector, tomorrow, the company can go bust, tomorrow the company can fire you, tomorrow some earthquake could happen. With us, it is proven that in the state sector, from a municipality to the highest levels of power, people have a certain security, so no one normal could blame them. Of course, they have, in companies like mine, like ours, and in other companies they have tremendous, building companies, people who are of that profession, electrical, mechanical, there are companies over here where they can gain tremendous knowledge, and where they can take advantage of this knowledge later and apply to work for global companies, but people do not see themselves in those companies at the moment, in the last two years. People see their long-term future, starting a family, etc., safety. They see it in the state sector. I say to you, as long as the private sector does not overtake the state sector, we will have a lag in technical development, in technological development, in knowledge, and, therefore, economic power will decline, and the best human resources will migrate abroad, because abroad salaries are abnormally higher than in the state sector, of course for people who are in new technologies.

We are creating new technology. In fact, we created new technology. In companies like ours in the West, simply, people would fight to work, there would be no competition, but at the moment we are not in a position to pay them more than the state sector. Furthermore, therefore, we do not have a possibility to do that, to grow our team, let alone to compete.

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We have a cooperation with the Ministry of science and technology in several segments, and we are pleased with that, but we are not pleased with that the Ministry does not have adequate budgets, adequate programs, does not have adequate..., with a small budget that they have they help a little, that little is nothing long-term, temporary it means something. Ministry of science and technology, or someone like that, responsible of that segment of the economy and new technologies has to have a much larger budget, and based on that budget a lot more concrete plans and systems of control.

We need a lot of different materials, services, people from different segments of knowledge and technique...and if Banja Luka has that to offer, and in most cases it has, we finish our problem. Of course, we pay that a little more, then if we were in some other bigger city, etc., but that link has functioned excellent so far.

From the date of incorporation (year) the Internet hasn`t been a barrier. We had significant problems during first three years. The emergence of a number of operators, better quality service...nowadays we function superb, and the Internet is the main infrastructure that we need. In the future period, the flight connection will be a problem. You have to travel to Belgrade, Sarajevo, and Zagreb. The airport in Banja Luka, which, unfortunately, does not have the capacity to have some more serious airlines, would be much needed to us, but simply, in our plans, if we decide to stay and survive here, we cannot count on that. Banja Luka - Gradiska motorway would, in that sense of travel, would mean a lot to us, but when we will be able to count on that. Any infrastructure development, for us, businessmen, especially for us who depend on Europe and the world, etc., means a lot.

Surely, they exist, in comparison to the West, developed countries. It is obvious, that they are on that level of development, and we are on this level of development, and that there are some reasons for that, to be honest. Through this business, and by working with the administration, I have found many obstacles, many problems. For example, if a company wanted to be listed on the stock exchange, it is very different over here in comparison to the USA. That is why they are where they are, and we are here where we are. Nobody can tell me that our regulations regarding the stock market, estimates, IPOs, better than theirs. We do not have anything in that segment, almost nothing, apart of... If it wasn`t for the privatization funds, we wouldn`t have any trading on the stock market. With them, different things happen on the stock exchange. From my point of view, it is completely different, and with us those things need to be, as soon as possible, adjusted, liberalized...

It is harder, in principle, when someone evaluates your company. Over here, they require for evaluation to be done on the basis of what you have already invested, on the basis of your market share, while in the USA, for example I`ve made Facebook. Who can estimate for me, well, at this moment maybe yes, but when that company was being established, Google, or thousands and thousands of software companies, thousands and thousands of some consulting companies, they had that opportunity, they made that sort of estimate on the basis of their business plan, on the basis of something, and it is not possible over here. Of course we are more limited in every segment, including that one, then them. And, I think we should learn from them, not them from us, but well, we shall see.

A lot. If you want to invite an expert to come to work for you. Is he going to come to the city where his child cannot play tennis, swim at the swimming pool, where there is

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no cultural amenities, where there is no gym, where there is no quality gym, where there is no that sort of, not to number. I can number at least 50 things which determine the quality of life of someone who is on the European and the global level, isn`t it? We are pushing to make a company which will be a competition to the European and the world...In those companies should, or must work people of a certain caliber. To bring or gain people of that caliber you have to bring them into the environment where they will have a certain quality of life. In places where his car will be stolen, where he will be robbed, burnt, etc., people won`t come. Over here, thanks God, there is fewer, and fewer things like that, but that sort of cultural infrastructure, sport infrastructure, I think, let’s say, behind Belgrade, we lag 100 years. And, it is one of the main problems, whether there will be a company ever to be born over here. If it is possible that Adobe, someone who invented first programs of company Adobe could function over here. You know that company like Adobe, Google, allow to their employees to come to work with their dogs, to have gyms, witnesses, finesses, to have 100 types of meals in one moment, etc. Simply, to make from the workplace, for that expert, for someone who creates new value, the quality, that he wants to come to work, to want to stay here to want to a part of his time and his knowledge give to his company. Over here you don`t have that, and I don`t know if it is ever going to be. But, if someone makes that, it will be the work, and without that there is no development. I don`t know if I answered the question correctly, but it is my honest opinion. It is not encouraging, but it is realistic.

Have a look. Of course, if you had a carnival over here, like in Rio, it would be great for employees, for people. If you had Oktoberfest, like in Munich, it would be fantastic, if you had Exit, that is a cultural centre, if you had Gucha, Beerfest in Belgrade, I don`t know, if you had columns of majorettes , days of culture, which are inspirational for real. Over here, maybe I do not have time, I am not the real address for that question, but I don`t notice something like that. I notice, unfortunately, that cultural events of this region are fairs. I cannot say that it bothers me, but it simply, it is not the time for fairs, and I don`t see myself, and I don`t see anyone, who would, you know, that to attract someone, and to mean something to someone. It is OK, and I value and respect that, a huge number of people who work and live to go to a fair, and to do that fair, etc., but with us there is nothing like that. Things are happening, of course, with bigger population, etc., in Kastel some bands are coming, different things are happening, which positively, but I don`t see that we have something what is, and cultural event is when you say, in certain month, and certain date, you have this and that. And everyone knows that, not only from Banja Luka, but everyone from the region, and everyone are looking how to go there. And over here, we don`t have that. I think some (name of the festival) had been started, but as far as my information goes, that is the project that will not be realized again. Therefore, literally, we don`t have any advantage, and simply, nothing is being done, and the main culprits for nothing being done are people. And, people who made Exit, they were going, searching, improving themselves, searching, I say again, our main driver are human resources. I say, why would someone come from Belgrade over here, his child, I don`t know, training tennis at the Djokovic's Academy, and now he is supposed to come to Banja Luka, someone training swimming is supposed to come...not to speak of Trebinje, and Bileca, all that part which is as it is. So, those are some personal things. Could that be improved, how could that is improved? It is possible, but many painful

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things. I don`t know. In a sense, not to do some things which are being done. Money that is available, and that will be available, to be redirected in some other direction, in some...

Over here, in Balkan countries, I am watching, an agreement is being made between the government and some representatives of some interest groups. As soon as, I don`t know, some organization has come and made an agreement with the government they have come for their interest, not the public interest, I mean interest of all people in that group or organization. In principle, by me, a decision, which is satisfactory for all is not a good decision. How can a decision be good if it is satisfactory for all? It is impossible. Decisions have to be made, which are strategic, and that have long-term effect, and not the short term effect. And, as long as those decision are not made, and I am not seeing them, not over here, nor in Serbia, nor in Croatia, nor Federation, then it will remain the same like it is. Nothing can fall from the sky. We cannot discover the oil now, and say it is Norway now. Because, if we found it, it wouldn`t be Norway. In fact, a lot of things have to be disrupted, and the main problem is the consciousness of the people.

Interview 3

The history is not very long. The company exists for a little more than three years. Production activities are moving pictures and modern technologies, meaning video materials, movies, adverts, music videos, and experiments with some modern technologies, for example, mapping interaction in relation to some cameras, analysis of movement, etc., and implementation of all that into moving pictures. When I say moving pictures, I cannot say only advertising and movies, when we are doing some experimental things, it is all connected to production of video pictures, predominantly through animation

We are seven and a half, because we have one student. Laughs. We are seven. I am the owner, founder, director, and the chief animator.

Well, we have three types of clients. The first type are foreign, those are all commercial, mainly we work for foreign, 60% of the company business is for foreign clients, via the Internet, second type is local, commercial part, which we do sporadically, depending from projects. The third part is local, but of a non-commercial nature. We always try to have something happening in the house, bigger or smaller project, which we do with some other organization, individual, or something for our own soul.

Do you think the location in the narrow or broad sense? Do you think the address in Banja Luka or Banja Luka? Depends on how you look at it. Of course, if we were in New York, we would have more work, and we would be paid better, but we would have better competition as well. Thanks to modern technologies, we do not have to be in the place of the work, so if you ask me, I would like to go to countryside, and work from there...Regarding location, it is important in a sense that it is harder to reach bigger clients from a smaller community. Foreign clients that we work for are small over there, very small. We know that we are worth more and that we produce better quality, but simply we cannot reach a bigger, serious company just like that. It will take longer. I think that we haven`t been around for long, and our connections with foreign clients are limited to a series of accidental contacts and recommendations with individuals, and not that we have made something globally phenomenal so everybody is looking for us. We

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dig with the hands and feet to get some work. We are not complaining, we have enough work, we are not earning big time, and we don`t have some big profits at the end of the year, but we have enough to pay salaries. Our client from Ireland, that we have for two years, it is an average furniture chain. Over there it is an average company, over here it would be minor.

It depends, it depends, if it is a huge project, and everybody cannot accomplish everything, than we complement one another. We have good relations and cooperation with everyone and it only depends from a project to project. It is very specific. it is not, like, some, I think on that companies that work in economics or law, or something that is interpreted in the same way that something. It is a question of a creative work, where, I don`t know, if it is shared among several companies, it is shared on different segments of work. For some events, some will be dedicated to graphic design, others will be dedicated to production of materials, and everything, and there are cases like that. Often, the next job that we are working on; there is a clear division, because it is a huge event so it is divided. We also cooperate with others. This is relatively small community, we cooperate in a sense that we are borrowing or lend equipment one from the others. Some have audio studio, some have a little bit more lighting, some have a little bit more computers, like us, and then we complement each other, shift work to others, etc.

Unfortunately, not that much. Because, we, specifically, work on video, animation, which is very expensive, and painstaking toy, and if institutions need some video materials, they would rather search for someone with a camera, rather than for someone with a computer. So, we do not cooperate (with institutions) that much, we are hired only for some specific cases, when they need some animation, advert or something, but it is rare. But some general, long term cooperation we do not have with any institutions, state.

At the Academy (of Arts) they do not have the department that we need. We need Animation, and there are talks that there could be something in a few years, but at the moment all people that work here are self learners, they learned via the Internet, tutorials. It is only me who focused through the school, online, which was in San Francisco, Emerwille. Well, I am the only one who directed himself. There is no school like that over here, and it is very hard to get human resources, good human resources. There are many people who would try something, we give an opportunity to all of them, we train as well, sporadically, there is no regular training or something, but it is still new sector of industry, so it will eventually appear. It is hard to get human resources. There is only few of us in Banja Luka, Republika Srpska, BiH. You can count people who are seriously doing that on fingers of two hands, let alone to have 100 people so you can choose that. There is no chance. There is even a joke. In our company we are all male. I say call a girl who is competent in the field, we will give her a job immediately, just for the balance. But there is none. Girls are less interested in that.

It can depend (on the size of the city) but not necessarily. Specifically, Czech Republic, not to talk only about computer animation. Regarding human resources yes, (we are limited in Banja Luka), but not because Banja Luka is small, but because it does not have tradition. That is why I mentioned Czech Republic, over there animation is very developed, and Czech Republic is much smaller (than the USA), like, I would dare to say that, for some quality of animation, it can stand shoulder to shoulder with big global centers, with the USA, I don`t know. Only, they produce fewer movies. The catch is that

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they are doing animation for 50, 100 years , they invest in that, they have great people, human resources, they train each other, and they have tradition, and by that they are have a lot of new animators.

We are specific; we only depend on the good Internet, and nothing else. Of course, it is convenient if people can arrive by bus, or something. When we were choosing location, the most important thing was if we can connect the Internet link which is good enough. Since, some providers have abnormal conditions to give us such a good Internet, and others have great conditions, but they do not cover all parts of the town. And, then, primarily, that was the reason for having powerful Internet over here. And then, after that, to be close to the center was important, simply to do some things more practically, and if there was parking, and if there is a bus connection. Our present location, since we moved three times, is the best. We are in the center of the town in five-ten minutes, by foot, we always have a parking, and the Internet is very good.

(Being close to the center) is not important for the work, but more to go to different meetings, it is for work as well, but it is not necessary that much. But, since, we are more, like, the creatives, we are not the bankers, to have fancy cars, or something, we are more on foot, or we use bicycle, so relatively it is important that we are not in, like, Shargovac. Although, if we had better, the best conditions in Shargovac. If we had an opportunity to build a studio where we would feel very good, we would solve that probably. We would only look for a bus nearby or something like that.

Considering that it is about sitting at the computer for a long time, it is important to have an option for some physical activities. In our previous space, we could put table tennis, and we used a lot, because it helps us a lot to shake a little bit after sitting at the computer. Now, because of circumstances, thanks to the crisis, moving, we crammed in the smallest possible space, and then we go outside for some recreation, individually or together. In general we are always searching for some additional physical activity because of computer. Other thing is connected to comfort., which, especially the creatives need, they need separate offices, common area, spaces of different use so we can relax and express creatively, and problem with locations closer to the center, they are more expensive, and it is less and less space. If we went somewhere outside, or if we had money, earnings, for bigger studio, we would gladly go into something like that. It is generally, a tendency; with people who work in animation globally they would rather sacrifice some other things for comfort of the studio. I don`t know, Pixar, was going outside the city, and went to some location where they were able to make, practically, their studio, their little studio...

Airy space, a possibility for some physical activity, table tennis, billiard, darts, to be placed in that space. Outside space, a little garden to relax... or some near forest for a walk, and a possibility to put some sofas, and beds so someone can relax. And some standard things.

Only thing why it is important is because we like to follow on cultural events, and it is why. Otherwise, the center, as a center is not important at all. Not completely, but less important. Some moments that we had at the beginning, to we had to go to the bank, we solved that by internet banking, having bookkeeper is also solved. The aim of all those things, something that is comfort for me personally, is that I am less bothered with paperwork, stupidities so we can focus on work. To go back on the question of the center, it is not important that much for us; it is only that we want to feel as a part of the

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community and surroundings we like to be somewhere close. If we were now in Trn or Laktashi, more rarely we would, now we learn that there is a concert or theatre performance, it would be more difficult, we would have to plan in advance. In this way, it often happens, OK, we have finished, we are getting there, let`s go to the Theatre, let`s go here or there, let`s go to bowling, and so on. It is much easier to make that decision. But, we could be comfortable in some suburban area, only if it is well connected by transport...

All our people are full time employees in the studio, and if there are some additional requests we hire freelancers. If something additional needs to be done, what we don`t know how or cannot. (Freelancers) are mainly from here, very rarely from abroad, very rarely via the Internet. Because, mainly, those things that need to be done can be completed here, and I try, if there are two same or similar to give an advantage to someone here, it is rare that we look for someone over the Internet. Generally, I don`t know how much you know about that, I started to teach animation ..., although, it is huge time burden. Financial benefit more or less, it sounds ridiculous, I am not there for money, seriously. I want to infect as many people as possible with animation, and I want to transfer that knowledge to them, because if they develop, I develop with them. My wish is, for example in five years, for this to be serious studio. Nowadays, what we have now is a toy, below 10 people. Serious studio of 30-40 people which will work serious, projects, big. We can come to grips with such things, but we need a lot of time. Animation is rather painstaking work. Whatever is found from such things, I give it to people around me. Firstly, when it happens to some draftsman or modeler that, to get interested, to try each other how we work together, and eventually, for him to get further jobs so we can cooperate. Firstly, it is for the desire to create better picture over here for work. It is not the question about money, if it is more expensive or cheaper, because our projects are still low budgets, than, abroad we cannot afford, when we search over the net, some top artists or workers. So, there is no big difference in price.

Well, firstly, (we are interested in) film, because we are dealing with that mostly, animation. But, in our cinemas, there are not many things like that, they have only blockbusters, so over the Internet, mainly, we access some more interesting works, and more broad selection. We are also interested in Theatre, also, fine art exhibitions, especially some installations which are hybrids of different things, and, of course, film and musical festivals, and so on. Mainly, considering our structure is varied, if you get us together over here, to tell you what we are about, I think we cover all cultural events.

We plan to stay (in Banja Luka). We plan to, in another 5 years or even earlier, to make feature animated movie, which would be more demanding project, and everything we are doing now, we are doing in that direction to gain, to pass those first steps that every company has to pass, to gain that financial stability, so 60% of the company does that commercial part, and 40% of the company does that sort of non commercial part, and to start that some movie. And the most important, the strongest, long term plan is that we want...from the beginning the story was started that we are equal. I am only the first one among equals, who started the story; any one of us could have done it. Of course, with that some responsibilities and privileges come with that, but, I don`t consider myself better or more worthy. I want that atmosphere to be created, generally, because in that case it will be easier and nicer for everyone to work over here, or anywhere. There are people who left, and I always wanted and helped them to go further...

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There is one more thing important... it is very important. I wish if we, during a month, one day, or more serious amount of classes, days, dedicated to that part. At the moment, we only sporadically educate ourselves in certain direction. For example, we need something for a certain project, and then we go through those tutorials, or we get that knowledge from somewhere, or we ask someone, or what do I know. It would be much better if we could to afford something that we cannot at the moment, and that is to send individual people to some specialization, or Online, what most of the schools regarding animation do, where they specialize Online in certain segment. Unfortunately, still we cannot do that, because ... at the moment we can only survive, to earn enough for living. The aim in the future is to move that balance, to get bigger projects, because, by the quality and by the comparison with someone abroad...we are three times cheaper, and we offer the same quality. So, we don`t need to be three times cheaper, we can be twice cheaper, and we will be better off immediately, because we will have more left over at the end of the year for specialization, to work less commercially, and more what we like, and that is the aim in the future.

Most of them (people who left the company) went abroad for better salary. Not most of them, but all of them. Only one of them got fired, because he was very foolish. All others, we are in great relations, they are all abroad. In Slovenia, Dubai, etc., some similar exotic destinations where they have got two or three times bigger salaries.

Interview 4

(The company) was established about one and a half years ago. Although, we are relatively young company, all the people, our team which has got together, got together from the project (name of the project). The project was donated by the (name of the country) government for the purpose of improving healthcare in Bosnia and Herzegovina. The project was conceptualized as an inter-entity project, where Federation and Republic of Srpska got involved, and (the company) was initially created as a company which will be technical support, in a sense of creation of texts, multimedia content for portal, e-portal, internet portal (name of the portal). It is not the main activity of the company. The company is promoted as a content provider, someone who produces or integrates contents, whether it is textual content or ... or multimedia content, animation, etc., etc. The company promotes itself as a general content provider. With a progress of the project, we profiled ourselves as a content provider for the sector of education. When I say that, I mean, electronic courses, digital courses that we developed for the project, plus, mainly in the field of medicine, linked to education, and for electronic courses for the (name) center...That divided us, on one side we have e-education, and on the other side we have copyrighting, original work. And, we can say that the company does those two things. As I said, we were established one and a half years ago. We came over here, the beginning was marked with entering the center, and we passed all the procedure. Application, commission, marketing plan. We established the team of some, between 9 and 12 people, depending on some needs. That was the team of some 9 to 12 people, plus external associates, I am talking here about the people who are on the pay list of the company, plus some 5 to 10 external associates, who have worked over here according to the needs. Regardless, whether it was people working in IT, designers , or experts from

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some area, that we were covering at that moment; management, business, medicine, and so on..

My role in the company is general executive director, considering that I am the owner of the company. At the moment, my role is, like in the past one and a half year, is executive, general director, and although those things will change together with needs, with expansion of the company. Expansion of the company means that new positions will appear, probably my role will be less important, and some new positions will appear.

What is specific for (the company), I said that we started from the project, and around 80% of the company was involved in that project, implementation of the quality of healthcare in BiH, the donor was (name of the country) government, which means, they were our direct client, most of the funding was coming directly on our account in regard to that project. This means that was our biggest client at that time. Considering that the implementer was (name of the NGO), nongovernmental organization, so some of the money was coming from that side. With the completion of the project, at the end of August, that cooperation with (name of the country) ended and (name of the NGO), however, what good came out of that is that contacts had been already established, so we can say now that we managed to, some of our products, two main products, two main services, we managed to sell in (name of the country) market, by using those contacts. (Name of the NGO) remained our client, not on that project. And now, by finishing that project we expanded our sale capacities, and, we gained some bigger clients, Ministry of (name of the ministry), (name of the university) university, (name of the centre) centre, (name) centre, we have that partnership relation. Our aim now is to develop sale capacities over here, and abroad, regarding... Correctly, (abroad) those are private companies. In our case those are medical institutions, clinics that we work with. We work with them on the subject of e-learning in the subject of medicine. Considering, it is our main business activity.

With our clients we try to establish client-partner relations. Our clients are automatically our partners, because we try to find some way of joint action towards some third parties. I would also add University in Banja Luka, as the biggest university in RS, with whom we have had excellent cooperation, and whom we donated some things, we donated web site, hosting, etc., to create, of course, better conditions, better...work, and nowadays we cooperate with them, with university or university (name of the center) center, which is a part of the university, a sovereign part.

We, our product, the company that was doing, from which we transferred the product, our platform for e-learning, is being used in (name of the city). After publication of the latest version of the platform we will try to establish the same contact with the university in (name of the city), but regarding the cooperation, it is mostly (name of the university), and University (name for the center) center Banja Luka.

All the people who are employed here, came over here after we published job adverts on posao.ba, Mali Oglasi, etc., etc. We did not have cooperation with the University regarding recruiting human resources. Also, the University didn`t have its database of students, so we could say... They also came for the interview, very little percentage of them are graduates, most of them were professionals who were capable immediately to join the project to earn. We have a continuous program, constant (job) add for young students. At the moment, we have two students from (name of the Faculty), department of design and multimedia, and one student from (name of the

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Faculty) who is in training, in the software, IT department. So, we have that communication with students, new generations constantly. At any time we have one, two, or three students who are here on a practice.

Thanks to conditions that we have in (the center), except the networking with other companies, I`ve forgotten to mention them, I don`t know why. I will add. We had, with many companies from (the center), who are tenants of (the centre), we had before, and have now, cooperation, we work on joint projects, what is one of benefits of (the centre), networking, outsourcing. On the other hand, (the center) has rich program of educational courses, that we send to our employees, depending on needs, who is capable of what, so we use (the center) for education of the employees.

(The center) has an excellent infrastructure, regarding the Internet, considering it is in the centre of the town, I would say (the centre) has excellent conditions. So, we are, in relation to other companies at an advantage. The Internet means a lot to us, it really means a lot, I would say more than 50% of all communication happens over the Internet, and there is no problem with that. (The center) location is excellent, the infrastructure is excellent, everything is renovated, quite new. Regarding the infrastructure, we don`t have any problems, I think we are at an advantage, we have conditions that are rare in Banja Luka, I do not know what the situation is beyond.

When we look at the projects we do, the only part, only events that we cover with our work are events connected with the healthcare, regardless of whether these are the days of diabetes, AIDS, etc., etc., together with the Ministry, we follow those. Regarding other events, we follow them in the context of, like sport activities, because of the healthcare. For other events, we follow them, if there is a need to introduce ourselves as a media. So, we follow events on Media Fest, days of diabetes, in that respect.

Most of our communication and most of our work is done, for example in this room, via conference, with (name of the country). Banja Luka is the centre of Republic of Srpska, the capital, and regarding hotels it is excellent. We do not have ultra-luxury hotels; I think that no one is expecting that. The infrastructure is solid, well connected, location of (the centre) is direct with..., there are really, really, no problems, because, as I said, our main communication is via the Internet, via Skype conference, emails, brochures, sales, etc., etc. Even with some internal, local clients bad infrastructure is a smaller problem than bad Internet..

Look, when it comes, I always divide that according to activities, when it comes to journalists, editorials, there is a huge number of journalists, graduated journalists, but when we talk about real knowledge, real experience, there comes the problem, because it is difficult to find someone who is, in small companies like ours always, multidisciplinarity is something that is always looked for. For journalist to be somewhat technically educated, and to have insight into the subject that he is writing about at the moment. it is really the problem, but situation in there is even good, in comparison with the situation with creative and IT part. First of all, people from the university don`t come as really educated, really people who could straight go to work, people who can quickly become competent at work. We train them, big part of the time, up to half a year, and then they become capable to work on something. That`s why we decided now, since a year ago, not to wait, but to bring students to the practice, to train, to get that sense of work, to work on real project, and eventually to filter those people to employ them full time. That is the only chance, otherwise, they either are already working and have good

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wages, or they work for the State where they have some security, so the only way is to train people before they come to work with us.

IT human resources, creative human resources are completely in deficit. Completely in deficit. I said, copyrighting, editorial, those are things that you can find, even economics is well covered, marketing, sale, all that is on some solid level. You can find an expert for an acceptable price. IT sector, software, design,...design, animation , multimedia. First of all, there is no faculty which is really educat..., legally speaking, there is a faculty for...Art Academy, and there is Communicology for multimedia Internet. But, the quality of teaching, lectures, I had a chance, now I talk to much, to see tests from that department. I think, assistant professors who teach that should not teach in that way, with such a low level of knowledge, but I think in all that the problem is that there is no something you call demanding client over here. Demanding client makes good programmer, designer, good expert. If the client doesn`t know what to look for, that level of the quality will be average.

(The company), we did strategic plan, overview of all, overview of our business activities, we have made strategic plan, short-term for one year, and long-term for 3-4 years. (The company) will continue to promote content providing and generally e-learning, whether it is education of the older or university education, that is the rout we are taking. Something that we will change, expand, is the way we distribute all that, whether it is IPTV, mobile telephones, only the way of distribution will change, but (the company) will continue to be a company for production of content, integration and support of e-learning.

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APPENDIX III – QUESTIONNAIRE

Do you find the city of Banja Luka attractive?

Numerous studies have documented the massive departure of young and educated people from Bosnia and Herzegovina. Since the success and future of the city depends on the Banja Luka smart and educated, the purpose of this questionnaire is to examine the factors that make highly educated people to choose to stay or move to Banja Luka, issues that worry them and what they are dissatisfied with. Questions in the questionnaire relate to life in the city, places to hang out, recreation and entertainment, pleasure, workplace and place of residence. The research results will be used for work on the subject of mobility and migration of highly educated people. Please answer the questionnaire if you:

have continued education after high school,

are permanent or temporary resident in the area of Banja Luka,

It should take 20 minutes to complete the questionnaire. Thank you for your time and effort. NOTES:

All questions marked with * must be answered to advance to the next page of the

questionnaire.

All information is strictly confidential and will only be used for this survey!

Questions and suggestions can be sent by email to: bl.istrazivanje (at) gmail.com.

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SECTION A – LIVING IN BANJA LUKA:

A1) How long have you lived in Banja Luka (select only one response by placing √ ): Less than 1 year Between 1 and 2 years Between 2 and 5 years Between 5 and 10 years More than 10 years

A2) Where did you live prior to moving to your current address? (select only one response by placing √ ) : Never moved/Always lived in same place In Banja Luka but other neighborhood Another city in Republika Srpska Another city in BiH Outside BiH Outside Europe

A3) Please rank the 4 most important reasons why you currently live in Banja Luka (1 being the most important and 4 the least important – please choose only four reasons) Born in Banja Luka Family lives in Banja Luka Studied in Banja Luka Proximity to friends Moved to Banja Luka because of my job Moved to Banja Luka because of my partner’s job Good employment opportunities Higher wages Size of the city Weather/climate Good transport links Proximity to natural environment (sea, mountains, countryside) Housing affordability Housing availability Housing quality Safe for children Openness to different types of people (in terms of race, ethnicity) The citizens of Banja Luka are open-minded and tolerant Gay/lesbian friendly Language (able to communicate with foreigners) Overall friendliness of city Diversity of leisure and entertainment facilities Cultural diversity Diversity of the built environment Presence of good universities Presence of good schools Other reasons (please specify)

A4) Which of the following most applies to you and your household? (select √ only one answer) I wanted to live in Banja Luka and so I found employment here My partner wanted to live in Banja Luka, so we found employment here I live in Banja Luka because I found employment here I live in Banja Luka because my partner found employment here Not applicable

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The following questions are about your experiences of Banja Luka as a city and how satisfied you are with aspects of living in Banja Luka. A5) How often are you involved in any of the following activities? (rate with a √ each activity) :

Almost never

At least once a year

At least once a month

At least once a week

Every day

Going out to the pub/bar Visiting coffee shops, during the day Eating out Going to movie, theatre and/or concerts Going to museum and/or art gallery Walking around city centre Excursions in parks or peripheral green areas Going to a night club Going to sport events Going to city parks Going to a festival (when happening in the city) Visiting friends Participating in resident’s associations Participating in religious activities Participating in community work Participating in political activities (trade union, political party, etc)

Others (please specify)

A6) How satisfied you are with the following leisure activities offered in Banja Luka (evaluate each activity with one √):

Very satisfied

Satisfied Neither Dissatisfied Very

dissatisfied

Quality of public spaces (plazas, parkas, etc) Quality of sport facilities The quality and range of festival events and cultural activities

The quality and range of art galleries / museums Quality and range of libraries Quality and range of restaurants Quality of bars and cafés Quality of cinemas Quality of shopping areas Architecture of city/relevant monuments Number of associations/ organizations for social activities

Quality and range of fitness centers Quality and range of saunas, spa and wellness centers

Other (please specify)

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A7) How satisfied you are with the following public services offered in Banja Luka (evaluate each activity with one √):

Very satisfied

Satisfied Neither Dissatisfied Very

dissatisfied

Quality of public transportation system Transport within the city – all types Connectivity between city & periphery Safety on city streets Police services Municipal police services Number of bicycle lanes Quality of tourist attractions Social security Quality of health services Quality of the university education Quality of the high school and elementary school education

A8) How would you rate the following environmental aspects of Banja Luka (evaluate the environmental aspects with one √ for all items):

Very satisfied

Satisfied Neither Dissatisfied Very

dissatisfied

Pavement condition of city streets and sidewalks Condition/cleanliness of city streets and sidewalks Recycling collection services Quality of drinking water Garbage/waste collection Cleanliness of facilities in city parks Care of trees and city parks Traffic congestion Availability of parking space Levels of use of bicycles as a means of transport Levels of noise in the city Air pollution Quality of children playgrounds Tidiness and cleanliness of rivers and river banks Other (please specify)

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A9) How worried are you are about the following issues in Banja Luka? (evaluate the level of concern with one √ for all items)

Very worried

Somewhat worried

Not particularly

worried

Not worried

Not worried at all

Amount of crime in the city Safety Availability of recreation for teenagers Availability of affordable housing Availability of recreation for seniors Availability of jobs Quality of university education Quality of secondary and elementary education

Quality of kindergartens Availability of public transportation Availability of recreation for children Amount of graffiti Drug problems Homelessness Aggressive/anti-social behavior Prostitution on streets Behavior of traffic participants Air pollution Maintenance of trees and green areas Demonstrations in the streets Illegal construction Lack of bicycle lanes Lack of sidewalks Quality of medical services Presence of smugglers, dealers Appearance of building facades and shop windows

Other (please specify)

A10) The cost of living in Banja Luka (evaluate all the costs with one √) Very

expensive Expensive Average Cheap Very cheap

Housing cost (mortgage, rent) Cost of basic services related to the house (water, electricity)

Cost of leisure activities Costs of education and training Transportation costs Cost of food and beverages General cost of Living

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A11) Which is the main mode of transport you and other household members normally use to get to work/college/school or in your/their free time? (Please tick one box for each household member)

Kinship (dropdown list)

Mode of transport

(dropdown list)

yourself member 1: member 2: member 3: member 4: member 5:

A12) On average, how often do you and other household members use public transport facilities?

Kinship (dropdown list)

How often (dropdown list)

yourself member 1: member 2: member 3: member 4: member 5: A13) On average, how long does it take you to travel to work? (√ tick one answer) I work from home Less than 15 min 15-29 min 30-44 min 45-59 min 60- 90 min More than 90 mins A14) Generally, how far do you travel to get to work? (√ tick one answer): I work from home No fixed place Under 1 kilometre 1-4 kilometres 5-9 kilometres 10-14 kilometres 15-29 kilometres 30 or more kilometres Don’t know A15) How many cars does your household own? (√ tick one answer) None 1 car 2 cars 3 cars or more

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The following questions are about how tolerant you think Banja Luka is as a city.

A16) To what extent do you agree with the statement that Banja Luka (√ tick one answer): Strongly agree Agree Neither Disagree

Strongly disagree

is welcoming place to people from other countries

accepts all ethnic groups accepts the gay population/LGBT accepts the minority religious and ideological groups (Jehovah's Witnesses, Rotarians, Masons, etc.)

accepts the differences between rich and poor (people with large and low income levels)

We want to ask you about your overall satisfaction with Banja Luka as a city

A17) Do you think that the quality of life in Banja Luka has gotten better, stayed the same or gotten worse in the last five years? (√ tick one answer) Improved Stayed the same Gotten worse Don’t know Please say why:

A18) If you have lived elsewhere for 1 year or more (not as a tourist), how would you rate Banja Luka as a place to live, compared to other places you have already lived in? (√ tick one answer): Not applicable (I have not lived in another city) The best place in which to live A much better place in which to live A slightly better place in which to live A slightly worse place in which to live A much worse place in which to live The worst place in which to live

A19)If you have lived elsewhere for 1 year or more (not as a tourist), please write down where.

City Country

A20) Typically, where do you spend your weekends? (√ tick one answer) At home In Banja Luka (but not at home) Out of Banja Luka but in Republika Srpska/BiH Out of Banja Luka / but in Europe Don’t know ne znam

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A21) All things considered, how satisfied are with your life in Banja Luka? Please mark with √ on a scale of 1 to 10, where 1 means very dissatisfied and 10 means very satisfied. Very dissatisfied

Very satisfied

1 2 3 4 5 6 7 8 9 10

A22) What is the likelihood of you moving away from Banja Luka in the next 3 years?? (√ tick one answer)

Mark one with √

Where? Why?

Almost Definitely Very likely Somewhat likely Not too likely Not at all likely

SECTION B. SATISFACTION WITH JOB AND WORK ENVIRONMENT:

The questions that follow are related to your job and where you work and about how satisfied you are with various aspects of your working life. (Select a response by placing a tick √ in the appropriate box) B1) What is your current employment status? (√ tick one answer)

Current status Employed Self employed / freelance Unemployed

B2) What is your current profession/occupation? Marketing and PR, advertising Architecture Art galleries, dealers in arts and antiques Arts: music, fine art, literature, theatre Design, applied arts Creative crafts Newspapers, printed media / publishing, books, web Video, film, photography Music production TV and radio ICT (Information and communication tech.) - software ICT (Information and communication tech.) - hardware Financial intermediaries Legal and other business services Management, consulting New product development Engineering, new technologies, processes, R&D College, university and HE teaching professionals Other (please specify)

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If you are not employed skip the rest of section B and go to section C B3) Who is your employer / where do you work? Government / state-owned company Privately owned company NGO (non-governmental organizations) Owner/co-owner of a private company Freelance / contract work Student

B4) What is your contract status in your current job? (√ tick one answer) On an unlimited permanent contract On a contract for a specific project On a fixed term contract of less than 12 months On a fixed term contract of 12 months or more On a temporary employment agency contract On apprenticeship or other training scheme Without a written contract Don’t know B5) What is your current occupation? B6) Please describe in a few sentences what your current job entails:

B7) Including yourself, about how many people are employed at the place where you usually work/worked? (√ tick one answer) Only employee Under 10 10 to 49 50-99 100-249 250-499 500-999 1000 – 1999 2000 or more (Don’t know)

B8) How long have you been in your company or organization altogether? Years: Months:

B9) How many people, if any, work under your supervision? Enter number

B10) How many hours do you usually work per week in your main job? (√ tick one answer) Less than 20 hours per week 21 - 30 31 - 42 43 - 55 More than 55 hours per week Varies over week Don`t know

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B11) Do you have additional job? Yes No

B12) How many hours do you usually work per week in your additional job (√ tick one answer)? Less than 20 hours per week 21 - 30 31 - 42 43 - 55 More than 55 hours per week Varies over week Don`t know

B13) How satisfied are you with the following aspects of your job? (√ tick one answer)

Very satisfied

Satisfied Neither Dissatisfied Very

dissatisfied The sense of achievement you get from your work The scope for using your own initiative The amount of influence you have over your job The quality of the working environment (appearance, air-conditioning, toilets)

The facilities in the workplace The intellectually stimulating aspect of your job The friendliness of the work environment The training you receive The amount of pay you receive The amount of holiday time/paid leave Job security The ability to balance your professional and personal (family, friends) life

Ability to meet and network with professionals from the same field

Respect for the rights of employees (vacation, sick leave, overtime, etc.)

Overall satisfaction with the job

B14) How long do you expect to remain in this company/organisation? (√ tick one answer) Less than 6 months Less than 1 year Between 1 and 3 years More than 3 but less than 5 years Between 5 and 10 years More than 10 years Don’t know B15) If you expect to leave the company/organization in the next year what are the main 2 reasons in order of priority? (mark with number 1 more important, and with number 2 less important reason – choose only 2 reasons from 8) To seek a more interesting job To seek better pay To seek a less stressful job To seek better conditions My work contract will be over I am moving out of Banja Luka I am leaving the country Other reasons

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SECTION C SATISFACTION WITH YOUR NEIGHBOURHOOD AND DWELLING:

Next are some questions about how satisfied you are with the neighborhood that you live in and about the dwelling that you live in. Select a response by carefully placing a tick √ in the appropriate box. C1) Where do you live (√ tick one answer)? City centre Rest of the core city (just beyond city centre) Rest of the city, including the outskirts Village or small town in area of Banja Luka Medium or large town in area of Banja Luka Don’t know

C2) How long have you lived in this neighborhood/area? (√ tick one answer)? Less than 1 year Between 1 and 5 years Between 5 and 10 years More than 10 years

C3) How satisfied are you with the following aspects of life in your neighborhood/area? (tick one √ for each aspect)

Very satisfied

Satisfied Neither Dissatisfied Very

dissatisfied

Nearness to employment Personal safety The level of traffic noise The level of pollution The provision of childcare facilities The provision of healthcare facilities The level of social interaction between neighbors Appearance of the neighborhood Access to commercial facilities (food, chemist, etc) Access to public spaces (parks, etc) Access to public transport Overall quality of life in the neighborhood Cultural and sports facilities in the neighborhood Parking places in the neighborhood

C4) Has living in this neighborhood/area generally lived up to your expectations? (√ tick one answer) Yes No

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C5) How important were the following factors in your decision to move to your current residence? (Tick one √ for each factor)

Very important

Important Neither Not

important Completely unimportant

Distance from home to work Time length of travel to work I didn’t have a choice Cost of dwelling Size of dwelling Availability of private open space (e.g. balcony, gardens)

Proximity to family/friends Closeness to services/facilities Proximity to public transport Proximity to major roads/highways Nearness to pubs/nightclubs Closeness to city centre Proximity to universities Proximity to good quality schools Availability of kindergartens Availability of leisure facilities The quality of the surrounding neighborhood Closeness to public open space (e.g. parks, playgrounds

The neighborhood atmosphere

C6) How satisfied are you with the following aspects of your dwelling? (tick one √ for each factor) Very satisfied Satisfied Neither Dissatisfied

Very dissatisfied

The overall size of dwelling Storage space inside The size of the kitchen The size of the bedrooms Outlook from the dwelling The security of the dwelling Provision of open (garden) space Physical quality of your dwelling Parking space The level of noise from neighbors (if in apartment building) The quality of management/maintenance of building

Other (specify) C7) Which of the following best describes your accommodation? (√ tick one answer) Own without mortgage (i.e. without any loans) Own with mortgage Tenant, paying rent to private landlord Tenant, paying rent in social/voluntary/municipal housing Accommodation is provided rent free (living with parents, relatives, friends, etc.) Other I don’t know

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C8) If you are renting, what percentage of your monthly income (after tax) is your rental payment? (√ tick one answer) 0-10% 11-20% 21-30% 31-40% 41-50% 51-60% More than 60%

C9) If you are purchasing, what percentage of your monthly income (after tax) is your mortgage payment? (√ tick one answer) 0-10% 11-20% 21-30% 31-40% 41-50% 51-60% More than 60%

C10) All things considered is your monthly rent/mortgage (√ tick one answer) Very easy to afford Easy to afford Just about affordable Not easy to afford Very difficult to afford

SEKCIJA D – DEMOGRAFSKE KARAKTERISTIKE:

This is the last section of the questionnaire on some important background information on you and your household. D1) Please indicate your gender. Male Female

D2) Which of these categories best describes the household you currently live in? (√ tick one answer) One person I live with my parents Husband and wife /cohabiting couple Husband and wife (or cohabiting couple) with children Lone father / mother and children Husband and wife (or cohabiting couple) and other persons Husband and wife (or cohabiting couple) and children and others Single father / mother and children and others Two family units Non-family household containing related persons (brother or sisters) or non-related persons (friends, flatmates), but not in a marriage or partners Other (specify)

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D3) Indicate the total number including yourself, of individuals living in your dwelling unit. (√ tick one answer): 1 2 3 4 5 6 or more

D4) Indicate local area where your current residential address belongs to: (√ tick one answer) Ada Dragočaj Lazarevo II Priječani Agino Selo Drakulić Ljubačevo Rekavice I Bistrica Goleši Mišin Han Rekavice II Bočac Gornja Piskavica Motike Rosulje Borik I Karanovac Nova Varoš Saračica Borik II Kmećani Obilićevo I Šargovac Borkovići Kočićev vijenac Obilićevo II Šimići Bronzani Majdan Kola Paprikovac Srpske Toplice Bulevar Krmine Pavići Starčevica Centar I Krupa na Vrbasu Petrićevac Stratinska Centar II Kuljani Piskavica Stričići Česma Lauš I Pobrđe Verići Debeljaci Lauš II Potkozarje Vrbanja Donja Kola Lazarevo I Prijakovci Zalužani I don`t know Other (specify)

D5) What is your highest level of education received? (√ tick one answer) High school 3 years High school 4 years Completed one or more years of college 3-years university degree 4-years university degree 5-years university degree Completed postgraduate specialist study MA, MSc Phd

D6) If you have a primary degree, in what year did you graduate? Specify year of graduation (enter the year with 4 digits, eg. 2002)

D7) Specify the primary study area (eg. economics, electrical engineering, etc.). The primary study area

D8) Where did you acquire your highest achieved level of education? Enter city Enter institution

D9) Please indicate the range that best describes your monthly income after taxes in KM (BAM). (select only one answer by placing √ ): below 500 500 - 999 1.000-1.999

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2.000 - 2.999 3.000 – 3.999 4.000 – 4.999 5.000 – 5.999 6.000 – 6.999 7.000 – 7.999 8.000 – 8.999 9.000 – 9.999 10.000 or more Do not know / do not want to answer

D10) Please indicate the range that best describes your age (select only one response by placing √ ): Less than 24 25-34 35-44 45-54 55-64 65-78 78-84 85 years and more Do not want to answer

D11) What is your nationality (select only one response by placing √ ): Bosniaks Montenegrins Croats Roma Serbs Ukrainians Undecided Do not know / do not want to answer

This completes the questionnaire. Once again, thank you for your time and cooperation.