Digitization is the focus of the Fourth Industrial Revolution and is putting pressure on businesses to rethink and innovate their business models in accordance with market demands. Given that the SME sector in the Republic of Srpska plays a dominant role in overall economic activity and generates the largest number of jobs, it is crucial to identify opportunities in the digital era that can lead to faster economic development, increased competitiveness and living standards. The first part of the paper presents the structure of the economy in the Republic of Srpska with special reference to SMEs and their importance for economic activity. The second part of the paper presents an overview of the literature on digitalization, its impact on the competitiveness of SMEs, while the third part of the paper deals with the results and analysis of research on the use of digitization in SMEs in the Republic of Srpska. Methods of classification, comparison, analysis and correlation were used and the results of the use of information and communication technologies in the SME sector were presented. The paper ends with a conclusion and a list of used literature.