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Lauren Simmonds: Why Croats are staying and transforming Croatia into an emerging tech hub

(Editor’s note: This post on Croatia’s emerging tech scene is part of Dispatches’ Tech Tuesday series. We cover tech because so many highly skilled internationals are engineers and entrepreneurs.)

Croatia is not immune to the demographic problems that have long plagued this region, but these issues aren’t as straightforward as your basic brain drain. Am I saying that the only people who leave Croatia are unskilled?

Of course not. Far from it.

However, one has to remember that until recently, Croatia was a tourist country with little else to boast of on the global stage – other than football of course. The tech and IT boom came much later, and one car maker, Mate Rimac, was not enough to alter global perceptions of “that beautiful ex-YU country with the cheap hotels.”

That meant the latest exodus, which saw Croats emigrate en masse to the United Kingdom, Republic of Ireland and Germany, was primarily made up of workers from the tourism, catering and hospitality sectors. Croatia’s main economic branch. The industry that butters its bread.

Self-starters who stayed

This trend was ramped up even more when the pandemic struck and the already evident cracks in Croatia’s tourism-obsessed economy became deeper. In search of more stability and less of an economic tie to something as apparently fragile as tourism, more people left.

Croatia has always been prone to exoduses, and they’ve occurred multiple times throughout history for both political and economic reasons. The result is that a huge number of people have left the country for new pastures, and there are now more ethnic Croats living outside Croatia than there are in it.

What of those who stayed? Those who shunned the idea of working for large hotel companies and the like? What of those who didn’t fancy competing with countless others for a job in a sector they couldn’t care less about?

They began to build things, design things, and seek the comfort and freedom of success built entirely off their own backs.

That’s no easy feat anywhere, but in Croatia – it was deemed a foolish and almost impossible move just 10 years ago. Very little infrastructure was in place to help entrepreneurs grow their businesses, and the word “start-up” referred to car engines. I can distinctly remember would-be self starters seeking the help of an office called Plavi ured (Blue office). It’s still around, and other than that, the Croatian tech landscape was dry.

Regional disparities also made things worse, with people based in Zagreb getting more of a hand than those down by the coast could ever dream of. Still, what was one man’s “foolish and almost impossible” was another man’s “what do I have to lose?”

Both of these attitudes had their place.

EU membership transformative for Croatia

As Croatia eased into its role as an European Union member state, EU funds were poured into the country, single market membership meant that things were suddenly easier for Croatia-based enterprises, and programmes designed to help with the green and digital transition were set up following the pandemic.

This shaking up of society brought with it tweaks to burdensome administrative processes, tax breaks, business incubators, positive investment ratings and the interest of venture capital funds in local talent. Now with Eurozone and Schengen membership, Croatia is being taken more seriously by all.

All that, coupled with a lack of regional competition that still holds strong as innovative Croatian names from the tech world like Damir Sabol, Albert Gajsak, Silvio Kutic and more join the ranks of Mate Rimac, and you have a promising mixture of circumstances.

Croatia’s immediate neighbours, with the exception of Slovenia, are not members of the EU, and have a lot of work to do politically. Serbia still likes to pretend it never committed atrocities, and the two federal entities of Bosnia and Herzegovina can hardly agree on what to have for breakfast.

That isn’t to say that EU membership and a stable political stage is the be all and end all when it comes to start-ups and tech, but it certainly helps. Croatia has access to tools Serbia and Bosnia and Herzegovina do not have access to, and the overriding mindset is completely different.

‘Estonia in training’

Croatia’s unique position as an EU, Eurozone and Schengen nation, as well as a Southeastern European country frequently thrown into the “Balkan” pot, is that its overall national attitude is markedly different to that of its neighbours.

“Somewhere between YU and the EU” read a shirt I once saw in Zagreb Airport, and that couldn’t be more true.

It’s precisely this unique position that makes top quality Croatian tech a selling point in its own right. It can be sold at excellent value for money owing to the special correlation between Croatia’s wage-adjusted labour rate against its productivity ratio.

There are more than 30 business incubators, technology parks and accelerators now operating in Croatia, all of which work on getting start-ups off the ground. Croatia’s loathsome regulations are easing as investments pour in through now borderless channels, and despite the chronic lack of risk capital, the one active VC fund specifically targeting the Balkan region is going to choose an EU, Schengen and Eurozone nation with a blossoming IT sector every time.

Croatian tech names are being revered globally, and the country known to the world for the war, sun, sea and football is now transforming into something that resembles an “Estonia in training” in the innovation world.


Read more about Croatia here in Dispatches’ archives.

See more from Lauren here.

Lauren Simmonds

Lauren Simmonds is the editor of Total Croatia News, the largest English language portal in Croatia. She lives in Zagreb, Croatia, and is a translator, content writer, interpreter and the co-author of "Croatia - A Survival Kit for Foreigners," which was published in 2022.

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