Sunday, 12 April 2020

Glas Poduzetnika Survey on Croatian Tourist Season 2020 Status

April 12, 2020 - While nobody now expects a strong Croatian tourism season, what is the actual situation with bookings. Glas Poduzetnik, the Voice of Entrepreneurs association presents its findings. 

What can we expect from the tourist season 2020? A question for many in the tourism sector, but also for those who are not directly related to it, given there will be many indirect consequences. Following our survey on the usefulness and expectations that entrepreneurs (especially in the field of tourism) have from tourist boards, we were interested in further exploring this topic. Expectations for the season are undoubtedly poor, and it seems that significant help from the tourist boards is not counted on. We were interested in what is currently happening with tourist accommodation lessors and their bookings? We got the following results:

56% of lessors sustained a considerable drop in reservations or sales of their accommodation capacities. Another 4% of them advised that they had a medium-size decline with the beginning of April. Somewhat reassuringly, about 16%, fortunately, counts only a slight decrease in the number of bookings or sales for their accommodation capacities. Unfortunately, another 21% reported a large number of cancellations for existing reservations or previously sold arrangements. Only slightly less than 3% of participants said that there is no decrease in the number of bookings, or it is minimal.

 croatian-tourism-season-survey.png

I have a considerable drop in reservations/sales of accommodation capacities

I have a slight decline in reservations/sales of accommodation capacities

I have a medium-size drop in reservations/sales of accommodation capacities

Most of my reservations/sales of accommodation capacities have been canceled

I have no decrease in reservations/sales of accommodation capacities

Some of my reservations/sales of accommodation capacities have been canceled

This is yet another confirmation that we will have a challenging tourist season, and especially for all those categories that will not be able to realize the new income until the season 2021, which is now also difficult to predict. Given the size of this sector, we should certainly think carefully about additional intervention options to avoid domino effect causing even more damage.

You can follow the latest from the Glas Poduzetnika association on Facebook

Thursday, 9 April 2020

Focus on Freezing Loans, Writing Off Rents, Utility Fees, Parafiscal Charges

Zagreb - April 9, 2020 - Glas Poduzetnika, the new Croatian association known as The Voice of Entrepreneurs, has announced its next steps. 

After a few days from the foundation, the GLAS PODUZETNIKA Association received the decision of registration in the Register of Associations and can start with work. In the first period, the Association will focus on the remaining demands and implementation of existing measures

"The Association is now registered, and applications are being reviewed so we can confirm the membership to all who applied, counting more than 4,000 people in the first five days. Our long-term goal is to participate in the work of the Economic and Social Council and to be the voice of entrepreneurs, especially micro and small businesses, self-employed and employees in the SME segment", said Hrvoje Bujas, the President of GLAS PODUZETNIKA. "Glas Poduzetnika is a prestigious representative of practically 70% of the private sector, and we believe that we complement with HUP, which gathers mainly large companies. Associations such as Glas Poduzetnika exist in all major economies—National Small Business Association exists in the USA for 80 years now, Germany has Verband der Gründer und Selbstständigen Deutschland (VGSD), and these organizations have tens of thousands of members. In this major crisis, we all had the opportunity to see that an organization like Glas Poduzetnika is necessary for our society."

The main objectives of the Association, defined in the Statute, are to promote and protect the interests of micro, small and medium-size enterprises in Croatia and their staff; to identify and encourage measures aimed at improving the entrepreneurial climate in Croatia; the creation of a more appropriate and favorable institutional environment for the development of micro, small and medium-size enterprises; the creation and promotion of business climate; the optimization of the efficiency of the state apparatus with the aim of the long-term sustainability of the economy and providing better services to citizens as well as to improve development and quality of society as a whole. No membership fee will be charged for membership in the GLAS PODUZETNIKA Association, and its activities will be funded from donations and commercial activities. Soon, the Association will also make public a detailed document with short, medium, and long term goals.

 

Meanwhile, after the April package of measures was published, the GLAS PODUZETNIKA Association has focused its current activities in four areas: the demand for banks and leasing houses to freeze loans and interest for 12 months; the demand for local governments to write off rental payments and utility fees; the demand for the country to cancel parafiscal charges, as well as support for members and the Government of Croatia in implementing measures and resolving open issues. 

Yesterday, the Association conducted two interesting surveys among its members. The first survey queried members' expectations from the Croatian National Tourist Board in the crisis and the following recovery period. The second one was about the opinion of entrepreneurs about what the territorial structure of Croatia should look like in the near future.

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First, we were interested in the attitude of entrepreneurs to the vast network of more than 300 tourist boards. Given that tourism is a profoundly affected sector which accounts for 20% of Croatia's GDP, we believe that opinions related to this topic are of strategic importance. When asked what they expect from tourist boards, up to 82% of entrepreneurs do not have any expectations because they believe that tourist boards are entirely useless. Just over 9% have some hopes and believe that targeted marketing actions should be initiated in accordance with the pools of tourists arriving on their transport. Another 5% think that tourist boards should first be radically reorganized, and 3% of participants are interested in fulfilling the board's promises to reduce membership fees in the short term. Considering these results, it is clear that the Association Glas Poduzetnika will also have an exclusive responsibility to encourage the public, the Government of Croatia and the competent Ministry to think carefully about how to optimize this crucial business sector and make the most of it since this system of tourist boards does not seem to fit the current situation.

parafiscal-charges (1).png

The question of the number of local government units is not new. Experts have for years warned of a massive amount of local government units, which is disproportionately large for the population and even for the size of the country only. The Glas Poduzetnika Association believes that this is the perfect moment to bring this topic to life and to finally make some decisions that can increase the chances of Croatia's long-term prosperity. Interestingly, the most significant number of participants responded to this survey within a few hours—almost two thousand of them. That shows how important this issue is and how many people believe it should be resolved as a matter of urgency. When asked if they thought the number of counties, municipalities, and cities should be reduced, the answers were very clear. A total of 97% of participants believe that the number of local government units should be reduced. 75% of them think that there should be 4-5 counties and 100 to 200 cities, while the remaining 22% believe that all units that cannot be self-funded should be eliminated. Of the remaining 3%, only 1% believe that the number should continue unchanged, and 2% have several different responses, each of which is negligible. Such results confirm past researches, but more extremely, potentiated probably with the impact of the current crisis. "Given the rarely observed unity in responses, we hope that the politics will also see that it is inevitable to initiate the process of territorial restructuring and optimization of local government as soon as possible," they emphasized from the Glas Poduzetnika Association.

Remember that the GLAS PODUZETNIKA Initiative started as a citizens' self-organized group, most of which are small entrepreneurs, after the announcement of the first set of Government's measures, which the organizers deemed insufficient. The Initiative assembled more than 100,000 entrepreneurs, small business owners, self-employed, and the employees in the private sector in less than 15 days, drawing the media spotlight with its uncompromising requests and appearances. Considering this, GLAS PODUZETNIKA positioned itself as a relevant factor in public discussions aimed to determine Croatia's new economic direction. Its position was also confirmed by the Government of the Republic of Croatia, having included some of the Initiative's suggestions in the second set of economic measures, thus confirming Initiative's undeniable influence. At the request of the Initiative's members, the GLAS PODUZETNIKA Association was created and received more than 4,000 applications for membership within a few days of its founding.

You can follow the latest from Glas Poduzetnika on Facebook

Wednesday, 1 April 2020

Government and Business Representative Activities in Last Week Showing Results

April 1, 2020 - The second package of Government measures is very similar to the list of 10 demands the Initiative GLAS PODUZETNIKA sent ten days ago. 

REACTION TO THE ANNOUNCEMENT OF THE SECOND PACKAGE OF GOVERNMENT MEASURES

“Glas Poduzetnika has, in less than two weeks, gathered around 100,000 micro, small and medium businesses, artisans and their employees. Looks like our voice was heard after all. We believe that the announced measure package will be confirmed by the Government and presented tomorrow. Two main points necessary for the survival of small and medium businesses from our demands are following, writing off and not just postponing of income tax and contribution charges and stopping the payment of rent to the government and local jurisdictions, utility and parafiscal charges. This will, together with subsidizing a minimal salary of 3,250 kuna, help our members who have been prevented from doing business to survive this period of no income with minimal expenses, and ensure the job loss would be as small as possible.”, stated Hrvoje Bujas, one of the initiators of the initiative. “We believe that the Government will find a common language with the banks as well to extend the loan and leasing postponement to 12 months form current 3, and that after the crisis our economy can finally breathe a little. In any case, we are sure that the Government agrees that this is only the beginning of structural changes that will help our economy exit this crisis with minimal losses. We hope we can ensure a sustainable budget deficit, we will address this together with the Government through cooperation in the Economy council whose members we have proposed last week.”

The Government has shown empathy for small and middle businesses problems and they were ready to listen to propositions coming from the private sector, HUP (Croatian Employer Association), Glas Poduzetnika, economy experts and entrepreneurs themselves. Enactment of the second measure package is in fact the real start of the fight against the economic crisis, Glas Poduzetnika notes. Quality enforcement of the measures that must be ensured with unambiguous enforcement of directions is key. A lot of our members in the field asked about operational problems and vagueness of the first measure package. The same problems were predicted and warned about by our legal and bookkeeping advisors. We are of opinion that the state needs to change the stance towards entrepreneurs and to simplify the approval process, with minimal restrictions and rigorous misuse penalties.

Many local jurisdictions have already made measures that write off businesses' rent and utility charges for the duration of the crisis, and we hope that soon the others will do the same. It is necessary that local jurisdictions come to an agreement around a unified and singular common approach, so that all can have similar conditions.

A good part of private sector employers impatiently awaits new measures form the Government. But in a crisis of these proportions, these are not their only problems. Of course, expectations from their local representatives are bigger and constantly being checked. Their survival will depend on their buyers, clients and business partners, not just the government. A lot of questions are being asked about real-estate loans the companies are using.

Our question - What if the rent write off is not agreed upon, was met with the answer that, at this moment, only 10% of companies will try to get a loan with which to pay for that kind of obligations. Furthermore, 23% of them are planning to close the company (and lay off all employees). 16% are planning to reduce the number of employees and see how things develop.

Around 51% plans to minimize expenses in different ways and try to survive the crisis! That data should be considered in the context of a previous poll that shows that over 90% of companies can, with minimized expenses, survive 3 months at most.

This is more data that suggest that a holistic solution is necessary and that partial measures, that can be good in and of itself, will not be enough for the survival of a large part of the private sector and its jobs. Today, 39% of entrepreneurs are ready to pull drastic measures, and we can see that the number grows week to week.

glas-pod.PNG

GLAS PODUZETNIKA has, to this day, gathered almost 100,000 companies, self-employed, artisans and their employees. With the support of businesses, small and large, that made more than 22 billion kunas of profit in 2019, it’s main goal is to ensure the existence of as many employees and entrepreneurs as possible, and save Croatian economy from a potential long-lasting recession. You can follow Glas Poduzetnika on Facebook.

Friday, 27 March 2020

Measures Proposed By Croatian Entrepreneurs Would Drastically Reduce Unavoidable Layoffs

Zagreb, March 26th 2020 - By the end of the year, if the government accepts the measures proposed by the initiative GLAS PODUZETINKA (Voice of Croatian Entrepreneurs), 250.000 jobs could be saved, 150.000 layoffs still inevitable.

CRISIS COST PROJECTION ON JOB AVAILABILITY

Headed by the prominent economical and political analyst PhD Vuk Vuković, GLAS PODUZETNIKA initiative made a projection of three possible scenarios that could befall the Croatian private sector. In the worst-case scenario, by the end of the year, 405.000 people could get laid off. In addition to that, by the end of 2021, 160.000 more people could be left jobless. If the current numbers are taken into account, the number of unemployed people could reach up to 700.000, more than half the number of currently working people.

The second scenario that follows the government’s measures will see the shock only partially mitigated. According to the assessments of the analytical team of the initiative, by the end of 2020, 290.000 people, and by the end of 2021, additional 120.000 people could face unemployment. If that happens, the total number of unemployed would climb up to 550.000.

“The assessment was made based on the negative reaction of leading companies to the proposed measures. They offer no security for planning the business years for 2020 and 2021 and some of the companies will have no choice but to go into debt just to keep afloat. In any case, companies will have to react with layoffs which are inevitable at this moment.”, says the initiative and adds that the government's plan will cause a big growth of budget deficit. They cite the inadequate measures package as the main culprit and add that there are no bigger budget expenses cuts planned. “We estimate that the budget deficit in 2020 could, in that case, reach 39 billion kuna, or almost 10% of GDP. In 2021 the deficit would go down because of the end of paycheck subsidies, but it would still be around 27 billion kunas or 6.8% of GDP.”, they remark.

In the third scenario, the Government would completely adopt the measures proposed by GLAS PODUZETNIKA initiative. The job cost of the crisis would be greatly mitigated and could reach up to 150.000 in 2020 with additional 60.000 in 2021. That would mean that we would end 2020 with a total of 290.000 and 2021 with a total of 350.000 unemployed people. After that, according to the initiative’s projections, a much stronger economic recovery would follow and a huge number of companies would be saved from ruin.

“In the case of accepting our measures, the budget deficit would be a bit smaller in 2020, around 25 billion kuna (6.4% of GDP) and in 2021 the deficit would go down to 3 billion kuna (0.8% GDP) because of the assumption of a faster recovery of the private sector.”, the initiative points out and adds that all three 2021 scenarios have accounted for unemployment growth in both public and private sectors.

The crisis will undoubtedly have a negative effect on employment no matter the scenario, so the goal of GLAS PODUZETNIKA initiative is to reduce the possibility of the worst-case scenario as much as possible. “The Government at this moment does not understand the cascade effect on the economy that will be caused by their inadequate measures. Besides that, the Government has not, at any moment, given information on its own projections. They also did not tell us which data, predictions and simulations they are basing their decisions on. Until they show their data to the public, our projections are valid, limited as they are in access to official data, but adjusted with input from the members of the initiative and observations of effects in real time.”, concludes the initiative.

GLAS PODUZETNIKA has to this day gathered almost 60.000 companies, self-employed, small businesses and their workers. With support from companies and businesses that made a profit of more than 11 billion kuna in 2019, its goal is to save the livelihoods of as many employees and entrepreneurs as possible, and to save the Croatian economy from potential long-lasting crisis.

croatian-entrepreneur.PNG

You can follow the Croatian entrepreneurs initiative on the Glas Poduzetnika Facebook page.

 

Wednesday, 25 March 2020

Croatia Faces 300,000 Layoffs Within 3 Months: Voice of Entrepreneurs

March 25, 2020 - Press Release - “VOICE OF ENTREPRENEURS” INITIATIVE REQUESTS DISMISSAL OF MINISTER HORVAT

The analytics team of the VOICE OF ENTREPRENEURS initiative led by eminent economic and political analyst Vuk Vuković, PhD, carried out an in-depth assessment of jobs already in jeopardy, potential layoffs and the cost of efficient measures the Government should implement to prevent the economic collapse. According to the assessment of the analysts, 730,000 jobs in total will be in jeopardy within the next two months and the number of jobs which would be lost within the next three months could reach 300,000. Because of insufficient measures adopted by the Government for the purpose of assisting the economy, they have requested the Prime Minister of the Republic of Croatia to dismiss Minister Horvat.

To avoid sweeping layoffs in the private sector, the initiative has proposed to the Government the measures to save the economy. The cost of these measures over the first three months would be 4.3 billion Croatian Kuna i.e. 8.6 billion Croatian Kuna over the period of six months. The stated cost refers to exemption from payment of the corporate income tax, health insurance and pension contributions, local income tax, public utility charges, urban lease and other local charges. In addition, the initiative has proposed a one-off abolishment of 4.9 billion Kuna of parafiscal charges over the period of six months.

For minimum wage subsidies, for which a measure has already been adopted by the Government for a part of entrepreneurs and the applications for which are already in course, additional 7.1 billion Kuna would be spent over the period of the next three months i.e. 14.2 billion Kuna over the next six months. The total cost of the stated measures and abolishment of parafiscal charges would be 16.3 billion Kuna over the period of the next three months i.e. 27.7 billion Kuna over the next six months. These measures would account for 4.1% of the GDP over the period of three months i.e. 6.9% of the GDP over a more likely period of six months, which is significantly less than the GDP percentages other countries have projected.

If the Government decided to intervene with the stated measures aimed at 185,000 jobs which are most at risk, the total cost of measures, with the abolishment of parafiscal charges, would be 8.3 billion Kuna over the period of 3 months, which is 2.1% of the GDP, or 11.8 billion Kuna over the period of six months which is 2.9% of the GDP.

„Considering that many other countries, whose financial situation is even worse than ours and which are even more indebted, have taken even more substantial financial measures than ours, we believe that these would be initial measures which would ensure at least some kind of continuity of operation of the private sector and the Croatian economy”, said Vuković.

A survey carried out among the members of the initiative prior to presentation of the Government measures has demonstrated that only 6.8% of entrepreneurs plan to accept and use the Government measures. As many as 68% of the surveyed stated that they are waiting for better and more quality Government measures, while 9% will choose the most extreme measures such as layoffs, suspension of payments to the state/city, closure of businesses or suspension of businesses which are in the course of opening. Aco Momčilović, in charge of carrying out surveys of the initiative, stated that the data obtained prove the failure of the measures to date and that a set of better measures is needed.

Hrvoje Bujas, one of the founders of the initiative, expressed his dissatisfaction with the presented Government measures after the Government’s press conference and his informal meeting with Finance Minister Zdravko Marić. He stressed that the Government has transferred the whole crisis risk on entrepreneurs. He called donating ministers’ March salaries for Zagreb’s earthquake relief “cheap populism” because tens or thousands of people working in the private sector and filling the state budget for the purpose of salaries of Government members will end up in the street. “Entrepreneurs are facing a tough decision: to apply for Government measures or to lay off their employees and close the businesses that took years or decades to build,” concluded Bujas.

Dissatisfied with the reactions from the Government and, in particular, with the reaction of Economy Minister Darko Horvat, as well as with insufficient measures which will result in a wave of dismissals, the VOICE OF ENTREPRENEURS initiative has requested from the Prime Minister of the Republic of Croatia the dismissal of the Economy Minister.

“By adopting these measures, Minister Horvat has rejected the proposal of our initiative, all relevant business associations and experts on the necessity of tax and contribution write-offs and considering his inappropriate public statements, he has shown that he is incompetent to manage his department in a crisis and that he does not represent the interests of the Croatian economy and society in whole. We need a Minister who will stand up for all businessmen in the same way that Minister Beroš stands up for health”, all initiative founders stated and requested immediate dismissal of Minister Horvat. “Appoint a competent Croatian Economy Minister and urgently establish an Economic Crisis Headquarters which must include representatives of both entrepreneurs and the economic profession”, the initiative members urge.

So far, the VOICE OF ENTREPRENEURS initiative has brought together more than 60,000 entrepreneurs and their employees, business owners and freelancers. Supported by entrepreneurs and business owners who generated over 11 billion Kuna in revenues in 2019, the goal of the initiative is to maintain the livelihood of as many employees and entrepreneurs as possible but also to ensure the survival of the Croatian economy facing the potential crisis which could last for years. The initiative’s requests are supported by many professional associations such as the Independent Hospitality Industry Association, Association of Event Organisers and Producers, Women in Adria, Croatian Association of Communications Agencies (HURA!), (HURA!), Croatian Independent Software Exporters (CISEx), MBA Croatia and the Croatian Artificial Intelligence Association (CRO.AI).

Saturday, 21 March 2020

In Medias Res: The Voice of the Entrepreneur (Glas Poduzetnika)

Or: How to save as many companies and employees. Meet Glas Poduzetnika (Voice of the Entrepreneur), a new private-sector initiative in Croatia.

March 21, 2020 - In the second half of March 2020, the coronavirus outbreak and its economic repercussions are on the rise and going truly global. From the health perspective, Croatia is comparatively well, with currently just 130 reported infected patients. On the other hand, chaos and fear, flavoured with uncertainty are also on the rise in business circles and between employers and employees. In the last few days, hundreds of employees have already been fired, and companies are preparing for the worst-case scenario, of losing 80 or 90% of their revenues, and trying to create some crisis management plans. And we are only at the beginning. The real problem is that nobody can say with certainty how long this crisis will last, and especially how long will we suffer the consequences. Will It be up to 2 months, and there is still some time for the tourist season, or it will be 6 or more months just to get rid of COVID-19? Some projections that are considered moderate, are mentioning 18 months of “economic contraction”. For Croatia, as a country significantly depending on tourism, the situation is far from good.

So, what happened in the last day or two? After the government published their extensive list of 63 measures, many entrepreneurial voices started to respond and to criticise the list. It seems that in comparison to other countries, they are not fast enough, clear enough, or efficient enough. They seem like politicians did something to save their jobs and explain their purpose, and not really to make things better for the economy.

A new initiative has been created by a group of 20 – 30 entrepreneurs (Hrvoje Bujas, Drazen Orescanin, Berislav Marszalek, Kristina Ercegovic, Ivana Matic, Bruno Samardzic etc.) and it got a name – The Voice of the Entrepreneur (Glas Poduzetnika). In less than 24 hours it gathered a few thousand entrepreneurs on Facebook, and is closing now on 10 000 members, a number that makes it a significant social voice. The number of stories shared in the group was amazing and at the same time depressing. There is really no time to waste and no sense to underestimate the situation and its consequences.

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The initiative was spontaneously created also as a response to the perception that the Croatian Government still doesn’t have the awareness that the private sector is feeding the public sector, and that if it goes down, country institutions will also not be able to function. In the call for solidarity, the Government is still not ready to reduce the working privileges of the public sector employees, their traditional voters, but to leave the burden of the crisis to the private sector alone. If some measures are just postponing some payments, and not cancelling them entirely for this period of time, it will be almost completely useless, and miss the intended positive impact on the economy.

On the other side, it is still visible that entrepreneurs are victims of the strong stereotypes about them. They are, in some parts of the society, still perceived as disproportionally rich, selfish and self-centered people who are just hoarding the money and don’t want to show solidarity with their workers and help them in this obvious time of need.

To fact check those comments, 2 surveys were organized which received hundreds of responses in a few hours. I think it will give a much clearer picture to the general population about the real situation of the Croatian entrepreneurial community.

The first question was:

How much cash do you have saved in reserve?

This should give a direct answer to the assumption of big piles of money in the hands of the entrepreneurs. And here are the results in Pie Chart 1.

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Almost 60% !! of entrepreneurs have financial reserves that are not higher than 5000 kn (some of them stated 1000 kn or even 0). That amount is insignificant for any kind of planning or decisions. The next 24 % has up to 20 000 kn in reserve which makes them able to pay their obligations and salary maybe for this month. The next 11% has up to 100 000 kn, and only 6 % has more than 100 000 kn. And it should be noted that this information is missing the obviously critical facts about the size and fixed costs of the company, which can make savings in millions disappear “overnight”.

The second question was about how much time they can survive AFTER they do some adaptations and cost-cutting? if this situation doesn’t get better significantly. And the answers are very aligned with the results from the first question:

voice-of-the-entrepreneur-3.png

50% of entrepreneurs can survive only ONE month, after that they will just close. The next 43% will be able to survive up to 3 months – so basically the period of time that is predicted as a best and unrealistic case scenario. Only 5% of companies can survive longer than 6 months. Those facts should be seriously considered when making any state-induced measures.

The second interesting piece of the information would be to cross-reference local measures with the measures of other EU countries. And some documents are already being created.

To sum up, as many world leaders stated, this is the worst crisis since World War 2. Decisions made today should be wise and based on facts and with the overview of the whole picture. We will know in a very short period of time if those decisions are good or bad, but the consequences will be felt most probably for years. So let us all unite our experience and skills and make the best of this situation.

And to end with a quote and a song:

The revolution will not be televised, The revolution will be live 

Below a draft of the measures proposed by the Voice of the Entrepreneur:

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Aco Momcilovic

Member of The Voice of the Entrepreneur Group (Visit the Glas Poduzetnika Facebook page here)

Owner of FutureHR

You can connect with Aco Momcilovic via LinkedIn.

Thursday, 19 September 2019

Spreading the Entrepreneurial Mindset in Croatian Society: Next Steps

A week has passed since the first Entrepreneurial Mindset conference in Zagreb on September 12, 2019. And preparations are being made to build on its initial success. 

I have been to many conferences in the last few years in Croatia. Many end with a feel-good factor, but as soon as the conference is over and the next day's news stories are consumed, that is often the end of the story and of the initiative. 

Last week was different. 

There is a new kid on the block in Croatian society, and it is a kid which is much more interesting than tourism and with the potential (that word which one always seems to apply to Croatia) to generate more income than tourism itself - the dedicated and driven Croatian entrepreneur. 

Last week's conference in Zagreb brought together some of the very top names in Croatian entrepreneurship, as well as heavyweights from the diplomatic world, for the start of a new initiative to share the success of Croatia's entrepreneurs and to tell their stories - and their failures - in a big to encourage the entrepreneurial spirit in the younger generation of Croats. TCN caught up with Mr. Positive himself, Ognjen Bagatin, conference co-organiser and CEO of Bagatin Clinic to find out how the conference went and what happens next. 

  1. Firstly congratulations on a very successful Entrepreneurial Mindset conference, which was very inspirational for all who attended. How would you sum up the conference now that you have had time to reflect on it for a few days?

Thank you for your kind words. It was a really inspirational day with top entrepreneurs in Croatia inspiring and sharing their experiences so we all can grow. Sum of the conference is that we have successful stories in Croatia, that you can succeed in Croatia if you work hard, if you are persistent, if you have a vision, courage, if you celebrate other’s success and you are not afraid of making mistakes. I think we planted a seed of a new hope for Croatia and presented the new leaders and role models of the country that we all can be proud of, leaders like: Mate Rimac, Silvijo Kutić, Nenad Bakić, Alan Sumina, Aleksandra Dojčinović, Matija Žulj, Ivan Mrvoš and many many others. We thank them all for their commitment.

  1. As an outside observer, one of the nicest aspects of the conference was seeing the special young guests in the front row of the audience. Tell us a little about them.

I appreciate your question, because the main idea of this conference was to influence the young people. This is why, together with EY Croatia and HUP (CEA - Croatian Employers Association), we made possible for the kids who won top prizes in their contest „Poduzetnici Budućnosti“ (Entrepreneurs of the Future), which involved more than 50 high schools from all over Croatia, have a chance to be a part of the conference and watch their role models from the first row as our VIP guests. 23 young, future entrepreneurs were delighted to be there and our responsibility is to make sure they succeed.

  1. The conference finished with an award for Vladimir Mihajlović. Tell us a little about him and his contribution.

It was very touching and I am glad that we as the organizing committee acknowledged the work Vladimir did for the past 13 years in Slavonia where he brought more than a hundred entrepreneurs, managers and business people to give inspirational speeches to elementary school and high school pupils. He is one of true silent leaders in Croatia and an example for all of us. He is a driving force in promoting entrepreneurial mindset amongst our kids which is why we gave him this prize and awarded him with the lifetime award for promoting entrepreneurship with Magazine Poduzetnik and spreading the entrepreneurial mindset. We are really grateful to have people like Vladimir here in Croatia.

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  1. During the conference, you announced 4 more regional conferences over the next 12 months. Tell us a little about those and what the focus will be.

Our plan is to continue Entrepreneurial Mindset events but for students and high school pupils in Osijek, Rijeka, Split and Zagreb. We think the best investment in our future is for the students to hear future leaders like Mate Rimac, Alan Sumina, Ivan Mrvoš, Matija Žulj etc. We want to share the entrepreneurial mindset and values with them and help them succeed in Croatia. The goal is to break the paradigm that you can`t succeed in Croatia, because you can, as our speakers have proved that.

  1. Two of the key themes I noticed during the day were the need to share success stories (including the failures on the way to success), and the need to improve education for the next generation. What initiatives are being taken in that regard?

Interesting question, thank you. From Nenad Bakić we have heard what is the impact of a great project he and his wife started which influences more than 100.000 Croatian kids, the „STEM revolution“ and IRIM – Croatian makers are definitely one of the top initiatives and we all support them. Stjepan Orešković (who is a Harvard Professor and entrepreneur) mentioned that we can make Croatia a student hub of Europe and bring top world teachers and a lot of foreign students if we put focus on that. Initiative for sharing success stories are many, from this conference, to Business cafe, to AmCham, AHK, HUP and other organizations that organize business talks with successful entrepreneurs and managers, but we need more media coverage for the successful stories we already have. In „Poduzetnik“Magazine we are focused on sharing these successful stories every day through video, print and web platforms and will not stop until we make entrepreneurs, the leaders of our society.

  1. The conference high-level international support in the form of both the Israeli and American ambassadors as speakers. What role does the international community have to play in developing the Croatian entrepreneurial sector?

Yes, we had ambassador Kohorst from USA and ambassador Mor from Israel as key notes because we wanted them to share stories from their countries that can help our entrepreneurs and business people get more ideas and inspiration.

Ambassador Kohorst is an entrepreneur and he shared with us his big successes but also his big failure. In one business he lost 4 mil. $, but it was a huge learning opportunity for him and we appreciate him sharing that, because it just shows that failures are just bumps on the road to success.

Ambassador Mor’s role was to share how Israel became one of world’s top Start-up nations, and there is a lot to learn from them.

The international community is important for Croatian entrepreneurial sector for investments, know-how, franchising and so on and we need to keep our eyes open for these opportunities.

 

  1. A successful working partnership with the relevant ministries will help Croatian entrepreneurs. What are the key issues you would like to see worked on to improve the entrepreneurial environment?

I think the biggest help will be with lowering taxes on salaries, but also to do more campaigns which would celebrate our entrepreneurs` success so they have a better perception in the public, because small and medium companies are those that benefit Croatian economy the most. Help entrepreneurs grow, so we all can grow. The goal for all of us together should be the growth of Croatian GDP overall and GDP per capita - this is something everyone in Croatia will sense in their salaries.

You can learn more about the first Entrepreneurial Mindset conference and meet some of its key speakers in the dedicated TCN section

Friday, 13 September 2019

Croatia 2.0 Cloaked in Positivity at Entrepreneurial Mindset Conference in Zagreb

Some of Croatia's most successful entrepreneurs gathered in Zagreb on September 12, 2019 for the first Entrepreneurial Mindset conference. It was quite a day. 

About 18 months ago, I met entrepreneur Nenad Bakic for a coffee in Varazdin. During the discussion, he told me that he had decided he wanted to show me something interesting, a different view of Croatia that would surprise and inspire me. 

And so it proved. A few days later, I found myself in a room with 300 people from the top of the emerging Croatian entrepreneurial class at the EY Entrepreneur of the Year dinner in Zagreb. It was probably the most positive atmosphere I have experienced during my time in Croatia, And there was only going to be one winner, man of the moment, Mate Rimac

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I started to look into this new breed of Croat - entrepreneurs setting up businesses in a society which was deeply embedded in the socialist mentality. And the more I looked, the more I realised that this was the most exciting story to be told in Croatia today, and not tourism. Outstanding individuals and proud Croats, forging their way onto global markets despite the overwhelming bureaucracy and negative perception of the entrepreneur in their home country. 

And the more I looked, the more I was astounded by the levels of Croatia excellence on the global stage. It was not just Rimac, but many IT companies and medical tourism clinics, for example. One of the driving forces for positive change and Croatia 2.0 is Ognjen Bagatin, CEO of the hugely successful Bagatin Clinic in Zagreb and Split, as well as the man spearheading Croatia's medical tourism expansion, and also strengthening business contacts between Croatian business and its diaspora. 

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It was no surprise to learn that he and his Casopis Poduzetnik magazine was being a new conference for Croatian business - the Entrepreneurial Mindset - in partnership with EY as an extension of their successful Entrepreneur of the Year evening in March. 

Both Bagatin and EY Managing Partner for Croatia, Berislav Horvat, welcomed participants to the one-day conference, which took place at the Zagreb Academy for Music. 

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Although there was a rich lineup of distinguished speakers, the front row was reserved for the entrepreneurs of the future, some of Croatia's brightest youth who had won entrepreneurial awards and the right to take their seats in the audience. A nice and inspiring touch. 

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This focus on youth and the need to educate and encourage the next generation in entrepreneurial ways was a core them of the day. Speakers were encouraged to talk of their failures and explain that rather than being a disaster, failure is a necessary step on the road to success, assuming one learns from those failings. 

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Nenad Bakic laid out the scale of the problem in a few simple slides on perceptions of EU citizens. 

How important do you think having political connections is in getting ahead in life? Croatia tops the EU!

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How important is being lucky to getting ahead in life? Only Bulgaria feels the luck factor more. 

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But when it comes to the importance of working hard, Croatia is bottom of the league. 

By contrast, Luka Abrus from Five told the conference that 'I find that the harder I work, the luckier I get.'

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Along with working hard, the importance of education is not highly valued in Croatia, with only the French deeming it less important. 

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And when it comes to learning computer skills, Croatia is bottom again on the list of countries where kids in 4th grade use computers at least once a month. 

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Some of the key messages of yesterday's conference were the need to share success strories to help potential entrepreneurs see that there is another way, to share and celebrate failures as a necessary path on the road to success, and to focus on education, education, education. Nobody is doing more in that regard than Nenad and Rujana Bakic with their STEM Revolution and Robotics League, which is already reaching a majority of schools in Croatia. I have written about this before, so click here to learn more.  

The conference was a sell-out with a waiting list of over 200 people, and there was a great atmosphere as entrepreneur after entrepreneur took the stage to tell their stories and share their know-how. One of the most eagerly awaited presentations was from Mate Rimac, whose meteoric rise in just a few years has made him a global icon in the car industry. 

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It was only a few years ago that those passionate early pioneers at Rimac Automobili were sleeping on the floor...

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From 2010 to 2019.

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 There were many highlights along the way, as well as THAT Richard Hammond crash, during which Rimac told the audience he aged 10 years. 

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But of the many positives, there can be few more important endorsements than this. 

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I have meet Rimac a few times, but this was the first time I had heard him speak about his business. What was impressive was his focus, and not on what he had achieved, but where he was going. A fabulous contribution to this most inspiring of days. I will do a feature later on his comparison of Craotia and Slovakia and the potential of a car industry - it was seriously interesting. 

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There were no prizes for guessing which speech caused the most waves. Atlantic Grupa CEO Emil Tedeschi was on the homepage of most Croatian news portals within hours of his speech after a typically forthright presentation. You can read more about the reaction here.

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The youngest entrepreneur on the stage, 24-year-old Ivan Mrvos from Solin, attracting the most audience participation, who gave a brilliant overview of Startup Mistakes 101. 

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Croatia's entrepreneurs have been strongly supported by US Ambassador Robert Kohorst in the past, and Kohorst was a keynote speaker taking about his own entrepreneurial journey before joining the diplomatic corps, including his biggest failure, a $4 million investment into an online vetinerary business. 

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Kohorst was not the only ambassador to address the audience. Israeli Ambassador Ilan Mor talked about the Israeli experience and how to create a startup nation. With less than friendly neighbours and a culture of self-reliance, necessity had become the Israeli mother of invention. 

The first Entrepreneurial Mindset conference was merely the start. In his closing remarks, Ognjen Bagatin announced that there would be four more conferences in the coming 12 months - in Osijek, Rijeka, Split and Zagreb - aimed specifically at encouraging entrepreneurial seeds in the next generation. 

Mate Rimac presentation in full:

Nenad Bakic presentation in full:

You can see more of the conference presentations here.

To learn more about entrepreneurial intiatives in Croatia, follow the Casopis Poduzetnik Facebook page

Meet some of the speakers at the conference in these TCN interviews over the past few days

Saturday, 31 August 2019

Croatia's Leading Entrepreneurs to Gather at Entrepreneurial Mindset Conference in Zagreb

August 31, 2019 - A star-studded lineup of Croatian entrepreneurial excellence will assemble in Zagreb on September 12 for a stimulating one-day conference on the entrepreneurial mindset.

About 18 months ago, I received a phone call from Nenad Bakic, one of Croatia's most successful and high-profile entrepreneurs. Along with Mate Rimac, Bakic was named recently in the Financial Times' list of top 100 digital champions of Europe. Shortly before he called me, Bakic had taken over the ailing Varteks company in Varazdin, and he was in town to turn things around (and you can read more about the Nenad Bakic Varteks revolution in a recent TCN feature). 

Our meeting was very friendly on a number of topics, and then he reached out for his phone and said:

"I want you to see something that you will enjoy, a totally different picture of Croatia." One phone call later and my place was reserved - I was to be a guest at the EY Entrepreneur of the Year award in Zagreb. 

It was an outstanding evening of positivity, where Croatia's emerging entrepreneurial class celebrated the very best of their own, with Mate Rimac taking the first prize. It was a real privilege to be a foreign fly on the wall that evening, and it showed me that there was hope for Croatia, as well as a stimulating group of people that I wanted TCN to spend more time investigating. You can read a report on that inspiring evening here

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On September 12, that positivity and creativity will take on a new angle, with the first Entrepreneurial Mindset conference taking place in Zagreb. Several of the judges and winners from the EY Entrepreneur of the Year Award will be sharing their knowledge and experiences of being an entrepreneur in a one-day conference in Zagreb. They will talk about their vision, successes, mistakes, courage and mindset. Among the speakers will be two of the more procactive foreign ambassadors on the Zagreb scene: Ambassador Robert Kohorst from the American Embassy and Ilan Mor from the Israeli Embassy. 

The event is organised by business magazine Casopis Poduzetnik, in collaboration with EY. The programme is above, the speakers are below. It promises to be a very stimulating event, one which TCN will be attending and covering in detail in the coming days. My understanding is that the conference will be mostly in Croatian (but with translation) with the presentations from the ambassadors in English. 

You can learn more about the conference and how to attend via the Casopis Poduzetnik Facebook page.

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Thursday, 16 May 2019

Global Entrepreneurship Monitor Shows Dismal Results for Croatia

ZAGREB, May 16, 2019 - According to the latest Global Entrepreneurship Monitor survey on Croatia, which deals with the question of what makes Croatia an (anti-) entrepreneurial country, Croatia is still not an entrepreneurial country primarily because of the quality of the business environment - its regulatory framework is demanding and complex and there is lack of quality cooperation between the business and research sectors and of education for entrepreneurial competencies.

Presenting the survey, which refers to 2018, the head of the Croatian research team, Slavica Singer, said on Wednesday that almost the same type of problems had been reoccurring for years and that not enough was being done to eliminate them.

Explaining why Croatia is still not an entrepreneurial country, Singer said that it was generally because of the quality of the business climate. "Government policies regarding regulations are the biggest problem, they have been very demanding and complex for years instead of being simple and stimulating for entrepreneurs. Another problem is the lack of quality cooperation between the business and research sector and the lack of education for entrepreneurial competencies," said Singer.

She stressed that in terms of technology, Croatia was around the EU average, but that in terms of the number of new products, it was at the bottom.

In terms of enterprise plans, which are limited by an unstimulating environment, and in terms of the entrepreneurial activity of corporate employees, which is not sufficiently recognised, Croatia is at the EU level or at the top, she said.

The survey shows that according to the value of the National Entrepreneurship Context Index, Croatia is at the bottom of a list of 18 EU countries, with a score of 3.83, the average score being 5.12.

Croatia scores the poorest in terms of government policies for the regulatory framework, market access barriers, research and development, education and social values.

The perception of opportunities in one's immediate surroundings is stagnating and the difference between Croatia (33.1%) and the EU (44.2%) is still very big.

In 2018, Croatia saw an increase in the intensity of early-stage entrepreneurial activity (9.6%) and that indicator puts the country above the EU average, however, this was again necessity-driven strengthening of entrepreneurial activity.

The motivational index in 2018 stayed at 1.9, which puts Croatia at the EU bottom. In the EU, there is an average 5.3 times more people who engage in enterprise because they see a business opportunity.

Croatia does not have enough 'adult' companies or companies older than 42 months. The number of such businesses is around 4.2%, which is only 62% of the EU average in 2018.

The most frequent reason for leaving a business activity is unprofitability (19.7%), the tax burden and red tape (19.2%) and a new business opportunity (18.5%).

Croatia still has few growing companies and it has much more companies that invest in the latest technologies than companies with new products.

The competitiveness indicator puts Croatia at 24.6%, which is slightly below the EU average of 27.7%.

In terms of employee entrepreneurial activity, Croatia is above the EU average with 9.6% of employees involved in an entrepreneurial activity in a company, the EU average being 7.6%.

The sector dispersion of new business ventures in Croatia shows an increase in the services sector but still much fewer ventures based on services for consumers.

The social attitude to entrepreneurs is still negative and the number of those who believe that entrepreneurs are people of a high social standing is declining.

Entrepreneurial activity growth is the most intensive in the regions of Dalmatia and Istria, Primorje and Gorski Kotar and the lowest in Lika and Banovina, which are nonetheless experiencing an improvement in the motivational index.

The survey includes recommendations for entrepreneurial activity such as cooperation, simpler regulations, stronger innovation capacity, financial strengthening of the existing programmes, launching of programmes of support for SMEs to use services of industrial designers, and formal training for students for entrepreneurial competencies.

The Global Entrepreneurship Monitor survey for Croatia has been conducted since 2002 by the SMEs Development Policy Centre, with the support of the Croatian Banking Association and the Ministry of Economy.

The 2018 survey covered 49 countries that account for 66% of the global population and 85.8% of the global GDP. In Croatia, the survey has covered 2,000 respondents every year.

More news about doing business in Croatia can be found in the Business section.

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