Croatian Entrepreneurship Decently Positioned on Global Monitor (GEM)

Lauren Simmonds

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As Poslovni Dnevnik writes, despite the widespread perception of the poor status of Croatian entrepreneurship, according to the intentions to launch a business venture, Croatia is at the very top of the list of EU member states according to the latest Global Entrepreneurship Monitor (GEM), for 2019 and 2020.

This is otherwise the world’s largest survey on entrepreneurship, which shows international comparisons of the frequency of starting up new entrepreneurial ventures, social attitudes towards entrepreneurship, fear of entrepreneurship and other determinants of entrepreneurial activity.

As many as 60 percent of Croatian respondents believe that being an entrepreneur is a good career choice, although at the same time, according to the attitude towards the social status of successful entrepreneurs, Croatia is at the back of the EU.

The highest growth of Croatian entrepreneurship has been recorded unexpected areas of the country, more precisely in Lika and Banovina

The findings of the latest research show that the perception of the opportunities in the immediate environment of the research participants tends to stagnate. To the extent that Croatia, while coming in first place among the member states of the EU in terms of entrepreneurial intentions, can say that this is attributed to doing so out of necessity, and not because of a mere opportunity being put on the table. The results of the world’s largest survey on entrepreneurship were explained in this way by prof. Dr. Slavica Singer from the University of Osijek, who was also the leader of the research team.

The perception of their own ability to start a business venture among respondents from Croatia is significantly above the average of EU countries that participated in the GEM survey in the past three years, as well.

The gap between the high perception of personal abilities to start a business in Croatia (75 percent) and the lower level of perception of opportunities (47.2 percent) in 2020 raises the question of how it can be that those who think they are capable of starting a business don’t see a business opportunity in order to do? This stands out in the analysis of the results. Is it because they don’t have the opportunity or maybe they don’t know how to recognise one when it comes knocking?

If the problem is in (non) recognition, then the question of the role of the Croatian education system arises. However, it should be noted that in 2020, all regions in Croatia except Zagreb and the surrounding area, despite the coronavirus pandemic, had an increase in starting business ventures.

The most intensive growth in terms of Croatian entrepreneurship last year was recorded in Lika and Banovina, the regions that still have the lowest entrepreneurial activity of all. At the same time, those who live there are those who see the least opportunities in their immediate environment, so the most common reason for entering an entrepreneurial activity is actually necessity, ie “earning a living”.

Is the so-called world of early entrepreneurial activity (which includes business ventures up to 3.5 years of age) as opposed to the activities of ”fully fledged” entrepreneurs, in Croatia we have a growth of new business ventures and a relatively small share of fully fledged companies.

Last year, the growth of Croatian entrepreneurship continued throughout the country (from 9.6 percent back in 2018 to 12.7 percent), which is above the average of EU countries included in the GEM survey.

At the same time, in the period 2018-2020, the number of so-called adult (fully fledged) enterprises per 100 adult inhabitants in Croatia stood at at the level of about 4.2 percent, which is just over half (57 percent) of the European Union average for 2020. Entrepreneurial activity is most often abandoned due to unprofitability (17.5 percent, compared to to all of the reasons for leaving) as well the tax burdens and bureaucracy involved (16.1 percent).

The analysis of the results of the GEM research still confirms the pattern according to which people who are more educated tend to be more entrepreneurially active, which is the case in the EU as well. People with a higher level of education are more likely to see opportunities, are more confident that they have the necessary knowledge and skills to start a business, are better networked with entrepreneurs (meaning that they know someone who started a business in the last two years or so) and intend to start a business in the next three years themselves.

Croatian entrepreneurship levels are above the EU average

The results also suggest that Croatian entrepreneurship on the whole is strengthening, according to competitiveness criteria at both the national and international levels. At the same time, Croatia is largely building its competitiveness in the sectors of medium and high technological intensity, as evidenced by the fact that in these sectors, there was a 11.4 percent representation of all newly started business ventures and a 12.2 percent representation of fully fledged (adult) business ventures. Both of these indicators are above the EU average of the countries covered by the survey.

For more, check out our business section.


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