Global Entrepreneurship Monitor Shows Dismal Results for Croatia

Total Croatia News

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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