The desire of many Croatian companies, institutions and state bodies is to create a digital Croatia, in which the country's draconian and almost masochistic love of paperwork and stamps are banished to the past and recalled only as a bad memory. Despite the wishes of many, it seems that the dream of a digital Croatia will take a while to become a reality.

As Bernard Ivezic/Poslovni Dnevnik writes on the 25th of December, 2018, the increase in the number of employees of various digital professionals in Croatian companies, and the retention of qualified digital professionals in Croatia, are two key goals for the establishment of the national coalition for digital skills and jobs.

A new body, coordinated by the Croatian Employers' Association (HUP), has kicked off with its work in Croatia. Representatives of HUP-ICT Association, the Croatian Government, the Ministry of Science and Education and the Ministry of Labour signed a memorandum on the establishment of the national coalition for digital skills and jobs.

Davor Majetić, CEO of HUP, says that digitalisation is now absolutely imperative for all companies which want to be competitive on today's market, and this is felt by the significant change that we have experienced in Croatia since 1997 in terms of jobs and employment.

"We lack digital skills and ICT professionals in all industries, and we're continuing to persuade people that the issue of digital skills is a matter of 21st century literacy, a standard without which our children will not be ready for the labour market," stated Majetić, adding that in solving this very issue lies an opportunity for the national coalition for digital skills and jobs.

Boris Drilo, President of HUP ICT Association and member of the Croatian Telecommunications Board, said that their ultimate desire is to move the current ICT sector's positive momentum over into other sectors of the economy and transform the Croatian economy into a digital economy.

He says that in Croatia's neighbouring countries, as well as in the rest of the European Union, the ratio is in favor of having a digital economy, as opposed to the traditional 3:1 contribution to the overall GDP of the country. He claims that the situation in Croatia is currently the other way around, adding that Croatia currently has about 50,000 ICT experts, and that the country needs 200,000 citizens with advanced digital skills for further market competition at an international level.

Bernard Gršić, State Secretary of the Central State Office for Digital Society Development, stressed that the work of this body is supported by the Croatian Government.

"This coalition should address the challenges of multi-level digital skills, and the work of the coalition is being supported by the Government of the Republic of Croatia and by Prime Minister Andrej Plenković," Gršić said.

Hrvoje Balen, Vice President of the HUP-ICT Association, who is also a member of Algebra board, says that the Republic of Croatia is experiencing a significant increase in the emigration of younger and highly educated individuals, he therefore highlighted the two main goals set by the coalition: an overall increase in the number of digital professionals, and their retention here in Croatia.

This Croatian coalition will likely become a leading power in the creation of a digital Croatia and is part of the grand coalition for digital jobs initiative, which was initially launched three years ago by the European Commission with the aim of linking the economy, educational institutions, and the state together to work on the general development of digital competencies.

Is digital Croatia on a concrete path to reality? Only time will tell.

Make sure to follow our dedicated lifestyle and business pages for more information on the transformation of digital Croatia and much more.

Click here for the original article by Bernard Ivezic for Poslovni Dnevnik

The Croatian Employers' Association score which measures the implementation of reforms in twelve key areas puts the Republic of Croatia at the very bottom of the European Union.

As Darko Bicak/Poslovni Dnevnik writes on the 22nd of November, 2018, after the World Bank and the Croatian Chamber of Commerce (HGK) showed data this past month that proved the country is lagging behind in terms of business and investment climate, the Croatian Employers' Association (HUP) has confirmed this unfavourable position once again with its HUP score. Moreover, according to HUP, which, as stated, measures the implementation of reforms across twelve key areas, it appears that Croatia has the worst score in the EU, even worse than countries such as Bulgaria and Romania, which are still considered weaker and less developed than Croatia.

"The first significant shift from the beginning of the measure of the HUP score (op.a. 2013) has been confirmed, but Croatia is still at the back end of the ''New Europe''. It's obvious that the country doesn't possess the capacity for quick economic growth and convergence. The problems with the entrepreneurial climate aren't caused by culture and mentality, but primarily by weak institutions,'' they state from HUP, adding that, first and foremost, the system of public and state enterprises needs to be reduced, restructured, professionalised, depoliticised, and then privatised, and that's how more investments will occur.

These preliminary results indicate that the HUP score for 2018 stands at 37, which is one point less than it was last year.

"This result shows that Croatia also lags considerably in regard to EU member states from Central and Eastern Europe (EU10) this year. Economic growth, which was re-established in 2015 after a long six-year crisis, was an indicator of economic strength and good looks. The lessening of that score for this year should be interpreted as an indication that the current growth impulse has a cyclical or rather passing character. Deep economic and institutional structures remain weak due to the lack of reforms,'' they note from HUP.

Not one figure in the aforementioned twelve areas exceeds 2/3 of the maximum value, which means that Croatia doesn't have a strong competitive edge in some areas. The biggest visible improvement can be seen in regard to fiscal consolidation (from 54 in 2017 to 56 in 2018), productivity and competitiveness (from 34 to 45), and capital supply (from 36 to 42). The HUP score of the education and pension system is still "in the red ", but was held at 26, while the justice system stands at at 33.

The biggest negative change can be seen in terms of the fall of the investment score and needless limitations and business barriers (from 35 in 2017 to 23 in 2018), following the rise in the cost of establishing a company and increasing the number of procedures for obtaining building permits and dealing with public administration due to the rapid growth in the number of days needed to launch a business. The areas of economic burden (19) and the labour market (22) continue to be critical, year on year. Gordana Deranja, the president of HUP, believes that Croatia is experiencing weak progress and is stagnating because other countries are more successful and faster when it comes to adapting properly to new circumstances and conditions.

"The burden on the economy is still high, which is why we can't be completely satisfied with the last wave of tax changes. Although we do consider them to be a step in the right direction, they're insufficient to give the economy a more serious positive incentive, and it's necessary to maintain the current growth rates, this relates particular to the burden on [taxes on] salaries.

The [situation with the] labour market situation is really difficult. There is not enough of a qualified workforce, and the pressure on wage growth is high. The problem is that with the current burdens, tax and everything else, employers have no room for further and more substantial salary increases without jeopardising the viability of their business. Instead of looking for room for greater decompression on companies and people, our budget continues to grow. Obviously, we haven't learned anything from the crisis. As a country, we continue to spend more than we make. We're just part of the expensive credits, which have now been replaced by funds from European Union funds, and these funds are the only development moment for the budget for 2019. There's no indication of any serious reforms in it [the budget], and that's what we all need to worry about,'' stated Deranja.

Davor Majetić, the Croatian Employers' Association's chief executive, pointed out that without stronger economic growth, nothing will stop more people from leaving the country, especially young people and those who make up Croatia's labour force.

"A serious labour shortage can endanger this kind of growth we now have, which is not the only problem for employers, it's a problem that needs to be solved systematically and comprehensively, the question of whether or not there will be enough maids, waiters, traders, etc depends on the salaries of doctors, teachers, policemen and soldiers,'' said Majetić, adding that everything that the Croatian Employers' Association points to as neuralgic points continue on being repeated from year to year - the burden on the economy, the labour market, the health system, the education and pension system, and the judiciary.

"The government is taking steps, but they're not enough because the huge problems we've inherited are enormous, and the changes we're making aren't going deep enough, nor are they big enough to be called reforms, which is why their reach is so limited, and when compared to other countries, we continue to remain behind them, trapped at the bottom of the European Union,'' concluded Majetić.

Make sure to follow our dedicated business and politics pages for more information on the Croatian Employers' Association, the domestic economic situation, and potential reforms.

Click here for the original article by Darko Bicak for Poslovni Dnevnik

ZAGREB, August 3 2018 - The Croatian Employers' Association (HUP) supported on Friday the government's efforts to reduce the tax burden on employers, but emphasised there was still room for more significant tax breaks, particularly with regard to costs of doing business and overall costs of labour.

ZAGREB, May 3, 2018 - Director-General of the Croatian Employers' Association (HUP) Davor Majetić said on Thursday that the European Commission's forecast of a growth of 2.8% of Croatia's economy was realistic and added that growth was slowing down as the reforms the government planned were not being implemented.

ZAGREB, March 9, 2018 - Croatian Employers Association (HUP) president Gordana Deranja said on Friday that politicians were always the most responsible for the failure to implement reforms and that the incumbent government now had the chance to do what the previous governments had failed to do.

ZAGREB, February 1, 2018 - General Director of the Croatian Employers' Association (HUP), Davor Majetić, has said that the country's National Development Strategy to 2030 should indicate which segment Croatia considers it will be competitive in, how it intends to create better living standards and which industries it will focus on.

Recent barriers to Uber’s operations in Croatia have drawn attention from the Croatian Employers Associations.

Trade unions want an increase to 3,800 kuna, while employers accept an increase of up to 5 percent.

Despite high level of unemployment, employers say they cannot find people to fill some open positions.

They claim that reforms will enable stronger and longer-term economic growth.