Zdenko Lucić, managing director of the Agency for Investments and Competitiveness of Croatia, talks to Courtney Fingar about the country’s growth industries of tourism and technology, and a refocus on quality investments.

Q: There seems to be some momentum behind Croatia at the moment, with the country placing highly in fDi’s recent rankings – such as our Tourism Locations of the Future 2017/18 list – and attracting some significant investments. Does it seem that way to you, and if so, what’s behind it? 

A: There’s definitely big momentum in Croatia regarding development. The past couple of years we have increased GDP. In 2017, the country is expected to have a 3% increase over annual rates, which is pretty good, one of the best in Europe. 

Croatia is extremely popular tourism-wise. We saw huge development in the tourism sector in Croatia this year. We saw huge developments in hotel resorts, by domestic and foreign companies.

Also, other sectors are experiencing a significant boom. IBM decided to locate its client innovation centre in Zagreb, so currently it is hiring and expanding this centre. The total number is going to be around 500 people providing global service out of Zagreb. Ericsson is expanding its R&D facilities in Zagreb; Siemens has been present in Croatia for 20 years and still expanding. 

Q: What do you feel is important or significant about an investment like IBM’s? What does it mean for what you’re trying to achieve?

A: It’s definitely good PR, because it was global visibility for Croatia, with IBM as a giant in the technology centre deciding to locate its centre in Zagreb. So this put us on the map of various other IT companies, which are seeing Croatia as the next destination. For example, Indian company Infosys established a presence in Croatia too.

Also, other sectors, such as pharmaceutical production and research and development in the pharma sector, are developing quickly, so hundreds of millions of euros are invested by foreign-owned companies. These are all knowledge-based hi-tech investments into different sectors, which is a huge shift from what we had 20 years ago, 10 years ago, when we were mostly production or service side.

Now new investments, especially since we joined the EU, shift toward more quality investments, so more technological centres and R&D centres, and also the significant investment in transportation was a new terminal of Zagreb airport that was opened in March this year.

Q: What factors do you think have led to being able to successfully attract these tech investments?

A: Croatia was always open to western markets, it is is conveniently located close to the major markets. And also we have good business environment at a very reasonable cost. For many industries, for example pharmaceutical or technology centres, we are the best cost location. We’re not the cheapest location (and we don’t want to be the cheapest) and we’re not the most expensive location.

So companies weighing the cost of doing business, and the quality of business infrastructure, the stability of the economy, and the stability of the political systems, will see that Croatia could be a good match for numerous businesses. There’s no perfect location, there’s no perfect country, but for many industries we provide a good set of terms.  

This article is sourced from fDi Magazine
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