Changing the State We’re In: Is Croatia’s Entrepreneurship Initiative a Model to Replicate?

Screen Shot 2014-01-21 at 15.45.30Good economic news from the post-developed world is predictably rare these days, but our Creative Director & CSO recently came across a heartening item which could point the way to a brighter fiscal structure. Croatia moves to boost entrepreneurship – a video news story from Al Jazeera English presented by the telegenic Jasmina Kos, a journalist who made waves by joining the Qatar-based media giant from the Zagreb subsidiary of German station RTL – highlights the incentives which the Croatian government is giving to startups.

These payments are significant by local standards – up to US$5,500.00 in the first year of business, an enormous sum given that Croatia’s GDP per capita weighted by purchasing power parity comes in just a tick over US$18,000.00 – but these are offset through increased retirement and health payments by the entrepreneur back to the state.

This should have a number of favourable consequences, including at least a small reduction in unemployment – though probably not enough to make a considerable dent in Croatia’s perplexing 0.37m jobless total in the short-to-medium term – and perhaps encouraging the formation of new Internet-based enterprises.

But the true success of the programme could be measured in terms of renegotiating the relationship between Croatian citizens and their state. As a constituent element of the former Socialist Federal Republic of Yugoslavia (‘SFRY’), the European Union’s newest member has a legacy of a bureaucratic state structure that does little to foster creativity in the business domain and which views constructive risk-taking as essentially pointless if not downright suspicious. A state which is actively encouraging novelty and at least a certain level of dynamism could ultimately transform its own internal culture – and eventually broaden its own tax base significantly. If successful, this may prove to be a model other countries – and not just those within the EU – should consider emulating.

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Filed under Business, Economic Development, Economics

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