This is a best prospect industry sector for this country. Includes a market overview and trade data.
The COVID-19 pandemic accelerated the digital transformation in Croatia. In response to the crisis, companies quickly implemented cloud technologies to enable work from home, retailers started online sales, new government services became available online, and citizens increased online purchases and daily online communication including education platforms.
The Croatian ICT market growth was steady in the last five years due to strong government modernization efforts, healthy enterprise investments and a strong consumer outlook. The ICT market is still relatively unsaturated, so the country is expected to retain positive outlook for enterprise IT adoption, focused on cloud computing, enterprise resource planning implementation, customer relationship management software, Internet of Things, e-commerce, and work-from-home solutions. The PC market in Croatia is saturated with smartphone domination further lowering PC demand. The largest ICT customers are telecoms, financial institutions, healthcare, and retail, while the growing demand has been recognized in utilities, manufacturing, transport, tourism, public sector, and small- and medium-sized enterprises (SMEs).
The Croatian IT industry has also been growing steadily for the last five years with an average growth rate of 11.2%, reaching $4.3 billion in revenues in 2019. IT services account for over 70% of the market, followed by 26% from sales of ICT equipment, and only 3% from hardware manufacturing. Despite the small local production, some examples of the high-tech industry in Croatia include: the fastest electric hyper car, Nevera, developed and manufactured in Croatia by Rimac Automobili; and the most-used multifunctional demining robotic system, produced by the Croatian company Dok-Ing.
According to the European Union (EU) Digital Economy and Society Index (DESI) 2020, Croatia ranks 20th out of the 28 member states. Despite this overall low performance in Digital Economy, there are some technologically advanced segments in Croatia. Seventy-seven percent of Croatia’s population uses the Internet and Croatia has the highest share of individuals aged 16 to 24 with basic or above basic overall digital skills (97%) in the European Union. The use of internet services in Croatia is comparable to the EU average, with news, video calls, music, videos, and games being the most used services. According to DESI 2020, Croatian businesses have significantly advanced integration of digital technology, jumping from 17th place in 2019 to 12th place in 2020. The use of cloud technologies, at 22%, is above the EU average, but it is in the bottom five EU countries for electronic information sharing.
According to the Digital Economy and Society Index, Croatia is continuously improving its connectivity; however, it is still among the least connected in the EU. 4G coverage is 98%, above the EU average, but 5G implementation is still in the early stages. T-Com launched the first commercial 5G network in Croatia in October 2020 and currently offers 5G network in 34 cities, covering 1.5 million citizens. A1 telecom is still in the testing phase and is the first telecom in Croatia to test the 700 MHz frequency. The third-largest telecom, Telemach, is also testing and developing a 5G network. Following a public tender, in August 2021, the Croatian Regulatory Authority for Network Industries (HAKOM) assigned frequency bands for 5G network to the three primary and six smaller telecom operators.
The eCitizen platform was launched in 2014 to unite all eGovernment services for citizens. The platform offers 66 eServices and 75% of Internet users used it to submit forms. To become more user friendly and to merge services for citizens and business entities, the government modernized the platform in April 2021. EU funds are the primary source of financing for digital technology advancements in the public sector. The COVID-19 pandemic highlighted the importance of digital technologies and gave an extra push to the government to implement new projects. However, the public debt has grown during the pandemic, pressuring the government to limit public spending, and put some large digitalization projects on hold. According to the National Development Strategy Croatia 2030., the four digital priority areas for the government are: digital transition of the economy, digitalization of public administration and judiciary, development of broadband electronic communication networks, and development of digital competences and digital jobs.
The best performance within eGovernment in Croatia is in the use of eHealth services. An estimated 22% of citizens use these services, which is above the EU average of 18%. The National Healthcare Information System (CEZIH) offers ePrescription, eRefferal, eBooking, Electronic Health Record (EHR), a Patient Portal, eSickLeave, eMedicalAids, as well as eHealthcare and eWorkInjury services for employers. Croatia is among several EU countries that started implementation of cross-border services involving e-prescription and access to patient data by physicians in EU countries.
The development of Smart City infrastructure in Croatia is ongoing, but still lags behind other Western countries. This segment is strongly supported and driven by European Union funds. The Association of Cities promotes the development of Smart City concepts and an increase in the use of EU funds for Smart City projects.
According to the study, Digital Readiness of Croatian Cities, conducted by the regional consulting company Apsolon, Rijeka and Zagreb are the leading large Smart Cities in Croatia. Among the medium-sized cities, Pula and Karlovac scored the best, while Varazdin, Dubrovnik, and Bjelovar scored the best among small cities.
Some smaller cities, like Pleternica and Koprivnica, also have extensive Smart City projects with focus on quality of life, transparency, energy efficiency and fostering local entrepreneurship.
Blockchain technologies in Croatia are in the early adoption stages with a strong focus on cryptocurrencies. The Association for Blockchain and Cryptocurrencies is the main market developer and it provides a list of companies working with blockchain technology. The Croatian government is participating in public discussions about implementation of blockchain technology in healthcare, urban planning, and other areas, but no specific projects have been created yet. In 2019, Croatia joined the European Blockchain Partnership.
Croatia has adopted the EU Directive on the Security of Network and Information Systems (NIS Directive) that is expected to boost demand for cybersecurity solutions. The Ministries of Defense and Interior are developing cybersecurity capabilities, including the recently established Cyber Command Center in Zagreb.
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Croatian Academic and Research Network - CARNet