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ICT Sector in Croatia Continues to Grow Despite COVID-19 Pandemic

December 20, 2020 – The impact of the COVID-19 crisis has brought many activities worldwide to their knees, but the ICT sector in Croatia has experienced growth. 
Index.hr reports that this is a conclusion derived from data from European and national statistics and HUP’s Association of Information and Communication Activities (HUP-ICT). According to these data, the ICT sector has in many respects already surpassed the traditionally strong industries in Croatia, such as food and metal processing, and the importance of this sector is getting closer to tourism, especially in this “corona year,” where tourist traffic is significantly reduced compared to previous years.
Data from HUP’s ICT associations, for example, show that the ICT sector already exceeded the food and metal industry in Croatia in terms of revenue and exports last year. Namely, the total revenues of companies from the ICT sector last year reached HRKK 41.1 billion. In contrast, the food industry’s revenues amounted to HRK 36.6 billion, and the metal industry HRK 19.5 billion. Exports of the ICT sector in 2019 were worth around HRK 9.6 billion, while exports of the food industry, according to HUP-ICT data, amounted to HRK 6.4 billion, and the metal industry HRK 9.1 billion.
But what the ICT sector is at the forefront of is certainly the added value, which is significantly lower in other industries than in ICT. Thus, value-added in the ICT sector last year amounted to around HRK 17.9 billion. The food industry amounted to HRK 8.6 billion, and the metal industry to HRK 7.8 billion.
Employment in the ICT sector has also increased significantly in recent years. In 2016, the sector employed 33,181 workers, and by the end of last year, the number of employees had grown to 41,437. According to HUP-ICT data, 45,926 workers worked in the food industry last year, which is slightly more than in the ICT sector, and 37,848 in the metal industry, significantly less than in ICT. Estimates say that the ICT sector in Croatia in 2025 should employ about 55,000 workers.
The growth trend of that sector has continued this year as well. HUP-ICT Vice President Hrvoje Balen says that the number of employees in the ICT sector is expected to increase by three to five percent this year, which means that around 2,000 new jobs will be created in the corona crisis in the high-tech sector in Croatia.
“The ICT sector in Croatia is growing from year to year. The corona crisis has certainly stimulated the growth of this sector because a lot of things in life and work have moved online,” Balen said.
The growth of the ICT sector in the corona crisis – or, more precisely, its telecommunications part – is also shown by new Eurostat data. Eurostatists point out that coronavirus protection measures have boosted employment in the telecommunications sector. Their data for the first and second quarters of this year show that the number of telecommunications employees in the EU rose from just over 822,000 at the end of last year to over 1.04 million in the middle of this year. The number of employees in telecommunications in the EU increased strongly in the first two quarters of this year, conclude Eurostat.
According to Eurostat data, Croatia also recorded a significant increase in the number of telecommunications employees this year. Namely, Eurostat data show that the number of employees in Croatia’s telecommunications sector at the end of the first half of this year amounted to 13,800. In contrast, at the end of last year, 12,400 workers worked in this activity. According to Eurostat statistics, tremendous growth was recorded in the second quarter, a good part of which we spent in lockdown like most of the EU.
Balen points out that the data on the number of employees in telecommunications available to HUP-ICT are somewhat more modest than those presented by Eurostat. Therefore, the question of coverage can be asked, i.e., when all Eurostat statisticians count as employees in the telecommunications sector. Here, however, it should be emphasized that a good part of the ICT sector employees, including telecommunications, are self-employed or work on student or some other looser contracts. However, the growth trend in the number of employees in telecommunications says Balen, is also shown by HUP-ICT data.
Nevertheless, the ICT sector believes that the state should support the development of this activity more. Balen says the sector supports tax reform that will reduce the tax burden on income. Still, they also want the ICT sector to be declared a strategic activity, as well as a significant increase in EU funding for research and development.
“Looking at what other members are doing, it is evident that everyone has invested significantly more and more open EU funds in research and development and thus raised the competitiveness of small, medium and even large companies. Ultimately, with tax reforms and further reduction of workload, decisions on how to allocate 24 billion euros will play a huge role,” Balen concludes.
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