Nemčević: The Role of Entrepreneurs is to Adapt to the Situation, Not to Adapt the Situation to Themselves

Micro-entrepreneurs achieved 10 billion kuna in exports last year, announced Martina Pavelić-Skukan from FINA at the continuation of the Lider conference on exports during the lecture Analysis of the Market and Labor Movement.

The number of exporters is significant and has increased by 11 percent. The largest number of entrepreneurs consists of micro-entrepreneurs, about 68.5 percent. They achieved 10 billion kuna in exports and recorded over 4 thousand employees. Unsurprisingly, large companies still employ the most workers, having achieved the highest exports while employing over 40 percent of all workers, said Martina Pavelić-Skukan interpreting the analysis of FINA’s annual reports over the last 10 years.

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Regionally, the City of Zagreb has the highest number of exporting entrepreneurs, while all other counties together have about half as many registered exporters.

When analyzing exporters by activity, it is evident that the manufacturing industry leads others, generating over 68 billion kuna. Overall, the number of exporters was lowest in 2009 and highest in 2017, while the number of employees reached its lowest level in 2012, a few years after the onset of the global financial crisis. Over the past 10 years, it can be seen that the number of entrepreneurs, and thus exporters, is gradually increasing, accompanied by total revenue figures that also show a slight increase.

Following this, a round table was held discussing the labor shortage in exporting companies and the problems they face when hiring or retaining workers.

– We do not lose seamstresses, as we employ over 500 workers. The problem we have is that there is no influx of new seamstresses because these positions have not been trained for a long time. We have the most hairdressers and nurses who later become our best workers, said Ivica Cerovečki from Kotka.

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Kotka produces about 600 suits daily and exports over 90 percent of its product. The reason why seamstresses do not leave is, according to Cerovečki, that they have a solid salary for the industry they work in, which amounts to about 3000 kuna net, along with transportation and a hot meal.

Denis Nemčević from the Spider group added that in the Spider group, the problem is not so much the departure of the workforce, but finding new and quality workers.

– We will need up to a hundred new people when the new facility is operational. Over the past two years, we opened an office in Zagreb and will conduct part of our business there because people generally find it difficult to return to Pitomača after studying. The role of the entrepreneur is to adapt to the situation, not to adapt the situation to themselves, concluded Nemčević.

– We see the lack of employees as the biggest problem in Croatia at this moment. It did not happen overnight; it has been developing over ten years of poor decisions, and it will take just as long to fix it. We are solving this by not working with our people but contracting subcontractors in some markets where we are no longer competitive. In Norway, we still work with our people, but for some other markets, we are not competitive, said Alen Premužak from Dalekovod.

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When it came to the possible import of labor, Darko Pappo from the DIV group stated that a few years ago, the first requests for a couple of thousand work permits for foreign workers started from shipbuilding, which the public met with resistance.

– We wanted to ensure that we could deliver foreign orders. In the end, it turned out that the labor shortage was not just a problem for shipbuilding but for the entire economy, he said.

When asked if there are more people from Split who want to work in the shipyard, he replied that employees of the DIV group are largely from the hinterland of Split, but that tourism has disrupted relations.

– Split has very quickly transformed from a transit center into a tourist destination, and everything has changed. Accommodation for new people is a big problem because it is difficult to find an apartment for rent that will be available all year round, including the season, said Pappo, adding that the business of renting accommodation and the tourism industry in general is still simpler and easier than working in a shipyard.

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Panelists agreed that higher wages are necessary because the demand for labor is high, but it is equally important to relieve taxes on wages.

– In a world where exponential population growth is a major problem, the topic in Croatia has become demographics. Croatia was ranked 21st in Europe in GDP per capita in 2000, and this year we are 26th out of 27. That is almost two decades of regression. Higher wages are inevitable; otherwise, our workforce will leave for places where the situation is better. The problem we have is uncompetitive labor legislation. But it is not just companies that compete; the state administration must also compete with other countries. The EU does not care whether a port is built in Koper or Rijeka, or whether Coca-Cola is bottled in Zagreb or Hungary. It is all Europe, said Đuro Njavro from ZŠEM, adding that Croatia has deficits in many areas, including education, and that currently, “the reform of universities in Croatia is the reform of all reforms.”