In response to the increasingly loud calls for public sector reform, digitalization, automation, and increased productivity, a counterargument often arises that the Croatian private sector is not at the level of the economies of competitive countries and that the problem of Croatia’s developmental lag is actually a problem of poor Croatian entrepreneurs. This highlights a deeply rooted misunderstanding of entrepreneurship, particularly pronounced among state-paid officials.
An important, and perhaps the most important, characteristic of entrepreneurship and a market economy is failure! Business ventures and companies fail. Entrepreneurs and directors fail. Only sufficiently good ideas, sufficiently good entrepreneurs, and sufficiently good directors survive in the market. Only sufficiently good workers keep their jobs. If a company is growing and developing, if it is successful in the market, it means that the products or services of that company are desired by its customers and that it is well-managed. This does not mean that it is digitalized, automated, and maximally productive. No, it simply means that it is aligned with the needs of its customers. When those needs change, and they certainly will change, then the company’s management must react and adapt the products and services to the needs of the customers. Or it will fail. And it is good that it fails.
The failure of a company in a free market simply means that customers have already turned to some competing company. The private sector does not need to change as long as it is in a free market. It will change as customers change, as competitors change. No state initiative or law is needed to force private entrepreneurs to change, to digitalize, to increase productivity.
Unnecessary State Application
This Sunday, we saw yet another example of misunderstanding the role of the state in society. The Ministry of Agriculture paid for the development of an application that ‘promptly informs citizens about the withdrawal or recall of products from the market that pose a risk or danger to human and animal health or may adversely affect the environment,’ which was downloaded and installed 2397 times in a month.
If it were a private company that invested its money or the money of its owners in the development of such an application, no one would have anything against it. If such an application were downloaded by a negligible number of citizens, the company would likely conclude that it was a failed project. However, this is about investing the money of Croatian taxpayers in a project that has nothing to do with the function of the Ministry of Agriculture. If the employees of the Ministry were clear about their role, they would ensure timely provision of information and allow anyone to create an application from it. As, for example, the Court Register does.
