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STARS OF TRANSFORMATION: The Fourth Industrial Revolution Raises the Temperature

Poduzetnici pet sjevernih županija ne prestaju digitalizirati poslovanje
Poduzetnici pet sjevernih županija ne prestaju digitalizirati poslovanje / Image by: foto

The first step is to establish the foundational industry on solid ground, and only the second step is reindustrialization, innovation, and digitalization, explained Minister of Economy Darko Horvat on one occasion in Varaždin to leaders of export stars from northern Croatia such as Omco Croatia, Vetropack, and Oprema Ludbreg. However, they have already passed the tests and in many ways 'outperform' the Croatian average. These companies have long begun working on the second step and do not cease to digitalize their operations, optimize production through investments in smart systems and automation.

Full throttle in digitalization

The north is already at a great advantage due to its geographical position. It is perfectly positioned to conduct business with foreign markets, but this also places the task of being competitive in foreign markets upon it. Today, this is an impossible task without the use of digital technologies. And in the north, they have long known this; they are not called the leaders of the fourth industrial revolution for nothing.

– Without systems that increase productivity and efficiency of production, one simply cannot sell on the global market. This is a process that must continue and in which investments must be made before anything else because without it, there is no further development – emphasized Darko Ranogajec, the head of Omco Croatia from Huma na Sutli, at a gathering.

Our 'northerners' have moved far beyond the introduction of computers at workplaces and by providing physical services digitally, they have fully engaged in digital transformation, and they are also working on the future, addressing what Gordana Deranja, CEO of Tehnomont and Vice President of the largest independent employer association in Europe, BusinessEurope, identified as the biggest problem of employer digitalization – the insufficient level of worker education for using the latest technologies, and there is also a lack of workforce, which the corona crisis could change.

Robotics and Deficient Professions

The northern counties have decided in various ways to expose primary and vocational school students to robotics, artificial intelligence, and the Internet of Things so that they can easily embrace all the tools that companies today do not yet possess in the workplace.

– Students use modern technologies and digital platforms to discover new ways of conducting business. For this purpose, the first Robotics Center has been established in the Business Technology Incubator of Krapina-Zagorje County. With the advancement of digital and other working technologies, new challenges have been set that manufacturing companies must follow to ensure competitiveness. Accordingly, the educational system must keep pace with labor market demands and timely, earlier than companies, apply new technologies in production processes. Timely intervention by vocational schools ensures the creation of appropriate competencies at the moment of need, as students will be able to apply the knowledge, skills, and responsibilities acquired only three years after entering vocational school – explain the Zagorje Development Agency, which, in cooperation with the County, is also implementing the project 'ENTER – Entrepreneurship for Employment'.

Varaždin County also insists on aligning educational programs with the labor market, and it is proud of the Center of Excellence, which is one of a total of 25 European centers for gifted students within the European Council for Gifted Children (ECHA).

– Our gifted students from primary and secondary schools can attend one of 13 programs in the Centers of Excellence of Varaždin County free of charge. These include mathematics, computer science, physics, biology, chemistry, astronomy, robotics, new technologies, Croatian language, visual arts, history, entrepreneurship, and chess. We have also established the Center for New Technologies (CENT), with an emphasis on robotics – say representatives from Varaždin County, where projects for establishing centers of excellence in vocational education in medicine and agriculture are also starting.

– In the Arboretum area, after 40 years of waiting, the Opeka Castle will finally be reconstructed, which will house a dormitory and numerous laboratories, practicums, cabinets, a genetic seed bank, and other facilities, while the Medical School in Varaždin will equip a small hospital with rooms, operating rooms, and laboratories, aimed at educating staff not only from Croatia but also from this part of Europe – they reveal new projects that will bring new applications of digital technologies and changes in business.

Investments in Innovations
Their neighbors from Međimurje have one of the most developed economies in the country, and their vision for the future includes 'strong entrepreneurship based on knowledge and innovations'. They believe that a significant contribution will come from the newly established Metals Core, a development-educational center for the metal industry, whose research infrastructure is intended for the scientific-research community to conduct 'top-level research aimed at strengthening scientific excellence, creating a knowledge society, and increasing the competitiveness of the metal and related industries'. However, Ivan Plačko, director of the Technology-Innovation Center Međimurje, brings it back to reality, stating that the structure of the Međimurje economy is heterogeneous so that it does not create the impression that all companies are equally advanced. Some, he explains, only introduce new technologies and business models when the market forces them to do so.

– Leaders in the application of robotics are metal processing and other manufacturing companies that significantly apply information technologies. Many service companies have also made significant strides in digitalization, with the pandemic reaction playing a non-negligible role. Digitalization and the business models it enables are also visible in agriculture, where intensive work is being done to establish short supply chains – adds Plačko.

An example of digitalization in agriculture will also be the 'collateral fruit' of a 100 million kuna EU project at the Secondary School Zabok – the Regional Competence Center for Tourism and Hospitality ReCeZa. Along with establishing new opportunities for students and professionals through modern infrastructure and the development of new specialized programs and an innovation hub, one of the project’s results will be the establishment of a digital platform for the procurement and sale of domestic products – a domestic product exchange. The Fourth Industrial Revolution and digital transformation are challenges but also great opportunities recognized by some entrepreneurs in Varaždin County, and the results are already visible through investments in new technologies and innovative solutions.

– For example, the company Oprema Ludbreg, which bases its production processes on the lean principle, has introduced automated production of air conditioning equipment. Ducati components from Ludbreg are known for producing a smart electric wheel that converts any traditional bicycle into an electric one, which can be controlled via a smartphone, Bluetooth, or screen. There is also Kostwein, a large exporter that produces machine tools and has developed an innovative in-house dual education model with its own mentor – highlights the digitally transformed companies of Varaždin County, which does not miss the opportunity to emphasize that it has positioned itself as an absolute leader in applying for and implementing EU projects and that it has a 100% efficiency in contracting them, meaning that no project applied for co-financing with non-repayable EU funds has been rejected so far.

Impact on Society
According to data from the Ministry of Economy, Entrepreneurship, and Crafts, from 2015 to the present, Krapina-Zagorje County has received 138.5 million kuna in non-repayable funds for projects worth a total of 343 million kuna from the Operational Program Competitiveness and Cohesion for financing innovations in entrepreneurship. It is interesting to mention that the Zagorje Development Agency has been involved in the preparation of 40 projects with an estimated value of 177 million kuna since the beginning of 2020.

– We are pleased with the high pass rate of projects for building entrepreneurial infrastructure, zones, and incubators, as well as investments by entrepreneurs financed from EU funds in high-tech equipment and innovations – says Sandra Polanec Marinović, director of the Public Institution for Development of Međimurje County REDEA, noting that the number and value of projects do not sufficiently show their impact on society.

While Međimurje companies most often use available EU funds and investment incentive measures for modernization projects – investments in equipment, machines, facilities, and software, innovation and development projects are most often financed from their own sources.

– For financing projects that are not so urgent or are profitable only if an external source of financing is secured, companies often apply for EU funds and other sources of financing – explains Plačko. 

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