Lipik: Investors can get everything on a platter for the realization of their ideas

Just an hour and a half drive from the city center lies a beautiful town, historically known for its thermal water springs and Lipizzaner stud farm. Two years ago, the Center for Artificial Intelligence (AI Center Lipik) opened in Lipik, the result of the work of enthusiast Dejan Iličić, who as the director of the development agency LIRA managed to realize a project that will give this town another, modern recognition.

Given the great popularity of artificial intelligence (AI), which has recently occupied media space, we decided to visit the source of that knowledge and see what young generations of IT professionals are cooking up in that field and whether their projects have the potential to put Lipik, along with Croatia, on the global map of AI innovations, as well as become respectable entrepreneurial projects.

Our host Dejan guided us through points in the city, incubators, and entrepreneurial zones, and we also took several walks through the center. Although it was a working day, we did not see more than three people on the streets. Peace and quiet are the main characteristics of Lipik, which represents the ideal image of many urban people: to get away from the noise and hustle of Zagreb and move to a smaller place that has all the necessary infrastructure (except for a high school and university).

However, these two characteristics are not attractive only to middle-aged people looking for a quiet corner to spend the rest of their lives but also to young people in their twenties who decide to permanently relocate to Lipik after completing the educational program at the Center. And that, says Iličić, is the main goal of the entire project: to bring back young people who will establish families and engage in entrepreneurship in Lipik, a town with just over five thousand inhabitants spread across 26 settlements. Currently, it is on a good path to achieve that goal, only that things are happening in small steps and at a slower pace.

Systematically neglected

The local community has done a lot so far; in fact, it has done the groundwork, so Lipik now needs – and deserves – a larger financial injection. Investors can get all possible conditions for the realization of their ideas on a platter. What is still missing is the justification for investment, i.e., the financial calculation. This lack is shared by Lipik with other continental destinations that have been systematically neglected by higher instances and potential investors for decades. Nevertheless, Lipik’s greatest asset is precisely its strong entrepreneurial scene, i.e., large and medium-sized companies such as Lipik Glas, the largest producer of flat glass in Croatia, specialized for the automotive industry, which has about 270 permanent employees and clients that include the train industry, such as train manufacturer Bombardier, and factories of prestigious car brands such as Bentley, Lamborghini, McLaren, Aston Martin, and the London taxi company LTI.

The Lipik glassworks is one of the largest factories in this industry in Europe. Since July 2017, it has been owned by the Italian corporation Isoclima S.p.A., one of the largest global manufacturers of automotive glass. There is also the well-known Lipički Studenac, which produces and bottles mineral water and soft drinks such as Pepsi, 7-up, Nara, Inka, which was purchased by the Slovenian Radenska owned by the Czech Kofola, making Studenac Radenska Adriatic; Stragatrans, a large transport company with over 150 vehicles and 200 employees, then Ribnjačarstvo Poljana, Poljoprivreda Lipik, etc.

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Goran Pušćenik, ravnatelj Toplica Lipik

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Without strong companies, Lipik would practically be a village. However, it is best known for Toplice Lipik, which is owned by the Požega-Slavonia County. The spa is also the largest employer of the local population, and in Pakrac, there is a high school for physiotherapists, who often end up with permanent employment at the spa.

– We have opted for high-quality medical rehabilitation and health tourism. Various projects are underway that will help us step up our business and elevate Toplice Lipik to a new level, making us competitive not only with similar institutions in the country but also abroad – announces the director of the spa, Goran Pušćenik.

Currently, more than 75 percent of patients come on a referral from HZZO, the rest are private users, but, as Pušćenik announces, plans are in place to increase the number of private users and achieve a balance of 50 percent private and 50 percent HZZO patients through the realization of the ‘Fontana’ project (construction of a new hotel).

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Projekt Fontana koji je grad kandidirao za NPOO predviđa kompletno preuređenje postojećih smještajnih jedinica uz koje se predviđaju i novi medicinski i wellness sadržaji
 

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Younger team

The nearest university is in Požega, but most young people go to study in Zagreb, Osijek, and Rijeka.

– Anyone who wants to work in Lipik can quickly and easily find a job today. Salaries are at the Croatian average, and unlike the more eastern parts of Slavonia, there has not been a significant emigration of young people to EU countries. The number of crafts and smaller companies is increasing. Lipik was among the cities with the highest drawn funds from EU funds in 2018/2019 – says the director of the development agency LIRA, Darian Husko, who succeeded Iličić in that position, adding that until 2013, Lipik poorly utilized the opportunities for drawing European money, but with the arrival of Mayor Vinko Kasana, things changed.

Today, there is no competition that the City does not respond to in the first seconds after publication. There have also been personnel changes; some have received more, some less authority, and as Iličić told us, the mayor, upon taking office, engaged a younger team that was once active in various associations and projects in Lipik. He called Iličić from Zagreb and the new director of the spa, who returned at his invitation.

– One of the main priorities of the City is to create an entrepreneurial climate and encourage the development of entrepreneurship. The entrepreneurial zone has been fully built, three entrepreneurial incubators have been constructed, and a development agency has been established to support entrepreneurs and investors. As part of the Entrepreneurship Promotion Program of the City of Lipik, entrepreneurs have received around one million kuna in direct incentives in recent years. The Center for Artificial Intelligence Lipik has also been established, which trains young people for the labor market and for the most sought-after technological professions of today. With the help of an EU project, we established an entrepreneurial incubator and accelerator for artificial intelligence at the end of last year, where the first startups have been established, from which we expect successes and new employments in the future – emphasizes Mayor Kasana, adding that the development of technology, especially AI, is becoming an increasingly important factor in the development of Lipik, resulting in the opening of new jobs and stimulating the growth of crafts and companies as well as the development of accommodation and hospitality capacities.

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Vinko Kasana, gradonačelnik Grada Lipika

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– The project has been implemented for only two years, and the results are already visible: people who complete the training are being employed, some have started their own businesses. The company Data Mir in our entrepreneurial incubator has developed excellently, with about 25 employed programmers. Today’s world is changing rapidly, it is difficult to predict how and what will be in a year or two, but investing in the technological world and new technologies has great potential, and I believe there will be those from Lipik who will succeed – says Kasana.

Rescue in EU funds

He also mentioned tourism as a sector into which a lot of time and energy is invested. One of the key investments is Terme Lipik, a European investment worth more than 9.7 million euros. The project includes the renovation of Lipik’s landmarks such as Villa Zinke, which will become an interpretive center and tourist attraction, the renovation of the People’s Baths, and the arrangement of the protected city park.

– In the last three years, we have carried out a series of projects and invested in tourism and entrepreneurship, as well as other public, social, and community infrastructure. New projects are also being prepared. One of the key ones is the construction of a hotel; the spa has applied for it in a recent competition by the Ministry of Tourism. It anticipates accommodation capacity of 147 beds and 87 rooms and is worth 15 million euros. The City of Lipik has also applied for the construction of a smaller high-quality heritage hotel with four stars. It will have 11 accommodation units, or 24 beds, a presentation center with exhibition spaces, and a relaxation area with a sauna and massage. The project is worth almost five million euros – announces Kasana, emphasizing that attracting European Union money is their only way to secure significant investments in public and entrepreneurial infrastructure for Lipik.

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Toplice Lipik najveći su poslodavac u Lipiku, a u suradnji sa startopvima iz Centra AI pripremaju nove projekte bazirane na najnovijoj AI tehnologiji

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Lipik is, in fact, a young Austro-Hungarian town that was second in the number of overnight stays by tourists in the entire former Yugoslavia in 1932, behind Opatija. After the spas were renovated, more than three thousand people swam in the pools during the summer, more than the town had inhabitants. Before World War II, Lipik had a hotel with over two hundred beds and closed pools. Unfortunately, key tourist facilities such as the Kursalon hotel and the covered promenade Wandelbahn, which were the drivers of tourist development before the war, have not yet been renovated. The hotel was demolished, and since then the town has had no hotel, except for accommodation in Toplice Lipik. The alternative in about forty private capacities is now filled by the students of the Center.

Although it is still not close to the situation in some other areas, foreign workers can also be seen working on construction jobs in Lipik, and there are more and more of them in hospitality. The town is also known for many communities of national minorities: besides Serbian, there are Italian, Czech, and Hungarian, and for ten years there has been an Association of Croatian-Ukrainian Friendship. With the help of the Italian Community, hunters come to buy houses cheaply, just to have a place to store their things. Empty houses can be bought for ten to twenty thousand euros. On the other hand, in the center of Lipik, real estate prices have skyrocketed. Despite this, it is difficult to find rental properties as students of the Center have become permanent tenants in the town.

Free education

Iličić says that when he founded the Center for Artificial Intelligence, he had a much humbler idea in mind, at the level of IT courses. He did not know that everything would become recognizable even at the level of Croatia. Perhaps the strongest aspect of the whole story is that education for participants is free. They have their costs covered for a six-month training program for programmers for the application of artificial intelligence and opening startups, which lasts more than a thousand hours (six months full-time, 968 or more hours of theoretical and practical teaching). HZZ provides incentives of 15 thousand euros through training measures, and both the City of Lipik and the Požega-Slavonia County participate in this. In this way, participants are ensured about 500 euros a month for living expenses, which is quite enough for a decent life in Lipik. Accommodation costs them about a hundred euros a month, and in Toplice, they receive a full meal for four euros.

– We have gathered really excellent professors and assistants from various fields of artificial intelligence; the fourth generation of education started in early May. There is great interest in training; participants come from all over Croatia, from Dubrovnik to Osijek, and we currently have a waiting list of two hundred candidates – explains Iličić.

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Lipik reportaža, AI Centar Lipik

foto Rene Karaman

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One of HZZ’s conditions for enrolling a new generation is that 30 percent of the previous one must be employed, which can be a burdening circumstance. For example, the Center waited five months for seven participants from the previous generation to be employed before it could continue with the education. A similar procedure is followed by gamers from Novska, which also conducts its programs in cooperation with HZZ. However, when the line is drawn, out of 67 previous participants, 34 have found employment. Regardless of the popularity it has gained in the media, the Center for Artificial Intelligence has faced and continues to face unnecessary challenges. First, it was necessary to introduce high-speed internet, for which large telecoms showed no interest, so the company Pro-Ping from Virovitica did it. The Center still does not have its own IT equipment but borrows it from Novska. It has applied for various competitions, but the procedure is slow.

– We have signed the first contracts with venture capital funds Feelsgood and Fil Rouge, which are supposed to support the development of startups. We are also waiting for HAMAG-BICRO, on whose call for accelerators we passed last year, but that has not yet been realized – says Iličić.

His idea is to build a campus in Lipik that will represent a community of all project stakeholders. The city recently purchased the Osječanka building for the needs of the campus, which belonged to Croatia osiguranje, a company that envisioned the location as a center for educating its management about twenty years ago, but those managers never appeared, and the building has been empty.

Balance between science and entrepreneurship

In this campus, the first laboratory for artificial and quantum intelligence should also be developed. Its conceptual creator is Hrvoje Kukina, the main leader of the educational program of the Center and the backbone of knowledge about artificial intelligence. He is both a computer scientist and mathematician, currently pursuing a doctorate in Vienna, where he is focusing on quantum artificial intelligence, a new direction that has very few experts in Europe. Kukina ensures that participants receive the latest knowledge about artificial intelligence being developed in the USA, China, and Europe; he has also educated himself at Cambridge and Oxford. Various external experts often guest lecture at the Center, including from companies like Microsoft, as well as directors from companies who give lectures on entrepreneurship to students.

– In the first five weeks, participants in the Center learn basic and advanced programming language Python. They are expected to already have prior knowledge of programming. There are also courses that cover areas such as computer vision, machine learning, deep learning, NLP (natural language processing, note). After three to four months, participants start their projects and independently engage in topics that interest them. This year, a five-week internship in companies has been introduced, with mentors. One of the ambitious plans is to establish the first laboratory for quantum and artificial intelligence in the future campus in Osječanka. Namely, where AI was ten years ago, today is quantum technology. It will enable the realization of some projects in a day or two that currently require several months and years of development on a classical machine – explains Kukina.

Besides him, the only expert in quantum technology in Croatia is reportedly Ema Puljak, the daughter of the mayor of Split, Ivica Puljak, who graduated from FER.

– Everyone will deal with AI. We want to be pioneers in quantum technology – emphasizes Kukina.

One of his main motives for getting a job at the Center and moving from Zagreb to Lipik is that the Center offers a perfect balance between science and entrepreneurship. Working in companies, he says, puts too much pressure on him, and he does not like the race for profit, while the scientific community operates on an old-fashioned model and does not give innovators enough freedom.

– We are specific in that our participants work for themselves, and after training, all patents remain theirs; I have nothing from their projects. I want them to open their companies in Lipik and employ people at the end; they have full freedom for that. The motto of the Center is: ‘Develop what you want, market where you may’ – says Iličić.

To verify this thesis, we dropped in on the participants during class. There was silence in the classroom; everyone was engrossed in the screens of their laptops, programming something. I sat in a desk next to one student and asked him what their task was, to which he replied that they were creating a website, which was quite enough explanation for me, who opted for social sciences. However, participants do not only learn in the classroom; you can meet them anywhere in the Center, wherever there is a chair or couch; they work together on some task.

It is never boring

The Center for Artificial Intelligence today spans three locations, so we were taken further to a mini-incubator where offices are used by more advanced generations of IT professionals, who mentor the younger ones. Thus, we met Ivan Martinić, a 23-year-old owner of the startup AI Power Startup, who has developed two digital systems for local communities with elements of AI. He introduced us to the e-Application system used by the Zagreb County and the City of Zaprešić. It is a completely digitized version of the application for public tenders. Thanks to his application, all documentation and communication are electronic, which saves users a lot of time. Artificial intelligence helps in data processing and calculating budgets and costs. The second system is e-Projects, intended at this stage for cities and municipalities, where all information about submitted projects, implementation, costs, and phases of implementation can be found in one place. Martinić is also preparing an e-office project for companies that will have complete CRM, human resources management, and similar functionalities in one place.

– The system will allow you, for example, to enter an entire contract into it, from which artificial intelligence will extract and suggest tasks you need to perform according to it. In addition, each employee will be able to keep a record of what needs to be done, and their boss can monitor that – describes Martinić, who is also the recipient of the award for the best innovation in the field of global security awarded to him by GCSP from Geneva, a Swiss organization for security policy.

– The application is used for detecting minefields. Since we went to fairs, GCSP heard about us and nominated our idea. We were first among 180 global projects, including IBM’s – emphasizes Martinić.

Two years ago, at the invitation of the United Nations, he participated in a panel on innovations in security, which included representatives from Google, Facebook, and the FBI. – And then I fell in love with a girl from Lipik and moved here. There is peace and quiet here, maybe sometimes too much, but it is never boring – concludes Martinić.

In the adjacent office sat a team of five young IT professionals, each of whom has their own lump-sum business, but together they are working on a system working under the name Fizzy, a computer vision technology they are developing for Toplice Lipik.

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Lipik reportaža, Logic lane

foto Rene Karaman

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– Until now, therapists manually measured the distance between joints and their angles with a goniometer. Now, with the help of AI, precise measurements can be obtained on the screen in real-time, and an overview of the rehabilitation process can be seen in one place. We are still polishing the system; it will soon be ready for the market – announces Marko Soldo from Slavonski Brod, who previously studied economics in Zagreb but then dropped out of school and turned to programming.

The team working on Fizzy will now unite into the Logic Lane cluster, and in legal form, it will be a cooperative to have greater market potential.

Lipik has it all

In the greatest sun, which nowhere shines as strongly as in flat Slavonia, we also visited the large entrepreneurial incubator, a building with six halls for which the City drew 2.8 million euros from EU funds. The first hall was rented by the German company Libelle, which established Data Mir in Lipik. We were welcomed on behalf of the company by Ana Novokmet, a young software developer who also handles organization and administrative tasks and is the link between the company and the German owner, who planned to expand business in Southeast Europe. Thanks to the former director from Marina Sela, instead of in Macedonia, the Germans opened a company in Lipik.

– Our primary activities are data protection, disaster recovery, data masking, and system copies. We do not create custom software but have four main products used by clients worldwide; some of the largest are Kaufland and Haribo. Kaufland and Lidl are protected by our products – says Novokmet.

Libelle AG, by the way, has branches in Germany, France, and Atlanta. Software is developed in Germany and Lipik, while sales are in Atlanta.

– More and more software development jobs are being transferred from Germany to Croatia, where we have three departments: development, marketing, and consulting. The employer pays employees’ accommodation, hot meals, travel expenses, and offers flexible working hours. There are plans to develop a new product that will unify all our existing products into one – says Novokmet, who is originally from Lipik and graduated from the Faculty of Computer Science and Digital Technologies in Rijeka.

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Lipik reportaža, Ana Novokmet

foto Rene Karaman

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In the business zone, besides the incubator, there is also a large cold storage, the company Vios, which deals with metallurgy, and a recycling yard that the city built with EU funds.

Unlike some other activities, the pace of technological development is quite uncertain, making it difficult to predict the direction of project and educational program development. As Iličić says, everything is changing, so we cannot be ‘slaves of the moment’.

– The greatest advantage of the Center is that people do what they want and have the freedom and opportunity to open their own company. The main goal is to create an ecosystem like those in the USA and China, where 70 to 80 people will develop startups and where everyone will work and cooperate together. Lipik actually has it all; it’s just that no one knows about it – concludes Iličić.