No Crowds, There Are Problems: Tight, Yet Empty Business Zones

Of the total of 41 plots in the Marof business zone in Lekenik, 36 have been sold to entrepreneurs. Some have already built business facilities and have been successfully operating for several years, but most entrepreneurs, claim the Municipality of Lekenik, cannot start business activities on the land they purchased due to financial difficulties. Interest from entrepreneurs in land in this business zone remains high, and there are plans to expand the zone to an adjacent area of 35 hectares. Due to significant investor interest in land in the Nemetin business zone, the City of Osijek has requested an expansion of the zone by an additional 36 hectares.

Osijek has six business zones, three of which are fully occupied – Tenja, Zapad, and Jablan. The Nemetin business zone is currently 80 percent filled, the IT park is 71.9 percent filled, and the PZ S-cesta is 53 percent filled. Investors have begun constructing facilities, and the activation intensity of all business zones is currently 55.5 percent. In addition to expanding the Nemetin business zone, Osijek is also working on new traffic solutions within it and will invest 1.7 million euros in traffic infrastructure over the next two years. A major project is underway to build a central building, an IT business center, in the Osijek IT park. The project is worth 8.5 million euros, co-financed by European funds, and is intended for the development of smaller and younger IT companies.

The City of Osijek provides numerous benefits to investors in the area of economic zones. One of them is, if all conditions are met, a privilege when purchasing land – de minimis support (up to 200,000 euros). Additionally, since January 1, 2022, the City has fully exempted municipal contribution payers who build economic-business buildings from paying municipal contributions.

Average 60 percent

In the Zagreb County, of the 59 business zones distributed across nine cities and 23 municipalities, 32 are operational, and their occupancy is over 60 percent. Some of the companies operating in the business zones in the Zagreb County include KFK, König metals, Ikea, Designer outlet Croatia, Kaufland Logistics Center, RALU Distribution-Logistics Center, Bajkmont, PIP, Pliva, Krka, Pfizer, Jamnica plus, DIV Group, Končar – Elektroindustrija, Komfor klima, Top glazure, Holetić Mirnovec pyrotechnics…

Given the equipment and large areas of the zones, totaling more than three million square meters, new investments are expected, and a large portion of them is currently being realized. The most notable brand is Rimac Automobili, which is building a campus worth 200 million euros. Two logistics centers are being built in Klinča Selima: Spar’s, worth 100 million euros, and Orbico’s, in collaboration with Logexpert, worth 40 million euros. Lidl’s logistics center in Križ is estimated at 80 million euros, and the Austrian company FACC in Jakovlje is expanding its existing facility with a new complex worth 21 million euros.

In addition, there are currently two business incubators operating in the Zagreb County: Mali tehnopolis Samobor and the Modular Wood Technology Business Incubator in Ivanić-Grad. The Department of Economy and EU Funds of the Zagreb County states that the biggest challenge for municipalities and cities lies in the fact that most land in business zones is not owned by local or state authorities, but by citizens or other private companies, which creates problems in achieving a uniform land purchase price.

Networks of Incubators

In the Virovitica-Podravina County, 45 business zones have been established. Some have managed to attract a larger number of entrepreneurs and also record a higher number of employees. In terms of the number of employees in the zones, Virovitica leads, but a large number are also recorded in other, mostly larger places, such as Slatina, Pitomača, and Orahovica. The benefits they offer relate to low land purchase prices, plots of various sizes, and strong support from the local community.

Entrepreneurs in the business zones in Virovitica and some municipalities in the Virovitica-Podravina County have resolved communal infrastructure, land for one kuna per square meter, and incentives for opening production and hiring new workers. The City of Virovitica plans to establish a megazone West II, which would cover about 390 hectares and would be one of the largest business zones in Croatia. The Municipality of Pitomača also plans to expand the business zone by seven hectares and ensure traffic and communal infrastructure to enable investment by investors within it.

In this county, there is also a network of business incubators, the first of which opened in 2013, and since December 19, 2019, the Business Incubator of the Virovitica-Podravina County has been operating and managing a total of four business incubators (Virovitica, Orahovica, Pitomača/Kladare, and Slatina) through the Network of Incubators. The Business Incubator of the Virovitica-Podravina County offers beginner entrepreneurs 65 fully equipped production and office spaces. In addition to business spaces, the Network of Incubators includes conference rooms, coworking-spaces, creative studios, multimedia studios… In the Virovitica Business Incubator, nine out of ten office spaces and all five production-storage spaces are filled.

Only the best

The situation is similar in the incubators in Slatina, Pitomača, and Orahovica.

– In the Primorje-Gorski Kotar County, a total of 116 business zones have been recorded, according to available public and other data sources. Some zones are operational, while others are not active. Some zones are privately owned, while others are indirectly managed by the cities and municipalities in which they are located. On the islands in the Primorje-Gorski Kotar County, ten business zones are actively operating where economic entities are located. The most significant progress is visible on the island of Rab, where the Mišnjak business zone was completed in 2022, covering an area of 117,000 square meters. Within the zone, 14 plots equipped with complete infrastructure have been arranged.

In Gorski Kotar, there are 17 active business zones with a total area of 147 hectares. Some zones are privately owned, while others are managed by cities and municipalities. The coastal area of the Primorje-Gorski Kotar County has 60 business zones, of which 28 are active – emphasizes Vedran Kružić, director of the Public Institution Regional Development Agency of the Primorje-Gorski Kotar County.

He lists the business zones Bodulovo, Kargač in the area of Novi Vinodolski, the Miklavija business zone in the municipality of Matulji, and the industrial zone Bakar located in the area of Kukuljanovo.

– Thanks to its geostrategic position and investments, today it is the largest and most organized industrial zone in Croatia. In the past nearly four years, 41 investments have been initiated, of which 20 are newly built economic facilities, eight are under construction, and 13 are in preparation. The total value of all initiated investments amounts to 160,850,487 euros. After the construction of all economic facilities, 2,000 new jobs will be activated, of which about 1,000 workers are already employed in completed facilities – lists Kružić.

High Expectations

According to him, within the upcoming multiannual financial framework of the European Union the continuation of investments is expected through various programs and tenders in entrepreneurial support institutions that operate successfully in the county. There are high expectations from regional companies in the upcoming mechanism of Industrial Transition of Adriatic Croatia, in which more than 140 million euros in non-refundable funds is intended to be invested in development and innovation projects in a consortium of companies from that area.

– One of the basic conditions and problems in the further development of each business zone is the resolution of property-legal relations, i.e., the way to accelerate this process. The increasing problem is also the cost of construction works and the lack of labor, which is already a serious issue. Quality human resources are key to attracting quality investments, especially those that bring a higher technological base and better-paid jobs – notes Kružić.

Digital Centers

He adds that several innovation clusters have been launched at the regional level as part of promoting innovation: Kvarner Health, which brings together more than 30 members, the Innovation Cluster in the maritime sector to promote the blue economy, the cross-border project ‘Hydrogen Valley’, aimed at placing PGŽ on the global map of hydrogen development, especially in the maritime sector, and the Innovation Cluster in tourism. The European Center for Digital Innovation (EDIH) Adria has been established at the University of Rijeka as part of the Network of European Digital Innovation Hubs.

According to Kružić, there is a lack of centers intended for transformation and providing entrepreneurship development services on the islands and in the Gorski Kotar area, which would ensure technical and financial support for newly created companies as well as promote the entrepreneurial climate needed to initiate industrial transition and encourage entrepreneurs to work and stay on the islands and in Gorski Kotar. Therefore, investments in entrepreneurial infrastructure on the islands and in mountainous areas have been announced, and prerequisites for this are currently being created.