Croatian Employers’ Association Establishes Defense Industry Coordination

In order to strengthen cooperation, improve the business environment, and position domestic manufacturers in the European and global markets, the Croatian Employers’ Association has established HUP Defense Industry Coordination. According to the statement, this provides the Croatian defense industry with a platform to address key challenges and leverage development opportunities in the context of growing European security needs.

Gordan Pešić, a member of the Management Board of DOK-ING, has been appointed as the head of the HUP Defense Industry Coordination, which will consist of military equipment manufacturers as well as members of HUP from various sectors, and will also be open to domain experts in the field of defense and security, as well as representatives from the academic community to ensure a multidisciplinary approach to the development of Croatia’s defense capabilities.

Some of the main goals of this Coordination include connecting all key stakeholders from the Croatian security and defense sector and positioning the Coordination as a relevant interlocutor for decision-makers in the public sector to ensure the simultaneous fulfillment of national interests in the area of national security as well as economic growth.

Particular attention will be directed towards dialogue between representatives of the Croatian defense industry and national and international stakeholders in the field of security and defense, including the European Union and NATO, to ensure that Croatian economic entities participate in all relevant activities aimed at strengthening the European industrial technological base. In this context, the plan is to increase the visibility and communication of relevant news from the field of security and defense in the public space so that the Coordination becomes a recognizable actor in advocating for the interests of the Croatian defense industry and to ensure the maximum utilization of all available national, EU, and NATO funds for co-financing research and development, as well as research and development activities in this domain.

The Coordination will particularly advocate for intensifying open dialogue between the Croatian private and public sectors to better integrate domestic manufacturers into joint supply and production chains and to increase the participation of Croatian companies in various types of defense consortia, with a special emphasis on joint procurements, research and development, and other related activities at the national level, as well as at the level of the European Union and NATO.

The Croatian defense industry stands out in the production of high-end systems, particularly in the field of personal weapons, protective equipment, and air and ground unmanned systems. In addition to traditional sectors, opportunities for growth are opening up in the areas of cybersecurity and critical infrastructure protection, extending to pharmaceuticals and other technological innovations.

In the context of global security changes and the growing need for the European Union to achieve self-sufficiency in providing security to its citizens, the Croatian defense industry must be as prepared as possible to participate in large international projects, conclude HUP representatives.

Development Opportunities

The development of defense technologies requires significant investments and long-term strategies, and Croatia plans to increase defense spending to 3.5 percent of GDP. Through the HUP Defense Industry Coordination, entrepreneurs and industrial entities will be able to jointly advocate for better access to co-financing from various national, EU, and NATO sources, as well as participate in dialogue with national and international entities in the context of public procurements from this highly demanding and competitive market.

Initiatives aimed at promoting innovation, strengthening industrial partnerships, and improving the regulatory framework are particularly important to facilitate business operations for Croatian entrepreneurs who are at a disadvantage in some business segments compared to European (and global) competition.

Member states of the European Union and NATO are increasingly investing in research and development as well as increased industrialization in the field of security and defense, which provides opportunities for the inclusion of Croatian companies in related projects, including ‘classic’ products and solutions from the security and defense sector, as well as new innovative dual-use technologies and other related products and solutions in the field of cybersecurity and digitalization.

In order for the Croatian defense industry to compete equally in the European and global markets, it is essential to remove various administrative barriers that affect the competitiveness of the Croatian defense industry and improve cooperation between the industry and state institutions. Therefore, the HUP Defense Industry Coordination advocates for the establishment of a cross-sector working group that would unite all relevant stakeholders from the Croatian public and private sectors, as well as the academic sector, accelerate public procurement procedures, strategically plan the realization of national interests, ensure long-term contracts for Croatian entrepreneurs, and better position Croatian companies in national and European defense initiatives.

The Croatian defense industry already achieves exports exceeding 150 million euros annually, and additional reforms can significantly increase its competitiveness and impact on a global scale.

Active participation in the common European defense industry market is crucial for the long-term growth of the sector at both the national and European levels. Therefore, the HUP Defense Industry Coordination will work on better connecting with the public sector to strengthen the position and increase the presence and active participation of Croatian manufacturers in joint European procurements, as well as strengthening cooperation with NATO and European institutions. Additionally, the inclusion of Croatian companies in European value chains will be encouraged, for example, in the sector of producing strategic materials and related sectors in the context of security and defense.