Does Croatia Need a Separate Ministry for the IT Sector?

The current functioning of the Ministry of Justice, Administration, and Digital Transformation is not ideal, and in the next term, that is, by 2030, there could be a separation of digital transformation into a separate department. With this statement, Minister Damir Habijan on Monday, on the occasion of the 25th anniversary of the establishment of the Croatian Internet Traffic Exchange Center (CIX) at the University Computing Center, raised the question of establishing a new IT ministry.

This possibility has sparked significant interest in the domestic technology community, given that for years there have been appeals from the private and academic sectors for a strategic boost and development of the IT industry.

It was a somewhat unexpected response from the minister to journalist Dragan Petrica‘s question about whether we can expect Croatia to have a ministry that would promote the development of IT, as is the case with, for example, tourism.

Namely, many other countries in the world, including our neighbor Slovenia, have such ministries, and the United Arab Emirates have gone even further and established a ministry of artificial intelligence.

Staffing and Salary Issues

Ivan Bešlić, the president of the board of the Unit Croatia association, which represents Croatian software exporters, and the chief strategy officer at Sofascore, supports the fact that the current Ministry of Justice, Administration, and Digital Transformation focuses at least one-third on IT, which is better than before when digital transformation was not in the ministry’s name.

He also considers it excellent that there is a interlocutor like Minister Habijan who participates in discussions about the IT industry in Croatia, as there has simply been no interlocutor from the ministry until now. He sees the establishment of a separate ministry for at least IT, in combination with some other department, as the next logical step, achieving ‘half’ of what is needed for progress.

However, regarding the functioning of a potential future ministry, he cites staffing and salary systems as the biggest challenges. Specifically, programmers who would work in the ministry would need to have special coefficients, higher than the existing ones, with salaries exceeding even that of the Prime Minister, because otherwise, they will remain in the private sector where they can already achieve such conditions. He emphasizes that this ministry should position IT as a strategic branch, ensuring that Croatian programmers do not work exclusively for foreign companies, but that knowledge and income remain in Croatia. Ultimately, he wants Croatian citizens to use Croatian software as much as possible.

Instead of a Ministry, a Prime Minister’s Advisor?

On the other hand, there are those who disagree with the idea that Croatia should have a separate ministry for each individual industry. Hrvoje Josip Balen, the president of the HUP-ICT association, believes that Croatia does not need a separate ministry for IT, but rather strong support for the technology scene within the existing structure.

– Looking at the practices of some other countries, as well as our specificities, I believe that the formation of a Directorate for the Development of the Technology Sector and the establishment of an institution for a special Advisor for Digital and Technological Transformation within the Prime Minister’s Office would help us the most. The new directorate should intensively engage in supporting domestic and foreign investments, creating a regulatory framework to encourage investments, internationalization, and inter-sectoral support for research and development grants, and economic diplomacy.

The Prime Minister’s Advisor should ideally also be one of the members of the management boards of HBOR and HAMAG and assist the Prime Minister in preparing and leading meetings of the National Council for Digital Transformation, which should have its expert groups and through which the guidelines for coordinating individual ministries, agencies, and other state bodies should be clearly defined, with the aim of increasing the competitiveness of the technology sector – Balen states.

Regarding digitalization and improving the work of public administration and the implementation of new technologies such as artificial intelligence, Balen emphasizes that this should remain under the jurisdiction of the existing Ministry of Justice, Administration, and Digital Transformation.

– I do not see the need to establish a new ministry for every new disruptive technology or challenge, because by that logic, we could also have, for example, a ministry of artificial intelligence, quantum computing, or energy – he concludes.

However, regardless of whether this discussion leads to the establishment of a new ministry or the restructuring of existing structures, it is clear that IT in Croatia lacks a more systematic institutional support. And given that globally, IT companies are facing a slowdown in growth, a lack of projects, and even layoffs, the question is how quickly and in what form Croatia will respond to these challenges.