Overview

Croatia’s digital strategy is closely aligned with the EU’s digital policies and regulations and many Croatian laws related to digital economy are directly transposed EU directives. Croatia’s digital initiatives and strategies are a part of the European Digital Decade policy program, which guides Europe’s digital transformation through 2030 and sets up an annual cooperation cycle for Member States to achieve common objectives and targets in four key areas: ICT skills, business transformation, secure and sustainable digital infrastructures, and digitalization of public services.

Croatia’s economic and societal digital transformation is advancing significantly. The Special Eurobarometer Digital Decade 2024 Report found that 83% of Croatians believe the digitalization of public and private services makes their lives easier, significantly higher than the EU average of 73%. Croatia is well-positioned within the EU in terms of digital skills.  59% of Croatians have at least basic digital skills compared with the EU average of 55.6%, and the percentage of the Croatian population with digital content creation skills (81.5%) is well above the EU average of 68.3%. Croatia is making a positive contribution to the EU’s Digital Decade target on ICT specialists, with year-on-year 0.6% growth 2022-2023 in ICT specialists employed in Croatia, who now represent of 4.3% of total employment. Croatia is also committed to supporting a greater role for women in the digital world and increasing the share of women who work in ICT. Currently only 14.5% of Croatian women are skilled in ICT compared with the EU average of 16.9%.  In 2023, Croatia ran a campaign to encourage and motivate young women to train and work in ICT.  

The largest digital initiatives in Croatia are defined in the National Development Strategy until 2030 and the Digital Croatia Strategy towards 2032, aligned with the Europe’s Digital Decade Policy Program, and in, the past three years, mainly funded by the National Recovery and Resilience Plan (NPOO).

The Croatian Development Strategy for 2030 identifies four priority areas to enable the green and digital transformation:

• Digital transition of the economy;
• Digitization of public administration and judiciary;
• Development of broadband electronic communication networks; and
• Development of digital competencies and digital workplaces.
• The Digital Croatia Strategy Until 2032 identifies four strategic goals:
• Developed and innovative digital economy;
• Digitalized public administration;
• Developed, accessible, and utilized very high-capacity networks; and
• Developed digital competences for life and work in the digital age.

Croatia allocates 20% of its total Recovery and Resilience plan to digital ($1.55 billion). Under cohesion policy, an additional $887 million (9% of the country’s total cohesion policy funding) is allocated to the country’s digital transformation.  

According to the Digital Decade Country Report 2024 for Croatia, Croatia increased its Fixed Very High-Capacity Network (VHCN) coverage from  61% in 2022 to 67.8% in 2023. There is still untapped potential with respect to the coverage of rural areas, with 25.5% of rural areas covered compared to an EU average of 55.6%.

Croatia improved in Fiber to the Premises (FTTP) coverage from 54% in 2022 to 62.1% in 2023. 5G in the 3.4-3.8 GHz band, an essential band for enabling advanced applications requiring large spectrum bandwidth, covers 40% of Croatian households in 2023, below the EU average (50.6%).  

Regarding 5G connectivity, Croatia made modest progress year-on-year in rolling out 5G to more areas, bringing coverage to 83.4% of Croatia’s national territory, compared to 82.5% in 2022, but behind the EU average which grew to 89.3% coverage in 2023.  

In 2023 Croatia started an initiative aimed at the establishment of the Croatian Competence Center for Semiconductors (CROCCS) as a contribution to the EU’s semiconductors target. CROCCS is expected to work as a one-stop-shop for research and development, prototyping, testing, and training in the field of advanced semiconductor technologies.

Croatia is implementing the first of two actions aimed at increasing its capacity in quantum computing. 2023 saw the formation of Croatia’s first quantum computing consortium, CroQCI. The CroQCI consortium aims to implement a national quantum network by building and testing architectural elements and enabling terrestrial infrastructure with a future space component to create a fully functional quantum network.  

Croatia is contributing to the EU’s Digital Decade targets for cloud computing, AI, and/or big data. 65.6% of enterprises adopted AI or cloud or data analytics, against an EU average of 54.6%.

Examining the digitalization of SMEs in Croatia reveals a mixed dynamic, with several indicators close to the EU average (for example, e-Commerce implementation at 11.3% is close to the EU average of 11.9%). On the other side, Croatia is among the EU forerunners in enterprise use of data analytics (51.7% versus an EU average of 33.2%).  

About 55% of Croatian citizens seek health information on the internet, only 1% below the EU average of 56%. Croatia also implemented a program in 2023 to popularize the use of electronic healthcare records (EHRs), which helped improve hospitals’ interoperability with the Central Health Information System of the Republic of Croatia (CEZIH) and brought data from the existing national EHRs to hospitals, avoiding redundant services and saving the healthcare system money. In addition, Croatian health authorities implemented the “eKarton” mobile app (available on Android and iOS) for health professionals at all levels of care, which facilitates secure access to EHRs by authorized health professionals.

Croatia is an emerging regional cybersecurity leader that especially excels in detection and response capabilities – skills that are in high demand due to increased cyberattacks throughout Europe. The country is taking actions to increase cybersecurity skills and awareness among both public and private entities. The Ministries of Defense and Interior are intensively developing cybersecurity capabilities, including the recently established Military Cyber Command Center in Zagreb. Croatia also transposed the NIS2 Directive, a European Union directive that specifies critical infrastructure cybersecurity requirements, into national law. NIS2 will formalize the Security and Intelligence Agency (SOA) as cyber incident detection and response lead, require all critical infrastructure companies to report breaches, and establish an expanded National Center for Cyber Security. SOA built a Cyber Technologies Center in 2019 to protect national cyberspace from state-sponsored cyberattacks and advanced persistent threat (APT) campaigns, and its SK@UT program, a distributed network of sensors that protects over 60 key government and critical infrastructure-related entities, ranks among the top three such programs in the EU.  

Most laws are set at the EU level. The Digital Economy Chapter of our Country Commercial Guide for the European Union provides a more comprehensive overview.

Market Challenges  

The EU digital economy is highly regulated. A number of newly enacted regulations still in the early stages of implementation make the regulatory environment complex.

The European Commission has listed the digital transformation of the society and the economy as a priority area of public policy, with a view to strengthening its digital sovereignty and setting its own standards for a new digital age. The Commission established the 2030 Digital Decade Policy Program, which sets digital targets and objectives in the realms of digital skills, digital infrastructure, and digitalization of business and of public services. The 2030 targets and objectives are pursued through an annual cooperation cycle, which takes stock of progress along defined trajectories and KPIs. The program also creates a new framework for multi-country projects that will allow Member States to join forces on digital initiatives.  

One Croatia’s key digital challenges is an insufficient number of ICT professionals in the labor market, resulting in a lack of resources necessary for an accelerated digitalization. This is mainly because of the low salaries offered to ICT specialists in Croatia, especially in the public sector, spurring many Croatian ICT experts to work for foreign companies or seek work abroad.

Despite these challenges, Croatia made notable progress in SME digitalization and in gigabit connectivity (FTTP networks) rollout. However, challenges persist in the digitalization of government services and in the adoption of AI and data analytics, as well as in increasing connectivity in rural areas.  

Digital Trade Opportunities

With significant support from EU funds, Croatia is working to progressively digitalize all sectors of the economy to improve its productivity and competitiveness. Croatia has particularly strong potential in the field of digital infrastructures, with increasing access to gigabit infrastructure and high access to 5G services, although it still suffers from persistent low penetration of these services and a coverage gap between urban and rural areas.

Croatia has invested $335 million in online public services for enterprises and the public, $73 million in e-health, $230 million in VHCN gigabit connectivity, $149 million in digital skills, and $120 million in ICT specialists. Support for digital technology adoption will include $202 million for SME digitalization; $67.5 million to promote the use of cloud computing; $67.5 million to adopt data analytics; $202 million on unicorn companies; and about $1.1 million on e-ID.

The 2024 Digital Decade Country Report suggests that Croatia should accelerate its efforts around digital skills and further digitalization of businesses and public services. It should take further steps to improve the user-friendliness of online public services, including enhancing support for users. Croatia should step up efforts to increase public procurement investments in the development, testing, and deployment of innovative digital solutions and to bridge the gap between local and regional governments and central governments. Tackling this challenge is key to offer top-quality public services with a rich set of functionalities that enable a more efficient and personalized way of interacting with citizens, businesses, and other administrations. This would help accelerate the wider adoption of advanced digital solutions into the public sector (such as AI, big data, virtual reality/metaverse technology, robotics, HPC, and blockchain).

In 2023, Croatia launched a call for proposals for Grants for Digitalization, which allocate $30 million of funding from the country’s recovery and resilience plan (RRP) for 2021-2026 to SMEs. Since mid-2023, the $11 million Vouchers for Digitalization program has offered grants aimed at innovation and the development and application of new technologies (including digital technologies).  

The voucher program aims to improve the overall digital skills of Croatian workers to facilitate the digital transformation and develop the skills needed to diagnose cybersecurity threats. The NIS2 Directive, as transposed to Croatian law, is expected to boost demand for cybersecurity solutions.

Most Croatian cities and municipalities are very interested in Smart City technologies and implementing smart city solutions, facilitated by EU funds. Some already implemented smart technologies include digitization of city administration, video surveillance of public areas, smart mobility, air quality measurement, smart waste management, and smart water purification. Although Croatia has less than 4 million inhabitants, strong centralization generates challenges for city management, forcing them to seek Smart City solutions. Coastal cities, like Split, Dubrovnik, and Zadar, have additional challenges posed by the tourism season, when the number of people in those areas doubles or triples.

Croatia is working to ensure synergy between the green and digital transitions, promoting electric mobility; pursing the revitalization, construction, and digitization of the energy system; and supporting infrastructure decarbonization in the energy sector. Croatia is renewing and digitalizing its energy system, with Eurostat reporting the country as one of the best-performing Member States in the decarbonization of the energy and transport sectors. Nevertheless, the country’s contribution towards the Digital Decade objectives remains limited in increasing sustainable energy and employing more resource-efficient digital infrastructure and technologies. This indicates that Croatia has untapped potential to contribute to the EU’s digital objective of twinning the green and digital transitions.