Supporting innovation in Croatia

Article, 22.01.2021

Innovation is an important factor in countries' economic development. However, government spending for research and development is often limited. In Croatia, Switzerland provides promising small and medium-sized enterprises (SMEs) with support for the launch and development of innovative new projects. Five SMEs have succeeded in obtaining funding from the European Eurostars programme with Switzerland's support.

Employees of a Croatian company attending a meeting.
Innovation is important to countries' economic development. In Croatia, Switzerland provides SMEs with support for the launch and development of innovative new projects. © SDC

The Eurostars programme owes its existence to the European research initiative EUREKA. EUREKA was founded in 1985 by the then French President François Mitterrand and German Chancellor Helmut Kohl to promote international, market-oriented research. Some 35 years on, the EUREKA network comprises 40 countries in addition to the European Commission. Switzerland joined EUREKA as soon as it was launched in 1985. Croatia joined in 2000. 

The Eurostars funding programme was launched as a EUREKA initiative in 2007. Eurostars targets research-driven SMEs that create innovative products, processes or services. The funding helps SMEs to access the financing they need to develop their products in cooperation with research or SME projects internationally and become more competitive. To be eligible for the Eurostars programme, projects must therefore involve partners in two or more participating countries.

The important role of SMEs

When submitting Eurostars applications, Croatian SMEs often face challenges as they do not have sufficient experience in developing projects and making a persuasive business case for their project. This is reflected in the small number of successful applications; Croatia has submitted six successful applications since 2008, Switzerland 380. Switzerland's contribution to the enlarged EU is providing support in cooperation with Innosuisse to improve the quality of the applications. As a top-ranking country when it comes to Eurostars applications, Switzerland has a great deal of knowledge and experience to draw on.

"SMEs are a very important and very active part of the economy in Switzerland. SMEs create jobs, both in Switzerland and in other countries. Large companies also benefit from the success of small, innovative companies," says Colette John-Grant of Innosuisse.

Supporting SMEs also prevents 'brain drain', the emigration of highly-qualified workers. Successful, innovative companies create career opportunities and attract motivated skilled workers. This is especially important in Croatia, which suffers from high emigration and unemployment. It is highly-qualified specialists in particular who struggle to find work in Croatia.

Innosuisse advises and coaches its Croatian counterpart, the Croatian agency HAMAG-BICRO, which is responsible for promoting innovation and submitting Eurostars applications in Croatia. HAMAG-BICRO in turn advises interested SMEs and supports them with their Eurostars project applications. This support is especially vital for Croatian companies wishing to attend broker events – trade fairs where companies and research enterprises from around Europe meet to discuss collaboration opportunities. These networking events are important since Eurostars requires applicant projects to involve companies from at least two countries. Once partners are found, the project funds also support pairs or groups of applicants in preparation and submission of their applications to the European programme. Considerable efforts on the Croatian side have raised awareness of the Eurostars project, and demand for support is growing strongly. Until Switzerland began supporting Croatia, there had been only one successful application. Now, both the number and success rate of applications have increased significantly. Five additional projects are under way.

Switzerland's target for 2017–22 was to attract five Croatian SMEs, which would receive funding for their projects if they met the Eurostars eligibility criteria. Two years ahead of schedule, five Croatian projects in biotechnology, energy and ICT have already received Eurostars funding – demonstrating the effectiveness of the Eurostars project with the backing of Switzerland's contribution.

Project example: on the pulse of well-being

A Croatian company designs and develops women's 'smart' jewellery as a subsidiary of a Silicon Valley-based US company.  Smart jewellery allows the wearer to monitor their state of health and achieve personal sports and health goals such as weight management, better sleep and reduced stress. The company's first product, an item that can be worn as a bracelet, necklace or clip, was launched in 2015. Since then, the company has been working to improve existing technologies and develop new ones to expand its range. 

Support from the Eurostars programme has enabled the Croatian company to step up its collaboration and build a close partnership with a Swiss research institute. Regular interactions with international research partners is enormously important in the development of new technologies. Working with the Swiss partner helped the company to restructure its project management and advance the development of a new intelligent product.