Croatia could be Europe's hidden tech haven in 2024 | Hacker News Reader

Croatia could be Europe's hidden tech haven in 2024

fastcompany.com

37 pointsBerislavLopac52 comments

The article doesn't touch upon some major pain points. While the sea side is nice, it heavily relies on tourism and short term rentals. A long term rental is difficult to find during the summer time and it's not well regulated.

The capital (Zagreb) is overcrowded and its infrastructure is getting worse every year. I spent many years there. Now, I can't imagine living there again (judging by my occasional 1-2 day long visits of it).

And, I'm not sure how much the tech sector plays the role for the digital nomads. Some companies did grow a lot, but I don't find today's tech sector (mostly in Zagreb) much different from the one 1-2 decades ago.

You are mostly left to the local market, which has a significant outflow to the rest of the Europe for the past few decades.

FastCompany is mostly paid articles. Croatia is cool, but I get the same RoI in Serbia, let alone in more established Romania, Poland, and Ukraine

The only real concern for remote workers is decent Internet connectivity. And that's a basically solved problem with 4G and/or Starlink. You can live anywhere you want... so why limit yourself to overcrowded capital with bad infrastructure? It's similar in Slovenia, everyone complaining about how bad prices in Ljubljana are but still fixated on living there.

It's been a while since I've been in touch with tech sector in Zagreb, but even then there were a lot of options ... Wouldn't say not much has changes in a decade or two.

It's like California but with Roman emperor's palaces and Habsburg vacation homes strewn around the shoreline. Happy to see this trend and hope it continues.

We went to Pula on vacation years ago and it really is a fascinating mix of a bunch of different things. There's a large Roman arena, the city center looks like it could be anywhere in northern Italy that was under Venice, there are Hapsburg buildings and then construction from the communist part of their history... it's really an impressive mix.

Pula lol

You ok dude?

It's also a mix of half a country (...well, the shoreline) being a tourist trap during summer and basically empty and dead during winter. The inner parts are mostly based around socialist infrastructure and more boring.

As a citizen I hope not. In the last 10-15 years the whole coast and islands got overbuilt with local and foreign owned buildings. The construction prices multiplied because of the difference in buying power. Why would a construction company work for a local investor for X amount of money if they can work for a German investor for multiples of X?

So a lot of young people emigrated as they got priced out of everything, while in "exchange" we got a bunch of rich, retired Germans and Austrians living in their newly build houses next to the sea for 3 months in a year (if that). Imagine living in Florida all your life and a bunch of very rich people from different country start buying properties and rising prices all over. How would you feel about that?

Its even worse because the local goverments usually incentivise this kind of "behaviour" with huge investments in tourism while completely neglecting their local population speeding up the whole process.

It's very ironic that that pattern is what we had before the communist takeover.

The current times are a tough spot for the country. The communist-era manufacturing infrastructure was not sustainable in current times of consolidation and specialization, so as much as we hated to see Torpedo go and with 3rd May struggling, tourism so far was the best plan B. But what if tech could become plan C that doesn't have the seasonality problems, and helps the local citizens? I really hope so.

The keyword is hidden. I'm a digital nomad who recently moved to Croatia, but my incentive was that I have roots here and speak the language. So I'm using one of their smaller cities as a home base while I travel around in other countries.

It's definitely a nice place to live cheaply if you can work remotely. And if you have a schengen citizenship it's even better.

I always say that it's on the fringes of the EU. Sort of like Romania. Cheap prices, lots of cash business, but still relatively safe and decent infrastructure. And of course close to other countries outside of schengen that are even cheaper.

Since you lived in other places, can you comment/compare on judicial system (level of corruption to get things approve, to have contract-related case litigated, medical malpractice issues, etc).

Also schools for children (cases of bullying, subpar level of STEM education, etc)?

Would be good to know of how these former Soviet block countries moved away from the almost universal corruption of basic institutions.

Speaking as someone from there. The judical system is actually very bad and very slow. We have 40 judges per 100K people, Ireland has 3. So if you have to litigate something good luck with that as it will take many years. If going after public service, there are very slim chances you'll succeed. There was a famous malpractice case where it was revealed that a hospital which the claimant was suing didn't have a malpractice logged in 20 years. So whatever happened it was a "complication". The guy did get some satisfaction after a lenghty trial, but after that there were very few malpractice cases that I know of. A now deceased neigbour of mine ended up in wheelchair after a routine hip replacement surgery and had 2 strokes. Sued them, and 10 years later lost because the court's medical expert is friends with the surgeon.

The corruption for a normal citizen is pretty invisible though (not the effects!). It happens on higher levels. And higher you go the bigger the corruption. So lets say you need a permit for something. You cannot walk into some office and offer money for them to get it done faster. Everyone is very suspicious of unfamiliar faces so you have to build a relation with a employee (or their boss), and then you can do it which of course takes time. But the N+1 time you do it its much easier... I think the general concensus is that the corruption actually got worse after the Yu breakup. In media you'll find egregious examples of government corruption but this very rarely gets prosecuted, even rarer someone has to go to prison for it. So for lot of politicians and public servants crime does pay off. Another problem is that a lot of corruption is legalized so you don't have much to look forward to.

Schooling is just not very good. I wouldn't say that I saw much bullying, not that it was unheard, but it was very rare. Curriculum on the other hand is based on rote memorization, anti-creativity, anti-leadership and obedience. If your kid is a genius it will actually have a good time because schools (and especially universities) over here want only those kind of students, everyone else can go dig ditches as they say.

Croatia has been having a brain drain to the north. In 30 years it has lost about a fifth of the people. They leave for Austria or Germany because they can earn 3+ times more even for not-IT jobs.

The whole Balkans are doing better and better in tech. Bulgaria and Romania have good startup scene and unicorns, Serbia seems to be doing good, Greece is catching up nicely. The brain drain mentioned in the comments is a problem of course, but at least in tech is not so big, even reversing.

As someone who has built and sold an original software startup in Serbia, and has followed the evolution of the local tech scene in the Balkans over the last decade pretty closely, the one thing the region absolutely needs more of is this kind of positive press.

While there's been a fair bit written about the growth of the "IT Sector"[0] there, for the longest time that sector was mostly made up of outsourcers and body shops (as opposed to product-centric, funded original startups). As that outsourcing workforce has matured, I've started to notice an increasing number of individuals at the top end of the talent spectrum that have become too experienced/expensive to be considered 'profitable resources' for those outsourcing companies (i.e. their salaries have grown to be too high compared to the daily rate they're sold at while demand for them has fallen away as companies seeking staff augmentation already tend to depend on their own senior technical leadership).

What this means is that we're going to see more experienced, highly skilled technical experts in reasonably well-off financial positions start to ask themselves what they could do next, and what I'm hoping happens is that the more original success stories we evangelise - the more we publicise the Infobips and the Rimacs - the more likely it is that those experts will choose to develop their original idea and seek funding.

TL;DR The talent is absolutely there and growing, they just need encouragement.

https://www.ft.com/content/03f995f0-9c12-11ea-871b-edeb99a20...

> I've started to notice an increasing number of individuals at the top end of the talent spectrum

Ye well they have to always have been there? Like, the "top talent" of Silicon Valley and their wages feels more like a medieval kind of guild, rather than actual top talent. With different arbitrary opaque admission ceremonies.

I really don't understand why SWE wages are not flatter nationally in the US and also world wide.

Outside of hardware SWEs who need to be there, who ironically have lower wages, there is no way that it is cost effective to pay for "top talent".

I've always wondered if these WFH proponents (I am one ...) know what they are asking for. They are killing the magic.

> Ye well they have to always have been there?

Maybe their talent has, but not the experience. What I was trying to say is that those talented individuals have now accumulated the experience they need to be able to confidently make that leap to meaningful original tech startup, rather than just remaining as a resource in a body shop.

My comment didn't discuss anything about wages at an individual level. All I was doing is pointing out the dwindling commercial value of individuals within the outsourcing sector as they advance and approach the top end of the pay scale.

FWIW I'm personally pretty allergic to individuals from the region who steer every local tech discussion towards the subject of 'wages'. To me this is an indicator that the person got into tech because it pays better than other jobs, not because it is something that ever genuinely interested them. Again, it's a personal thing, but to me it's a red flag that tells me they are unlikely to push themselves to progress unless they're forced to, and will always be chasing a number.

OTOH if you can show me that you're truly driven by curiosity and love of tech, I'll make sure I pay you enough so that you never have to think about all those things you just mentioned in your comment.

Sure! But what you don't need is a band of locust like tech bros that play 'digital nomad', don't pay taxes and high tail it to the next hot spot as soon as they are bored (which usually doesn't take all that long). You don't build stability that way.

I absolutely agree, but that group of people is almost exclusively attracted by government policy rather than startup-up success stories. The key is structuring government policy in a way that encourages local innovation over tax migration (or rather, government wanting to do that in the first place).

> outsourcers and body shops spot on. Example for Bulgaria - see who's big there.. Re-sellers of man-hours. And that trend created a big percentage of butterflies (who fly off to next door/flower for $100 or bag of peanuts more, anytime)

yeah the talent is (still) there. Some are even Returning..

But.. The burocracy though and taxation etc hurdles, for having (and keeping) a company is staggering..

Essentially, at last in .bg, everybody is tax-treated as BigCorp. Too bad if you are not one. (And, if one grows enough so that does not bug you, there is still some mafia, which.. will)

They've been saying this about Portugal for years

And to some extent it is true, but fortunately Portugal is not so easy to overrun. The area in and around Cascais is very popular with 'expats' (aka immigrants). At 200K+ inhabitants it is large enough to have all facilities, quite warm and not so large that you get the trouble associated with large cities in the South of Europe. The fact that it always was fairly wealthy probably also helps.

The problem is that "expats" don't come create a tech haven. They come with remote jobs, earn good multiples of the local salaries, come increase rents, convert houses to temporary accommodation, fund the party scene, and then they leave. There has been no concrete signs of Lisbon becoming a "tech haven".

Yes, I made the rough equivalent of your post here:

https://news.ycombinator.com/item?id=38592222

But: the Cascais situation seems to be an exception to that because it's a fairly expensive place to live so that seems to ward off tech nomadism.

Kudos to Croatia's tourism board or whoever ordered this article. It is nice place for digital nomads for sure.

Belgrade is much bigger hub for example (Serbia) and more of Ukrainians and Russians moved there to work, but overall this creates positive climate for Balkans as a whole... Not sure what is happening in Bosnia for example.

Nothing much in Bosnia, it's all either Serbia or Montenegro.

Croatia is Schengen, so it's much more difficult to get there, and once you're in, there are better destinations.

You mean it is much easier to get there.

I mean it's much easier to get into Serbia, Montenegro or Bosnia than into Schengen == Croatia, Slovenia.

But Serbia has people, and Montenegro has sea, while Bosnia has neither. So nothing much happens in Bosnia compared to other two. (edit: although it's somewhat cheaper and mountains are gorgeous)

That is relative to where you yourself are from.

Well, idk who has problems. They never exactly liked exalted islamists, or anyone with a bad attitude here, but otherwise people are pretty laid back.

Once I saw a guy from Turkie being given trouble at the airport, but that's about it. We shared a taxi after that.

Basically no one gives a fuck so long as you don't cause any trouble.

It's polako worldview you see.

https://www.montenegro.travel/7-culture-keys-for-understandi...

Bosnia's too tiny and badly connected to be relevant.

Sarajevo's definitely the leader, with smaller tech scenes in Mostar, Tuzla and Banja Luka, but it's almost all outsourcing. A fair amount of those outsourcing companies were founded by Bosnian migrants abroad, "investing back" into their homeland by (ab)using cheap local IT labour. I'd have trouble naming more than 5 local IT companies that actually have their own products on the market.

For a drastic change to happen, loads of things would need to be improved: more datacenters, better interconnection (Sarajevo's just annoyingly difficult to reach from any direction), more than one decent IT college, Sarajevo's infrastructure is still lagging behind Zagreb's and Belgrade's (it was... a little more directly involved in the war, to put it mildly), and at least some sense of political stability on a national level.

Marginal improvements can definitely be observed if you follow closely enough, but I'd say it'd take another decade of investments before it stops feeling like a major disadvantage in comparison to even its neighbouring capitals.

Source: Bosnian, ~8 years in the IT sector in Sarajevo.

It is a nice country but unlikely due to the small tech scene and lack of venture funding.

I don't believe that for a second, they haven't demonstrated anything yet

People go where the money is. It is capitalism. SV is where the money is so people are going to go there. Same as wall street before it. You want the best talent you pay the most money. With Europe paying so little compared to the US I don't know if Crotia or anywhere in europe will be a real tech hotbed.

People have different priorities than just money. I for one would never move to SV even if I get 3 times the salary there. There are a lot of other factors that make life great than just money.

On aggregate people go were the money is. There are exceptions, but greed motivates a lot of smart ambitious people.

Also when those very rich people start buying properties/coast/islands from people who "had different priorities" in couple of decades, the latter will have to rethink their strategy of letting go and not developing their biggest talents. But its going to be too late for that by then.

Europe is going to have a long hibernation in the global scene. Whatever existed was killed by bureaucracy and taxation.

Whatever doesn't exist, it will simply not happen, the ship has sailed

What do you base this opinion on?

Northern European countries consistently rank at the top of the world in ease of doing business

https://en.m.wikipedia.org/wiki/Ease_of_doing_business_index

Some of them have more entrepreneurs per capita than USA.

What you don’t have is the ability to attract a crazy amount of international capital to mega corporations like in California/Texas or some places in China. So it’s hard to build the very largest tech corporations there.

I think European companies tend to be less consumer oriented, not as visible, and focusing on more “behind the scenes” technology. So you get the impression there’s fewer of them than there actually are.

Like, in my industry, there’s nothing like Nvidia or AMD. But there’s ASML and Zeiss for instance, without which Nvidia couldn’t make their chips. There’s nothing like the mega super high performance foundries like TSMC and Samsung but there’s a whole bunch of smaller specialised foundries focusing on very high power, very low power and optics and MEMS stuff.

Any article that mentions Europe either directly or in passing will attract at least a couple of comments that mention 'regulation' and how everything is going down the drain here. It's all bs but that doesn't seem to stop the influx of these comments, in this case from a brave novelty account no less.

One quick example: Germany has a 3 month required severance period. So if you are doing something where funding may be uncertain, a German employee is somewhat risky. A startup in California that fails to raise funding can cut staff and take another swing in 6 months. In Germany, this is less likely. You could just budget for this up front and sock away 1/4 salary for every hire, but along with the employer taxes, that really starts to negate any cost advantage vs California.

It also cuts the other way. German hires often cannot start for 3 months, so in addition to the time it takes for a developer to start learning the codebase once they’re hired, it might take 6 months between the time that you realize you need a developer and when they are hired and up to speed.

I’m not sure, but I believe it is also more complex to freelance in Germany, requiring more of an official business entity, vs the US where you can just send someone an email with an invoice and everyone’s happy.

Adding this all together, German employment law is heavily tilted towards larger businesses with longer time horizons and the funding and scale to absorb uncertainty.

An alternative viewpoint for you to consider: Germany recognizes that employing someone is much more a risk for the employer than for the employee. So they protect the employee's interest. That there are countries where employees have fewer rights gives the employers in those countries and edge, but that's only because there is a 'race to the bottom' element here.

In spite of all that Germany is an economic powerhouse and even if the companies don't make profits as ridiculous as those in countries where such protections do not exist your average employee in Germany is going to have a far less stressful life on account of this than elsewhere.

Freelancing all over Europe is best done through a business entity, it offers some basic liability protection and allows you to defer taxes.

That's nice, just pointing out that German employment law gives large and predictable businesses an edge over small ones

To attract top tech talent you need to offer 200k per year at least.

A salary like this in Western Europe pays 70% of taxes (UK is the most favorable one with "only" 50%)

Switzerland is better than the UK compensation-wise, see e.g. https://www.levels.fyi/t/software-engineer/locations/greater... and https://ch.talent.com/en/tax-calculator?salary=200000&from=y....

Your numbers are plain wrong. France, Spain and Germany are at around 43%, worst case scenario.

As someone who pays tax in one of these countries and manages/recruits people across all Europe (as well as Americas and Asia) I can confirm these calculators are very accurate.

Taxes (incl. pension + unemployment + health insurance and other social contributions) for 200K euros annual salary, for a single, no-dependents employee (the most unfavourable situation)

Spain (1):

   Taxes: 81,915 EUR

   as % of income: 40.96%

France (2):

   Taxes: 87866.28 EUR

   as % of income: 43.94%

Germany (3):

   Taxes: 86,439.33 EUR

   as % of income: 43.22%

(1) https://cincodias.elpais.com/herramientas/calculadora-irpf/

(2) https://www.urssaf.fr/portail/home/utile-et-pratique/estimat...

(3) https://www.brutto-netto-rechner.info/gehalt/gross_net_calcu...

Quoting fantasy numbers with an air of authority, without sources and using an aggressive/dismissive tone throughout all your comments strikes me as pretty pathetic but, who knows, it might convince others.

(edited for layout fixes)

Don't know mate, seems to me Europe controls a, maybe the, major component of tech through ASML. If they decide you can't buy their machines anymore, then good luck with your home grown chips on 10+ year old lithography.

Whenever there is a comment about EU doing not great tech wise there is somebody mentioning ASML or Mistral. This is not very productive.

What's next, people pointing to Google and Apple when talking of Big Tech?

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