86 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 44 | 2026 age entrepreneurship by involving higher education institutions is a proved, effective way to introduce students to the possibilities of business development (European Commission: Directorate-General for Research…, 2025a; Hornstein Tomic & Taylor, 2018) that should receive reallocated resources and concerted support from the Croatian government. Attracting more foreign investment in high-impact STEM sectors is another valuable avenue for stimulating growth (Ipsmiller & Dikova, 2021). With Croatia making considerable progress toward the green and digital transitions outlined in the NRRP (European Commission, n.d.; World Bank, 2024), foreign companies whose work aligns with sustaining those commitments could set up offices and facilities in Croatia and employ Croatian citizens. Croatia’s strategic geographic location within the EU and its relatively well-developed infrastructure, compared to the rest of the region, are selling points for investors (U.S. Department of State, 2025a). Ironically, the viability of this solution hinges on Croatia’s ability to market itself as an investment destination. One example of successful foreign investment is the pharmaceutical company PLIVA, Croatia’s largest (see Al Hattab in this volume for further information). Founded in 1920, the company achieved success in developing and patenting azithromycin but increasingly focused on the sale of generic medications starting at the turn of the century (Banić Tomišić & Inićc, 2024). In 2008, PLIVA was acquired by Teva, an Israeli pharmaceutical giant, which sought to capitalize on Croatia’s lower production costs (Palmer, 2013). PLIVA’s trajectory illustrates both the opportunity and risk of foreign investment. It brought capital and manufacturing scale but in generic production rather than innovation. The lesson is to target investors whose activities build Croatian STEM capacity rather than just low costs. Recruiting investors into NRRP-aligned industries could leverage foreign investment to strengthen STEM capacity. Government investment in these relatively nascent categories can make those sectors less risky and signal long-term commitment. A potential incentive for this initial investment could be government subsidies of private investment dollars, such as financial grants and tax breaks, sourced from redirected EU funding. Conclusion Keeping Croatian STEM talent at home is crucial to maintaining strong national identity (Hornstein Tomic & Taylor, 2018; Šlibar et al., 2023). Nonetheless, the current version of the Croatian education system does not prepare its students adequately to perform well in STEM careers in their home country (Palijaš, 2024). Few opportunities exist in the Croatian economy to apply STEM training to innovation (European Commission: Directorate-General for Research…, 2025b), albeit some purely technical roles are available in greater numbers (European Commission: Directorate-General for Research…, 2025a). Although students tend to stay in Croatia to earn their degrees, they eventually emigrate after graduation in search of better professional training and better salaries (Pavić et al., 2025). As a result, the Croatian economy has a relatively thin STEM sector compared to other EU competitors (European Commission: Directorate-General for Research…, 2025b, 2025c). Because tourism demand plays a large role in the vitality of the Croatian economy year over year, there is greater incentive to train Croatians in tourism-supportive roles than in STEM. Such is the genesis of the negative feedback loop: The initial weakness of STEM education and the STEM economy perpetuate overreliance on tourism, leading to a lack of engagement with and investment in STEM that only further weakens its educational and economic importance. Croatia is well positioned to become a STEM hub in the Balkans and to diversify its economy away from tourism overreliance, addressing each component of the negative feedback loop. Key questions moving forward boil down to whether Croatia is committed to taking the necessary risks to build that hub. New directives should not be at the expense of the tourism industry, which will continue to add significant value to the Croatian economy for the foreseeable future. Instead, they should be pursued in the interest of overall economic growth. Croatia must capitalize on some of its STEM-focused national development goals by creating jobs, closing gaps in its STEM education system, engaging the global STEM community to attract investors, and demystifying entrepreneurship. Many of the resources needed to realize these goals already exist; it is a matter of implementing them effectively. References Banić Tomišić, Z., & Inićc, S. (2024). Pharmaceutical company PLIVA: From Nobel laureate Vladimir Prelog to global blockbuster – antibiotic azithromycin. Pharmazie 79, 246–257. doi: 10.1691/ph.2024.4047 Bosnjak Kuharic, D., Melada Zaja, A., Kober Vrbat, I., Zaja, N., Grizelj Benussi, M., & Pinto da Costa, M. (2023). Migration tendencies among psychiatric trainees and early career psychiatrists in Croatia: Brain Drain follow-up study. Psychiatria Danubina, 35, 138–139.
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