Remember the War-torn Balkans? Entrepreneurship There Is Now on the Rise. The challenges can be big, but the opportunities are wide open.
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On a recent trip to Zagreb, Croatia, I stumbled across the LEAP Summit, a conference fostering entrepreneurship in the Balkans. There were over 1,200 attendees from 26 countries represented at this initial year of the conference.
It was an event that provided me, an American entrepreneur, a great window on to what the region is about today, following years of war in parts of a region loosed defined as Croatia, Serbia, Slovenia, Montenegro, mainland Greece, Macedonia, Kosovo, Bosnia and Herzegovina, Bulgaria and Albania -- and sometimes referred to as "Southeast Europe.")
In fact, the Balkans are an interesting, emerging region that most people don't know much about, but that has great potential mixed with difficult challenges. Those challenges were very much on the mind of Andrej Hanzir, a graduate student at the University of Zagreb, who was the driving force behind the conference.
"We have some of the highest unemployment rates in all of Europe, yet many countries have a very skilled workforce and good language skills," Hanzir said at the conference. "We really need to get young people on board with the entrepreneurial mindset, because that's going to up the level of the region.
"Many of the countries came from socialism or communism and were part of ex-Yugoslavia just 25 short years ago, and we need to accelerate the shift to a market-driven economy. We need jobs -- and the best way to create jobs is to foster startups and small business."
That's why the conference focused on people under 35, who have grown up in this new world. Those current and potential entrepreneurs hope that their governments are paying attention, because there is much that can be done, specifically around bureaucracy and taxes.
It can be expensive, for instance, to start a new legal entity in the region -- often requiring $1,000 or more (big money in the Balkans) to start a company, and weeks to months. The challenge comes into perspective when you consider that average wages in the region range from only about $500 to $1,000 a month. Paperwork can seem endless, and it also changes frequently.
One positive point is that some of the countries, such as Croatia and Greece, are in the European Union, which helps open up trading opportunities and reduces at least some of the bureaucracy.
A negative? Taxes, which companies pay for their employees, on top of the salaries, and which can be quite high.
The biggest challenge, however, is mindset. "It used to be that, if you start a business and it doesn't succeed, you are labeled a failure. Yet if you succeed, you are a crook. So why even try?" commented Davorin Stetner, a well-known entrepreneur in the region. Stetner heads up the Croatian Business Angel Network and also serves on the Presidential Economic Council, which advises Kolinda Grabar-Kitarovi, who's president of Croatia.
"We're changing that," Stetner continued, about the region's issues with mindset. "With mentoring, education, accelerators and incubators, we're giving the people the tools they need to succeed. There's just so much potential here."
While area universities are churning out skilled technology workers who speak good English and German, many of them move to London, Germany or the United States after graduation to make more money. It's the challenge of the countries here to give them a reason to stay. And, in fact, some have cracked the code, quite successfully.
Yellow Designs is a web and digital design company in Montenegro that has thrived by finding Western clients through outsourcing outlets like Upwork and Freelancer.com. The company offers graphic design, web design, 3D design, animation, video editing and photography.
Marko Mujicic, one of the founders, remarked of his firm that, "We have quality people -- college graduates, many with master's degrees -- that our clients can take advantage of, for around $10 an hour. That's cheaper than most anywhere in the world, and our customers tell us that it's much easier to communicate with us than other outsourcing they've done.
"We like working with the Western companies because they know what they want -- it can be frustrating working with local companies, who don't value IT projects the same way."
Yellow Designs ends up paying its people significantly more than the average Macedonian wage, which keeps them people-focused, and loyal.
But that's the story of only one Balkans company: It will be interesting to see how the region shapes up over the next few years. Will area governments do more to support the startup scene? Will people start accepting the risk that comes with starting a business? Will capital facilities be able to fund the high-potentials?
Great questions to ask -- with a whole region on the line.