Croatia ranks 11th in the world in unicorn creation

Croatia ranks 11th in the world for unicorns, according to the World Intellectual Property Organization (WIPO). 

Unicorns are new, technology-driven, private companies with a valuation exceeding one billion dollars. 

WIPO measured the value of local unicorns in relation to GDP, and due to the valuations of Croatian firms Infobip and Rimac Automobili, which together account for 4.1 percent of the national GDP, Croatia has been placed among the top countries globally where valuable new technology companies are emerging, novac.jutarnji. hr reported.

For comparison, Croatia is one place ahead of China, where unicorns contribute 3.8 percent to its GDP, and one place behind Finland, where unicorns account for 4.4 percent of GDP.

According to WIPO’s annual report, Estonia is the world leader in creating unicorns, being the most digitally advanced country in the world, with its unicorns representing 23.8 percent of its national GDP. Following Estonia are Israel (9.6%), Lithuania (8.4%), the USA (7.8%), Senegal (5.7%), Hong Kong (5.3%), the United Kingdom (5.2%), Singapore (5.1%), and India (5.0%).

WIPO lists some of the most successful unicorns, including Estonian transportation player Bolt, Israeli cybersecurity unicorn Wiz, the online thrift store Vinted, and Senegalese fintech unicorn Wave.

WIPO emphasizes that GDP was taken into account when compiling this ranking. Nominaly, the most successful country in the world in terms of unicorn value is the USA, home to Silicon Valley.

Unicorns from the USA collectively are worth over 2 trillion dollars, which can be illustrated as 2 billion billion dollars. China follows with unicorn valuations of 736 billion dollars, and India with 193 billion dollars.

According to WIPO, the most valuable unicorn in the world is ByteDance, the owner of TikTok, located in China. The second most valuable is SpaceX by Elon Musk from the USA. The third is the e-commerce giant Shein from China, followed by fintech Stripe and gaming company Epic Games, both from the USA. The fifth most valuable unicorn is the graphic cloud software Canva from Australia.

Local experts acknowledge the recognition of domestic economic success but also emphasize the need to critically interpret WIPO’s indicators. Zoran Aralica, head of the Department for Innovation, Business Economics, and Economic Sectors at the Institute of Economics in Zagreb (EIZG), points out that Croatia is well-positioned in terms of ecological sustainability of production and the value of its unicorns relative to GDP, as reported in WIPO’s annual report. 

However, he warns that WIPO’s innovation indicators for Croatia are diverse.

“We have a poor institutional environment and weak links between science and the economy. While innovation teams in Croatian companies are making progress, the overall innovation governance, which starts with the joint public policies of different ministries towards companies, such as clustering, is lacking,” says Aralica. He adds that in Croatia, everyone is working on innovation individually.

“Even countries in Central and Eastern Europe are adopting new forms of thinking about public policies in the areas of innovation and industries, such as mission-oriented innovation policy and transformative innovation policy, while Croatia was initially moving in that direction within the S3 specialization, but it regressed due to the pandemic,” Aralica concludes.

Mirna Marović, president of CVCA, notes that the Croatian startup ecosystem has significantly developed in the last two to three years, but according to WIPO’s global innovation index, Croatia is almost at the bottom of the EU rankings. Croatia ranks third to last among EU member states and 44th out of 132 countries worldwide in terms of innovation.

“Many important indicators for the startup ecosystem show that we are lagging behind. I would highlight the business environment (112th out of 132 globally), collaboration between universities and industry in research and development (113th), education expenditure as a percentage of GDP (76th), and the ranking of our universities (70th),” says Marović.

She explains that this broader picture is more concerning than encouraging.

“It is clear that we have a lot of work to do if we truly want to transform our economy and society into one based on high technology, expertise, and high wages, one that is recognized as a global champion in unicorn creation,” Marović concludes. She also points out that caution should be exercised in interpreting WIPO’s data on the most valuable unicorns relative to GDP, as these figures may be outdated.

“WIPO used values from CB Insights, which record unicorn values at the time of investment, and these values have changed in the meantime. For Infobip, it used data from July 2020, and for Rimac, from June 2022,” Marović concludes.