April 12-15, 2015, Osijek, Croatia

Fostering the ICT Ecosystem

Opening Remarks by Ambassador Merten

Remarks by U.S. Ambassador Kenneth Merten

Brown Forum Opening Session

8 April 2013

Minister Maras, Deputy Foreign Minister Klisović, Mr. Vidošević, Deputy Assistant Secretary Reeker, Ambassadorial colleagues, Zupan Zrilić, Mayor Vrančić, business leaders, innovators, entrepreneurs and regional startups!, thank you all for being here today. It is my great pleasure to co-host the third Brown Forum with our Croatian partners. I want to express my gratitude to all the government officials here today for Croatia’s continued commitment to the Brown Forum. I also want to thank the Croatian Chamber of Economy for your exceptional work co-planning and co-organizing this event with us, and the Croatian Employer’s Association and our Forum sponsors, without whom this conference would not have been possible. I’d like to recognize Ms. Yvonne Tesch of the Falkensteiner Group for your hotel’s great support of this event, as well as the Croatian Angel Investors Association and Zagreb School of Economics and Management for your assistance throughout the development of this forum. Finally, a special thanks to our hosts – the beautiful city of Zadar, and Zadar County.

This marks the third year in a row that we host the Brown Forum to commemorate the former U.S. Secretary of Commerce Ron Brown and his delegation that perished while on a mission to promote the economic revival of war-torn Southeast Europe. I had the pleasure of meeting then-Secretary Brown when I was working at our Mission to the EU in Brussels. He was a dynamic and committed public servant. I believe the Brown Forum has emerged as an excellent platform for bringing together government and business leaders from this region and the United States to discuss economic development and the prospects for enhanced partnerships with American businesses.

In 2013, the time is right for a discussion of startups, entrepreneurship, and venture capitalism. With Croatia poised to enter the European Union on July 1 this year, the next 18 months represent a critical time for Croatia to position itself to attract investment and ensure the country is prepared to compete – both in the EU and more broadly. American, European, and other investors will take a fresh look at Croatia during this new phase of your history.

However, I would like to stress that making the most of this unique opportunity will not happen by magic. Positive economic developments are not an entitlement of EU membership, as we can see looking around the region, and there are no guarantees. It is up to Croatians, both in the public and private sectors, to implement the necessary reforms that will make Croatia more competitive and prepared to make the most of this opportunity. One key way to ensure that Croatia is prepared to compete regionally and attract new investment is by developing a thriving culture of entrepreneurship; an entrepreneurial culture with strong links to global investment capital. Embracing innovation, entrepreneurship, and venture capital investments as key drivers of growth is arguably as important as any government-led policy reforms to ensuring a vibrant, growing Southeast Europe.

Within this context, the U.S. Embassy is delighted to partner with the Croatian Chamber of Commerce, the Croatian Employers Association, and the Government of Croatia to host this year’s Brown Forum with an emphasis on venture capitalism, startups, and entrepreneurship. Of course, we believe this event also presents excellent networking opportunities for American businesses and investors to meet with regional startups and others focused on nurturing innovation.

In terms of vibrancy of the American economy, business startups are crucial. Think of the most innovative American companies such as Google, Twitter, or Apple – or even companies like Walmart and Home Depot. Most of these firms are relatively young and started as very small startups. And it is important to note that the vast majority of new jobs in the United States are created by small businesses. Many startups of course do not succeed, but there is a culture of risk-taking and an accepted process of “creative destruction” that works to keep our economy competitive and future-oriented. Indeed, many of the greatest American companies 30 years from now will be firms we haven’t even heard of today.

This is not just relevant for the United States, and this is an important point when considering Croatia and Southeast Europe’s future. There is a growing cadre of Croatian startups that are succeeding and creating jobs in Croatia. Admittedly, they still play a relatively small role in Croatia’s economy, but they are growing, and they represent an important part of Croatia’s future in the global knowledge economy. Let me name just a few that have links to the United States – either by securing investment from American venture capital firms, by expanding their businesses into the U.S., or by setting up strategic partnerships. Names like Kupi Me, Salespod, WHOApi, UXPassion, and Farmeron. These entrepreneurs in Croatia are succeeding, and they should be getting more attention.

I’d like to highlight two Croatian startups in particular that are leveraging strengths in both the United States and Croatia to rapidly expand. ShoutEm has offices in both New York City and Zagreb and focuses on helping customers create mobile apps through a do-it-yourself online tool. ShoutEm employs 11 technology workers in Croatia and 4 in the United States – and is looking to hire more employees in both countries. ShoutEm has introduced an innovative service to the U.S. market and is currently growing at more than 10 percent—per month. A sister company to ShoutEm, Five Minutes, is also based in both New York and Zagreb and focuses on offering mobile application development and design services. Five Minutes employs 45 people and exports 75% of their services to United States, and also plans to expand in both countries. These types of links benefit both Croatia and the United States -- creating jobs, economic growth, and enhancing the competitiveness of both countries’ economies. I’m pleased that we have representatives from ShoutEm, Five Minutes, and a number of Croatian startups with links to the United States here with us at this forum.

The U.S. Embassy is doing its part to help foster a culture of entrepreneurship and innovation in Croatia. For example, during the past year the embassy spent roughly $150,000 on programs that develop entrepreneurship. With several local partners we hosted a Startup Camp on the island of Vis that taught students and young Croatians how to develop and pitch a business plan to investors. We plan to host the second Startup Camp in Rijeka at the end of May. And, of course, the Ron Brown Apprentice Program taking place during this year’s Forum seeks to provide the next generation of regional entrepreneurs with exposure to influential venture capitalists and entrepreneurs from Europe and the United States.

Let me close by emphasizing the importance the United States continues to attach to the region of Southeast Europe and our faith in, and our commitment to, its future. The Brown Forum is a reflection of America’s abiding commitment to this region’s economic success and integration into Euro-Atlantic institutions. In this regard, we look upon Croatia’s pending EU accession as a critical milestone that underscores to the entire region that the door is open to all, provided that the hard work of economic reforms and developing a culture of entrepreneurship is undertaken. Events like this Brown Forum represent our attempt to help in this process of economic transformation. However, at the end of the day, Croatia’s friends cannot do the fundamental work of reforms to make Croatia the competitive, vibrant economy it could be. Croatia’s future lies in Croatians’ hands. With the science, engineering, and informational technology skills already present in Croatia, there is no reason you cannot compete successfully in the global economy – particularly if you pair your hard science skills with an entrepreneurial spirit that is willing to embrace new ventures. I am confident you can chart just such a path.

Thank you all for coming, and I wish you a successful Brown Forum 2013.