One Croatian town’s example of a successful transformation

Resourcefulness and drive for development. This is how the transformation of the Croatian city of Novska can be described, which in only about 7 years managed to get out of the shadow of the traditional industries and take a step towards the innovative video games sector. The bold idea has unleashed a slow but sure economic boom in its wake. Young people are coming back, housing prices are soaring, and the small town is attracting international investors to its business zones.

With a population of over 11 thousand people and located near the border with Bosnia and Herzegovina, Novska, like the cities of mainland Croatia, faces a number of problems, such as population decline, and economic turmoil related to the effects of the Croatian War of Independence and underinvestment in the past.

Over the years, however, the city managed to skillfully use European funding to develop. It is with such funds that important social facilities are built, the inclusion of elderly people is encouraged, and the educational infrastructure is also developed. So, in practice, Novska can offer something for everyone.

Undoubtedly, the engine of this development is the IT and gaming industries. Novska is an excellent example of how smaller cities can use niche areas to promote growth and regional development.

The transformation of Novska

The economy of Novska and the entire Sisak-Moslavina region are mainly dominated by traditional industries, such as timber logging, metallurgy and textile industry. In 2017, the local administration initiated the creation of the Pismo Incubator with the aim of entering the rapidly developing world of video games. With the support of EU funds and the national government, the project became an entrepreneurial center where more than 80 startups are now operating. They have access to a modern equipped studio for game development and testing.

We have created retraining programs in partnership with the Croatian Employment Service," explains the mayor of Novska Marija Kušmiš to Economic.bg. "Many people from all over Croatia came to train and retrain in the gaming industry. This not only changed the labor market but also the very appearance of the city."

With the emergence of Pismo and the influx of young entrepreneurs, the real estate market has come to life sharply, new housing projects have appeared, and the infrastructure has begun to be renewed. Property prices in the city have risen significantly. If before it was possible to buy a house for about 20 thousand euros, now the prices reach 120 thousand. euro.

Novska is also becoming attractive to foreign investors. The city has two business zones, one of which hosts 20 companies. The ambitious project for a gaming hub will unfold on the territory of the second business zone, and the mayor of the city says that very soon the German company TECE International will also be established there, which will open a production base for sanitation. The investment was announced back in March - it is in the amount of 25 million euros and will create 150 new jobs.

The social aspect of development

Novska's transformation affects not only its economy but also its society. Programs to support young families, for newborns and housing assistance stimulate young people to settle in the city.

People used to leave Novska, but now we are observing the opposite trend. Young families not only come to visit, but also stay," says Marija Kušmiš.

Social infrastructure has been renovated and built in the city - a daycare center for the elderly, a library, a cinema, a historical museum, as well as a special STEM laboratory for students. There are 4 kindergartens in the city, and the construction of a fifth is planned. There are two primary schools. Novska is also home to one of the two schools in the region, where students are trained in programming and 3D modeling

We are learning to create video games. After I graduate from college, I'm thinking of starting my own business," shared a 12th grade student from the local high school.

A small museum was born from the desire to preserve the history of the town. The Sajko family ended up being the custodians of Novska's memories. For many years, father Živko and son Željko collected various artefacts reflecting the history of the city. The entire collection was housed in the family's house until 2019 when the museum was officially opened. The more than 340 objects have the status of cultural heritage. The museum also has many old photographs of famous places and people from the town.

The local library also takes part in the cultural life of the city. Entering it, one steps into a modern environment, which even contains a kids' corner for the youngest ones. The entire collection of the library can be found online as well.

The library used to be located in another part of the town but because of the small space, it had to be moved. The building of its new premises, next to the Music School of Novska, was co-financed by the European Investment Bank (EIB), and local and state budgets. Restored furniture from the first pharmacy in the town can also be seen in it.

The day center for the elderly has been fully financed by the European Fund for Regional Development. For this purpose, an entire building was completely renovated and redesigned to contain rooms where the elderly can stay and spend the night if they wish to. Medical staff attend to their needs. The center opened 2 years ago, and currently, most of its users gather there to spend the day participating in various activities, such as art painting. There are also educational classes where school students come and show the elderly how to work with computers. Apart from various activities and social inclusion, one of the people at the center shared that love can also be found there.

The transformation that Novska is undergoing also appeals to the older generation. Most of their children do not live in Novska, but they visit them often.

Entrepreneurial flair

There is a strong desire on the part of some town residents to have something of their own to work on. For example, Julija Škovrlj and her husband, who are in their 50s, are developing their own furniture upholstery business - Julija Design. They previously worked in a butcher shop, but decided they needed to have a business of their own.

They taught themselves how to upholster furniture and use their old house as a workshop. They import fabrics from Turkey, Spain and other places. Their children also help them in their work. They say they don't need a website and marketing on social networks because they already can't keep up with the orders.

Our advertising is word of mouth. We already have orders for several months ahead. We want to maintain the quality of our work, and if we take more orders, we won't be able to fulfill them," says Julija, after whom the atelier is named.

Video game start-ups are the other driving force of entrepreneurship in the city. Their owners are young people, most of whom have moved from different parts of the country to Novska with the sole purpose of developing a gaming business.

The Pismo incubator has brought together companies related to every single component that a good game needs, from 3D modeling to script writing and voice acting.

One such startup in the incubator system is Polychron, which deals in the 3D modeling of hyper-realistic objects. The services of the startup are used not only by game creators but also by film productions and marketing companies. Recently, the company has been interacting with museums and parks, offering them augmented reality (AR) services.

Another company - Hiroma - is engaged in creating educational games for the little ones, introducing them to a world of little fluffy friends called Moopies. The games are available in schools and kindergartens in Novska, but also throughout Croatia, and in several languages.

All of the interviewed game developers stated that they would stay in Novska because of the favorable environment and the upcoming gaming hub project. Some of the companies have received state funding of 20 thousand euros to start their business.

Our motto all these years has been, “You have to take risks to succeed.” If you don't take risks, you can't expect success. We should not be afraid to start new big projects, because they can be a generator of further development," says Mayor Marija Kušmiš.

Co-Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the Managing Authority. Neither the European Union nor the Managing Authority can be held responsible for them.

Translated by Tzvetozar Vincent Iolov