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Željko Erkapić
Episode · #348

RITAM POSLA Željko Erkapić

Guest Željko ErkapićHosted by Lidija KiseljakMay 3, 2026
About this episode
What you'll hear in this conversation

Small and medium-sized enterprises (SMEs) often struggle to compete on a global stage, especially from smaller economies. Željko Erkapić, director of the Cluster of Agricultural Mechanization, offers a firsthand account of how collective action can create a fighting chance for these businesses. His story is not just about the power of collaboration, but also about the unexpected bureaucratic hurdles that can derail even well-intentioned initiatives. He shares how his cluster, formed to empower local producers against international giants, found itself paradoxically classified as a 'large enterprise' by EU funding rules, effectively cutting off vital support. This conversation reveals the daily struggle of Croatian SMEs to internationalize, the surprising complexity of modern farm technology, and the critical, yet often fragile, role of clusters in bridging the gap between local ambition and global markets.

Insights from the conversation
What to take from this episode
01
Croatian small and medium-sized enterprises (SMEs) were "too weak to compete alone," as Erkapić puts it, facing challenges from quality and pricing to branding on a global market. For businesses operating in small national economies, individual efforts are insufficient; collective action is the only path to international visibility and competitiveness.
02
The cluster's journey began with Erkapić visiting a hundred metalworking and agricultural machinery firms to gauge interest. From those hundred visits, 43 expressed initial interest, but only eight ultimately committed as founding members. Building a collective isn't just about identifying potential partners; it's about converting broad interest into concrete, shared ownership and commitment.
03
The Cluster of Agricultural Mechanization was initially registered as a limited liability company (d.o.o.) in 2009, a structure that helped with VAT. However, EU funding rules later required a 'non-profit character' for clusters to qualify for grants, necessitating a change in their social contract to reinvest profits into projects. Navigating complex regulatory frameworks often demands pragmatic adjustments to core legal structures.
04
The cluster organized around twenty-five international events, including participation at major global fairs like Agritechnica in Hanover, EIMA in Bologna, and Sima in Paris. These appearances put the cluster members into "all the important catalogs" of agricultural machinery producers, leading to direct inquiries and business deals. For internationalization, a sustained, visible presence at industry-defining trade shows is not merely marketing; it's a direct channel for new business.
05
After Croatia joined the EU, funding for clusters "suddenly disappeared." Due to consolidated balance sheets, the cluster of eight SMEs was paradoxically classified as a 'large enterprise' under EU criteria, making it ineligible for SME-focused grants. Policy frameworks can inadvertently create absurd outcomes, penalizing collective initiatives designed to support the very businesses they aim to help.
06
This unexpected classification issue led to "great disappointment" and the cluster scene "slowly starting to die." When central policy support for clusters vanished, the collective initiatives began to unravel, highlighting the fragility of such structures when external encouragement and funding are withdrawn.
07
Modern agricultural machinery has moved into "space-age spheres," using satellite navigation for tractors and multi-functional devices that perform multiple operations in one pass. This rapid technological evolution means small producers must constantly adapt to complex, high-tech solutions, pushing even traditional industries into domains demanding continuous innovation.
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