Your country is dying
Probably.
Italy, Japan, Serbia, and Croatia all experience negative growth rates [2]. These countries have birth rates lower than their death rates, but Croatia and Serbia also have net negative immigration, primarily due to economic reasons.
Since Croatia joined the EU in 2013, many Croats move to other European countries for work and then laborers from other Balkan nations backfill: "Increased migration from Croatia to the EU has caused labour shortages in the country, which is being addressed with workers from the WB6, more specifically, Bosnia and Herzegovina, Montenegro and Serbia" [3].
Those that live in Zagreb know that the country has recently taken a similar approach, with many immigrants performing gig economy work (such as food delivery and rideshare driving).
If you have to rely on immigration to have net positive population growth, you are doing something wrong. The United States has positive growth but will only sustain itself in the future due to 0.3% immigration [4]. Your country, your product, isn't meeting the needs of the market.
In fact, it's estimated that Croatia will be 25% foreign by 2053, according to one demographer [5]. Croatia has tried to bribe the diaspora — the Croatian citizens living abroad, estimated at 3 million people — to move back to the country; efforts failed with only 165 people took up an offer to return and start a business in exchange for about ~€26,000 [6].
So what's a country to do when faced with decreasing birth rates, skilled labor moving abroad for higher wages, and brain drain?
Where to play
Last time, we talked about building a product vision for your country. We're going to move forward with a Winning Aspiration:
To provide the foundations for diverse communities to thrive, fostering a high quality of life, cultural richness, and sustainable well-being.
Where do I sign up?
Where to Play is all about identifying your core customer (singular), geography, channel, and product type. Here's what we need to consider.
Customers
Who are our customers? At first glance, this might seem intuitive but in reality it's a bit more complex. You might initially say it's people who have kids or plan to have kids, aged 18 to 40.
But this is short-sighted. Considering that all individuals can positively contribute to a society, we need to build a community that works for everyone, regardless of their life choices and plans (or capabilities) to have children.
For instance, the elderly (who may or may not have had children) bring wisdom and experience to a community. Others that don't have children can contribute financially, socially, and culturally.
Geography
The initial focus is, of course, on those inside the country. Churn kills companies and it kills countries, too. The reason for this is because of cost of acquisition. It's much more expensive to replace a customer than it was to gain them in the first place. Step one is focusing on the needs of the existing population.
The diaspora is another aspect to consider. Is there a way to entice these people back?
We are competing with other European countries, but it doesn't make sense to focus on them yet. If they have a better product than our country, then our customers will buy their product instead. So essentially we are competing continent-wide (if not globally).
Channel
Countries use many channels to communicate with their residents including traditional media (television, radio, newspaper), digital channels (apps, social media, websites), community engagement (community centers, town halls, public forums), and more formal pathways.
Different customers use different channels so the way you communicate must vary based on the specific customer your are trying to reach, the message you are sending, and the impact you desire.
For instance, the children of the diaspora have a right to citizenship under jus sanguinis. But do they speak Croatian? You'll have to modify your message if they don't.
Product type
Those formal pathways are really the product. It's laws, regulations, enforcement, and court judgements. This is how the government lays the foundation for the society. Let's see what policies might make sense.
How to Win
When using Playing to Win, Where to Play and How to Win are always paired up and tightly coupled. I'll explore some of the topics that a How to Win choice might be concerned with, namely: quality of governance, economics, innovation and education, cultural preservation, social infrastructure, and environmental sustainability.
Quality of governance
This is probably the biggest complaint I hear of in Croatia. Corruption and bureaucratic efficiency are very important. It's called out very clearly in the US Department of State investment statement on Croatia: "The economy remains burdened by underperforming state-owned enterprises, low regulatory transparency, and permit approval delays that impede project development, particularly in the energy sector" [7].
Digitalization of government (e-government) is one way to have an impact on corruption. While not a panacea, e-government reduces uncertainty and risks which limits the capability for corruption to take root [8]. Ultimately, citizen participation is needed.
What government services are available online in your country?
Economics
With a dying country, who is going to pay for the care of the elderly? That is a major conflict right now in countries with aging populations, such as Croatia and Japan [9].
People don't want to have kids when they can't afford to pay for housing or food [10]. The "right time" to have kids keeps getting delayed and delayed. This is largely driven by economics but see below for other factors.
Additionally, 62% of Americans are living paycheck to paycheck [11]. The economy may look good according to indicators but people aren't happy, likely because the basic needs (energy, food, housing) cost more [12].
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In the US, minimum wage is not a function of inflation such as in Belgium [13]. Each year in Belgium, many wages change due to an indexation which is an adjustment based on the "basket of goods" consumer price index. In other words, the paycheck (and pensions, unemployment benefits, and insurance contributions) changes automatically based on inflation.
Trade is a very important factor here. I was living in Seattle during the Battle of Seattle. I was 16 so my sister didn't let me join the protests. Reflecting now, the impact and abuse of corporations taking advantage of a global marketplace is obvious. Why build something locally when you can offshore it, reduce your costs (potentially through slave labor), skip the red tape, and make a killer profit? Business ethics be damned.
Germany learned that a strong economy is based on the middle class, Mittelstand [14]. They way it works is to find a very specific niche, such as making a metal spring. Get really good at, German perfection. Then sell it globally and take advantage of economics of scale. It's supported by an apprentice system and unions where workers and businesses work together to achieve success. Everyone gets a piece of the pie.
And that's now faltering. More expensive energy (thanks Putin!) is cutting into profits and a cooling global marketplace reduces sales.
How can the government react to this?
Innovation and education
The country need to prepare the next generation for the future of work. Otherwise, the economics break down again as workers are not appropriately skilled or capable of working in high-demand fields.
Look at the energy conversion necessary by everyone country in the next decades. Germany alone is predicted in 2030 to lack 5 million works in solar technology [15]. And that's just one field of energy conversion.
In the US, the government provides loans and grants for education, something that is not necessary in most European countries since education is free. If companies demand educated workforces to accomplish their goals, it follows that companies should pay for that education. The government can certainly subsidize certain areas of study to accomplish its goals.
Why does this not happen in the US?
Cultural preservation
What is a country if not its people? Cultural and ethnic identity is incredibly important in Croatia, especially due to the impact of the Yugoslav wars. Respecting traditions and preserving the culture of the national identity is an important aspect of governance.
Supporting language, art, music, crafts, and indigenous knowledge is essential. This often takes shape in the form of museums, events, school curriculum, and festivals.
Most importantly the minority and autochthonous voices need to be represented and protected, too. After all, they are a part of the heritage. For instance, the Romani people have been a part of Croatia for more than 600 years [16]. How should they be treated?
Social infrastructure
The social infrastructure is one of the most visible aspects of governance. This includes healthcare, day care, community centers (third places), parks, libraries, public transport, communications infrastructure, cultural centers (theaters, museums), and parks.
If you have a car, it's probably very easy for you to visit all of these types of locations. But, due to car-centric design, you probably live in a city where it's difficult to get around without a vehicle.
European capitals and metropolitan areas do a fantastic job of providing good public transportation, sometimes even achieving the requirements of a 15-minute city.
But imagine you have a new baby, with a stroller, and a bunch of junk (bottles, diapers, formula, wet wipes). It's raining and you are trying to get to a pediatrician appointment. Would it be convenient to take public transit?
Two of the things on the list, healthcare and day care, are a bit unlike the others. The reason is because in Europe, these are free services; whereas in the US, they are paid. This has a major impact on survivability since they are essential services.
For example, in the US, healthcare is tied to your specific job. Everyone has a different insurer and a different plan and different coverage. When you go to the doctor you probably have to pay, even though you pay through each paycheck.
In Europe, once you are registered, you have a baseline coverage. You can buy additional coverage through an insurer that might cover things like long-term treatment, medicinal regimes, and special costs such as longer hospital stays.
In Croatia, day care is available year round through the school system, once the child can walk (~1 year old). It's usually free but if you have a specialized program, such as Montessori, there is an additional fee. We pay the maximum, €130 / month.
In the US, day care is so expensive, some parents are leaving the workforce [17]. Invisible labor is real and it has an effect on the happiness of families and the success of a nation due to economic impact.
Companies are feeling this burden too. Because the government is not shouldering costs or providing services, many people expert child care benefits as part of their compensation; the largest cohort is Gen Z parents with 43% willing to switch jobs for financial assistance [18].
What is the social infrastructure like in your neighborhood? Can you walk or bike to all the services needed including medical offices, pharmacies, salon, public pool, and hardware store?
Environmental sustainability
Our planet is dying. With governments making little progress towards their agreed goals, it's becoming more and more important to make an impact earlier (both financially and health wise) [19]. One of the major complaints at COP28 is the infiltration by fossil fuel lobbyists [20].
Reports also show that fewer people are having children because of climate anxiety [21]. "Their analysis found that, in 12 of 13 studies, stronger concerns about climate breakdown were associated with a desire for fewer children, or none at all."
Having fewer children isn't a bad thing, per se, since the population is reduced. However, increased heat, air pollution from wild fires, and other factors are impacting pregnant people and babies [22]. That's a surefire way to do permanent damage to your future population.
If we think back to Maslow's hierarchy of needs, how can we possibly provide the base levels of the pyramid (physiological needs, safety) when the world is burning down around us?
Your government's response
If you were prime minister (or president!) for the day, what would you do? How would you win with the customers? What are the most important categories for you?
In the next edition, I'll explore some specific policies and how they impact these categories.
References