Innovation Europe > News > Innovation EU Vol1-1 > Croatia

Within the EIS framework, Croatia belongs to the group of catching up-countries. Although the country has displayed relatively strong economic growth, its innovation performance has not been significantly improved in recent years. It is still undergoing a challenging transition from a labour-intensive economy to a knowledge-based economy.

One of the key issues in the Croatian innovation system is low level of business R&D expenditures, which is then reflected in insufficient innovation performance. Although innovation may be performed even with low R&D budgets (especially in the case of incremental and process innovations), this is often difficult to achieve, as the data on innovation outputs demonstrate. Innovation often plays a secondary role in business strategies, and is more likely to be facilitated by competition, rather than by internal resources and capabilities. The key policy measures in this field comprise tax incentives and grants.

The insufficient innovation performance is reflected in two processes: few innovations are developed and/or introduced, and the innovation diffusion is relatively slow. The latter is due to insufficient infrastructure and inadequate skills as well as by low propensity of enterprises to co-operate with other enterprises (suppliers, customers, competitors) and academic institutions. This is large and diffuse policy area whereby financial incentives may not be sufficient to bridge gaps. The policy measures focus on building interfaces and collaborative projects through the government agency BICRO (Business Innovation Centre of Croatia).

Main innovation challenges

• Increasing participation in lifelong learning
• Increasing business R&D expenditures
• Increasing innovation diffusion and providing support to enterprises with high growth potential

Action

Innovation policy in Croatia is relatively comprehensive, but there are still gaps that need to be addressed. These gaps are often related to policy implementation mechanisms, promotion and communication of policy measures, co-ordination between different bodies responsible for innovation policy, and planning and evaluation process.

Consequently, future policy can make use of the following suggestions:

• Implement the Action Plan for Increasing Investments into Science and Research and monitoring its implementation on an annual basis
• Perform regular evaluation of innovation policy (including the work of institutions which are responsible for policy implementation)
• Develop regional innovation strategies
• Analyse and redefine mechanisms of coordination between different government bodies responsible for socio-economic development in general and innovation policy in particular
• Develop a platform for dialogue among researchers, policy makers, business people, media, the general public, and others concerned by innovation development.