Innovation Europe > News > Innovation EU Vol2-1 > Innovation Croatia

Prior to the economic crisis, observed levels of economic performance of Croatia were still well behind the EU-27 averages. However, these improvements have been based on positive external trends and credit expansion, rather than on increased competitiveness and innovation capabilities.

Although innovation activities may suffer in the short term, the companies and sectors that face the crisis while developing new foundations of competitive advantage should secure future growth. Innovation policy can play a beneficial role in this regard.

Croatia belongs to the group of catching-up countries. From 2004 to 2008, SII for Croatia has been stagnating: it only increased from 0.278 to 0.293, indicating a trailing performance. The SII score of Croatia remains low and relatively stable, with no catching-up trend towards the EU-27 average. Stagnation of the innovation performance seems to be the most challenging issue: among catching-up countries, only Croatia and Lithuania are slow growers.

Although some steps are taken by policymakers to address the innovation performance gap, they are insufficient to generate major improvements. The relative position has remained stable – in 2008 Croatia was ranked 28th out of 32 European countries. Relative strengths are in Innovators and Economic effects, while relative weaknesses are in Firm investments and Throughputs.

Over the past five years, Human resources and Linkages & entrepreneurship have been the main drivers of the improvement in innovation performance, in particular as a result from Life-long learning (12.7%) and Public-private co-publications (10.1%). Performance in Firm investments and Throughputs has worsened, in particular due to a decrease in Business R&D expenditures (-3.6%) and Technology Balance of Payments flows (-7.4%).

The impact of public support for innovation is positive, but still limited. The implementation of policy measures is effective in identifying and supporting the most promising projects, research units and knowledge-based enterprises, as well as in spreading good practices related to a knowledge-based economy.

Main innovation challenges

• Providing access to capital.
• Increasing business R&D expenditures as a means to enhance accessibility of knowledge.
• Facilitating the protection of intellectual property.

Conclusions

Unfortunately, the policy debate is still underdeveloped and often restricted to academic and professional circles.

This is in part due to the lack of data and evaluation studies and in part due to insufficient communication among policy-makers and business and academic communities. Other areas that require more attention include co-ordination between different bodies responsible for innovation policy, better planning and evaluation processes, including the definition of specific linkages between policy priorities, policy measures and performance indicators.

During the past few years, budgets allocated to innovation policy tended to be increased gradually. This may be difficult to continue due to expected cuts in public spending. The long-term nature of effects of innovation policy may make policy-makers reluctant to increase available resources or introduce new policy measures. Innovation should be viewed as a means to secure long-term economic growth, rather than as a regular budgetary expenditure.