Development of Innovative Entrepreneurship in Croatia: Analysis and Policy Recommendations

The role of innovative small and medium-sized enterprises (SMEs) in the Croatian economy is comparatively smaller than in the developed European Union (EU) countries. In this paper we analyze some of the factors which contribute to such a situation, and provide some policy proposals which could address it. The proposals have been based on the analysis of current trends related to innovation activities and innovation policy. The needs and experiences of existing innovative SMEs have also been taken into account. The key recommendations include setting up an export agency, development of innovation infrastructure, employment incentives, using public procurement and EU funds for development and marketing of innovative products, adoption of the Innovation Act, development of innovative products through clusters and strengthening the linkages with the diaspora.