The Croatian Economy is Transitioning from a Traditional to an Innovation-Based Economy

– When all changes are taken into account, Croatia has advanced two places in the global competitiveness index and one place in the business competitiveness index, which means it has maintained its position compared to last year’s report with a slight real positive shift – said Darko Marinac, president of the National Competitiveness Council (NCC).

Croatia ranks 57th in the global competitiveness index and 60th in the business competitiveness index, according to the Global Competitiveness Report 2007 – 2008 presented on Wednesday by the National Competitiveness Council. The report covers 131 countries worldwide, and this is Croatia’s sixth appearance in it. As Goran Radman, a member of the NCC, stated, the World Economic Forum introduced many methodological improvements in this year’s report, including seven new countries. 

– When all changes are taken into account, Croatia has advanced two places in the global competitiveness index and one place in the business competitiveness index, which means it has maintained its position compared to last year’s report with a slight real positive shift – said Darko Marinac, president of the NCC. In Croatia, 101 companies were surveyed, and the best results were achieved in the areas of healthcare, primary and higher education and courses, technology, innovation, structure, and the labor market. Below the world average are macroeconomics, the goods market, the financial market, institutions, market size, and business sophistication.

Marinac announced that the NCC plans to present an action plan in the spring to address what he considers the core of Croatian reality and added that without strengthening the reforms in which Croatia is currently engaged, there will be no progress. According to the report’s results, Croatia is approaching new EU member states, primarily Poland, Hungary, and Slovakia, while countries like the Czech Republic and Slovenia are still ‘eluding’ it.  – The gap between Romania and Bulgaria has increased, and the quality of the business environment and the quality of the business sector are equalizing – said Marinac. Among Croatia’s competitive advantages are the quality of natural sciences and mathematics education, the number of telephone lines, the quality of primary education, the number of internet users, the quality of roads, the number of mobile users, internet access in schools, and the number of personal computers.

– Among the advantages are many factors from the ICT sector, which aligns with the NCC’s idea that ICT should be a driver of Croatia’s development – emphasized Marinac.  Croatia’s shortcomings include the cost of agricultural policy, foreign direct investment, technology transfer, cooperation between employees and employers, and the strength of investor protection. Among the most important parts of the report is certainly the data indicating that Croatia is transitioning towards an economy based on innovation factors, which shows that the Croatian economy has begun to be measured by different criteria than before.

The most problematic factors for business in 2007 remain low administrative efficiency, corruption, tax rates, tax regulations, and inadequately educated workforce. Marinac emphasized that focus should be on areas where we are strong and that the initiated reform efforts must continue but also be deeper and more dynamic.
– The next year, as a post-election period, is an optimal framework for uncompromising and urgently needed changes – concluded Marinac.  In the overall ranking, the USA is the most competitive country, followed by Switzerland, Denmark, Sweden, Germany, Finland, and Singapore, while China and India are getting closer to the major developed countries. (Bojana Božanić)