Successfully managing innovations has become the basic precondition for the development of both companies and national economies. At the national level governments are forming innovation systems whose primary goal is to create conditions at which science and technology can flourish and then transfer their findings trough private sector into new revolutionary products and services.
Unfortunately not all countries have the same preconditions for creating such systems and transition economies due to many of their characteristics face serious difficulties. The aim of this paper is to describe the role of innovations and innovation systems in economic development and to point out many problems transition countries face regarding this issue.
The paper highlights following:
as in other transition countries (such as Hungry, Poland, Romania, Bulgaria, etc.), the political elite in Croatia, perusing the dominant “mantra” of the liberal market economy, cut off the state support for industrial institutes and left them to market seriously worsening the R&D potential
the large industrial companies in transition countries, which were the only ones capable of R&D performance, were struggling with the problems of lost markets and privatisation, so that educational and research activities were considered as serious liabilities rather than assets
The author stresses four key measures needed to improve R&D potential in transition countries:
creating innovation culture in all organizations trough stimulating and making people comfortable in delivering new idea
supporting development trough small innovative companies instead of creating big national champions
further involvement of private sector in research and technology
more active role of the government in stimulating R&D