RIO Country Report Croatia 2014

The RIO Country Reports, co-authored by JRC policy analysts and independent experts, give an update on the performance of the national research and innovation systems, and examine policies to address key R&I challenges, assessing their effectiveness. They serve as a tool to inform EU and national policy-makers, and support policy learning in Member States (MS).

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The annual RIO Country Report analyses and assesses the development and performance of the Croatian national research and innovation system and related policies in the perspective of EU strategy and goals.

The report highlights recent national policy and system developments occurring and assesses the match between national policy priorities and the structural challenges of the research and innovation system. It addresses among others:

  • The progress of Croatia towards achieving the Innovation Union, focusing on areas where action is needed.
  • Progress in responding to the ERA actions, particularly in light of the ERA progress report findings published in September 2014.
  • Country specific R&D and innovation recommendations as indicated in COM(2014) 400 final '2014 European Semester: Country specific recommendations, Building Growth' adopted by the Commission on 2 June 2014 and endorsed by the Council on 27 June 2014.
  • Progress in tackling research and innovation system challenges beyond those outlined above.
  • Areas highlighted by the Commission's Communication on 'Research and innovation as sources of renewed growth' (COM(2014) 339 final) and its accompanying Staff Working Document 'State of the Innovation Union, taking stock 2010-2014' (SWD(2014 181 final).

The RIO Country Report 2014 builds on the experience of the ERAWATCH project. The ERAWATCH Country Reports from previous years are also available for download on this page. 

Report year
2014
Official publication date
03/09/2015
Geo coverage
Document type
EU Report or Publication

Country Report file

RIO Country Report Croatia 2014.pdf
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National economic and political context

Croatia is still influenced by prolonged recession which effects are seen in negative social and economic outcomes. A sharp GDP decline of -7.4% was recorded in 2009, and continued to decline through 2010 (-1.7%), 2011 (-0.3%), 2012 (-2.2) and 2013 (-0.9%), according to Eurostat data. Since the beginning of  2014, Croatia became a subject to the Excessive deficit procedure, which will have a sizable impact on fiscal and economic policies.

Croatia became the 28th member of the European Union on 1 July 2013. With the EU accession, new opportunities are arising for Croatia, particularly through access to EU markets and increased funding for innovation. Important political events were the first elections for European parliament, since Croatia has joined the EU in the context of equal Croatian participation in the debate and the creation of EU policies, which also include R&I policies.

ERA priority 2: Optimal transnational co-operation and competition

Croatia participates in the transnational research programmes that include coordination of research priorities, plans and goals, but does not include cross-border flow of funds (e.g. EUREKA, COST). It also participate in the large infrastructural projects like CERN, EMBO, and ALICE, as well as in the ERA-NET type of projects.

According to the Partnership Agreement (2014) Croatia will be involved in 13 territorial cooperation programmes in the period 2014–2020, under the ESIF. These are: /1/ Cross border cooperation with Italy, Hungary, Slovenia, Serbia, Bosnia and Herzegovina and Montenegro; /2/ Transnational cooperation with the Central Europe, Danube Programme (EUSDR), Adriatic-Ionian Programme (EUSAIR) and Mediterranean; and /3/ Interregional cooperation which include ESPON, URBACT, INTERACT and INTERREG EUROPE.

National R&I strategies and policies

The State budget for 2014 and projections for 2015 and 2016 envisagea reduction instead of an increase in public resources for R&I, which diminishes the financial sustainability of R&I system policy. The most noteworthy changes relate to the new model of financing scientific activities from the State budget that includes two main components. The first component refers to the allocation of the competition based research grants from MSES to the Croatian Science Foundation. The second component of reforms in funding schemes refers to the establishment of a new model of institutional funding based on performance indicators.

The Strategy for Education, Science and Technology and the Strategy for innovation encouragement of the Republic of Croatia 2014-2020 were recently adopted, which is a significant contribution to the establishment of stabile framework for R&I development, bringing new guidelines regarding future R&I policies.

National Reform Programmes 2013 and 2014

As a full member of the European Union since 1 July 2013, Croatia adopted the first National reform programme (NRP) in April 2014. It groups reform measures in four key areas: public finance, financial sector, labour market and competitiveness. The main objective of measures envisaged in the area of R&I is the increase in the share of total domestic expenses for research and development to 1.4% of GDP by 2020 compared to 0.75% of GDP in 2012.

ERA priority 3: An open labour market for researchers

Open, transparent and merit-based recruitment of researchers:

In the area of open, transparent and merit based recruitment (OTM) Croatia has made a big progress since 2012 with the help of a range of action plans and regulations that significantly simplified participation of foreign scientists in research activities in Croatia and made recruitment of researchers much more open and transparent. The recruitment has to be carried out based on public competition and published not only in the Official Gazette and organizations’ websites but also on the official web portal for jobs of the European Research Area (EURAXESS). Despite the progress towards OTM, some reports indicate that that there is greater room for Croatia in becoming more open, especially in terms of requirements for national citizenship and/or native speaker level.

Access to and portability of grants:

Publicly funded grants or fellowships in Croatia are not portable to other EU countries. The rules on portability within the he transitional and regional cooperation programmes in the period 2014–2020 under the ESIF are not fully outlined.

EURAXESS:

Euraxess network Croatia has been existing since 2008 as part of the public administration system within the Agency of Mobility and EU Programmes (AMPEU). It provides a complete range of information and support services to researchers and students to strengthen cross-border mobility and to remove the barriers to free movement of academic staff within Europe.

Euraxess Service Centre consists of the central office located in the capital city of Zagreb and nine Euraxess local contact points all over Croatia.

Doctoral training:

Organization of doctoral studies in Croatia is completely autonomous and can be founded by public or private higher education institutions after initial accreditation of the study programme conducted by the Agency for Science and Higher Education (ASHE). Enrolment quotas are determined on the basis of availability of research, teaching and mentorship capacities. A doctoral candidate receives a mentor to supervise and direct the research work. The special measures addressing the Innovative Doctoral Training (IDT) are not carried out. However, the main principles of IDT (research excellence, exposure to industry, international networking, etc.) are an integral part of the elaboration submitted to ASHE for initial accreditation and to the MSES for establishing the study programme.

HR strategy for researchers (HRS4R) incorporating the Charter and Code:

The implementation of the “Charter & Code” and HRS4R principles are promoted by public administration and incorporated in the national legislation related to R&I policy. By March 2013, 37 research and higher education institutions had signed the Declaration of Commitment to the Principles of the Charter & Code.

Education and training systems:

Croatia's tertiary educational attaeinment target for 2020 (share of population aged 30 to 34 with some form of tertiary education) is set at 35%. Although the number of graduates in science, technology, engineering and mathematics (STEM) aged 20-29 has tripled over the last decade, human resources in STEM are considered insufficient.

Many efforts were invested since 2008 in vocational education and training (VET) and entrepreneurship education prior to higher education. The National Curriculum Framework (NCF) and other regulations provide a formal framework to include teaching entrepreneurship as a cross-curricular theme in existing curricula. The Croatian Qualification Framework (CROQF) has been adopted in 2013 to align education with labour market needs, to improve employability and mobility of the working population and to link together the qualifications in Croatia with the qualification levels of the European Qualifications Framework (EQF) allowing, thus, the mobility of human resources within Europe.

Policy developments related to Council Country Specific Recommendations

Not applicable.

ERA priority 5: Optimal circulation and access to scientific knowledge

e-Infrastructures and researchers electronic identity:

Research e-Infrastructures are rather well developed in Croatia owing to the efforts of the University Computing Center (SRCE) and the Croatian Academic and Research Network (CARNet). SRCE is one of the key subjects in designing and maintenance of the e-Infrastructures at the national level while CARNet provides, due to the State support, and policy, free access to research data and international e-communication.

Open Access to publications and data:

Open access to research data in Croatia is enabled by the Croatian scientific portal which provides open access to all scientific information resulting from publicly funded research. They include the Croatian scientific bibliography - CROSBI, the Croatian scientific journals portal – HAMSTER (with full text databases), the Who's who in Croatian science and the Registry of the large scientific equipment at HEIs and PROs - CALIPER.

Framework conditions

In general, the business environment in Croatia is not conducive to innovation. Demand-side policies and instruments working towards increasing business investments in research and innovation practically do not exist which significantly influences innovation performance of both public and private institutions. The main supporting measures providing incentives for businesses to invest in R&D are tax incentives, with addition of several programmes aimed at funding of innovation activities, which can also be classified as supply-side policies. However, it is expected that different forms of demand-side policies will be introduced in the coming period, as presented in Strategy for innovation encouragement of the Republic of Croatia 2014-2020.

Science-based entrepreneurship

Although the problem of weak linkages has been recognised as one of the main problems of the Croatian innovation system, actual support schemes aiming at facilitating knowledge and the creation of university spin-offs have not been developed. When it comes to supporting young innovative companies, several supporting schemes have been developed over the last decade: development of Knowledge-Based Companies Programme – RAZUM and Venture Capital Programme – VENCRO, a public-private partnership initiative to encourage potential fund managers to start venture capital funds in Croatia. RAZUM programme provides financing to start-up SMEs for projects at a pre-commercial development phase. The Proof of Concept (PoC) Programme, also administered by BICRO, is the newest policy measure introduced in 2010, which was created to ensure means for technical and commercial testing of innovation concepts. However, most of these programmes are currently suspended, mostly because of structural changes in the national innovation system.

Funding trends

Funding flows:

Financing of R&I is still below the level of developed EU countries, which represents a problem in the context of future economic and social development. Since the beginning of the global economic crisis, investments in R&I have significantly decreased. Eurostat data shows that Croatian GERD reached 0.81% of GDP in 2013, which was a slight increase compared to three previous years of stagnation (0.75% in 2010, 0.76% in 2011 and 0.75% in 2012). With the adoption of the Economic Programme, a new goal has been set to reaching R&D expenditures of 1.4% of GDP by 2020.

Project vs. institutional allocation of public funding:

Traditionally, project based funding representes a rather low share in total GBAORD, while institutional funding covered over 90% of public funding for R&D. However, reforms of the science sector, which have recently been implemented, should significantly improve the ratio between project and institutional funding of R&D in Croatia. An important change is the introduction of institutional funding on a three-year basis (compared to annual decisions made in the past), which is now awarded at a three-year basis, with funding amounts determined on the basis of institutional performance indicators. The second important change represents the transfer of responsibilities for project-based allocation of public funding from the Ministry of Science, Education and Sports to the Croatian Science Foundation. Another new form of institutional funding has also been introduced in 2013. This refers to Scientific Centres of Excellence, whose establishment will be funded by MSES from the State Budget. For the period 2013-2015, €0.330m annually has been reserved within the State Budget, which should be sufficient for the initial phase of establishing 3-5 centres.

R&I funding:

Over the last years, programmes aimed at innovation funding have primarily been administered by BICRO. The main goal behind the merger of the Croatian Agency for SMEs and Investments and the Business Innovation Agency of Croatia, was the creation of a unique system for supporting entrepreneurs through all development phases – from research and development to commercialisation and market entrance. The Ministry of Entrepreneurship and Crafts (MEC) also manages several programmes aimed at innovation development, under the comprehensive Business Impulse Programme, oriented towards development of SMEs. Croatia also has a relatively generous system of tax breaks for R&D, as compared to OECD countries, which corresponds to a subsidy of about 35% for US$1 of R&D. Other forms of innovation funding in Croatia (such as public-private partnership, venture and seed capital, etc.), are still highly underdeveloped, and do not influence the access to finance for innovative companies.

Smart Specialisation

The Smart Specialisation Strategy has been drafted in 2014 but has still not been approved by the European Commission. The strategy sorted out five priority areas for smart growth: /1/ health and quality of life; /2/ energy and sustainable environment; /3/ transport and mobility; /4/ security; and /5/ agro-food and bio-economy. Sub-areas will also be defined within these priority areas. The Strategy also recognized several important cross cutting themes such as KETs (advanced materials, photonics, etc.) ICT, tourism, creative and cultural industries and green growth. Croatia's research capacities coincide with the industry’s competitiveness in areas of telecommunications, electrical equipment, food processing, pharmaceuticals, engineering (machinery) and ICT.

Knowledge markets

Intellectual property protection in Croatia is rather well regulated and falls under the responsibility of the State Intellectual Property Office (SIPO).The course of development of the intellectual property system in Croatia has been set by the National Strategy for the Development of the Intellectual Property System of the Republic of Croatia for the period 2010 – 2012. There have been no recent initiatives aimed at protecting and enhancing the value of intellectual property and boosting creativity. There is a need for introducing additional supporting mechanisms and regulation in the area of IPR on Croatian universities. This specific area is stipulated by the Labour Act, which primarily regulates inventions and relations between the inventor (employee) and employers and provides the rights of appropriation to the employers. In practice, the higher education institutions are provided with free disposition of the intellectual property rights, resulting in low levels of spinouts and start-up creation.

Evaluations, consultations, foresight exercises

The evaluation system of R&I policy is mostly focused on institutional assessment carried out by the Agency for Science and Higher Education (ASHE) within the national quality assurance system. It includes initial accreditation, re-accreditation, thematic evaluation and external audit of PROs and HEIs. These evaluations have a significant impact on institutional strategies and funding.

The ex-post evaluation studies have been carried out only for the innovation programmes co-funded by the Science and Technology Project (e.g. RAZUM, TECHRO, IRCRO) without major policy implications. In general, an effective monitoring and evaluation system of R&I policies and programmes, impact analysis of R&I, benchmarks, foresight studies are for the most part not in place.

Knowledge transfer and open innovation

Development and promotion of academia-industry cooperation is considered as one of the main national priorities for the development of Croatian economy, and has been included in the Strategy for Education, Science and Technology, Industrial Strategy 2014-2020, Strategy for innovation encouragement of the Republic of Croatia 2014-2020, etc. Besides the programmes funded by the European Union, Croatia has developed several programmes aimed at fostering cooperation between public research organisations and industry. Some of the most important measures supporting R&D cooperation and knowledge transfer between public and private sectors were the programmes Technology-oriented projects (TEST), Collaborative research development programme (IRCRO), Development of the knowledge-based companies programme (RAZUM). IRCRO and RAZUM are currently the only active programmes aimed at innovation development and implemented by HAMAG-BICRO. Science and Innovation Investment Fund (SIIF) is a project implemented by MSES and funded through EU IPA IIIc. The project supports technology transfer and commercialisation of universities’ research results.

Performance of the National Research and Innovation system

The Innovation Union Scoreboard 2014 sees Croatia as a moderate innovator with one of the lowest innovation growth rates in the period 2006-2013. Despite some progress in closing the gap with the EU in the period 2011-2013 Croatia is performing well below the average of the EU for most indicators, most notably for Intellectual assets and in License and patent revenues from abroad. Croatia’s main strengths are in International scientific publication, the Non-R&D innovation expenditures, the new doctorate graduates and the Youth with upper secondary level education.

Structural challenges of the national R&I system

The five main structural challenges of the R&I system are the following: the lack of a coherent and integrated policy framework, a discouraging business climate not conducive to innovation, weak interest of private companies for research and development, uncompetitive research and higher education system and weak regional research and innovation system.

Meeting structural challenges

In order to meet the structural challenges and overcome inefficiencies of the R&I system, in 2014 the Government initiated several important reforms of the R&I and higher education system based on the relevant strategic documents and legal regulations. A range of new supporting measures co-funded by ESIF have been launched while several previously terminated instruments for science-industry cooperation have been re-launched. However, the main difficulties related to the weak business climate for innovation, commercialization of research results and fragmentation of research resources still remain the main obstacles to efficiency of the R&I system.

Innovation framework for SMEs

SMEs encounter significant problems regarding their innovation activities. Main barriers for development of innovation and entrepreneurship in general include complex administration, unnecessary bureaucracy, long and complex procedures to obtain necessary licences as well as high regulatory fees. The selection criteria for a significant part of implemented support measures are vague, making the applications more difficult to prepare and the selection process more dependent on evaluators’ subjective appraisal. Evaluation procedures remain rather underdeveloped, but some improvements have been made towards ensuring effective evaluation of implemented programmes and their revision based on the evaluation results.

Venture capital markets

Venture capital funding in Croatia is still largely underdeveloped. There were some initiatives over the last decade, however, these were not successful. There is some business angel activity, mostly through CRANE (Croatian Business Angel Network). Current investments are still rarely targeted at early stage financing; they often focus on financial operations related to restructuring of more mature companies. In 2011, several Economic Cooperation Funds have been established on the Government's initiative. Economic Cooperation Funds (ECFs) are open venture capital investment funds with private equity that are established and operate in accordance with the Alternative Investment Funds Act.

Innovative public procurement

Public procurement procedures are based on the Public Procurement Act, which does not distinguish innovative goods and services from other goods and services. The strategy for innovation encouragement of the Republic of Croatia 2014-2020 does recognise the need of using specific procurement procedures to boost development of innovation. However, the Strategy has been adopted only recently (December 2014), and specific measures enabling the development of public procurement procedures serving innovation development have not entered into force.

The country in the European R&I landscape

Croatia is a small country (4.2m of inhabitants) in Southeast Europe bordering the Adriatic Sea. It is a middle income country with €10,129 GDP/pc in 2014. Gross domestic expenditure on R&D (GERD) amounts to 0.81% of GDP in 2013 which is significantly below the average investments of the EU-28 (2.02% of GDP). However, Croatia became a member of the European Union on 1 July, 2013 and received a remarkable opportunity to address its R&I needs by access to the European Structural and Investment Funds (ESIF).

Main features of the R&I system

The governance of the R&D system in Croatia is centralised at the state level under the authority of the Ministry of Science, Education and Sports (MSES). Research and innovation activities are mostly funded by  public resources and allocated to PROs and HEIs which employ together over 80% of total researchers. However, the private sector, although underinvested in the domain of research (0.35% of GDP), showed in 2013 a trend of growth and exceeded slightly the public sector in both performing (50.1% of GERD) and funding (42.8% of GERD) of research activities.

The regional research policy does not exist in Croatia mainly due to the insufficient resources (small tax base) for R&I activities.

Structure of the national research and innovation system and its governance

The pillar institution of the Croatian R&I system is the Ministry of Science, Education and Sports (MSES). Because of the increasing role of entrepreneurship and business ventures in the innovation system and access to the European Structural and Investment Funds (ESIF) for financing R&I activities, the Ministry of Economy, Ministry of Entrepreneurship and Crafts and the Ministry of Regional Development and European Funds acquired increasingly important roles within the R&I system over the last several years.

The Croatian Science Foundation (CSF) is the funding body for competition-based fundamental scientific research. MSES is responsible for institutional funding organized around the multi-annual research programmes based on performing indicators. The Croatian Agency for Small Businesses and Investments (HAMAG –BICRO) implements the government principle programme to encourage innovative small businesses and crafts ("Business impulse") and other innovation programmes based on science-industry cooperation.

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