Front Cover -- Contents -- Acknowledgments -- Abbreviations -- Executive Summary -- Chapter 1 Introduction -- Background -- Aim and Structure of the Report -- Note -- Bibliography -- Chapter 2 Smart Specialization -- Smart Specialization: The Main Concepts -- Smart Specialization: Incomplete Information and the Political Economy of Lobbying -- Operationalizing Smart Specialization: Access to Information -- Smart Specialization: Implications -- Promising Sectors for Smart Specialization -- Notes -- Bibliography -- Chapter 3 Croatia's Trade: Performance, Competitiveness, and Potential -- Chapter Summary -- Export Growth -- Market Orientation and Export Diversification -- Exports' Economic Complexity, Sophistication, and Quality Upgrading -- Product-Space Analysis -- Identifying High-Potential Export Opportunities -- "Low-Hanging Fruits" for Croatia Are Few and Far Between -- Could Croatia Become a Bigger Player in GVCs? -- The Importance of Services Exports -- Notes -- Bibliography -- Chapter 4 Stylized Facts on Productivity -- Chapter Summary -- Exploring Firm Heterogeneity: Are There Regional, Export Status, Ownership, and Size Trade-Related Disparities? -- Entrepreneurship: High-Growth Firms and "Gazelles" -- Firm Dynamics and Productivity Growth: Firm Entry and Exit -- Factors That Can Affect Productivity -- Notes -- Bibliography -- Chapter 5 Innovation Challenges for Smart Specialization -- Chapter Summary -- What Is the Importance of Research and Innovation? -- Recent Innovation and R&D Performance -- Business R&D Determinants -- Modest Research Excellence and Science-Industry Collaboration -- Inadequate Policy Governance -- Notes -- Bibliography -- Chapter 6 Conclusions and Policy Implications -- Conclusions -- Policy Implications -- Note -- Appendix A Examples of Potential Areas for Research and Innovation Specialization -- Boxes.

Box 4.1 Sample Characteristics -- Box 4.2 Croatia Shows Low Rates of Firm Entry and Exit -- Box 5.1 Assessing the Impact of UKF -- Box 5.2 Assessing the Impact of RAZUM -- Box 5.3 Assessing the Impact of SPREAD (IRCRO) -- Figures -- Figure 1.1 Croatian GDP per Capita and Growth Rates -- Figure 1.2 Structure of the Report's Analysis -- Figure 2.1 Access to Information, Risk Level, and Policy Making -- Figure 2.2 RIS3-A Simplified Typology -- Figure 2.3 Examples of RIS3 Experimentation and Adaptation Stage -- Figure 3.1 Export Openness and per Capita GDP, 2007-08 vs. 2011-12 -- Figure 3.2 Export Growth and Change in Market Share, 2006Q1-2013Q1 -- Figure 3.3 Export Market Distribution, Croatia, 2002 vs. 2012 -- Figure 3.4 Market Concentration: Herfindahl-Hirschman Index, Croatia and Peer Countries, 2002 vs. 2012 -- Figure 3.5 Export Growth Orientation, Croatia's Top 10 Export Markets, 2007-12 -- Figure 3.6 Growth Orientation of Top 20 Export Sectors, Croatia, 2008-12 -- Figure 3.7 Intensive and Extensive Margin of Trade, Croatia -- Figure 3.8 Economic Complexity of the Export Basket, Croatia vs. Peers, 2000-08 -- Figure 3.9 Revealed Factor Intensity of Croatia's Exports, 2012 -- Figure 3.10 Relative Quality Elasticity, Croatia vs. Peers, 2012 -- Figure 3.11 Price vs. Quality Elasticity, Croatia vs. Peers, 2012 -- Figure 3.12 Change in Relative Quality and Market Share of Top Croatian Exports, 2000-10 -- Figure 3.13 Croatia's Product-Space Maps, 1992-2012 -- Figure 3.14 Emerging Exports, 2012 -- Figure 3.15 Marginal Exports, 2012 -- Figure 3.16 Significant Exports, 2012 -- Figure 3.17 Declining Exports, 2012 -- Figure 3.18 Proximity of Croatian Exports to High Global Demand -- Figure 3.19 Minimal Spanning Tree, Exports of Intermediates, 2010 -- Figure 3.20 Exports of Parts and Components, Croatia and Six Regional Peers.

Figure 3.21 Croatia vs. Peers, per Capita Services Exports vs. Income, 2002-04 vs. 2008-10 -- Figure 3.22 RCA by Services Subsector, Croatia, 2000, 2005, and 2009 -- Figure 3.23 Croatia vs. Peer Countries, Services Sector Share in the Value Added, 1990, 2000, and 2010 Sector Share in Value Added vs. GDP per Capita, 2008-10 -- Figure 3.24 Sector Share in Value Added vs. GDP per Capita, 2008-10 -- Figure 3.25 Services Export Sophistication, Croatia vs. Peers, 2000-09 -- Figure 4.1 Percentage Difference of Firms in the Adriatic Region vs. Continental Region Average -- Figure 4.2 Percentage Difference of Firms with Different International Exposure vs. "Exporters and Importers" Average -- Figure 4.3 Percentage Difference of Different-Size Firms vs. Large Firms (>250 Employees) Average -- Figure 4.4 Percentage Difference of Private and Mixed Firms vs. SOE Average -- Figure 4.5 Entry Density and GDP per Capita, 2008-12 -- Figure 4.6 High-Growth Firms' Rate, 2010, Measured by Turnover Growth -- Figure 4.7 Gazelles' Rate, 2010, Measured by Turnover Growth -- Figure 4.8 TFP Change Decomposition by Type, 2008-12 -- Figure 4.9 TFP Change Decomposition by Region, 2008-12 -- Figure 4.10 TFP Change Decomposition by Ownership, 2008-12 -- Figure 4.11 TFP Change Decomposition by Type and by Export Status, 2008-12 -- Figure 4.12 TFP Change Decomposition by Type and by Macro Sector, 2008-12 -- Figure 4.13 TFP Change Decomposition by Type and by Services Macro Sector Group, 2008-12 -- Figure 4.14 Total Noncrisis State Aid -- Figure 4.15 Noncrisis State Aid: Selected Aid Categories for Croatia, 2011, and EU-27, 2012 -- Figure 4.16 Sector-Specific Aid, 2009-11 -- Figure 4.17 Intensity of Local Competition, 2013-14 -- Figure 4.18 Measures of the Ease of Doing Business (Distance to Frontier) -- Figure 5.1 Share of Innovative Firms, 2010.

Figure 5.2 Share of Innovative Firms Conducting in-House R&D, 2010 -- Figure 5.3 Share of Innovative Firms Conducting External R&D, 2010 -- Figure 5.4 Share of Small, Innovative Firms, 2010 -- Figure 5.5 Share of Medium, Innovative Firms, 2010 -- Figure 5.6 Share of Large, Innovative Firms, 2010 -- Figure 5.7 Percentage of Firms Innovating, Croatia, 2005-09 -- Figure 5.8 Percentage of Firms Innovating, Slovenia, 2005-09 -- Figure 5.9 Key Innovation Indicators -- Figure 5.10 BERD (% of GDP) -- Figure 5.11 BERD (€ per Capita) -- Figure 5.12 R&D Intensity (All Firms), 2010 -- Figure 5.13 R&D Intensity (Small Firms), 2010 -- Figure 5.14 R&D Intensity (Medium Firms), 2010 -- Figure 5.15 R&D Intensity (Large Firms), 2010 -- Figure 5.16 R&D Intensity (by Size), Croatia, 2009 -- Figure 5.17 R&D Intensity (by Size), Slovenia, 2009 -- Figure 5.18 R&D Intensity (by Age), Croatia, 2009 -- Figure 5.19 R&D Intensity (by Age), Slovenia, 2009 -- Figure 5.20 R&D Tax Breaks, Share of Represented Tax Breaks of Total Funding -- Figure 5.21 Number of Beneficiaries, 2009 -- Figure 5.22 Share in Total Net Profit, 2009 -- Figure 5.23 State Aid Based on R&D Incentives, 2009 -- Figure 5.24 Average Tax Burden (% of Tax Liability after Tax Deductions in Net Profit), 2009 -- Figure 5.25 Average Venture Capital Investment, 2007-12 -- Figure 5.26 Venture Capital Funding Gap, Croatia -- Figure 5.27 Scientific Publications among the Top 10 Percent Most Cited Ones, 2009 -- Figure 5.28 New Doctorate Graduates (per 1,000 People Aged 25-34), 2010 -- Figure 5.29 Public-Private Copublications, 2011 -- Figure 5.30 Innovative SMEs Collaborating (as % of All SMEs), 2010 -- Figure 5.31 Government Funding of BERD -- Figure 5.32 Government Support for BERD -- Figure 5.33 Composition of R&D Expenditures, Croatia, 2012 -- Figure 5.34 Composition of R&D Expenditures, United States, 2007.

Figure 5.35 Operating Costs and Salaries -- Figure 5.36 Capital Investments and Project Financing -- Figure 6.1 Framework for the Design and the Monitoring and Evaluation of RIS3 in Croatia -- Figure A.1 Carbon Intensity -- Figure A.2 Growth in Clean Tech Sales by Region, 2012 -- Figure A.3 Global Investment in Clean Energy -- Figure A.4 Number of Patents in Clean Energy, Croatia -- Figure A.5 Number of Patents in Clean Energy, Regional Countries -- Figure A.6 R&D in Engineering and Technology -- Figure A.7 Enrollment in Engineering, Manufacturing, and Construction -- Figure A.8 High-Tech Exports, Croatia -- Figure A.9 Croatia's High-Tech Exports vs. Regional Peers' -- Figure A.10 Export Composition -- Figure A.11 Product-Space Analysis -- Figure A.12 Global Aquaculture Production of Flat Oysters -- Figure A.13 Aquaculture Production of O. edulis in Europe by Country, 2004 -- Figure A.14 Oyster Prices Originating in Ireland and France -- Figure A.15 Annual Production of Marine Mollusc Mariculture Industry of Croatia, 1990-2001 -- Figure A.16 Areas of Scientific Output in Croatia, According to Number of Scientific Articles, 2011-12 -- Figure A.17 Number of Citable Documents in Medicine, Austria, Switzerland, Croatia, and Slovenia, 1996-2012 -- Figure A.18 Quality of Scientific Output in Medicine as Measured by the h-index, Austria, Switzerland, Croatia, and Slovenia, 1996-2012 -- Figure A.19 Number of Citable Documents in Biochemistry, Genetics, and Molecular Biology, Austria, Switzerland, Croatia, and Slovenia, 1996-2012 -- Figure A.20 Quality of Scientific Output in Biochemistry, Genetics, and Molecular Biology as Measured by the h-Index, Austria, Switzerland, Croatia, and Slovenia, 1996-2012 -- Figure A.21 Number of Citable Documents in Pharmacology, Toxicology, and Pharmaceuticals, Austria, Switzerland, Croatia, and Slovenia, 1996-2012.

Figure A.22 Quality of Scientific Output in Pharmacology, Toxicology, and Pharmaceuticals as Measured by the h-Index, Austria, Switzerland, Croatia, and Slovenia, 1996-2012.