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The Importance of Small and Medium Entreprises for Croatian Development

In this paper particular importance is given to small and medium enterprises (SMEs) in Croatia, which are considered engine and driving force of local and regional growth. The paper shows that the development of a region depends mostly on local entrepreneurial capabilities and competitiveness. Development of SMEs is very important for local/regional development process, as well as reconstruction and revival process for a whole country. Strengthening of development could have multiplicative effects on a whole Croatian economy. Developed SMEs, narrowly specialised in particular production may influence economic, social and technical development of particular region. Considering contribution of SMEs in stimulating innovations, development of technology and human resources, employment, industrial changes and export, it is realistic to expect their contribution to local and regional development of Croatia. Circumstances, in Croatia &#8211 ; high unemployment rates, transformation process, reconstruction and industrial restructuring - contribute even more to the development needs of SMEs. Due to the fact that one of basic goals of regional, industrial and technological policy in Croatia should be raising foreign trade competitiveness of enterprises, it is necessary to change policy instruments, a specially the regional ones. In this sense, the central planing and policy should lose its past strategic significance.

Small and Medium Enterprises (SMEs); transition; restructuring; regional development; employment

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