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THE IMPORTANCE OF EDUCATION FOR COUNTRIES’ AND ENTERPRISES’ COMPETITIVENESS – CROATIAN MACRO AND MICRO INDICATORS

1. INTRODUCTION By the end of 20th century, the most competitive and advanced economies became "knowledge economies" where knowledge is the primary creator of wealth. The most efficient enterprises became “ learning organizations” where knowledge is the primary creator of business success. Knowledge is a consequence of a learning process that encompasses different learning means. Effective education and training therefore must combine continuous learning, informal training and sharing of information (Martel, 2002). Educated and skilled workers are the most important factor in achieving countries' and enterprises' competitiveness. This paper reveals the present status of education, training and development in Croatia and its implications on the competitiveness of Croatia and Croatian enterprises. 2. METHODOLOGY For the purpose of the secondary research the worldwide standard methodology of the International Labor Organization (ILO) was used. The indicators that were selected for this study are considered the most relevant for the analysis of a country's competitiveness based on its education level. To compare the Croatian competitiveness, a group of current EU member states and some candidate countries were chosen. The primary research of training and development in Croatian enterprises was conducted in 2003 on a nationally representative sample consisting of 334 enterprises in the Republic of Croatia. The research instrument was a highly-structured questionnaire of four sets of questions: enterprise characteristics, characteristics of employees, employee data about training and development, and managers' perceptions of employees’ knowledge and skills. Data were gathered through personal interviews. Human resource managers were interviewed on behalf of their enterprises. 3. RESEARCH RESULTS 3.1. Macro indicators related to education The analysis of the correlation between the education level and unemployment shares and rates showed that the majority of countries analyzed have the highest proportion of unemployed with the secondary degree (in Croatia 71% in 2002). According to 2002 data, the share of unemployed with the tertiary education in Croatia was around 10%, which is relatively high. The unemployment rates in Croatia at all education levels are approximately twice as high as in the EU-15. This gap is the smallest for the primary education and the largest for unemployment rates at the highest education level. The percentage of graduates in natural sciences in Croatia (5% in 2001) is lower than in selected EU countries, although the percentage of university graduates in natural sciences decreased in the last decade in the majority of those countries (except in Denmark and Finland). 3.2. Micro indicators related to training and development The results of the primary research reveal that on average only 14.4% of Croatian employees underwent additional training and development in 2002 (for all education levels). The average time and amount of money spent on additional training and development per employee are minimal. The findings also show that Croatian enterprises mostly invest in the additional training and development of their employees with a university degree. A disappointing fact is that out of the total number of enterprises from the sample, 46.6% of them did not invest in the additional education of their employees in 2002 at all. The data about the additional training and development of employees by their hierarchical level reveal that from the financial point of view, Croatian enterprises invest the most in the additional education of their top managers. However, percentages of employees who have undergone the additional education show that enterprises engage more in the education of nonmanagers and first-line and middle managers. The main finding is disappointing: only 14.81% of first-line and middle managers and 8.75% of top managers in Croatia underwent additional education in 2002. The amount of time and money spent on their education are minimal. According to managers’ perceptions, Croatian employees’ knowledge is not satisfactory. Managers find each and every type of knowledge listed more important than currently present. 4. CONCLUSION AND RECOMENDATIONS The analysis of the selected macro indicators lead to the conclusion that Croatia is not competitive taking into account the education level of its workforce in comparison with EU member countries and some candidate countries. The findings of the primary research depict that Croatian enterprises invest little in knowledge. Less than 15% of employees in Croatian enterprises underwent additional education in 2002 and spent less than 8 hours on it. For the future development of education in Croatia a special consideration should be given to raising the level of employability of the unemployed, encouraging the education and re-qualification of both employed and unemployed, and supporting the development of natural sciences. For the future progress of training and development in Croatian enterprises a special consideration should be given to increasing investments in the additional education of employees.

education; training & development; competitiveness;

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