ࡱ> y{x}yb7 NbjbjUU 7|7|&] l666:p,$!!!8!4"$_2"pL#(t#t##&P&&_______$a 8cZ+_Q'j&"&''+_X+t##|_.X+X+X+'Rt##_X+'_X+X+2Yl"\#" Y $!)[*\$_<_+[c.**c\X+$$THE IMPORTANCE OF EDUCATION FOR COUNTRIES AND ENTERPRISES COMPETITIVENESS  CROATIAN MACRO AND MICRO INDICATORS Alka Obadi, Ph. D. Nina Poloaki Voki, Ph. D. Dubravka Sin i, M. Sc. Graduate School of Economics and Business, University of Zagreb Trg J.F. Kennedya 6, 10 000 Zagreb, Croatia Phone: ++38512383333; Fax: ++38512383355 E-mails: aobadic@efzg.hr npoloski@efzg.hr dsincic@efzg.hr Key words: education, training & development, competitiveness, macro indicators, micro indicators 1. INTRODUCTION Two major changes forced national economies and enterprises to recognize knowledge as a sustainable competitive advantage: (1) the changing global economy, and (2) product and service convergence. A rapidly globalizing economy unified by improved communication and transportation gives consumers greater choice of goods and services and many new and better offerings from global enterprises (Davenport & Prusak, 2000). Consumers require quality, value, service, innovation and speed to market. Therefore, economies and enterprises will differentiate themselves on the basis of what they know and how fast they can deliver it. Secondly, traditional distinctions between products and services are breaking down. Similarly, distinctions between manufacturing and service firms are disappearing. These changes make knowledge vital. In the light of these changes, in this new society, knowledge is the primary resource for individuals and for the economy overall. Land, labor, and capital the economist's traditional factors of production do not disappear, but they become secondary (Drucker, 1995). By the end of 20th century, the most competitive and advanced economies thus 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). Basically, the dominant competitive weapon of the twenty-first century will be the education and skills of the workforce (Thurow, 1997). Namely, 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. As paper deals with both macro and micro aspects of education, training and development, each part of the paper (methodology, research results and recommendations) covers those issues separately. 2. METHODOLOGY First the sources of data for the macro analysis are given. After that, the sample, research instrument and methods of the empirical research of training and development in Croatian enterprises are described. 2.1. Secondary research: selection of macro indicators related to education For the purpose of the secondary research the worldwide standard methodology of the International Labor Organization (ILO) was used. The ILO data come from several sources. The majority is gathered by surveys on the labor force and on the basis of census, while the remainder pertains to official institutions and ILO estimates. The ILO's LABORSTA database was used to analyze basic macroeconomic indicators of countries' education level. The indicators that were selected for this study (share of unemployed by education level, unemployment rates by education level, and the percentage of graduates in natural sciences in the total number of university graduates) are considered the most relevant for the analysis of a country's competitiveness based on its education level. As Croatia intends to join EU in the near future, to compare the Croatian competitiveness depending on its education level, a group of current EU member states and some candidate countries were chosen. 2.2. Primary research: empirical research of training and development in Croatian enterprises The research of training and development in Croatian enterprises was conducted in September and October 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 (1) location, (2) main enterprise activity (manufacturing, commerce, other services, construction and other activities), and (3) size of the enterprise, measured by number of employees (1 to 34 employees (small enterprises), 35 to 99 employees (medium small enterprises), 100 to 499 (medium large enterprises), and 500 and more (large enterprises)). Characteristics of employees (1) age, (2) gender, (3) level of education, (4) hierarchical level, and (5) length of service in enterprise. Employee data about training and development (1) number of employees that underwent additional training and development by different education and hierarchical levels, (2) total hours of additional training and development by different education and hierarchical levels, and (3) total cost of additional training and development by different education and hierarchical levels. 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 The research results are presented in three parts: (1) the results of the analysis of the most important macro indicators related to education, (2) the results of the primary research of training and development in Croatian enterprises, and (3) Croatian managers perceptions of their employees knowledge and skills. 3.1. The results of the analysis of the most important macro indicators related to education For the macro analysis of the country's workforce competitiveness it is essential to observe the unemployment structure according to the education level. Namely, the education level determines the competitiveness of a country's workforce and the potential for its economic development. When shifting to a market economy, workers' qualification skills in transition countries were not adjusted to the new structure of labor demand, so majority of them had to retrain. Due to the fact that the progress of all modern industrial nations is based on a high technology and knowledge, the educational structure has to adjust to new circumstances. Qualification skills of the labor force, which do not correspond to the market requirements and industrial needs, decrease the competitiveness of the whole national economy in the long run. Consequently, the labor supply has to be more flexible. Therefore, countries started to reform their schooling systems, higher education systems and training systems. Beside the unemployment structure according to education levels, the percentage of graduates in natural sciences in the total number of university graduates is considered to be a significant macro indicator related to education (Council of the EU, 2001). In this paper this indicator was used as a measure of Croatian workforce competitiveness as well. 3.1.1. Share of unemployed and unemployment rates by education levels The education level of unemployed was analyzed in order to determine the correlation between the education level and the risk of unemployment. This indicator also reveals the inadequate coordination between the demand on the labor market and educational programs attended by the unemployed. In other words, this indicator can imply that the knowledge and skills demanded from the market do not correspond to those possessed by the unemployed. The analysis of the correlation between the education level and unemployment shares and rates was made for the three common levels of education: Primary education levels 1 and 2. Secondary education level 3. Tertiary education levels 5, 6 and 7. Figure 1 shows the share of unemployed according to their education level in 2002 in Croatia and selected EU and EU candidate countries. Figure 1. Share of unemployed based on education level, Croatia and selected countries, in 2002. Source: calculated by authors according to LABORSTA data-base, ILO (2005). As visible in the figure, the majority of countries have the highest proportion of unemployed with the secondary degree (eight years of schooling). The exceptions are France, Italy and the Netherlands where the highest proportion of unemployed has just partially finished the basic education. The proportion of unemployed with higher education degrees (tertiary education) is the smallest in Slovenia (3,17%) and Czech Republic (3,56%), and the highest in Lithuania (28,9%) and Greece (25,4%). In Austria, Bulgaria, Czech Republic, Croatia, Hungary, Poland and Slovenia there are no unemployed people with the postgraduate or doctoral degree. The level of education is an important determinant of employability and of waiting time before finding employment. In Croatia, as in most transition countries, non-professionals (only elementary education completed, and unskilled and semi-skilled workers) compose a particularly high-risk group, and they experience a much greater difficulty when finding jobs than people with higher levels of education. The majority of unemployed (even more than 70% in 2002) have a secondary degree. That is a consequence of a former planned economic system where young people were educated for specialized types of production. For the time being, that was not considered a bad policy, because after finishing their education such young workers were immediately employed by local state factories. During the transition phase, the majority of such factories became uncompetitive and was closed, leaving a large number of people with a high school degree without work. According to 2002 data, the share of unemployed with the tertiary education in Croatia was around 10%, which is relatively high. From the selected transition countries, only Lithuania has a larger share of unemployed with tertiary education (28,9%) (Figure 1). In addition, it is interesting to compare the unemployment rates by education level in Croatia with those in the EU-15 (Figure 2). Figure 2. Unemployment rates by education level (in %), LFS results, age group from 15 to 59, in 2000.  EMBED MSGraph.Chart.8 \s  Source: Central Bureau of Statistics (2002). Figure 2 illustrates that 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, where both Croatia and the EU-15 have the highest level of unemployment. This confirms that the least educated workers are the most vulnerable group in the globalized labor market because of their restricted ability to adjust to new technologies and new methods of work. In comparison with the EU-15 average, Croatia has high unemployment rates at secondary education level. The largest gap in unemployment rates is at the highest educational level. In 2000 unemployment rates in Croatia at the tertiary level were around 12% and the EU-15 average was around 5%, hence the difference is more than double. Such a large distance from the EU-15 average implies that more attention should be paid to the mismatch between the supply and demand for knowledge at that education level, having in mind the financial costs of a higher education systems. Increased demand for workers with higher education appeared worldwide as a consequence of structural changes and new production approaches. The analyses also show that wages of workers with lower education in the last twenty years were increasing at a lower rate than wages of workers with higher education (Blundell, 2002). Workers with lower education have greater difficulties when finding employment than workers with tertiary education. Consequently, as already said, workers with lower education are a risky group among groups of unemployed. As a result, a country with a high share of highly educated workers can employ a higher proportion of its labor force, which makes it more competitive on the global market. In view of that, knowledge and higher education policy issues become the main creators of economic development. 3.1.2. Percentage of graduates in natural sciences The nature of work is changing in terms of increasing knowledge intensity in products, increasing proportion of the workforce in the service sector, jobs that demand new skills, and the role of enterprises as training providers. In these circumstances knowledge cannot be expected to remain static throughout the life, on a contrary, employees need to pursue and anticipate these changes. The EU policy makers agreed that the way to stay competitive is to strengthen the knowledge based society by increasing the proportion of higher educated people in the population, specifically people educated in natural sciences. Namely, natural sciences are considered to be the foundation of the most prosperous industries such as telecommunication industry, biotechnology or pharmaceutical industry. Therefore, one of the conclusions of the European Council is that the total number of graduates in natural sciences in the European Union should increase by at least 15% by 2010, while at the same time the level of gender imbalance should decrease (CHEPS, 2003). Figure 3 illustrates that the percentage of graduates in natural sciences decreased in the last decade in the majority of selected EU countries. The exceptions are Denmark and Finland, presently the most competitive countries in the world, where the percentage of natural sciences graduates increased. Figure 3. Graduates in natural sciences as a % of total number of university graduates, Croatia and selected EU countries.  EMBED MSGraph.Chart.8 \s  Source: CHEPS Higher Education Monitor (2003) and Croatian Bureau of Statistics (2003). Figure 3 shows as well that the percentage of university graduates in natural sciences in Croatia is rather low. Therefore, one can conclude that Croatia's competitiveness in the time of "knowledge economies" is inferior because graduates in natural sciences are considered to be the engine of national development. 3.2. The results of the primary research of training and development in Croatian enterprises The results of the primary research encompass two areas: (1) investments in training and development of employees at different education and hierarchical levels in Croatian enterprises in total, and (2) investments in training and development of employees at different education and hierarchical levels in Croatian enterprises that have additionally educated their employees. Figure 4 shows investment in training and development of employees based on their different education levels in Croatian enterprises in 2002. Figure 4. Percentage of employees that underwent additional training and development, total hours per employee, total costs per employee in HRK; based on education levels; in 2002.  EMBED MSGraph.Chart.8 \s  It can be seen that Croatian enterprises mostly invest in the additional training and development of their employees with a university degree. This is logical, taking into consideration that employees with a university degree are considered to be a driving force in modern enterprises. They are the creators and drivers of change and considered a key source of competitive advantage. Figure 4 further reveals that on average only 14.4% of Croatian employees underwent additional training and development in 2002. The average time spent on additional training and development per employee was 7.6 hours, while the average cost of additional training and development per employee was only 290.00 HRK. Those values are obviously small. A disappointing fact is as well 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. More accurately, 83.3% of them did not invest in education of their employees with a basic education, 48.3% of them did not invest in education of employees with a secondary and college degree, 54.5% did not invest in any employee with a university degree, and 94.1% did not invest in education of employees with master or doctorate degrees. When taking into account only the data for enterprises that have additionally educated their employees, the findings are disappointing too (Table 1). Table 1. Percentage of employees that underwent additional training and development, total hours per employee, total costs per employee in HRK; based on education levels; in 2002; data only for enterprises that additionally educated their employees. Education levelPercentage of employees that underwent additional training and developmentTotal hours of additional training and development / total number of employeesTotal costs of additional training and development / total number of employeesBasic education level34.257.9414.50Secondary and college degree23.9910.4623.40University degree44.9440.02350.00TOTAL all additionally educated employees26.8914.7900.25 As Table 1 shows, only the quarter of employees in enterprises that additionally educated their employees underwent additional training and development. The majority of those educated (44.94%) posses the university degree. The amount of time spent on additional education is however quite small (40 hours per year on average), which implies that they may have attended circa one seminar. Although the data in Table 1 are in a way more promising than the data from the Figure 1, the percentage of employees that underwent additional training and development in enterprises that additionally educated their employees (26.89%) is still quite below the standards existing in Croatian enterprises that have ISO certificates. Those enterprises have to invest heavily in the additional education of their employees in order to keep the certificates and therefore additionally educate 48.93% of their employees on average. One can expect that data about the additional training and development of employees by their hierarchical level would reveal that enterprises are mainly focused on the additional education of their top managers. But the results obtained are different (Figure 5). Figure 5. Percentage of employees that underwent additional training and development, total hours per employee, total costs per employee in HRK; based on hierarchical levels; in 2002.  EMBED MSGraph.Chart.8 \s  From the financial point of view, Croatian enterprises invest the most in the additional education of their top managers, due to the fact that this type of education is the most expensive one. 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. Unfortunately, the main finding from the Figure 5 is that Croatian enterprises invest poorly in the additional education of their employees. Especially disappointing is that 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 (on average 11 hours for first-line and middle managers, and 10 hours for top managers) and money spent on it (on average 374.00 HRK for first-line and middle managers, and 561.00 HRK for top managers) are as well minimal. The findings about percentages of employees, hours and costs of additional training and development in only those enterprises that additionally educated their employees are slightly better (Table 2). Table 2. Percentage of employees that underwent additional training and development, total hours per employee, total costs per employee in HRK; based on hierarchical levels; in 2002; data only for enterprises that additionally educated their employees. Hierarchical levelPercentage of employees that underwent additional training and developmentTotal hours of additional training and development / total number of employeesTotal costs of additional training and development / total number of employeesNonmanagers29.2514.1701.63First-line and middle managers38.1329.12338.14Top managers37.6552.66628.75 Table 2 illustrates that 30 to 40 percent of employees (depending on their hierarchical level) underwent some additional education. It also shows that top managers are those who spent greatest amount of time on additional education (52.6 hours per year on average). Enterprises thus spent the most on their education (6628.75 HRK per year on average). In conclusion, it is important to stress that in general Croatian enterprises do not invest sufficiently in the additional education of their employees. Specifically, less than 15% of employees in Croatian enterprises underwent additional education in 2002. On average they spent one working day per year on additional education and that cost their companies 290.00 HRK per employee. However, when comparing Croatia with new EU members and some EU candidate countries, in terms of the percentage of enterprises that provide the additional education for their employees, Croatia is between Estonia and Slovenia, and has a relatively high position (Figure 6). Figure 6. Percentage of enterprises that provide additional education for their employees in relation to the total number of enterprises; EU countries, EU candidate countries and Croatia.  EMBED MSGraph.Chart.8 \s  Source: based on Nestler and Kailis (2002) and data for Croatia from this research. 3.3. Managers perceptions of their employees knowledge and skills In order to assess the importance and presence of different types of knowledge in Croatian enterprises, managers were asked for their perceptions about these topics. Managers were given the list of 8 different types of knowledge and asked to evaluate their importance and presence on a scale from 1 (not important/present at all) to 5 (extremely important/present). Their assessments of importance and presence were given for different education levels of their employees (Figure 7). Figure 7. Importance and presence of different types of knowledge among employees with basic, secondary and college, and university degree (mean).  EMBED MSGraph.Chart.8 \s  According to managers perceptions, Croatian employees knowledge is not satisfactory. Managers find each and every type of knowledge listed more important than currently present. Managers expressed that each type of knowledge listed is extremely important for university degree employees (the importance of each type of knowledge was graded with 4.5 and more on average). At the same time, their presence was graded at least 4.28 on average, except for the knowledge of foreign languages (3.95). For employees with secondary and college degree, all listed types of knowledge, except the knowledge of foreign languages, are perceived to be important (graded above 4.0 on average), while their presence is graded approximately half point less. Figure 5 also shows that two types of knowledge (computer skills and foreign languages) are not perceived to be important, nor present, for employees with a basic level of education. 4. RECOMENDATIONS 4.1. Macro policy recommendations for increasing Croatian competitiveness by improving the education level of its workforce Since Croatias primary economic and political objective is to join the European Union in the near future, according to the Plan for the Stabilization and Association Agreement, implementation and coordination of education policies according to Lisbon strategy is needed as soon as possible. To be precise, the goal of this strategy is to increase countries' competitiveness and achieve a sustainable economic growth through the knowledge-based development. The first Lisbon goal should be achieved through the five related concrete objectives: (1) improving education and training for teachers and trainers, (2) developing skills for the knowledge society, (3) ensuring access to information and communication technology (ICTs) for everyone, (4) increasing the recruitment for scientific and technical studies, and (5) making the best use of human or financial resources (Council of the EU, 2001). In the context of becoming a "knowledge economy", education and training systems must adopt the concept of lifelong learning. For the achievement of the second Lisbon goal it is vital to enable a high quality education for all from the early childhood and to encourage continuous learning, especially for older age groups. It is, therefore, important that education and training systems are flexible and provide entry points at all stages, as well as allow shifting from one type of qualification to another. Furthermore, citizens, in addition to their particular vocational skills, should have the ability to work and communicate across national boundaries. In other words, they should easily adapt to international and multicultural society. In the case of Croatia, around 10% of unemployed with tertiary education in 2002 did not match requirements of the labor market. Thus, admission quotas to universities should be adjusted in accordance to the real labor market needs. A special consideration should be given to the support of the development of natural sciences, both in the number of students enrolling natural sciences graduate schools and in the financial resources given to institutes of natural sciences. 4.2. Recommendations for enterprises The results of the primary research depict that the importance of continuous training and development of the employees in Croatian enterprises is not recognized. The results should, therefore, induce researchers, practitioners and politicians to invest in education of any kind more heavily. More to it, there are two specific recommendations concerning training and development in Croatian enterprises: The number of enterprises in Croatia that additionally educate their employees should increase. Currently, 53% of Croatian enterprises educate their employees, while that percentage should be at least 69%. That benchmark is chosen because it is the percentage of enterprises educating their employees in Czech Republic, which is the country with the highest percentage of enterprises providing additional education to their employees that entered the EU in the last round. The number of additionally educated employees in Croatian enterprises should increase. Presently, only 27% of the total number of employees in Croatian enterprises participated in some form of additional education, while that should be at least 49%. That benchmark is chosen because Croatian enterprises with ISO certificates, which are considered to be among the best Croatian enterprises, educate approximately 49% of their employees on average. Having in mind that a 10 percent increase in education is associated with an 8.6 percent increase in productivity, whereas a 10 percent increase in capital stock saw a productivity increase of only 3.4 percent (Martel, 2002), it is obvious that Croatian enterprises need to reconsider their attitude toward additional training and development. 5. CONCLUSION The knowledge economy stands on three pillars: (1) Knowledge has become what we buy, sell, and do. It is the most important factor of production. (2) Knowledge assets that is, intellectual capital have become more important to companies than financial and physical assets. (3) To prosper in this new economy and exploit these newly vital assets, we need new vocabularies, new management techniques, new technologies, and new strategies (Stewart, 2001). As knowledge is the result of a learning process, effective education, training and development have to encompass continuous learning, informal training and sharing of information. Those are prerequisites for the more competitive labor force, lower unemployment rates, lower risk of unemployment, more competitive enterprises and more competitive national economies. Like some other transition countries, Croatia has a relatively high share of unemployed with tertiary education (around 10%). The highest unemployment rates (around 17%) are at the secondary education level. The number of graduates in natural sciences is rather small. Those 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. Although Croatian managers find education to be the most important activity when dealing with employees, 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 enterprises that additionally educated their employees the data are in a way better. They educated around the quarter of their employees in duration of 15 hours per year on average. When comparing Croatia with new EU members and some EU candidate countries, Croatia has a relatively high position with 53% of Croatian enterprises additionally educating their employees. For the future development of education in Croatia a special consideration should be given to the following: (1) raising the level of employability of the unemployed, (2) encouraging the education and re-qualification of both employed and unemployed, in order to ease the transition from the industrial to a service economy, and (3) supporting the development of natural sciences, both in the number of students enrolling natural sciences graduate schools and in the financial support given to institutes of natural sciences. For the future progress of training and development in Croatian enterprises a special consideration should be given to: (1) increasing the number of enterprises in Croatia that additionally educate their employees, (2) increasing the number of additionally educated employees in Croatian enterprises, and (3) increasing investments in the additional education of employees. BIBLIOGRAPHY Blundell, R. (2002): Welfare-to-Work: Which Policies Work and Why?, Keynes Lecture in Economics 2001, London: University College London and Institute for Fiscal Studies, pp. 1-54. Davenport, T. H. & Prusak, L. (2000): Working Knowledge How Organizations Manage What They Know, Boston, MA: Harvard Business School Press Drucker, P. F. (1995): Managing in a Time of Great Change, New York, NY: Truman Talley Books / Dutton Franco, A. (2002): LFS in the candidate countries, 20th CEIES Seminar Labour Statistics Towards Enlargement, Budapest, 14-15 November 2002, pp. 1-23. ILO (2005): LABORSTA Internet, operated by the ILO Bureau of Statistics, http://www.laborsta.ilo.org/, [Accessed 30. 01. 2005] Martel, L. (2002): High Performers How the Best Companies Find and Keep Them, San Francisco, CA: Jossey-Bass, A Wiley Company Nestler, K. & Kailis, E. (2002): First survey of continuing vocational training in enterprises in candidate countries, Statistics in Focus, Population and Social Conditions, Eurostat, Theme 3 2/2002 Poloki, N. (2003): Rezultati istra~ivanja funkcioniranja managementa ljudskih potencijala u velikim hrvatskim poduzeima, Ekonomski fakultet  Zagreb, Sveu iliate u Zagrebu, Working Paper Stewart, T. A. (2001): The Wealth of Knowledge  Intellectual Capital and the Twenty-First Century Organization, London: Nicholas Brealey Publishing Thurow, L. (1997): Changing the nature of capitalism, in R. Gibson, ed.: Rethinking the future: rethinking business, principles, competition, control, leadership, markets and the world, London: Nicholas Brealey Publishing xxx (2003): Higher education policy issues and trends, An update on higher education policy issues in 11 Western countries, Enshede: Center for Higher Education Policy Studies xxx (2002): Labour Force Survey Results Croatia-Europe, 2000, Statistical Reports, No. 1148, Zagreb: Central Bureau of Statistics xxx (2003): Statistical Yearbook 2003, Zagreb: Croatian Bureau of Statistics xxx (2001): The concrete future objectives of education and training systems, Report from the Education Council to the European Council, Brussels: Council of the EU  Data gathered in transition countries are still not completely aligned with data gathering methods and definitions that are used by national statistics offices in the EU countries (Franco, 2002).  This research was a part of the Croatian labor force competitiveness indicators research conducted by Poloaki Voki & Frajli (Sin i) in 2003 for the purposes of  The Competitiveness of Croatia s Human Resources study. This study was conducted by USAID consultants and published by the Institute of Public Finance, Zagreb.  The interviews were conducted by employees of Puls, market and public opinion research agency from Zagreb.  The accepted International Standard Classification of Education (ISCED) encompasses the following degrees: X less than one year of schooling, 0 kindergarten level, 1 basic learning in reading, writing and arithmetic, and rudimentary knowledge of national history, geography, natural and social sciences, art, music and religion, 2 slightly more knowledge of individual subjects and specific forms of commercial and technical subjects, 3 includes specific forms of education requiring a full eight years of schooling, 5 various forms of professional education, e.g. for technicians, teachers and nurses, 6 university degree, 7 graduate degree.  In all selected countries data pertains to people older than 15. In the Netherlands data pertains to people aged 15-64. Data for France and Slovenia are for 2003 and for all other countries for 2002. Data were collected using Labor Force Survey.  Data for Croatia are calculated by authors and refer to 1999 and 2001.  Data for EU countries and EU candidate countries refer to 1999 and data for Croatia refer to 2002.  The Ministers of Education at the meeting in Lisbon have adopted the following concrete strategic objectives to be attained by 2010 (Lisbon goals): (1) increasing the quality and effectiveness of education and training systems in the EU, (2) facilitating the access of all to the education and training systems, and (3) opening up education and training systems to the wider world (Council of the EU, 2001).  When asked to evaluate the importance of different HR activities on a scale from 1 (not important at all) to 8 (extremely important), HR managers from the biggest Croatian enterprises, among 13 activities, appointed the most (7.39) to the education (Poloki, 2003). 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