Croatian Science Foundation research project IP-06-2016: Possibilities for reindustrialization of Croatian economy (REINDUCE)

Grant holder: University of Dubrovnik, Department of Economics and Business Economics
Duration: January 1, 2017 –  January 1, 2020
Collaborators: Zoran Aralica, Ivan Damir Anić

The premise of REINDUCE project is that the completion of economic integration of Croatia in EU requires rapid convergence of productivity and employment levels towards the EU average. Therefore, the overall concept underpinning REINDUCE is the new industrial policy adapted to the specificities and realities of Croatia. Over past twenty years Croatia faced massive deindustrialization and needs to find its own specific model of reindustrialization which takes into account its own historical and cultural characteristics. These challenges are analyzed through the following key areas: sources, extent and implications of deindustrialization; institutional changes and corporate governance, innovation, entrepreneurship and SME development; international trade, foreign investment and global value chains; policy changes and institutional reforms. The project will make a substantial step forward in understanding the microeconomic dynamics of the Croatian economy whose understanding is of crucial importance for its future growth prospects within the EU. It will provide a better and deeper understanding of non-market obstacles and market failures from a variety of economic perspectives, which are required to reverse the severe deindustrialization and to boost the catching-up process. The subject matter of REINDUCE represents one of the most important policy considerations of Croatia today: the understanding of the reasons behind the current economic state and the developing evidence-based tools for policy-makers to reverse de-industrialization to re-industrialization and to boost catching-up process by shifting economic activities to high value-added, knowledge-based activities. The outcome of this project will be new research to deepen the thinking on economic policy together with evidence-based recommendations on a wide range of linked policies and tools.