Innovation Policy in the EU and Challenges for Croatia

The paper analyses the role of innovativeness according to the Lisbon strategy's goals and present the effects of boosting the innovation as well as the benefits of investments in research and development. The aim of this research is to analyze the European Union innovation policy and the achievement in implementing targeted measures. Separately, the policy of stimulating innovation in Croatia is discussed and it was pointed out some inadequate characteristics of that policy. Research of innovation activities on large Croatian firm's shows that the main reasons for enterprises' innovative activities are to increase or retain market share and the product range expansion within main production programme. The most important goals of innovation activities are: lowering the production costs, new technology/equipment implementation, labour costs cuts, product quality improvements, working conditions improvements and better work organisation. The limiting factors of innovative activities are primarily low innovative potential of the enterprise, then insufficient qualifications i.e. lack of employees' training, the companies quoted insufficient buyer aptitude for accepting new products, as well as the uncertainty of the timetable for the realisation of innovation