Research and Innovation Strategy of Slovenia 2011-2020

Another side to this is that the service industry, which represents a large proportion ofthe Slovenian economy and has an added value of 62% of the total economy, does notuse innovation capabilities to a sufficient extent. Innovation opportunities are unrealisedin public services such as health care, environment and public administration.Due to inadequate business models and a poor focus on development, most Sloveniancompanies still operate on the basis of economies of scale, where the main emphasis ison quantity and less on added value. Development possibilities for the Slovenianeconomy are limited by the potential of marketing Slovenian products and services andthe small share of sales to end-customers. The Slovenian economy does not have asufficient internal market which limits the development of new products and technologiesand makes it difficult to enter the global market.ObjectivesThe main goal is to strengthen innovation capabilities of companies and thereby increaseadded value, create quality jobs and promote the long-term competitiveness of theeconomy. Measures in this field strongly relate to policies in education and industry. Toreach this goal, adequate incentives are needed:1. Incentives to strengthen innovation capabilities of companiesTo create this, encouraging restructuring of companies’ business models is the mostimportant. RISS will encourage companies to focus on long-term restructuring of theirbusiness models, product strategies and leadership systems and the inclusion of creativeindustries. It will direct measures towards strengthening managerial, organisational andtechnological capabilities of small and medium-sized companies in particular. Theprogramme will particularly encourage different forms of horizontal and verticalintegration of companies in supply chains, technological networks and clusters andservice providers.2. Incentives for the development and introduction of new products, services andmarketsEncouraging the development and faster introduction of new products and services aswell as the development of new markets includes a series of measures to supportcommercialisation of knowledge, which is recognised as one of the key deficiencies in theexisting system of R&D support. The support encompasses direct incentives for thedevelopment and formation of products and indirect financial and fiscal incentives fortheir market testing and introduction. With public procurements that include innovationsRISS can accelerate the introduction of new solutions and thus create demand. Thepossibility and effectiveness of introducing additional tax incentives for the developmentand introduction of new products (tax holiday) will be tested.3. Encouraging internationalisationInnovation and internationalisation of companies are two intertwined determinants ofgrowth and competitiveness. Internationalisation and successful performance in foreignmarkets is dependent on the innovation capability of companies, and on the flip sideperformance in foreign markets and integration in international chains strengthens theinnovation capability of companies. A review of development policy measures in the fieldof internationalisation, competitiveness and innovation will be prepared, as well as acomprehensive programme of measures which support them and provide synergies. Themeasures will be focused on encouraging internationalisation, inward investments whichbring knowledge and international connections enabling improved performance ofcompanies in foreign markets, and outward investments of Slovenian companies whichstrengthen their technological and innovation capabilities. A closer association with theprogrammes of international development cooperation will also be established.4. Incentives for augmenting innovation in the area of servicesServices are closely integrated into raising the competitiveness of other parts of theeconomy and public sector. Knowledge-based services which enhance innovation in theeconomy and public sector in a horizontal manner play a special role. Technologicalinnovations are not very important in services: non-technological innovations prevail in