Industrial Policy In Turbulent Circumstances

Industrial development of Croatia since the beginning of the transition period has not demonstrated satisfactory results. Over the entire process the share of industry in GDP has been declining. Such a result is attributed to the fact that there was no consistent industrial policy. The period is characterised by dramatic declines of output, notably industrial production. Upward shifts were sporadic and during much shorter periods, thus leading to a negative evaluation of the outcome of the entire period. The reallocation of resources over this period has been modest. The best measure of achievement of industrial development is the decline of competitiveness of manufacturing and high declines of employment. A growth-oriented environment with respect to macroeconomic policy has supported development of industry. Such an environment has not created a business friendly environment either. Without a policy of technological development as well, the outcome is a declining competitiveness of the firms. Cost inefficient state administration has become an additional burden to firms. Competitiveness of manufacturing enterprises is thus more an outcome of their own efforts than from outside incentives. From the point of view of strategic positioning of the firm the relevance of the approach introduced earlier by D. Gorupić is underlined. They are used as a starting position in the elaboration of framework for strategic positioning of the firm under competitive conditions. Based in this a further elaboration of a framework of a new industrial policy is presented.