According to various indices, Slovenia ranks globally around 35th to 40th places in terms of innovation, and unfortunately it has regressed slightly in recent years. All of these rankings also have their disadvantages because they reflect only a part of the innovation achievements or capabilities of a country. However, it cannot be denied that they rather fully reflect the real situation, which is generally not so satisfactory for Slovenia.

We are faced here primarily with a disproportion between the quality of human capital (rather favourable) and the achieved business results: the share of value added per worker, the total amount produced per employee, and the structure of exports (being less favourable). In this regard, we are clearly lacking in ambition to upgrade our innovation performance – both at the corporate and at the national level.

The following indicators demonstrate this challenging situation for Slovenia very clearly:

  • R&D investment in enterprises (in 2007 it was 18%, and in 2023 only 11.5% of GDP).

  • The share of public R&D investment as a % of GDP (in 2005 it was 4% and in 2023 5.5%).

  • The number of patents registered with the Institute of Intellectual Property (41 in 2022 – while the Czech Republic had 220 and Austria 876).

  • Share of high-tech products in total exports (in 2023, it was 31% for Slovenia, and 34% for Austria).

A somewhat better result has been achieved in the growth of labour productivity: the index has improved essentially over the period 2007 – 2023, from 100 to 140.

Slovenia is facing two serious problems in the field of innovation:

  • As a small, not highly developed economy, it cannot compete with richer countries in terms of its financial potential, and consequently, it is exposed to a strong "brain drain" (over the last 20 years, about 30,000 university graduates left Slovenia).

  • Due to the huge sell-off of successful companies to foreigners (with the exception of the pharmaceutical company Krka), the country has remained practically without a major company in Slovenian ownership. Being in foreign hands, major companies in Slovenia undertake R&D activities responding to the interests of their foreign owners (another form of brain drain).

This is all manifested in Slovenian Global Innovation Index rankings: position 26 by human capital and research, position 20 by infrastructure, and only position 35 in general innovation ranking.

As researchers – like Prof. Charles Edquist from Lund University – have demonstrated over the last 10-15 years, the contribution of an effective innovation ecosystem is now of essential importance. What are the key instruments of such a system:

  • Conditions attracting capable students into innovation-related disciplines (scholarships, rewards at innovation competitions, etc.).

  • Fiscal support for corporate R&D investment.

  • Important public investment into R&D activities.

  • Government support for international corporate R&D activities.

Over the last 2-3 decades the nature of innovation has actually changed dramatically, increasing its role in society more than ever before. Gradually, it is becoming recognised that innovation represents the key mobiliser and decisive engine of change and economic growth of our societies. Numerous studies, including empirical research, have defined the new nature of the innovation ecosystem – clearly differentiating it from the traditional linear model and the less articulated impact of the innovation ecosystem and government policies.

Actually, most governments are now paying to innovation much more attention than ever before, having at least partly realised its huge potential for development and economic growth of countries. Consequently, looking at all corporate investment, the share of resources devoted to innovation is high and consistently rising. In Slovenia this is the case for government investment (between 2005 and 2023 it has grown from 4% to 5.5% of GDP), while for business investment this share has dropped from 18% to 11.5%, which is quite alarming!

As already mentioned, the whole domain of innovation has experienced over the last few decades important changes in the very character of the process. It is no longer following the rather predictable linear model (from academic research and individual inventors to organised innovation, connecting and even integrating various actors) but a new, modern innovation model. This is engaging all kinds of innovators, with the support of government policies and innovation-friendly legislation – creating a productive innovation ecosystem.

As a consequence, countries are becoming increasingly innovative – largely as a result of public commitment and successful policies. By the Global Innovation Index in 2025, the top 15 countries (among 139) were Switzerland, Sweden, USA, Korea, Singapore, UK, Finland, Holland, Denmark, China, Germany, Japan, France, Israel and Hong Kong. 3) One should add that there is no surprise – as we know that these countries have decided to build their competitiveness on innovation, and with this purpose succeeded in developing highlyin effective innoecosystems.

On this basis, the conclusions are quite clear and simple: without decisive policy emphasis on innovation, no progress is to be expected – and it is actually strange that only a minority of countries have so far fully understood this. A major reason for the above-listed countries to understand the importance of innovation is probably not in the wisdom of their politicians, but in the fact that a productive relationship has been developed between business, academia, and government. This relationship is based on the realisation of all three partners that innovation is key to development and that this requires efficient collaboration among them in support of translating creativity into the process of developing new products, services, and technologies. This awareness and interest to collaborate is the distinguishing feature between industrial and knowledge economies. And in the latter, not just business but also academia and government have come to understand that innovation is the key to development and that innovation has become the joint front for all social actors, gaining access to benefits of innovation precisely through productive collaboration.

The central premise of the performance of innovation ecosystems is simple but demanding: it depends less on isolated excellence but more on effective collaboration and the quality of innovation governance and management – impacting decisively all innovation actors. This role includes institutional design, policy coherence, regulatory capacity, and the ability to align innovation with long-term societal interests and goals.

The modern debate on innovation follows a critical analysis at the intersection of innovation, public policy, and institutional governance, but focuses primarily on:

  • The role of public institutions as architects and stewards of modern innovation ecosystems.

  • The interaction between national strategies and global innovation dynamics.

  • The governance failures, policy lock-ins, and unintended consequences.

  • The comparative analyses illuminating structural differences between countries and regions.

The current discussion is addressing innovation as a strategic public concern, rather than a purely technological or managerial issue. The background behind this is that innovation should not merely be celebrated but should be fully understood, critically evaluated and debated, as well as properly governed.

Evidently, the level and success of innovation depend primarily on people – from direct innovators to business managers and relevant politicians and senior administrators. At the same time, they are all substantially influenced by the regulations affecting the research and innovation processes and – last but not least – depending also on how innovation is actually treated by the members of society. In all innovative societies, the role of innovators is highly recognised and appreciated – as actors and contributors to knowledge-based development and actors of positive societal change and progress. If till recently advanced societies were referred to as “knowledge societies”, now we should rather call them “innovation societies”, based on a clearly distinguishable and productive innovation culture and business outlook.

The quality of countries’ human capital is very important, but equally so is the efficiency of the regulatory environment – which needs to stimulate people’s activity and indeed creativity. Based on this realisation, we are making important progress but still facing many challenges in building an efficient innovation society.