THE ROLE OF BUSINESS SUPPORT INSTITUTIONS IN REGIONAL DEVELOPMENT: LESSONS LEARNED

Business support institutions in Croatia have been founded to create quality, user-oriented business ecosystems and coordinate programs that foster entrepreneurship and regional development. To achieve the purpose mentioned above, the Croatian government allocates significant funds for strengthening business support organizations' capacities every year. This paper's primary goal is to check whether business support organizations use government funds (state subsidies) to stimulate entrepreneurship and regional development, especially in underdeveloped counties. To analyze the development of counties in Croatia and the development of entrepreneurship, data from the Ministry of Economic, Entrepreneurship, and Crafts for the 2008-2014 period will be used. Secondary data from GEM BEEPS and Doing Business reports. The observed period is exciting for several reasons: Croatia prepared for full membership in the European Union and EU funds aimed towards entrepreneurship and regional development; Croatian economy was struggling with recession, which was especially hard for underdeveloped counties; during that period, there was a change of government - the left-oriented coalition won the elections. The results of this research should answer whether changes of government affect state subsidy distribution schemes, how effective business support organizations are in fostering entrepreneurship and regional development, and finally, provide some recommendations from lessons learned.