The bank ranked countries by their capacity to effectively invest in innovations, with Croatia ranking ninth with 6.22 points.
The list was topped by Estonia with 8.26 points, followed by Slovenia with 7.88, Lithuania with 7.17 and Hungary with 7.01 points. EU members the Czech Republic, Latvia, Poland and Slovakia preceded Croatia, while Bulgaria, Russia and Romania placed 10th, 11th and 12th respectively. Serbia and Montenegro ranked 17th with 4.55 points. The bottom of the list was occupied by Tajikistan with 2.18 points, Albania with 2.99 points and Bosnia and Herzegovina with 3.02 points.
The World Bank has designed knowledge economy indicators to assist the countries in defining the necessary reforms for increased government investment in innovation.
The countries in the region covered by the report currently allocate on average less than one per cent of Gross Domestic Product for research and development, which is considerably below a target of three per cent as set by the European Union.
About two thirds of the expenditures are financed from the budget, as opposed to Western Europe where 60-71 per cent of funds come from the private sector.
The report says that there is a small likelihood of the situation improving until the private sector assumes a more important role. It warns that increased investment by the state in encouraging innovation will not produce desired results unless economic incentives are boosted, information infrastructure is upgraded and the education system is reformed.
In order to encourage a debate on how these countries can promote their innovation systems and improve the application of knowledge by business enterprises, the World Bank will host a Knowledge Economy Forum in Prague from 28 to 30 March. The meeting will be co-sponsored by the Czech government.
Turning research and development into economic success is a crucial factor for achieving steady long-term economic growth, said Shigeo Katsu, vice-president of the World Bank for Europe and Central Asia.