Tourism has had an exceptionally long tradition in the Republic of Croatia. Therefore Croatia as such is not an unknown destination on the tourist map of the world. However, due to the globalization process and the increasingly strong competition in the tourist market, especially among the Mediterranean countries, several questions are raised: the question of competitiveness of the Croatian tourist product; as well as that of the competitiveness of Croatia as a tourist destination, and as an economy as a whole. The answer to the question why Croatian tourism does not achieve results proportional to its natural resource basis is to be sought at the company level. In fact, even though debate over achieving competitiveness and economic development is still frequently associated with the macroeconomic level, it is becoming increasingly clear that wealth and competitiveness are accumulated at the macroeconomic level of an economy. If we take into account that the main indicator of competitiveness of a company is productivity, in a broad perspective it being the basis of GDP, i.e. the standard of living in a country, it is easy to deduce that the productivity of Croatian companies falls significantly behind that of their European counterparts, where an especially big discrepancy is noticeable in the area of small enterprise. Even though tourism is unconceivable without the existing natural and cultural attractions, modern research undoubtedly indicates that competitiveness is directly associated with advanced specialised factors based on knowledge, developed specialised infrastructure, high technology and innovation, with a natural correlation between innovative capacity of a company and its size. As those factors are frequently beyond the reach of small and medium enterprises, the question of making them more available is raised, with the purpose of increasing the competitiveness of a tourist product, namely service. Precisely for this reason, in a time when there is a need of adjusting to a new value system in the European tourist market, where knowledge and innovation are becoming the backbone of competitive advantage, the implementation of a clusterization model in the tourist market can have a positive impact on the increase of economic efficiency of small and medium enterprises gaining their maximum from the environment in which those companies operate.
small and medium enterprise competitiveness cluster productivity