1.02 Review article Creativity and Intangibles in the Public Sector: Sources and Socio-Economic Importance in Slovakia and Slovenia UDK: 35:330.341.1(497.6+497.4) Kamila Borseková Faculty of Economics, Matej Bel University, Banská Bystrica kamila.borsekova@umb.sk Katarína Petríková Faculty of Economics, Matej Bel University, Banská Bystrica katarina.petrikova@umb.sk Primoz Pevcin University of Ljubljana, Faculty of Administration primoz.pevcin@fu.uni-lj.si ABSTRACT Development of creative and cultural sector, which is based on internal resources of the territory, can ensure competitive advantage; and several Factors of competitive advantage based on resources can be defined. Those Factors are human capital, tangible and intangible potential as well as financial resources. The purpose of this paper is to elaborate on the importance of creativity as competitive advantage factor and to assess unique resources (tangible, intangible potential, human capital, financial resources) potentially leading to innovation in two EU member states, Slovenia and Slovakia. The paper presents the case study analysis and comparison of current and potential Future situation in creative and cultural industries in Slovakia and Slovenia. The results oF the study suggest that the Foundations For the development of the creative and culture sectors are quite different in those two countries, and Slovenia tends to exhibit stronger current and potential future position in those industries compared to Slovakia. Key words: creativity, intangibles, competitiveness, Slovenia, Slovakia JEL: O30, L80 Borseková, V., Petríková, K, & Pevcin, P. (2013). Creativity and Intangibles in the 103 Public Sector: Sources and Socio-Economic Importance in Slovakia and Slovenia. Mednarodna revija za javno upravo, X/(3-4), 83-98. Kamila Borsekova, Katarina Petrfkova, Primož Pevcin 1 Introduction Currently, intangible resources have become more important than tangible resources. They are unlimited and their distinctive advantage is inexhaustibility. One of these resources is creativity. The framing, nurturing, as well as ethical and sustainable exploitation of human creativity has become a key focus for economic development linking it to concepts around innovation, design and entrepreneurship. The importance and role of creativity and innovations for the economy has been highlighted by the European Union in strategic documents, for example, in The Treaty of Lisbon and Strategy of EU 2020. To achieve the key aims of the European Union by 2020, three main priorities were identified, namely smart, sustainable and inclusive growth. Smart growth should broaden the values of the EU through growth based on knowledge using education, research, innovations and creativity. This is why the ambitions of the EU are aimed at the strengthening of knowledge and innovations, based on creativity, improving the education system, research, supporting and spreading innovations and knowledge, thus transforming ideas into new products and services (Europe, 2020, 2010; Treaty of Lisbon, 2007). Creativity can provide a source of economic and social resilience also in times of economic down-turn (Suciu & Ivanovici, 2009). Intangible assets are now recognized as drivers of economic value creation. They are distinctively associated with the leadership, human and intellectual capital, workplace culture, innovation, adaptability, brand equity, reputation and the quality of alliances and network, new processes and technologies that make an organization or business successful or otherwise (Youngman, 2003; Carayannis, 2004; Jarboe, 2007). The most important 'producers' of intangible assets are creative and cultural industries. Being at the crossroads between arts, business and technology, cultural and creative sectors are in a strategic position to trigger spill-overs in other industries. Culture and creativity have direct impacts on sectors such as tourism and are integrated at all stages of the value chain of other sectors such as fashion and high-end industries, where their importance as key underlying assets is increasing (European Commission, 2012). There is recognition that the role of public sector intangibles also needs to make progress in terms of their measurement and, therefore, allows us to assess their contribution to the productivity growth of the economy and well-being. The intangibles make up an increasing share of many companies' total assets. However, there is a lack of a clear understanding of the importance of intangible investment and assets in the public sector, as they are often regarded as expenditures. Their contribution to the innovation and growth of the economy, including historical and cultural resources, and their role as a competitive asset of a country and intergenerational well-being are not recognized fully. The structure of public sector expenditure, budget and efficiency are crucial for long-term growth, particularly during a period 1Q4 International Public Administration Review, Vol. XI, No. 3-4/2013 Innovation and Creativity in Public Sector of fiscal consolidation and austerity. Yet, in the present economic situation, there is an inherent danger that such public sector investment in intangibles - which is important for long term smart, inclusive and sustainable growth and for the society - are understood merely as a 'cost and cut' exercise during austerity policy. Therefore, the purpose of this paper is to elaborate on the importance of creativity as competitive advantage factor and to assess unique resources potentially leading to innovation in two EU member states, Slovenia and Slovakia. The empirical part of the paper is based on the case study analysis, where the focus is set on highlighting the importance of creative and cultural industries producing crucial intangibles for smart growth and innovation in these two countries. The case study and comparison of the research issues in Slovakia and Slovenia is performed by selected indicators divided into three groups of indicators representing (1) human potential, (2) tangible and intangible potential and (3) financial resources in two European countries (Slovakia and Slovenia). The existing data come from the databases of European statistical office, official documents and analysis on the level of EU. The main thesis related to this part of the paper is that current and potential future situation in creative and cultural industries differs between Slovakia and Slovenia. The paper is organised as follows. Chapter 2 presents the definition of intangible assets and their specifics in the public sector. Chapter 3 presents the sources of intangible assets, where creativity takes crucial part. Chapter 4 describes the overview of creativity measurement techniques and methodologies, whereas chapter 5 builds on a short case study for Slovenia and Slovakia, where the investigation of unique resources of creativity is presented, followed by a short conclusion. 2 Intangible Assets in Public Sector Organisations Creativity is a process of generating ideas, expressions and forms, either when looking for new ways of tackling existing problems, of re-interpreting existing realities or searching for new opportunities (Council Conclusions on Culture as a Catalyst for Creativity and Innovation, 2009). Without creative thinking and actions, there would be no evolution or development, as creativity represents a key ingredient of innovations (Kloudova, 2010). According to investment theories, creativity requires a confluence of six distinct but interrelated resources: intellectual abilities, knowledge, styles of thinking, personality, motivation, and supportive environment (Sternberg, 2006). All these resources influence decisively also the intangible assets, their character, number, quality and progress. International Accounting Standard 38 requires an intangible asset to be identifiable. Generally, the intangible assets include: know-how (processes, manufacturing techniques, inventions, designs, drawings, formulae and more which are used in the production of Mednarodna revija za javno upravo, letnik XI, št. 3-4/2013 105 Kamila Borsekova, Katarina Petrfkova, Primož Pevcin products or services), patents, trade marks, domain name, goodwill, designs, database right, and copyright. The intangible assets can be divided also by their relations to production and selling stage. It includes the market-related, customer related, content-related, contract-related, and technology-related intangible assets (iaSCF, 2012; IPO, 2012). The intangible assets are also very important in public sector because of its service orientation. Besides, the main goal of public entities is usually not oriented towards achieving profitability, but rather towards achieving value. The intangible assets in the public sector can be represented by data (such as geographical and statistical data), audio-visual materials (such as photographs and videos) and documents produced or held by government agencies as a part of their public service duties, public sector brands and all their variants such as names, logos, and domain names, specific expertise and know-how of public sector entities, software and patents developed by or for public sector entities, some public real estate properties, because of their prestige or unique historical value. There are also specific assets that are exclusively controlled by the government (e. g. radio frequency spectrum) (Resources for managing intangibles, APIE, 2011). Furthermore, Cinca, Molinero and Queiroz (2001) state that public intangible assets include the internal organisation (ability to innovate, know-how, structural organisation, corporate culture, links and contacts); external structural capital (service, image, transparency), human capital (aptitudes of civil servants, permanent training, condition of services) and social and environmental commitment. It is worth noting that creativity and innovation in public organisations has been increasingly debated also in the theoretical and empirical literature. Some authors have even developed specific labels for this phenomenon, like e.g. public entrepreneurship (Klein et al., 2009) or commercialisation partnership (Micheli et al., 2012). The increase in the interest can be attributed to two factors: (1) increasing pressures to adopt commercial orientations and competitive market responses; and (2) fiscal pressures and austerity measures undertaken that affect public organisations, which consequently need to adopt entrepreneurial practices (see Mazzarol, 2003, Klein et al., 2009). Entrepreneurial behaviour subsequently demands innovation in the creation of new products, services and process in order to accomplish organisational goals (and sometimes even to survive). This tends to be particularly important, if innovations are needed in order to reduce costs, which is currently very common necessity in the public sector (Setnikar Cankar & Petkovšek, 2013). However, this area of research points out that creativity is prerequisite to achieve innovations, yet public organisations often tend to face various structural barriers and inflexible organisational culture. This is the reason why it is especially important to study creative potential of public organisations, because isomorphism can be applied and taken into account on rather limited scale. 1Q4 International Public Administration Review, Vol. XI, No. 3-4/2013 Innovation and Creativity in Public Sector The intangible assets are also an important factor of the innovations, which are now recognised as a vital factor in public sector organisations in meeting the challenges of globalisation and demographic changes, while at the same time, sustaining a high level of services to citizens and businesses (Roste, 2004; Koch et al., 2006; Marr, 2009; Donahue, 2005; Bloch et al. 2010). 3 Creative and Cultural Industries as Sources of Intangible Assets As already mentioned, the most important sectors delivering intangible assets are creative and cultural industries. There are several definitions of cultural industries. Cultural industries produce and distribute cultural goods or services "which, at the time they are considered as a specific attribute, use or purpose, embody or convey cultural expressions, irrespective of the commercial value they may have" (Convention on the protection and promotion of the diversity of cultural expressions adopted by UNESCO, 2005). The cultural industry, directly or indirectly, represents an important part of the wealth of the society, as this industry includes publishing, music, cinema, audiovisual production and multimedia. Besides, crafts and design are also included in this industry sometimes, and this concept has been widened to incorporate also certain creative industries, such as architecture and different artistic categories (Poussin & Schischlik, 2005). Following, several definitions of creative industries exist as well. We are inclined to definition of Department of Culture, Media and Sport (DCMS) in the United Kingdom, which defines creative industries as "those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property" (DCMS, 1998). Power (2011) argues that despite differences there is a considerable overlap in considerations, which industries are involved with creative and cultural outputs and those that are concerned with creative inputs and processes. Authors use the terms interchangeably, but also take them as conceptually linked and similar. Indeed, given policy and academic debates in the area it is convenient to use the label 'creative and cultural industries'. This has been confirmed also by the conference of German Ministers of Economic Affairs that defined culture and creative industries in the following way: "Culture and creative industries comprise of all cultural and creative enterprises that are mainly market-oriented and deal with the creation, production, distribution and/or dissemination through the media of cultural/creative goods and services. The most important defining criterion is a market-orientation of the enterprises. This set of enterprises includes all market-oriented companies that are financed through the market, liable to pay turnover taxes or simply all those that want to earn money with art, culture and creativity." (Sondermann et al., 2009). Cultural and creative industries can help to boost economies, stimulate new activities, create new and sustainable jobs, have important spill Mednarodna revija za javno upravo, letnik XI, št. 3-4/2013 107 Kamila Borsekova, Katarina Petrfkova, Primož Pevcin over effects on other industries and enhance the attractiveness of territories (Communication from the EC to the EP, 2010). The influence of creativity on the development of national economy is evident from the figure 1. Figure 1: Creativity and economic growth Institutional Environment Creativity People Place Local Government School system Innovation Factor of Production Rate of Development f N Production Implementation vk- Economic growth Source: Kioudova & Chwaszcz, 2012. In this context, creative industries are often taken as one of the most promising field of economic activity in developed countries, since they tend to have a great potential to contribute to wealth and job creation (Müiier et. ai., 2008). Moreover, since they depend on creativity, skill and talent, more developed countries should exhibit comparative and competitive advantage in those fields. This is the reason, why increasing stream of research exists that studies creative industries, and studies tend to be focused either on the contribution of creative industries to the economy, on their roie in contributing to the innovations or on the specific innovation activities that are taking place in organisations belonging to the creative sector. 4 Review of the Contemporary Approaches Related to creativity and creative potential measurement Several approaches have been recognised so far to measure creativity, given the fact that creativity is important source of intangibles. For instance, scaling models, such as the Balanced Scorecard (Kaplan & Norton, 1992) or Business Navigator (Edvinsson & Malone, 1997) have been utilised with this purpose. This was accustomed to the public sector in the form of National Intellectual Capital model by Brooking (1997), Sveiby (1997), and Roos (1997). One of the methodologies suitable for the public intangible assets is also the Multidimensional Scaling (MDS) and Knowledge Balance Sheets (KBS) implemented at Austrian public universities (Habersam, Piber & Skoog, 2012). Another related approach was developed by Hollanders and van Cruysen (2009), who have utilised the scoreboard approach and suggested potential indicators for measuring creative climate - creative education, self-expression, openness and tolerance, opportunities, creative sector, innovation in R&D 1Q4 International Public Administration Review, Vol. XI, No. 3-4/2013 Innovation and Creativity in Public Sector including patents and trademarks. Furthermore, Florida (2002) created a creativity index based on four key components: Creative Class concentration, High Technology Index, Innovation Index, and the Diversity Index. Due to specific European conditions, this methodology was later extended with the 3T's of economic development, that is, Technology, Talent and Tolerance. The structure of creative index 3T illustrates Figure 2. Figure 2: Creativity index 3T Talent index Human capital index % of population with the university degree Creative Class index concentration of creative class Technology index Innovation index number of patents per person High-tech index % of high-tech industry outputs on the whole outputs Tolerance index Gay index number of gays on the population of region Bohemian index art -oriented population in region Immigration index % of immigrants in region Source: Florida, 2002. Beside to these approaches, several other distinct methodologies of creativity measurement were developed by various expert groups in the world (e. g. Flemish Index, Hong Kong creativity index etc.). They reflect special features of the territories (Florida et al., 2011). The creative capital theory says that "regional growth comes from the 3Ts of economics development and to spur innovation and economic growth a region must have all three of them" (Florida, 2003). 5 Creative Potential as Competitive Advantage Factor - a Case Study Analysis for Slovakia and Slovenia Based on the Unique Resources Approach 5.1 Methodology description Creative and cultural industries are based on unique creative and cultural potential which is specific for every region and state and its value is unrepeatable. Development of creative and cultural sector, which is based on internal resources of the territory, can ensure competitive advantage. Several authors (e.g. Ansoff, 1965; Solomon, Marshall & Stuart, 2006; Vanova, 2006) relate competitive advantage to the concept of uniqueness, whether in terms of use the regional potential suitable for the creation of competitive advantage as well as in terms of defining the competitive advantage. Namely, the approach of competitive advantage based on resources (Barney, 1991, 1997, 2001; Ulrich & Lake, 1991; Powel, 1992; Pfeffer, 1994, 1995; Hall, Mednarodna revija za javno upravo, letnik XI, št. 3-4/2013 109 Kamila Borsekova, Katarina Petrfkova, Primož Pevcin 1992, 1993; Stewart, 2008 etc.) focuses on the region's resources and the competitive advantage is created through internal resources of the region. The unique resources help to create a unique market position. When considering several theoretical approaches on the exceptional characteristics of the region, several factors of competitive advantage based on resources can be defined. These are human capital, tangible and intangible potential and financial resources of the region (Borseková & Vañová, 2011). Human potential is an extremely important factor because it plays a key role in the process of identification and exploitation of competitive advantage. Tangible and intangible potential together form the total potential of the region; tangible potential relates to the natural and geographical potential, infrastructure and urban potential, certain elements of socio-demographic potential and cultural potential, whereas the intangible potential relates to the innovation potential, creative potential but also to the elements of cultural potential (e.g. habits and traditions). Financial resources of the territory are a prerequisite for its further development and competitiveness. They are represented by particular type and quality payment transfers, financial management, quantity and value of available capital etc. The main intent of this chapter is to highlight the importance of creative and cultural industries producing crucial intangibles for smart growth and innovation in two European countries - Slovakia and Slovenia. Based on the literature review, we see the creative and cultural industries as potential source of competitive advantage. Therefore, the analysis of current and potential future situation in creative and cultural industries in those two countries is performed. The selected indicators are utilised to compare current situation in creative and cultural industries. The comparison includes three key factors of competitive advantage, i.e. groups of indicators representing (1) human potential, (2) tangible and intangible potential and (3) financial resources in two European countries (Slovakia and Slovenia). The existing data from European statistical office, official documents and analysis on the level of EU have been utilised in the analysis. In fact, this represents a new approach to measure creative and cultural industries through the crucial factors of competitive advantage based on the unique resources approach, which means that specific level of each of the above stated factors is assessed for both countries. 5.2 Results of the Case Study Analysis The results of the case study analysis on the unique resources for creative potential are described below. This potential should serve as the specific factor of competitive advantage, and the unique resources should be tangible and intangible potential, human potential and financial resources. Basically, the approach of this case study is based on the identification and presentation of human, tangible and intangible potential as well as financial resources that potentially enable the development and rise of competitive 1Q4 International Public Administration Review, Vol. XI, No. 3-4/2013 Innovation and Creativity in Public Sector advantage. Specifically, this approach is first utilized to assess unique resources, particularly in the case of Slovenia, and to compare the findings to another similar country. 5.2.1 Tangible and Intangible Potential According to definition of tangible and intangible potential, only potential related to the creative and culture industry is evaluated. As the main source of this potential world heritage written in UNESCO is considered. UNESCO World heritage list includes 981 properties forming part of the cultural and natural heritage which the World Heritage Committee considers as having outstanding universal value. These include 759 cultural, 193 natural and 29 mixed properties in 160 countries (UNESCO, 2013). List of UNESCO World Heritage sites in Slovakia and Slovenia is presented in table 1. Table 1: List of UNESCO World heritage in Slovakia and Slovenia UNESCO World heritage Slovakia Slovenia Cultural site - Historic Town of Banska Stiavnica and the Technical Monuments in its Vicinity - Levoca, Spissky Hrad and the Associated Cultural Monuments - Vlkolinec - Bardejov Town Conservation Reserve - Wooden Churches of the Slovak part of the Carpathian Mountain Area (set of 9 churches) - Prehistoric Pile dwellings around the Alps - Heritage of Mercury. Almadén and Idrija Natural site - Caves of Aggtelek Karst and Slovak Karst - Primeval Beech Forests of the Carpathians and the Ancient Beech Forests of Germany - Skocjan Caves Source: Adopted from UNESCO (2013). Table above points out that Slovakia has 5 cultural sites and 2 natural sites; whereas Slovenia has 2 cultural sites and 1 natural site. Culture heritage can be a resource that strengthens the competitive edge of the region and improves the conditions for economic growth. It namely increases tourist attractiveness and subsequently contributes to the development of tourism in the area. The new trends on cultural heritage are composed by its valorisation and its integration, although not just the values of the heritage capital gains are valued, but also social and cultural functions (Farrero, 2012). According to our research results, realised in Slovakia in 2012, the most frequent identified competitive advantage is culture and historical heritage. This competitive advantage occurred in respond of representatives in all Slovak regions on NUTS 3 level. This kind of competitive advantage is based on unique internal resources and has all features and characteristics of real competitive advantage - uniqueness, profitability, compliance of market needs, the existence of imperfect competition, sustainability, and compliance with the external environment. Cultural and historical heritage of the country is based on creativity and is included in cultural and creative industries. This kind Mednarodna revija za javno upravo, letnik XI, št. 3-4/2013 111 Kamila Borsekova, Katarina Petrfkova, Primož Pevcin of advantage benefits aH target segments in the country, creates a cultural environment in which their inhabitants live, attracts domestic and foreign tourists to visit these interesting places, attracts businesses, particularly in the small and medium-sized enterprises brings business opportunities or employment in the tourism sector (Borsekova, 2012). We believe that cultural and historical heritage of Slovakia and Slovenia has the potential to become a competitive advantage of the both countries, especially because it is a potential of high value that is unique and unrepeatable and therefore could be converted to long-term sustainable competitive advantage. This kind of advantage based on creativity, in case of its effective exploitation, can assure increasing of incomes, employment and assure development of territories. 5.2.2 Human Potential Still more young people are demonstrating their interest in creative industries and prefer creative work instead of work in automatized environment. On the basement of experience from other countries we can assume that employment in creative industries will increase also in the future. As we are speaking about industries with high value added, that are closely related to the latest technologies and processes, it is important for regions and cities to maintain this workforce (Blahovec, 2011). Following, the available data related to human potential in creative and cultural industries is presented. Table 2 presents selected data of tertiary students in the creative fields. The students in humanities have lower share in both countries as is the European average, the same also in arts. In 2009, Slovenia had less journalism and communication studies students as is the European average. However, in Slovakia there were more journalism and communication studies students than is European average. Slovenia had in more architecture and building students than European average in 2009 and the number of Slovak students in the same field was close to the European average. Both countries have the less number of students in humanities and arts as is the European average. Table 2: Share of tertiary students in the field of education related to culture and creativity in 2009 (as % of total students) Humanities Arts Journalism and communication Architecture and building EU 27 8.7 3.8 1.6 3.9 Slovenia 6.2 1.9 0.5 4.3 Slovakia 4.8 1.7 2.3 3.6 Source: Adopted from Eurostat (2013). The human potential that is a source of creative and cultural intangibles could be also characterised by the number of persons employed in the cultural sectors. This summary is presented in the table 3. 1Q4 International Public Administration Review, Vol. XI, No. 3-4/2013 Innovation and Creativity in Public Sector Table 3: Persons employed in selected cultural sectors (in thousands and as a share of employed persons) in 2009 Film, video, TV, music, recording and publishing Programming and broadcasting Creative arts and entertainment Libraries, archives, museums and other cultural activities Number % Number % Number % Number % Slovakia - - 2,600 0.11 7,300 0.31 7,000 0.30 Slovenia 1,000 0.10 3,800 0.40 4,300 0.45 5,000 0.52 EU 27 402,300 0.19 348,600 0.16 1,045,600 0.49 590,300 0.28 Source: Eurostat (2013); own calculations. Table 3 presents the number of employed persons in the creative sectors. We count over the number also in percentage as a share all employed persons, which enables cross-national comparisons. In all selected creative areas Slovenia has higher percentage of employees compared to Slovakia. When the percentage of employees in Slovenia is compared with the percentage of European Union average, Slovenia has more employed persons in the area of film, video, TV, music, recording and publishing; creative arts and entertainment. Only the percentage of employed people in libraries, archives, museums and other cultural activities is larger in Slovakia compared to the EU average. Unfortunately, there is no possibility to make comparison among Slovakia and Slovenia including data within the whole creative industries as these data are missing. There have been no specific data collections or surveys implemented in Slovakia for covering the creative industries. In Slovenia the situation is a little bit better as it was realized in the survey related to human potential employed in areas of publishing, production of films, distribution of films, TV and radio organizations, cinemas, theatres, orchestra and choirs, museums and galleries, cultural homes (ESSnet-Culture final report, p. 222-223). In general, there is a huge gap in the availability of data related with creative industries especially in the 'new' EU member states. 5.2.3 Financial Resources An important indicator evaluating the available financial resources to creative and cultural industries are research and development (R&D) expenditures. Data for those expenditures is presented in graph 1. This figure illustrates that R&D in Slovak Republic is deeply underfinanced. In comparison with Slovenia, Slovakia supports the research and development by lower volume of finances from all possible sources (government sector, business sector, higher education sector, private non-profit sector), although this spending is well below the EU average also in Slovenia. The greatest difference among countries is in the financial funds granted by the business sector, which indicates the better level of cooperation between the research and educational institutions and businesses in Slovenia compared to Slovakia. Related spending of private non-public sector is negligible in both countries. Mednarodna revija za javno upravo, letnik XI, št. 3-4/2013 113 Kamila Borsekova, Katarina Petrfkova, Primož Pevcin Graph 1: R & D expenditure in euro per inhabitant in government, business, higher education and private non-profit sector in Slovenia, Slovakia and EU 27 member states Slovakia o Slovenia _ EU Slovakia o ^ Slovenia EU Slovakia en § Slovenia EU Slovakia oo - § Slovenia EU Slovakia 8 Slovenia V//////W/Í EU Slovakia u> - § Slovenia 'MMtffM EU L..................... Slovakia in - § Slovenia VSSSSS////A Psl _ EU i3 Slovakia ■a- - § Slovenia — EU p_ - -1-1- 0 50 100 150 200 250 300 H Private non-profit sector ■ Higher education sector Business enterprise sector HGouernement sector Source: Adopted from Eurostat (2013). 5.2.4 Unique Resources and Creative Potential in Slovenia and Slovakia The results of case study in Slovenia and Slovakia show that their prepositions for the developing the creative and culture sectors are different. Slovakia disposes of longer list of cultural and natural heritage. In contrast, Slovenia has more persons employed in the observed cultural and creative sectors; and also the research and development are more financially supported. To build the competitive advantage based on the intangible and tangible resources, as well as on human and financial potential, it is necessary to interconnect all of these potentials. The case study analysis indicates that there is a lack of financial support and the lack of employment in the creative areas in Slovakia. Besides, also the share of students attending 'creativity-based' study programmes is lower compared to Slovenia and the EU average. However, Slovenia does not have so many world heritage sites, but there exists larger 1Q4 International Public Administration Review, Vol. XI, No. 3-4/2013 Innovation and Creativity in Public Sector financial support for research and development; and also more persons are employed in the creative and culture industries. The results also indicate that in order to develop creative and culture industries it is not enough to have intangible and tangible culture heritage, but it also needed to be continually supported by financial resources, education; this ultimately results in larger employment in those areas. It is worth noting that the main ambition of the paper was to include more relevant data related to the crucial competitive advantage factors but because there is a problem with the data availability and the lack of detailed statistics, especially in the Slovakia, we were not able to compare the data in full range. Furthermore, even at the Eurostat level, there are also some problems with the statistics, so the ESSnet project findings suggest that the availability and collection of national data on cultural expenditures should be improved in the future (Bína et al., 2012). The next group of problems is the lack of political support for the development of creative economy. The creative activities should be more supported by the local and national governments (Vañová, 2010; Petríková, Vañová & Borseková, 2012). 6 Conclusion Creative and cultural industries are based on unique creative and cultural potential which is specific for every region and state and its value is unrepeatable. Development of creative and cultural sector, which is based on internal resources of the territory, can ensure competitive advantage. Several authors relate competitive advantage to the concept of uniqueness. The unique resources help to create a unique market position. When considering several theoretical approaches on the exceptional characteristics of the region, several factors of competitive advantage based on resources can be defined. These are human capital, tangible and intangible potential and financial resources of the region. This paper investigates three groups of indicators representing human potential, tangible and intangible potential as well as financial resources in two European countries (Slovakia and Slovenia). The results of case study analysis performed for Slovenia and Slovakia show that the prepositions for the developing of the creative and culture sectors are quite different in those two countries. Attracting and retaining industries with high added value will be crucial in the following years for the both countries and their regions. One of the options how to assure long-term economic growth of the country is orientation on the support of creative industry. Creative industry is based on human creativity and ability to bring new products, which is inexhaustible (Blahovec, 2012), however the awareness on the importance of this industry seems to be very low in both countries (Lloydlová, 2012). Mednarodna revija za javno upravo, letnik XI, št. 3-4/2013 115 Kamila Borsekova, Katarina Petrfkova, Primož Pevcin Kamila Borseková is senior researcher and the Head of Institute of Economic Sciences, Matej Bel University in Banská Bystrica, Slovak Republic. Her research orientation is on creative economy and industries, competitive advantage -its building and utilisation, regional competitiveness, regional development, strategic marketing planning, local production systems and networks. In last 4 years she published in many international peer-reviewed journals. Katarina Petríková is a senior lecturer and a researcher at the Department of Public Economics and Regional Development, Faculty of Economics, Matej Bel University in Banská Bystrica, Slovak Republic. Her scientific orientation is aimed at the application ofmarketing, relationship marketing, service marketing in the public sector and territories, local and regional development, especially forming the local production systems, networks, partnerships, creative economy and its various aspects. Primož Pevcin is associate professor for public sector economics at the Faculty of Administration, University of Ljubljana. His areas of research have predominantly encompassed public and non-profit economics, public choice economics and industrial organization. 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Retrieved 05. 09. 2013, from http://whc. unesco.org/en/list/#criteria_revision 1Q4 International Public Administration Review, Vol. XI, No. 3-4/2013 Innovation and Creativity in Public Sector povzetek USTVARJALNOST IN NEOPREDMETENA SREDSTVA V JAVNEM SEKTORJU: VIRI IN DRUžBENO-EKONOMSKI POMEN V SLOVENIJI IN NA SLOVAŠKEM Ključne besede: ustvarjalnost, neopredmetena sredstva, konkurenčnost, Slovenija, Slovaška Razvoj ustvarjalnega gospodarstva in kulturne industrije temelji na notranjih virih neke družbe oziroma države, pri čemer pa lahko ustvarjalno gospodarstvo in kulturna industrija pomenita tudi konkurenčno prednost neke države. Med dejavnike konkurenčne prednosti države uvrščamo tudi specifične vire, kamor bi lahko uvrstili človeški potencial, opredmetena in neopredmetena sredstva ter finančne resurse. Pri tem velja poudariti, da so neopredmetena sredstva s časom postala bolj pomembna kot opredmetena sredstva, saj so ob zagotavljanju pravih pogojev lahko dejansko neizčrpna. Med neopredmetena sredstva uvrščamo tudi ustvarjalnost, pri čemer je postalo ustvarjanje pogojev za ustvarjalno delovanje ter etično in trajnostno izkoriščanje ustvarjalnosti eden izmed ključnih pogojev za zagotavljanje gospodarskega napredka, ki temelji na inovativnosti in podjetništvu. Tako dejansko neopredmetena sredstva delujejo kot pospeševalci ustvarjanja ekonomske vrednosti, pri čemer so ti pospeševalci tesno povezani z načinom vodenja, obstoječo organizacijsko kulturo, razpoložljivim človeškim in intelektualnim kapitalom, inovativnostjo, s prilagodljivostjo, z obstojem omrežij, razvojem novih procesov in tehnologij itd. Neopredmetena sredstva »nastajajo« kot stičišče umetnosti, poslovnega sektorja, raziskovalne dejavnosti ter industrije predvsem v okviru ustvarjalnega gospodarstva in kulture. Njihov strateški »mejni« položaj omogoča prelivanje izkušenj in učinkov med različnimi panogami. V zvezi s tem se vsebina članka osredotoča na prikaz pomena ustvarjalnosti kot dejavnika konkurenčne prednosti. Pri tem so v članku izpostavljeni tudi t. i. edinstveni viri, ki lahko vodijo do inovacij. Glavni namen članka je podrobneje predstaviti pomen ustvarjalnosti kot dejavnika konkurenčne prednosti, hkrati pa oceniti edinstvene vire (človeški potencial, opredmetena in neopredmetena sredstva, finančne resurse), ki lahko pomenijo osnovo za doseganje inovacij v dveh državah članicah EU, to je v Sloveniji in na Slovaškem. Prispevek temelji na analizi študije primera, pri čemer se osredotoča na primerjavo sedanjega in prihodnjega položaja v ustvarjalnem gospodarstvu in v kulturni industriji v Sloveniji in na Slovaškem. Rezultati analize študije kažejo, da so osnove za razvojustvarjalnega gospodarstva in kulturne industrije precej različne v teh dveh državah, hkrati Mednarodna revija za javno upravo, letnik XI, št. 3-4/2013 121 Kamila Borsekova, Katarina Petrfkova, Primož Pevcin pa tudi, da je sedanji položaj teh dveh panog boljši v Sloveniji glede na Slovaško. Tudi v prihodnosti je pričakovati, da se stanje naj ne bi spremenilo. Namreč, rezultati analize kažejo, da je v Sloveniji več ljudi zaposlenih v ustvarjalnem gospodarstvu in v kulturi v primerjavi s Slovaško, hkrati pa Slovenija namenja tudi več finančnih sredstev na prebivalca za raziskave in razvoj, kar je dejansko eden izmed temeljev za razvoj ustvarjalnega gospodarstva in zagotavljanje t. i. pametne rasti. 1Q4 International Public Administration Review, Vol. XI, No. 3-4/2013