However, this approach had serious drawbacks, as it hampered recognising innovation and technological change as the driving force of economic growth, the roles of applied science and technology and of the interaction of science and industry (Svarc, 2006). In 1994, the first steps were taken by transferring “best practices” from abroad, in particular from Germany and Italy, w'ith a focus on science-industry co-operation and financial support for technology-based small and medium-sized enterprises (SMEs). Special attention was paid to knowledge and technology transfer from higher education institutions (HEIs) and public research institutes (PRIs) through the establishment of incubators, support of new technology-based firms, contract research, and the establishment of research labs.