Slovenian catching up with the developed countries: when and how?

Purpose - The purpose of this paper is to provide assessment of the current status of economic development and policy suggestions as to how Slovenia can catch up with developed countries and close the development gap. Design/methodology/approach - The paper first analyses world development scenarios. Part two is devoted to the calculation of development gaps by novel time distance methodology in order to identify major reasons for lagging behind and concludes by providing policy ideas how to close these gaps. Findings - The time lag for GDP per capita with the EU 15 average is 18 years, and larger when Slovenia is compared to the successful small EU member states. The optimistic scenario of catching up in 16 years would require 2 per cent higher growth rate than EU 15 average. This time would be shorter if the government policy would promote the knowledge‐based economy, internationalisation, innovative capabilities and become more effective, responsive, flexibile and closing persistent implementation and co‐ordination gaps. Practical implications - The application of a different way of measuring development gaps by time distance methodology is applicable also for other small transition economies. The paper also provides a source of policy ideas for a development strategy of Slovenia and small transition countries in general. Originality/value - The paper makes original calculations of development gaps by time distance methodology for, e.g. GDP per capita, productivity, export per capita, export of technologically intensive products as well as policy suggestions how to close development gap.