This paper discusses current challenges of sustainable regional development in Slovenia. Slovenia is facing the double challenge of catching up with the developed economies, as well as adapting to the future. An unfavorable sectoral structure together with a lack of innovative capacities seems to be among the most important factors underlying lagging competitiveness, suggesting that the key development challenge in the regions affected is to improve the productive base and their potential to growth. It is now recognized within the EU that regional policy is not only the policy for redistribution of income and employment but also an on-going requirement for local restructuring, enhancement of competitiveness and productivity, continuos innovation and internationalization. Much still needs to be done before Slovenia will be ready to fully adopt the proposed guidelines.
Regional policies are still weak, lacking a comprehensive strategy and a programming approach.
Thirdly, the paper discusses the potential of integrating sustainable regional development policy into national policy promoting enterprise development and competitiveness and the role of partnership between university and private sector. The lagging development argues strongly for an integrated approach to regional development, which explicitly acknowledges the complexity of the process and takes due account of the interaction between factors, intangible as well as tangible. The need is for the long-term strategy, which addresses simultaneously the many aspects of the problem of a lack of competitiveness and attempts to build up the social capital of the region in parallel with its physical infrastructure, the skills of its workforce and its productive base. The paper presents two cases illustrating the government approach to a coherent regional development in Slovenia. On the other hand, the case of cluster development illustrates an attempt to promote interaction between enterprises, support institutions and public sector aiming at developing unique local knowledge to compete globally.