ABSTRACT
Since the lifting of the Iron Curtain, significant flows of foreign investment have been directed to Central and Eastern Europe. There are, however, large differences in the use of the new openness by foreign investors, mainly connected to the divergent level of transition of the recipient economy. As far as regional “active space” development is concerned, the results give a rather pessimistic picture. So far, it appears that the contribution of foreign direct investment to regional innovation is limited to those cases where there was already an existing system of innovative suppliers in the region and where this system could be used within the investor’s strategy. The preliminary observations indicate a need for a general policy to acquire and absorb new knowledge, as well as targeted policies to benefit from foreign direct investment in terms of spill over into the regional economy.
