The main role of local development policy is to create a favorable business environment and new jobs, thus contributing to economic development. Creating a positive business environment to act as a pull factor for new businesses is of great importance, because entrepreneurship conduces to the rise in the supply of goods and to an increase in citizens’ income and revenues of local budgets. This paper therefore examines the main goals of economic development in the towns and municipalities of the Republic of Croatia, as well as the tools used by local governments to encourage entrepreneurship and new businesses. Using a questionnaire, mayors and deputies of towns and municipalities were surveyed, and the sample covered 131 towns and municipalities. The research methodology included a descriptive analysis and the Kruskal–Wallis test. The results indicate that improving the quality of life of the residents, creating new jobs, and retaining the residents in the town or municipality were identified as the most important goals of economic development. To encourage entrepreneurship and new jobs, towns and municipalities most often simplify regulations, reduce local taxes, and introduce various benefits and incentives. The contribution of the paper is manifested in providing useful guidance to local governments to improve the business environment.

In the past decades, in all the world schools and faculties of economics, it was taught that the main objective of economic policy is to ensure continuous economic growth. However, for reasons of limited absorption capacity of the environment and increasing reduction of the original ecosystems, models of economic growth are in opposition to the basic ecological principles. This is primarily the consequence of learning and applying the conventional economic paradigm which disregards the relationship between economy and environment. Therefore, the authors of this paper, proceeding from the correlation between economy and environment from the aspect of fundamental natural laws, analysed the basic determinants of the strong sustainability paradigm which implies that natural capital resources should be maintained in the constant flow of time. The research also includes analysis of the correlation between specific economic and ecological challenges of sustainable development in global regions. The authors concluded that sustainable economy may exist only in the sustainable symbiosis with the natural system. Taking into account the complex relationship between nature, society, technology and economy, the authors concluded the paper with the proposition of concrete guidelines for a reform of economic education, in accordance with the concept of strong sustainability. Key words: economy, education, environment, strong sustainability, weak sustainability.