Qualitative analysis of economic, innovation and scientific potential in North Macedonia.
Date: 2022-03-31
Institutions: Joint Research Centre
Subjects: North Macedonia, economic analysis, economic development, entrepreneurship, innovation, qualitative analysis, research report, scientific research, smart specialisation, sustainable development

Qualitative analysis of economic, 
innovation and scientific potential in  
North Macedonia 

Radovanovic, N., Lazarov, D., Arizankovska, J.,  

Majstoroska, J. and Bole, D. 

2022 

EUR 31013 EN 

 
 
 
 
This publication is a Technical Report by the Joint Research Centre (JRC), the European Commission’s science and knowledge service. It 
aims to provide evidence-based scientific support to the European policymaking process. The scientific output expressed does not imply a 
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designations employed and the presentation of material on the maps do not imply the expression of any opinion whatsoever on the part 
of the European Union concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation 
of its frontiers or boundaries. 

EU Science Hub 
https://ec.europa.eu/jrc 

JRC128181 

EUR 31013 EN 

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ISBN 978-92-76-49385-3 

ISSN 1831-9424 

doi:10.2760/231671 

Luxembourg: Publications Office of the European Union, 2022 

© European Union, 2022 

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How to cite this report: Radovanovic, N., Lazarov, D., Arizankovska, J., Majstoroska, J. and Bole, D., Qualitative analysis of economic, 
innovation and scientific potential in North Macedonia, EUR 31013 EN, Publications Office of the European Union, Luxembourg, 2022, 
ISBN 978-92-76-49385-3 (online), doi:10.2760/231671 (online), JRC128181. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contents 

1 

Introduction..................................................................................................................................................................................................................................................... 7 

2  Summary of the quantitative analysis of economic, innovation and scientific potential ................................................... 9 

3  Qualitative analysis and collection of data .................................................................................................................................................................. 13 

3.1 Methodology ..................................................................................................................................................................................................................................... 13 

3.2 Data collection by preliminary areas ........................................................................................................................................................................ 16 

3.3 Assessment of possible effects of the COVID-19 pandemic on promising priority domains ............................ 17 

4  Data analysis by preliminary areas ...................................................................................................................................................................................... 18 

4.1 Sustainable food and beverage production and value chains ......................................................................................................... 18 

4.2 Information and Communication Technologies (ICT) sector ............................................................................................................... 26 

4.3 Smart/Sustainable buildings and materials ....................................................................................................................................................... 32 

4.4 Electrical equipment and mechanical parts ....................................................................................................................................................... 37 

4.5 Sustainable tourism and catering ................................................................................................................................................................................ 43 

4.6 Energy for the future................................................................................................................................................................................................................ 48 

5  Conclusions and recommendations for the Entrepreneurial Discovery Process ....................................................................... 54 

5.1 Proposal of areas and sub-areas for the EDP ................................................................................................................................................. 54 

5.2 Priority area justification elements to be further improved in the next stage ................................................................. 56 

5.3 Detailed analysis of suggested preparatory steps ...................................................................................................................................... 58 

5.4 Key topics to be discussed within the thematic EDP workshops ................................................................................................... 60 

5.5 Key stakeholders that should be invited to working groups during the EDP...................................................................... 60 

5.6 Adequate promotion of the EDP to ensure stakeholder involvement ....................................................................................... 61 

5.7 Resources management ........................................................................................................................................................................................................ 61 

6  Conclusions .................................................................................................................................................................................................................................................. 63 

References ............................................................................................................................................................................................................................................................. 64 

Annex .......................................................................................................................................................................................................................................................................... 65 

List of abbreviations and definitions ........................................................................................................................................................................................... 71 

List of tables ........................................................................................................................................................................................................................................................ 72 

3 

 
Acknowledgements 

The  authors  would  like  to  thank  the  representatives  from  the  business  community,  academia  and  public 
institutions of North Macedonia for providing input when gathering information for this qualitative analysis. In 
particular, the authors are grateful to Marina Nikolovska, Tanja Ilijevska, Dane Josifiovski, Emilija Fidancevska, 
Anita Grozdanov, Vladimir Atanasovski, Aleksandra Martinovska–Stojcevska, Anita Nikova, Natasa Markovska, 
Ilija Nasov and many other national experts. The authors would also like to thank Monika Matusiak from the 
Joint Research Centre of the European Commission for her valuable comments. 

Authors 

Nikola Radovanovic, European Commission, Joint Research Centre (JRC), Seville, Spain 

Darko Lazarov, Associate Professor at the Goce Delchev University, Shtip, North Macedonia 

Jadranka Arizankovska, Economic Chamber of North Macedonia, Skopje, North Macedonia 

Jasmina Majstoroska, Ministry of Economy of North Macedonia, Skopje, North Macedonia 

Domen Bole, independent expert, co-creation, Trzic, Slovenia 

4 

 
 
 
 
Executive summary 

Policy context. North Macedonia launched the Smart Specialisation process in 2018 with the main goal of 
identifying priority areas in terms of economic, innovation and scientific potential for implementing targeted 
action  for  further  economic  development.  By  enforcing  its  innovation  policy  with  the  Smart  Specialisation 
concept, it looks to boost its economic transformation efforts and enhance its competitiveness in a sustainable 
manner. The process has  been undertaken with strong political commitment by national authorities and the 
devotion of the nominated inter-institutional Smart Specialisation working group composed of representatives 
of the government, relevant ministries and the academic community. The Joint Research Centre is continuously 
providing technical assistance to these efforts. So far, the Smart Specialisation process in North Macedonia has 
been based on following the S3 Framework for the EU Enlargement and Neighbourhood Region (S3 Framework) 
(Matusiak and Kleibrink, 2018). 

The mapping process. In 2019, North Macedonia conducted the first phase of the mapping exercise, which is 
the quantitative mapping of economic, innovation and scientific potential. The results of this stage revealed 
preliminary priority areas in the country based on the analysis of various statistical data and indicators. These 
results  were  fed  into  the  qualitative  mapping  phase,  which  focused  on  validating  the  findings  through 
customised discussion with a number of different stakeholders and, hence, further profiling of priority domains. 

The qualitative mapping stage, which is presented in this report, included preparations for the interviews with 
the stakeholders (elaboration of questionnaires, identification of stakeholders, development of procedures for 
interviews  and  similar);  conducting  the  interviews;  the  analysis  of  the  information  and  data  received; 
organisation of focus groups meetings; and the development of the report based on the findings. The focus 
group meetings were organised to address the information missing from the interviews and discuss the early 
findings from the interim report on qualitative mapping. In order to complement the findings, where applicable, 
the local expert team used the results from various available studies. 

Results. The work on qualitative mapping succeeded in establishing initial contact with the key stakeholders 
for the Smart Specialisation process in North Macedonia. The importance of this achievement is in establishing 
the grounds for the efficient upcoming stakeholder dialogue and continuity of stakeholders’ contribution to the 
Smart  Specialisation  process  in  the  country.  This  stage  of  the  Smart  Specialisation  process  ended  with  an 
evidence-based  decision  on  the  final  list  of  priority  domains  which  will  enter  the  entrepreneurial  discovery 
process stage. This list includes the following priority domains: 1) Sustainable food and beverage production 
and  value  chains;  2)  Information  and  communication  technologies;  3)  Smart/sustainable  buildings  and 
materials;  and  4)  electrical  equipment  and  mechanical  parts.  The  decision  on  the  final  list  of  domains  was 
confirmed  during  the  focus  groups  meetings,  which  also  helped  in  bridging  the  gaps  when  obtaining  the 
information required from the stakeholders. The main points of the report include validation of the selected 
preliminary priority areas and identification of key relevant stakeholders in each priority area. With regard to 
the limitations of this exercise, the analysis occasionally suffered from a lack of available data to determine 
comprehensive information on value chains and strengthen the justification of certain priority (sub-)areas, and 
these should be further investigated at the entrepreneurial discovery process stage. For this purpose, the report 
also includes recommendations for the activities in relation to the upcoming stakeholder dialogue. These relate 
to  justification  elements  concerning  final  priority  domains  to  be  further  improved,  analysis  of  suggested 
preparatory steps, key topics to be discussed within the thematic EDP workshops, key stakeholders to be invited 
to working groups during the EDP and advice regarding promotional activities and resources management. 

5 

 
 
Abstract 

In  2018,  the  Republic  of  North  Macedonia  launched  the  process  of  designing  its  first  Smart  Specialisation 
strategy in accordance with  the methodology and guidance provided by the Joint Research Centre. From its 
outset,  the  process  was  regarded  to  be  of  utmost  importance  to  the  future  growth  of  the  economy, 
strengthening competitiveness  based on the country’s innovation potential and unleashing smart growth by 
defining high-priority domains in which new added value would be created. One of the key goals of this venture 
is to identify and apply smarter and more competitive solutions within the identified priority domains, taking 
into account new challenges for digital and green transition, as well as challenges caused by the COVID-19 
pandemic. 

After the quantitative mapping of the country’s economic, innovation and scientific potential, 19 industries have 
been identified as having potential in terms of Smart Specialisation, and these were grouped into 6 preliminary 
priority domains. These domains were analysed in-depth in the qualitative mapping phase, which provided the 
rationale for the final selection of priority domains in North Macedonia and served as a preparatory stage for 
the stakeholder dialogue within the entrepreneurial discovery process. This report includes the analysis of each 
preliminary priority area in terms of justification for their selection. The findings in this report are based on the 
input from more than 100 interviews held with the key stakeholders, subsequent focus group meetings and 
information obtained from additional external analyses. 

6 

1 

Introduction 

Smart  Specialisation  was  introduced  by  the  European  Commission  to  align  the  allocation  of  the  European 
Structural and Investment Funds’ spending with overarching policy objectives, as defined in the ‘Europe 2020’ 
strategy for smart, sustainable and inclusive growth. Under this approach, regions and countries are developing 
Research and Innovation Strategies for Smart Specialisation through evidence-based analysis embodied in the 
quantitative  and  qualitative  mapping  of  economic,  innovation  and  scientific  potential,  followed  by  an 
entrepreneurial discovery process that includes a dialogue between the public and private sectors as well as 
academia and civil society in a quadruple-helix approach. Such a sequence of the Smart Specialisation steps is 
intended to lead to the prioritisation of a limited number of fields where cross-sectoral policy interventions can 
bring  about  promising  outcomes  in  terms  of  innovation  and  economic  growth.  In  such  a  way,  Smart 
Specialisation is helping a region or a country to be better equipped to streamline R&I investments, increase 
competitiveness, encourage R&I business cooperation and strengthen R&I ecosystems, as well as contribute to 
the further integration into the regional and EU research community (Guzzo and Gianelle, 2021; Woolford et al., 
2021; Marques Santos et al., 2021; Gianelle et al., 2020). 

Smart Specialisation is a tool for concentrating public and private investment in areas where the country has a 
critical mass of knowledge, capacities and competences, and where there is innovation potential to position the 
country within the global markets and thus enhance recognition. The basic concept of Smart Specialisation is 
mainly to increase the added value of economic activities through public and private investments in research, 
technological development and innovation, targeted to the areas with the highest potential impact. 

Within the EU, having a Smart Specialisation policy framework has been an ex-ante conditionality to receive 
Cohesion Policy funding under the current programming period, while for the EU enlargement economies there 
is  no  conditionality  for  Smart  Specialisation.  Nevertheless,  the  basic  concepts  of  the  approach  –  with  its 
quadruple-helix entrepreneurial discovery process; evidence-based policy-making; prioritisation; cross-sectoral 
perspective; and subsequent implementation and monitoring – are expected to contribute to the modernisation 
of innovation policies in these economies. In this regard, all Western Balkan economies expressed a political 
commitment  to  support  the  development  of  their  own  Smart  Specialisation  strategies,  and  each  of  them 
launched their respective Smart Specialisation processes by 2018. 

North Macedonia launched the Smart Specialisation process in March 2018 and formed an inter-institutional 
working group for Smart Specialisation composed of representatives of the government, relevant ministries and 
the academic  community. The initiative for  the development of the Smart Specialisation strategy for  North 
Macedonia started with an exchange of letters of interest between the Deputy Prime Minister of the Republic 
of North Macedonia, in charge of economic affairs and coordination with the economic sectors, and the Joint 
Research Centre as the European Commission’s science and knowledge service. The Ministry of Education and 
Science  of  North  Macedonia  created  the  S3  Working  Group  and  together  with  the  Ministry  of  Economy  are 
coordinating the development process for the strategy, cooperating intensively with the Cabinet of the Prime 
Minister of North Macedonia, Cabinet of the Deputy Prime Minister of North Macedonia, the Fund for Innovation 
and  Technology  Development  as  well  as  other  competent  ministries,  institutions,  business  representatives, 
academics and non-government sectors under the quadruple-helix governance model. The process is supported 
by  the  European  Commission’s  Joint  Research  Centre  who  is  collaborating  with  the  Directorate-General  for 
Neighbourhood  and  Enlargement  Negotiations  in  providing  expert  support  to  the  EU  Enlargement  and 
Neighbourhood Region in developing national Smart Specialisation strategies.  

In  conducting  its  Smart  Specialisation  process,  the  country  is  following  the  S3  Framework.  In  2019,  North 
Macedonia  initiated  the  mapping  exercise  to  identify  its  economic,  innovation  and  scientific  potential.  This 
exercise comprises quantitative and qualitative analyses of key indicators and factors related to the economic, 
innovation and scientific performance of a country or region (Kyriakou et al., 2016; Sorvik and Kleibrink, 2015). 
In  late  2019,  the  country  finalised  the  quantitative  part  of  the  mapping  with  the  identification  of  different 
industries with a high level of potential. While the quantitative part analyses statistical data and indicators and 
applies  different  techniques  for  revealing  specialisation  fields  in  the  form  of  preliminary  priority  areas,  the 
qualitative stage aims at validating these findings through customised discussion with a number of different 
stakeholders and, hence, further profiling of priority domains. 

The qualitative analysis, as the final part of the mapping exercise in North Macedonia, was carried out in the 
second half of 2020 and the beginning of 2021 in order to verify the results of the quantitative analysis in the 
mapping exercise. This report aimed at providing thorough analysis of preliminary priority areas with particular 
focus on validating results of the qualitative analysis and discussing justification for the list of selected priority 
domains. The qualitative analysis of the preliminary priority areas was based on the in-depth interviews with 

7 

the selected stakeholders for each preliminary priority area, focus group meetings and desk research of existing 
external studies. This report also aimed at providing crucial input for the start of the EDP process by setting a 
framework  for stakeholder  dialogue. The EDP, which in fact represents  a  continuous  dialogue  between four 
spheres of modern innovation society (known as a quadruple helix, consisting of academia, the government 
sector,  economy  and  civil  society),  represents  one  of  the  key  elements  for  the  successful  design  and 
implementation of the Smart Specialisation strategy. 

The  potential  Smart  Specialisation  priority  domains  should  be  supported  by  targeted,  comprehensive  and 
tailored  support  through  government  programmes  and  measures  from  using  national,  regional  and  local 
budgets; business investments by business sector funds; as well as other relevant sources. By identifying key 
priority  areas,  S3  aims  to  put  North  Macedonia’s  research  potential  at  the  service  of  business  and  societal 
needs.  Additionally,  the  key advantage  of  the  S3  concept  is  the  participative  role  of  all  stakeholders  in  the 
process of designing and implementing the strategy, which represents a challenge for North Macedonia. 

8 

 
 
 
2  Summary  of  the  quantitative  analysis  of  economic,  innovation  and 

scientific potential 

In 2019, with the  support of the German development agency  GIZ, the National Centre for Development of 
Innovation  and  Entrepreneurial  Learning  (NCDIEL)  conducted  the  quantitative  mapping  with  the  aim  of 
assessing potential S3 priority domains based on economic, innovation and scientific indicators. 

The  assessment  started  with  collecting  data  at  national  level.  The  data  largely  originated  from  the  State 
Statistical Office of the Republic of North Macedonia, State Office of Industrial Property of the Republic of North 
Macedonia, as well from relevant European and international databases. The research methodology applied for 
the mapping of economic potential for Smart Specialisation in North Macedonia was based on the analysis of 
the statistical data elaborated in the descriptive part, while the second step included the analysis based on 
comparisons of the statistical economic indicators (growth rate, export value, productivity level, average wage) 
for North Macedonia with respect to the EU average. Mapping of the innovation potential was based on the 
statistical data originating from the State Statistical Office. Lastly, mapping of the scientific potential was based 
on the data that originated from various data sources (databases with scientific publications – Web of Science, 
Scimago Journal & Country Rank database, National and University Library, State Office of Industrial Property 
and World Intellectual Property Organisation)1. 

Based on the comprehensive  analysis, the final, refined list of industry  groups with economic or innovation 
potential with respect to the industry sections mapped for their scientific potential is given as follows. 

Table 1. Mapped industries with economic/innovation and scientific potential 

Mapped industries with economic/innovation and scientific potential 

Pillar 

C10.6 Manufacture of grain mill products, starches and starch products 

Innovation, scientific 

C10.8 Manufacture of other food products 

C11.0 Manufacture of beverages 

C18.2 Reproduction of recorded media 

C22.1 Manufacture of rubber products 

Innovation, scientific 

Innovation, scientific 

Economic, scientific 

Economic, scientific 

C23.7 Cutting, shaping and finishing of stone 

Innovation, scientific 

C27.1  Manufacture  of  electric  motors,  generators,  transformers  and 
electricity distribution and control apparatus 

Innovation, scientific 

C27.9 Manufacture of other electrical equipment 

Innovation, scientific 

C28.4 Manufacture of metal forming machinery and machine tools 

Economic, scientific 

C29.3 Manufacture of parts and accessories for motor vehicles and their 
engines 

Innovation, scientific 

C31.0 Manufacture of furniture 

Innovation, scientific 

I56.1 Restaurants and mobile food service activities 

Economic, scientific 

I56.2 Event catering and other food services 

Economic, scientific 

J58.1 Publishing of books, periodicals and other publishing activities 

Innovation, scientific 

1 GIZ, Mapping economic, innovative and scientific potential in the Republic of North Macedonia, NCDIEL, September 2019. 

9 

                                           
J59.2 Sound recording and music publishing activities 

Economic, scientific 

J60.1 Radio broadcasting 

Economic, scientific 

J61.2 Wireless telecommunications activities 

Innovation, scientific 

J61.9 Other telecommunication activities 

Innovation, scientific 

J62.0 Information technology services activities 

Economic, 
scientific 

innovation 

and 

Source: GIZ, Mapping economic, innovative and scientific potential in the Republic of North Macedonia, NCDIEL, 
September 2019. 

The mapped industry groups possess potential in at least two of the main pillars for S3: economic, innovation 
or  scientific.  In  total,  19  industries  were  selected  as  a  base  for  further  analysis  in  the  development  of  the 
national S3  strategy. Overall,  it was  evident that industry  C  (manufacturing)  is  the  most dominant industry 
section,  represented  by  11  subsequent  industrial  groups.  The  second  most  dominant  industry  section  is  J 
(information and communication), represented by 6 subsequent industrial groups. And finally, the last industry 
section  listed  in  the  table  is  I  (accommodation  and  food  service  activities),  represented  by  2  subsequent 
industrial groups. 

In order  to continue  with  a further  analysis based on interviews  with  key stakeholders, the Inter-ministerial 
Working Group responsible for leading the process for the development of the Smart Specialisation strategy in 
the Republic of North Macedonia grouped the 19 industries identified in the quantitative analysis into 6 areas 
according to their interrelatedness, their sector characteristics and connections, also proposing the consideration 
of further smart and sustainable joint growth opportunities. 

The proposed names of the areas for Smart Specialisation represented a framework for further discussion and 
possible evolution. 

Sustainable 
tourism and 
catering 

Smart/Sus-
tainable 
buildings and 
materials 

Energy for 
the future 

- Restaurants 
and mobile 
food service 
activities. 

- Cutting, 
shaping and 
finishing 
stone. 

New area 
proposed 
for analysis. 

- Event 
catering and 
other food 
services. 

- Manufacture 
of furniture. 

- Manufacture 
of rubber 
products. 

- Civil 
engineering. 

Table 2. Grouping of the industrial sectors 

Name of the 
proposed area 
for S3 
qualitative 
analysis 

Sustainable 
food and 
beverage 
production and 
value chains 

Information and 
Communication 
Technologies 

Industries 
identified in 
the 
quantitative 
analysis with 
economic/inno
vation/scientifi
c potential 

- Manufacture 
of grain mill 
products, 
starches and 
starch 
products. 

- Manufacture 
of other food 
products. 

- Manufacture 
of beverages. 

- Information 
technology 
service 
activities. 

- Other 
telecommunicat
ion activities. 

- Wireless 
telecommunicat
ion activities. 

- Radio 
broadcasting. 

- Sound 
recording and 
music 
publishing 
activities. 

- Publishing of 
books, 
periodicals and 

Electrical 
equipment 
and 
mechanical 
parts 

- Manufacture 
of electric 
motors, 
generators, 
transformers 
and electricity 
distribution 
and control 
apparatus. 

- Manufacture 
of other 
electrical 
equipment. 

- Manufacture 
of metal-
forming 
machinery 
and machine 
tools. 

- Manufacture 
of parts and 
accessories 

10 

 
for motor 
vehicles and 
their engines. 

other publishing 
activities. 

- Reproduction 
of recorded 
media. 

Source: Working material of the S3 Working Group of North Macedonia based on the ‘GIZ, Mapping economic, 
innovative and scientific potential in the Republic of North Macedonia, NCDIEL, September 2019’. 

At the qualitative analysis stage, the proposed domains were further analysed in relation to their potential and 
interconnections with other sectors/value-chains and refined in order to be further discussed in the EDP. 

Energy for the future as a newly proposed potential S3 priority area 

A new potential area, ‘Energy for the future’, was proposed for the qualitative analysis, being an area that was 
not covered in the quantitative analysis but with potential for further growth due to the existing capacities in 
science, innovation and new business opportunities. The development of the energy sector, use of renewable 
energy sources (RES) and the enhancement of energy efficiency are one of the main government priorities and 
strategic objectives in the country. 

In January 2020, the Government of the Republic of North Macedonia adopted the new Strategy for Energy 
Development  of  the  Republic  of  North  Macedonia  until  20402.  This  strategy  provides  a  platform  for 
modernisation and transformation of the energy sector in accordance with EU energy development processes, 
enabling better access, integration and availability of energy services, a reduction in pollution and increased 
private sector participation. 

The Strategy relies on the five-dimensional framework of the EU Energy Union (pillars): security, solidarity and 
trust; fully integrated energy market; energy efficiency; climate action – de-carbonising the economy; research, 
innovation  and  competitiveness,  taking  into  account  the  country’s  development  potential  and  domestic 
particulars. The strategy integrates climate and environmental aspects of the energy sector, while proposing 
affordable,  reliable  and  sustainable  energy  for  the  future.  The  vision  for  2040  is:  ‘a  secure,  efficient, 
environmentally friendly and competitive energy system that is capable of supporting sustainable economic 
growth of the country.’ The strategy defines six strategic goals for North Macedonia, mapped along five energy 
pillars: maximise energy savings; maintain current levels of energy dependence; limit the increase of greenhouse 
gas emissions; increase the share of renewable energy sources; minimise system costs; and ensure continuous 
harmonisation with the EU acquis. These strategic goals are in line with the new Energy Law and the EU's energy 
directives. 

Energy trends highlight the more ambitious transition to a low-carbon economy, with renewable energy sources 
(RES) and energy efficiency (EE) being amongst the most important factors enabling transition. 

The part of the strategy dealing with R&D and innovation states that research, innovation and competitiveness 
cover the following priorities from the Energy Law3: 

 

 

 

stability, competitiveness and economic functionality of the energy sector; 

promotion of energy efficiency; 

promotion of the use of renewable energy sources. 

The newly adopted strategy represents a framework that will enable support to further develop and promote 
this sector. There is a strong base for research and development within academia in North Macedonia. There 
are several institutions that are focused on R&I in the energy sector. North Macedonia has a broad range of 
research institutions in this area, such as: the Research Centre for Energy and Sustainable Development of the 
Macedonian Academy of Sciences and Arts ICEOR – MANU4, faculties of the Ss. Cyril and Methodius University 
of Skopje (Faculty of Electrical Engineering and Information Technologies, Faculty of Mechanical Engineering, 
Faculty  of  Computer  Science  and  Engineering);  faculties  of  the  Goce  Delchev  University  -  Shtip  (Electrical 
Engineering and Mechanical Engineering); the Faculty of Technical Sciences of the St Kliment Ohridski University 
– Bitola; The South East European University - Tetovo (Contemporary Sciences and Technologies), Faculty of 
Technical Sciences at the Mother Teresa University - Skopje; as well as a few NGOs/associations: ZEMAK, MACEF, 
MAKO CIGRE, North Macedonia Innovation Centre, E-Mobilnost, Analitika, Ekosvest, Front 21/42, Go Green, Solar 

2 http://www.economy.gov.mk/doc/2759. 
3 https://economy.gov.mk/Upload/Documents/Zakon%20za%20energetska%20efikasnost.pdf 
4 http://iceor.manu.edu.mk/. 

11 

                                           
Association, CeProSARD, etc. The strong capacities and potential for research and innovation for this sector is 
also  demonstrated  by  the  number  of  projects  supported  by  HORIZON  20205  and  the  number  of  projects 
supported through the Fund for Innovation and Technology Development. 

As another argument about the existing research and innovation capacities of the sector is the fact that, in the 
period 2014-2020, according to an internal database review by the Ministry of Education and Science, 37% 
(EUR 5.06  million)  of  the  total  EU  financial  contributions  (EUR 13.7  million)  under  Horizon  2020  for  North 
Macedonia  were  associated  with  projects  focused  on  various  topics  from  the  thematic  area  of  energy  (28 
participants or 25% of the total number of awarded projects). Most of the spending was used for the topic of 
secure, clean and efficient energy – EUR 3.8 million (21 participants) – while the rest of the projects covered 
activities  under  climate  action,  environment  resource  efficiency  and  raw  materials  and  smart,  green  and 
integrated transport (EUR 1.3 million). 

In terms of stakeholder involvement in the sector, most of the spending was used by the private sector, i.e. 9 
SMEs participated with net contributions of EUR 1.6 million. Public sector and research institutions participated 
with 10 projects and EUR 1.5 million, while higher education took part in 5 projects with EUR 0.9 million. Other 
institutions, such as associations or chambers of commerce, participated with EUR 1 million. On the other hand, 
according to the official report of the Fund for  Innovation and Technology Development (FITD), 7.7% of the 
projects supported by the FITD are from the sector energy and energy resources, with more than EUR 3 million 
grants for  projects in  this area in the last  5  years.  Additionally, according to data from  the  State Office of 
Industrial Property, 6% of the total number of patent applications in the last decade belong to this area6, while 
6.6%  of  the  total  approved  budget  for  innovative  projects  of  the  Fund  for  Innovation  and  Technology 
Development also comes from this area7. 

One example of an active NGO in this sector is the association for solar energy, ‘Solar Macedonia’, as an expert, 
scientific, educational and cultural association, founded to act in the Republic of North Macedonia and abroad. 
The association’s primary development focus is to boost and facilitate cooperation between companies in North 
Macedonia, as well as connecting experts (producers, designers, performers, importers, services) and scientists 
from all scientific branches to promote solar energy. The organisation works at every stage of the solar energy 
systems; from production to service and maintenance. 

5 Reports of the Ministry of Education and Science of North Macedonia, https://mon.gov.mk/category/?id=2061. 
6 State Office of Industrial Property (SOIP), http://www.ippo.gov.mk. 
7 Reports of the Fund for Innovation and Technology Development, https://fitr.mk/en/#. 

12 

                                           
3  Qualitative analysis and collection of data 

The qualitative analysis is one of the key stages in the process of developing a Smart Specialisation strategy. 
The  main aim of the  qualitative analysis  is to  provide more  information  and evidence  about the economic, 
innovation and scientific potential of the strategic areas/domains identified in the quantitative analysis and to 
validate and refine potential priority domains. 

The  collection  of  data  used  to  perform  the  qualitative  analysis  is  based  on  in-depth  interviews  with 
representatives  of  the  business  sector,  academia,  state  and  non-government  institutions.  More  than  15 
interviews were held within each of the identified strategic areas. The main findings of the qualitative analysis 
based on the interviews conducted and on the results of the six focus group meetings were meant to clarify the 
previously identified preliminary areas and to go deeper in the process of defining strategic subsectors that 
have the highest development potential within each of the preliminary identified areas. Lastly, the qualitative 
analysis should represent the main input for further discussions within the EDP. 

The interviews had several purposes. The first was to collect information to verify the results of the quantitative 
analysis  in  mapping  the  current  areas  and  defining  the  potential  sub-areas  where  the  country  has  latent 
comparative advantages, as well as identifying key stakeholders by area. This should be the main input for the 
EDP  as  a  crucial  stage  for  designing  the  Smart  Specialisation  strategy.  The  second  purpose  is  to  identify 
‘ambassadors’  for  each  priority  area  –  representatives  of  the  business  sector,  scientific  community,  state 
institutions and civil sector, who would quickly recognise the usefulness of the EDP and were influential enough 
to be able to ensure the participation of other important stakeholders, as well as being prepared to contribute 
to the quality of the process by frequently providing opinions and recommendations. The third purpose was to 
identify key inputs for planning the next phase in the RIS3  design, i.e. EDP. Finally, the last purpose  was to 
analyse the current impact of the COVID-19 crisis on each strategic area and to identify the influence of the 
crisis on the future development pathway of each area in the post-crisis period. 

3.1 Methodology 

Qualitative interviews 

The qualitative analysis was performed by an internal team from the Economic Chamber of North Macedonia 
(ECNM) with the support of a few external domestic experts. The team worked in close cooperation with the 
Smart Specialisation Working Group of North Macedonia. 

The interviews were held with 10-15 main stakeholders per preliminary priority area, of which at least 50% of 
the interviewed stakeholders had to represent businesses (major companies and SMEs), while the other 50% 
were relevant researchers, government officials, business and civic organisations. Following the advice from 
business  associations  within  the  Economic  Chamber  of  North  Macedonia  and  in  consultation  with  other 
stakeholders (MASIT- Chamber of Commerce for Information and Communication Technologies), the Fund for 
Innovation and Technology Development – FITD, national S3 working group, etc.), a list of representatives from 
the business sector (companies) was drafted. In the process of selecting stakeholders from the business sector, 
the ECNM team has used several criteria such as growth potential, number of workers, turnover, export and 
innovativeness of the companies within each preliminary priority area. Accordingly, a list of government and 
academic institutions was drafted in consultation with the national S3 working group. 

Questionnaires for the business sector, academia and the government sector were developed based on the S3 
methodological guidance. The questionnaire was composed of a list of questions which were specifically created 
for the business sector, academia and government sector according to the specific characteristics of each group 
of stakeholders. The structure of each questionnaire was made up of three types of questions:  

 

 

 

general  questions  for  the  sector  (status/structure,  development  stage,  perspectives,  key  players, 
COVID-19 effects, etc.),  

EDP-related questions, and  

questions concerning the identification of ‘ambassadors’.  

At  the  same  time,  the  ECNM  organised  meetings  with  internal  and  external  experts,  as  well  as  with  the 
coordinator and members of the national S3 working group, where a detailed working plan for interviews was 
created in accordance with the defined methodology, and the capacities to conduct the interviews were built. 
Additionally,  the  ECNM  team,  S3  working  group  and  the  external  experts  created  the  list  of  potential 
stakeholders, prepared the protocol and the invitation letter from the Minister of Education and Science of the 

13 

Republic of North Macedonia. Institutional support was also secured in order to motivate the participation of 
the key stakeholders in the qualitative analysis. 

Minutes were prepared after every meeting, and had to be confirmed by the person interviewed. Following that, 
they were uploaded to the cloud system, which was accessible by the members of the S3 working group and 
other experts. 

Questionnaire structure 

The list of guiding questions that were considered in the interviews are given below. In the interviews, a specific 
list of questions would take priority, depending on the type of stakeholder. This was due to the fact that each 
stakeholder  group  (business  sector,  academia  and  government  sector)  has  a  different  position,  role  and 
responsibility in the Smart Specialisation process and in the country’s development process. 

1. General questions for the specific domain: 

a) Standardised questions for the business sector8:  

 

Is  your  sector  really  as  strong  as  shown  by  statistics?  What  makes  it  strong  (export,  human 
resources, innovation, etc.)? 

  Which subsectors are developed the most within your sector? Which parts of the value chains of 

those sectors are present in the country? 

  Who are the key players in your industry? Do you collaborate with them and to what extent? 

  Who are the key players in science in your area? Do you collaborate with them and to what extent? 

  With which other sector(s) does your business sector predominantly cooperate? 

 

Is the level of internationalisation generally high or low? Which business (sub)sector(s) have the 
greatest export potential? Which business (sub)sector(s) exercise the best collaboration with the 
academic community? 

  How dynamic is the sector and what is the role of start-up, scale-up and other small and medium 

enterprises in its development? 

  Do you invest in innovation and technology improvement? 

  What are the main strengths and challenges of your sector? 

  What is the development potential of your sector (on a 1-5 scale)? Why? 

  How do you see the future of your sector? In which part of the supply chain within your sector do 

you see the greatest opportunity for the future? 

  Could you please identify the state measures that could help your sector grow? 

  What are the expected impacts of the economic crisis caused by the COVID-19 pandemic on your 

sector? 

  What are the actions that the government should take in order to address the potential effects of 

the COVID-19 pandemic on your sector? 

  Which companies are the most innovative in the sector and which success stories could be used 

as lessons for other companies? 

  Which actors from academia are the most innovative in the sector and which success stories could 

be used as lessons for others? 

  Who are the key stakeholders from the government and civil sectors in the preliminary priority 

areas? 

b) Standardised questions for the academic sector: 

8  For  some  of  the  defined  questions  in  the  proposed  questionnaire,  the  ECNM  team  has  not  succeeded  in  collecting  more  detailed 
information. Hence, some specific fields within the defined preliminary areas, such as innovation potential and value chain, should 
additionally be explored in the upcoming EDP process. 

14 

                                           
  How would you assess the R&I conditions in your institution/department in relation to international 

centres of academic and research excellence? 

  How  would  you  assess 
institution/department? 

the  number  and  quality  of 

research  personnel 

in  your 

  How  would  you  assess  the  relevance  of  educational  programmes  delivered  by  your 

institution/department in relation to business sector needs? 

  How would you assess the importance of our state’s participation in international publications in 

your scientific field? 

  What are the specialised topics within your scientific field that are most commonly addressed by 

domestic authors in international publications? 

  How would you assess the collaboration of your institution/department with the business sector? 

  What are the specialisation topics that your institution/department most commonly addresses in 

collaboration with the business sector? 

  How would you assess the innovation activity within your institution/department? 

  Who are the key stakeholders from the governmental and civil sectors in the preliminary priority 

areas? 

  How would you assess the government support to academia? Do you think the government should 
have a more active role in building stronger research and innovation capacity in this sector? 

  How would you assess the innovation and development potential of this sector? How innovative 

are the companies within this sector? 

  How do you see the future of this sector? In which part of the supply chain within this sector do 

you see the greatest opportunity in the future? 

  Could you please identify the state measures that could help this sector grow? 

  What are the expected impacts of the economic crisis caused by the COVID-19 pandemic on the 

construction sector and production of sustainable materials? 

  What are the actions that the government should take in order to address potential effects of the 

COVID-19 pandemic on this sector? 

c) Standardised questions for government institutions: 

  How do you evaluate the development potential and opportunities of the sector? 

  Are there any institutional obstacles for the development of the sector? 

 

Is  the  government  ready  to  make  regulatory  and  institutional  improvements  to  increase  the 
opportunities in the sector? 

  Do  you  think  that  the  government  or  other  institutions  are  willing  to  eliminate  obstacles  and 
improve the business environment to boost sector development and create opportunities for its 
advancement? 

  What measures do you recommend to further increase sector development? 

  Who are the key stakeholders from the governmental and civil sectors in the preliminary priority 

areas? 

  How would you assess the government support to academia? Do you think the government should 
have a more active role in building stronger research and innovation capacity in this sector? 

  How would you assess the innovation and development potential of this sector? How innovative 

are the companies within this sector? 

  How do you see the future of this sector? In which part of the supply chain within this sector do 

you see the greatest opportunity in the future? 

15 

  Could you please identify the state measures that could help this sector grow? 

  What are the expected impacts of the economic crisis caused by the COVID-19 pandemic on the 

construction sector and production of sustainable materials? 

  What are the actions that the government should take in order to address the potential effects of 

the COVID-19 pandemic on this sector? 

The second and third part of the questions in the questionnaires was identical for all stakeholders. The intention 
was to provide recommendations for the EDP process and identify ambassadors. 

2. Standardised questions related to the organisation of the EDP process were the following: 

  How often would you come to the workshops? 

  How long should the EDP workshop last? 

  Would you attend the EDP workshop in other regions of North Macedonia? 

  Would you need a formal invitation to the workshop? Who should be the institution sending the 

invitation (national ministry, chamber of commerce, academia)? 

3. Standardised questions to identify ‘ambassadors’ within the priority area/sector included the following: 

  Could you assure the participation of other stakeholders? 

  Are  you  willing  to  provide  in-depth  feedback  on  the  process  and  content  between  two  EDP 

workshops? 

  How often can we contact you regarding the S3? 

In order to conduct face-to-face interviews of high quality and within deadlines, the ECNM created a team of 
internal sectoral experts who served as co-coordinators for each priority area and hired external experts from 
the academia who were the coordinators of each area and were involved in the development of the qualitative 
analysis. The lead internal expert was Jadranka Arizankovska from the ECNM, while the lead external expert 
was Professor Darko Lazarov. 

3.2 Data collection by preliminary areas 

In  total,  100  interviews  were  conducted  with  the  representatives  of  the  business  sector,  academia  and 
government sector in each of the previously defined preliminary priority areas. A total of 63 interviews were 
conducted in the Skopje region; 5 were conducted with stakeholders from the Polog region; 5 with stakeholders 
from  the  South-West  region;  10  with  stakeholders  from  the  Vardar  region;  2  with  stakeholders  from  the 
Pelagonija  region;  13  with  stakeholders  from  the  East  region;  and  2  with  stakeholders  from  the  Southeast 
region. 

The responsiveness of the companies was very high and more than 90% of the interviews were conducted face-
to-face.  The  interviews  with  academia  were  held  with  relevant  representatives  from  the  largest  state 
universities. Despite the fact that 13 interviews with representatives from academia were carried out, there is 
a need for further analysis in relation to detailed mapping of the innovation and scientific potential for each 
area proposed for Smart Specialisation. It is expected that after the finalisation of the development process for 
the  research  infrastructure  roadmap  of  the  Republic  of  North  Macedonia,  a  better  overview  of  existing 
institutional capacities will be given. 

Some  interviews  were  conducted  online  due  to  the  limitations  of  the  communication  procedures  caused  by 
COVID-19  restrictions.  All  interviews  were  held  in  the  period  September–December  2020.  Other  identified 
relevant  stakeholders  that  were  not  interviewed  in  this  phase  because  of  the  COVID-19  restrictions  were 
additionally invited to participate in the focus group meetings that were organised in January 2021. 

The number of interviews that were conducted within each of the defined preliminary areas is presented in the 
following table9. 

9 In Annex 2, the table is presented with all interviewed stakeholders. 

16 

                                           
Table 3. List of interviewed stakeholders 

Preliminary area/sector 

Number of conducted interviews 

Business 
sector 

Business 
associations 

Academic 
sector 

Government 
sector 

Information and 
Communications 
Technologies (ICT) sector 

Sustainable food and 
beverage production and 
value chains 

Smart/Sustainable 
buildings and materials 

Electrical equipment & 
mechanical parts 

Energy for the future 

Sustainable tourism and 
catering 

Total 

Source: Authors. 

8 

11 

11 

14 

8 

14 

71 

1 

1 

/ 

1 

/ 

1 

4 

Total 

13 

19 

15 

20 

14 

18 

3 

4 

2 

3 

3 

1 

1 

3 

2 

2 

3 

2 

13 

12 

100 

3.3 Assessment of possible effects of the COVID-19 pandemic on promising priority 
domains 

In  2020,  the  effects  of  COVID-19  on  the  science,  technology  and  innovation  (STI)  ecosystem  and  policy 
responses were very diverse. The openness and speed of research on COVID-19 increased compared to prior 
established  practices.  Meanwhile,  the  shock  resulting  from  the  COVID-19  lockdown  and  ‘social  distancing’ 
measures  negatively  affected  the  entire  STI  ecosystem.  Immediate  effects  on  research  institutions  and 
universities included interrupted research projects due to limited access to research labs; restricted research 
mobility; the diversion of research efforts towards COVID-19 topics; and disruptions in human capital training. 

Innovative businesses were relatively resilient to the COVID-19 shock in 2020. However, this is not to say that 
business innovation did not suffer. Access to innovation facilities and opportunities for research collaboration 
were severely hampered, possibly reducing future rates of innovation. A range of low R&D-intensive service 
sectors  (in  particular  involving  tourism,  entertainment  and  necessary  in-person  interaction)  did  not  see  a 
recovery in demand with implications for opportunities to invest. Small firms were also affected more than their 
larger counterparts. Differences were also observed between regions, depending on their sectoral composition, 
the severity of local COVID-19 outbreaks and subsequent restrictions implemented10. 

The detailed assessment of possible effects of the COVID-19 pandemic on each promising priority area is given 
as an integral part of the priority area sections in the following chapter of the document. 

10 Paunov, C. & Satorra, S., Science, technology and innovation in the time of COVID-19, 2020. 10.1787/234a00e5-en. 

17 

                                           
 
4  Data analysis by preliminary areas 

Based  on  the  data  collected  through  the  interviews  with  the  key  representatives  of  the  business  sector, 
academia and government institutions, as well as from the input from focus group meetings and the input from 
additional sectoral analyses, the analysis of the preliminary areas was conducted to identify: 

- 
- 
- 
- 

- 
- 

areas of specialisation;  
key players in areas;  
innovation potential, R&D capacity, internalisation level and export potential;  
key  strengths  and  challenges  for  Smart  Specialisation  and  government  policies  to  accelerate  the 
development process of each identified area;  
the proposal for the future EDP process; and 
the influence of COVID-19 on each identified area. 

4.1 Sustainable food and beverage production and value chains 

The  preliminary  defined  area  of  ‘Sustainable  food  and  beverage  production  and  value  chains’  included  12 
interviews with representatives of the business sector; the Agricultural and Food Industry Association of the 
Economic Chamber of North Macedonia as a business association; 4 representatives from academia (Faculty 
of Agricultural Sciences and Food, Faculty of Veterinary Medicine, Faculty of Technology and Metallurgy within 
Ss.  Cyril  and  Methodius  University  - Skopje and  the Centre for  Transfer  of  Technology  within Goce  Delchev 
University, Shtip); and 2 representatives of government institutions (the Food and Veterinary Agency and the 
Cabinet of the Deputy Prime Minister in charge of economic affairs and coordination with the economic sectors). 
Additionally, answers to  the  questionnaire were also received from the Ministry  of  Agriculture, Forestry  and 
Water Economy. The interviewed  stakeholders are located in different regions of the country:  4 interviewed 
stakeholders are located in the East region; 2 companies are located in the Pelagonija region; 3 companies in 
the  Vardar  region;  1  company  in  the  Polog  region;  while  9  stakeholders  (primarily  from  academia  and  the 
government sector) are located in the Skopje region. 

Table 4. List of interviewed stakeholders with proposed process ambassadors for the ‘Sustainable food and beverage 
production and value chains’ area11 

No.  Business sector 

1 
2 

3 
4 

MIK SVETI NIKOLE 
PIVARA AD  

PEKABESKO 
BRILIJANT SHTIP 

5 
6 
7 
8 
9 
10 
11 
12 

MLEKARA AD BITOLA 
KOZUVCANKA KAVADARCI 
FLOREO KAVADARCI 
LARS 
MAKPROGRES DOO, VINICA 
VITAMINKA AD 
VESE SHARII 
ASSOCIATION  FOR  AGRICULTURAL  AND  FOOD 
INDUSTRY 
No.  Academic sector 
1 
2 

FACULTY OF VETERINARY MEDICINE 
CENTRE FOR TRANSFER OF TECHNOLOGY - UGD 

3 

FACULTY  OF  AGRICULTURAL  SCIENCES  AND 
FOOD  SKOPJE,  UNIVERSITY  SS.  CYRIL  AND 
METHODIUS IN SKOPJE 

Ambassador 

Smart 
agriculture 

Food processing 
with high added 
value 

X 

X 
X 

X 
X 

X 
X 

X 

X 

X 

X 
X 

X 

X 

X 

X 
X 

X 
X 

X 
X 
X 
X 
X 
X 
X 
X 

X 
X 

X 

11 The classification is based on the proposed sub-area(s), while the ambassadors are identified in the process of interviews according to 

the results of the previously developed questionnaire. 

18 

                                           
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 

FACULTY  OF  TECHNOLOGY  AND  METALLURGY, 
SS.  CYRIL  AND  METHODIUS  UNIVERSITY  IN 
SKOPJE (TMF-UKIM)  

No.  Government sector 

1 

2 

3 

FOOD  AND  VETERINARY  AGENCY  OF  THE 
REPUBLIC OF NORTH MACEDONIA 
CABINET  OF  THE  DEPUTY  PRIME  MINISTER 
RESPONSIBLE  FOR  ECONOMIC  AFFAIRS  AND 
COORDINATION WITH THE ECONOMIC SECTORS 
MINISTRY  OF  AGRICULTURE,  FORESTRY  AND 
WATER ECONOMY 

Source: Authors. 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

Moreover, а focus group meeting was organised with 3 ambassadors from the business sector (BiMilk Bitola, 
Veze Sharri Tetovo and Pekabesko Skopje), 3 representatives from the government sector (Cabinet of the Prime 
Minister,  Ministry  of  Economy  and  Cabinet  of  the  Deputy  Prime  Minister)  and  2  representatives  from  the 
academic  sector  (professors  from  the  Faculty  of  Technology  and  Metallurgy,  Skopje,  and  the  Faculty  of 
Agricultural  Sciences  and  Food,  Skopje).  The  focus  group  participants  contributed  to  the  finalisation  of  the 
strategic sub-areas and the clarification of some of the open questions from the interviews. The participants’ 
discussion in the focus group meeting concluded that ‘agriculture and food processing’ was one of the most 
strategic  domains  for  the  future  development  of  the  country,  given  that  these  identified  sub-areas  have 
significant economic, innovation and scientific potential for Smart Specialisation. 

In the broader area, based on systematised data obtained from a number of sources (conducting interviews, 
focus group meetings, additional existing studies, etc.), a proposal was made to rename the domain as ‘Smart 
agriculture and food processing with high added value’, which will comprise the following sub-areas: 

 
 

Smart agriculture 
Food processing with high added value. 

The conclusions from the conducted interviews, the organised focus group meetings and the in-depth sectoral 
analysis of each defined sub-area are described in the section below. 

  Sub-area 1 – Smart agriculture 

The agricultural sector makes a significant contribution to the economy of North Macedonia in terms of the 
number of employees, contribution to the GDP, investments in new technology and exports. The gross added 
value  of  this  sector  in  2019  reached  EUR 800  million,  which  is  7%  of  the  country’s  GDP.  This  value  was 
generated  by  110 000  workers.  Over  110  companies  exported  EUR 168  million  of  agricultural  products  (of 
animal and plant origin) in 2019, which amounted to 2.85% of the country’s total exports. This export value has 
shown an increasing trend in the last several years, which demonstrates that the internalisation level of this 
sub-area is increasing12. 

The country recorded a comparative advantage in 50 agricultural products (Revealed Comparative Advantage - 
RCA>1), which is more than 15% of the total export products in which the country specialises (470 products 
with RCA>1).  The top  export  products in the agricultural  sector are  brassica (cabbages), fresh grapes, fresh 
tomatoes, peaches, apples, cucumbers, peppers, cereals, raspberries, blackberries, lamb, milk and others13. A 
major share of these export products goes to the Western Balkans region, the EU market and Russia, while a 
very small share is exported to other regions across the world. 

The country has favourable natural potential (climate, soil quality) for agricultural production. The agricultural 
sector  of  North  Macedonia  has  established  a  long-standing  tradition  and  accumulated  knowledge  of  the 
production of quality agricultural and food products (in particular, vegetables and fruits, rice, wine and lamb 

12 Own calculation based on official statistical data from the State Statistical Office of the Republic of North Macedonia. 
13  Identification  of  development  opportunities  and  potential  for  export  diversification  and  structural  transformation  of  the  North 

Macedonia’s economy, Economic Chamber of North Macedonia, Skopje, 2020, working document.. 

19 

 
 
  
 
 
 
 
 
                                           
 
 
 
 
 
meat),  which  are  regionally  recognised.  The  untapped  potential  for  further  development  results  from  the 
availability of uncultivated land and the abundance of ecological pastures combined with the low-cost labour 
in  the  rural  areas,  as  well  as  the  country’s  position  in  Europe  and  the  already  established  traditional  trade 
partners. 

According  to  the  representatives  of  academic  and  business  sectors  that  were  interviewed,  the  challenges 
associated  with  climate  change  will  require  strengthening  of  the  collaboration  between  academia  and  the 
agricultural producers in defining the next steps in the development of new innovative agriculture products with 
high added value and the implementation of new modern technologies and smart production methods. This 
intention is provided for in the Smart Specialisation concept as a global trend that should be adopted by the 
local farmers and agri-food  companies. Changes in consumer demand and orientation towards modern and 
healthy lifestyles involve searching for new products for which there is potential – such as medical cannabis, 
different types of flours, avocado and other high-added value fruits – and new markets where the companies 
from  North  Macedonia  could  start  exporting,  such  as  the  Middle  East  countries.  In  fact,  transforming  the 
agricultural sector by initiating the production of new products with high added value and investments in new 
technology and the implementation of smart production concepts are the main challenge and opportunity in 
the Smart Specialisation process for this sub-area. 

The opportunities to increase the production volume and exports offered by several Free Trade Agreements 
(FTAs),  mainly  CEFTA  within  the  EU,  can  be  unlocked  with  investments  that  boost  the  productivity  and 
modernisation,  the  implementation  of  food  quality  and  safety  standards  and  the  concentration  of  supplies 
coming from numerous small farmers with improved vertical integration. Better investments in marketing and 
promotional  activities  to  diversify  the  limited  export  destinations  can  trigger  a  high  return  considering  the 
current low level. 

The introduction of modern technology and innovations, transfer of knowledge and digitalisation can increase 
production  efficiency,  overall  competitiveness  and  income  level  and  combat  climate  change.  This  trend  of 
transformation to more high-tech agricultural production (smart agriculture) is continuously growing, and an 
increasing  number  of  companies  –  such  as  ZIK  Pelagonija  Bitola,  Veze  Sharri  Tetovo,  Perm  Index  Gradsko, 
Fruktana Shtip, Oaza Samantov, Green Food - Sv. Nikole and others – are introducing modern techniques into 
their production processes. There is also a critical mass of individual farmers, farmers’ organisations and small 
agri-business firms with the capacity to adopt innovations and new technology. The number of modern fruit 
plantations  (apple,  peach,  cherry,  raspberry and other  fruit products),  greenhouses for vegetable production 
(tomato, pepper, cucumber and other vegetables) as well as the number of modern facilities for the production 
of horticultural products, cereals, wine and other agricultural products is increasing. Additionally, there are many 
investments  in  growing  organic  agricultural  products,  as  well  as  investments  in  the  production  of  medical 
cannabis  as  one  of  the  sectors  with  the  highest  potential.  As  an  example,  Oaza  Samantov,  Zaum  Struga, 
Fruktana  Shtip  and  others  produce  organic  agricultural  products;  Oaza  Alkaloidi  Shtip  and  several  other 
companies started the production of medical cannabis according to EU standards, while Antura Kocani produces 
different types of flours. 

Apart from the investments in new technology, another very important element in the process of transformation 
from the traditional agricultural sector to high-tech smart agriculture that was pointed out by the interviewed 
representatives of academia is in building stronger R&D capacities and utilising the innovative potential of the 
academia itself. The key players in academia are the Faculty of Agricultural Sciences and Food and the Institute 
of Agriculture within Ss. Cyril and Methodius University - Skopje, the Faculty of Agriculture within Goce Delchev 
University, the Faculty of Veterinary Medicine - Skopje and the Faculty of Technology and Metallurgy within Ss. 
Cyril and Methodius University - Skopje. There are more than 200 professors and researchers that work in these 
state institutions, which include several institutes and  research laboratories, such as the Institute of Animal 
Science, whose activities include: the nutrition and dietetics of domestic animals as well as finding solutions to 
obtain animal  products  with  improved  qualities; controlling  herd  books  and  the biodiversity  of endemic and 
domestic animals; collaboration with the farmers as well as finding solutions to obtain animal products with 
improved  qualities;  research  in  the  field  of  aquaculture;  as  well  as  the  UNILAB  as  a  part  of  the  Faculty  of 
Agricultural  Sciences  –  Shtip,  whose  activities  include:  sophisticated  agrochemical  soil  analysis,  seeds,  raw 
products, oils, wines, the determination of macro, micro and trace elements in solids and liquid samples. These 
key  players  in  academia  have  scientific  and  research  capacities  and  innovative  potential.  They  are  actively 
involved in collaboration projects with the business sector regarding the preparation of project applications for 
IPARD,  USAID  and  other  EU  calls,  conducting  laboratory  experiments  and  scientific  research.  Research  and 
innovative capacities of this sub-area are demonstrated by 7 successfully finished H2020 projects in the field 

20 

 
 
  
 
of food security,  sustainable  agriculture and  forestry14;  more than 25  projects  financed  under the Fund for 
Innovation and Technology Development instruments in the field of agriculture; and over 3% of the innovation 
vouchers  (for  collaboration  between  academia  and  the  business  sector)  awarded  under  the  first  Fund  for 
Innovation and Technology Development call that were granted in this field15. Additionally, according to the data 
from the State Office of Industrial Property, 4% of the total number of patent applications in the last decade 
came  from  this  area  (agriculture  and  food)16,  while  10.5%  of  the  total  approved  Fund  for  Innovation  and 
Technology  Development  projects  came  from  this  area  (EUR 1.6  million  approved  budget  for  projects  from 
agriculture  and  EUR 2.9  million  approved  budget  for  projects  in  food  processing)17.  Moreover,  the  FITD  has 
created  a  special  instrument  for  digitalisation  in  the  agricultural  sector  as  a  way  to  stimulate  the 
implementation of the ICT tools in this sector. 

An effective upgrade of the knowledge and skills of the farmers and other stakeholders in the sector and the 
introduction of innovation is also going to be stimulated through functional links established with the science 
and advisory services, achieved within the newly established Agricultural Knowledge and Innovation Systems 
of the Government of the Republic of North Macedonia. The role of the business organisations and clusters is 
of no less importance. In fact, there are more than 15 active clusters in the field of agriculture and several 
business associations and organisations, and they make a particularly important contribution to delivering on 
the main goal of further developing this sub-area. Although the current production structure of the agricultural 
sector is unfavourable (most of the export products for which the country already built comparative advantages 
are agricultural products with relatively low added value), there are opportunities to improve its position in the 
value chain by: protecting the geographical indications and traditional specialties of the products; shifting to 
organic production; increasing the value-added substance; producing less-represented non-traditional crops that 
generate  a  higher  yield  from  limited  resources  (aromatic  and  medical  herbs,  spices,  indigenous  races  and 
varieties); as well as by linking agriculture with non-farm activities, especially rural tourism. 

Smart  agricultural  production  requires  new  resources,  thus  generating  innovation  in  a  range  of  ancillary 
activities – the production of seeds and crops, production of mineral and microbiological fertilisers, production 
of  infrastructure  crop  elements  (pillars,  nets,  irrigation  systems),  production  of  measurement  and  control 
equipment  (sensors,  data  loggers,  information  systems  for  data  collection,  processing  and  management), 
growth  regulators,  biological  and  chemical  agents  for  combating  pests  and  diseases  as  well  as  modern 
agricultural equipment. Even though there is development potential in these activities, many of them have not 
yet  been developed  in North  Macedonia.  However, there  are many  parts  of the value  chain which are well-
established.  For  example,  Alkaloid  Skopje  produces  and  exports  various  types  of  fertilisers  (liquid  mineral 
fertilisers  and  mineral  fertilisers),  bio-stimulants  and  soil  conditioners  under  the  brand  names  Agrosal  and 
Alkafert.  Additionally,  there  are  well-established  modern  storage,  packaging,  processing,  logistics  and 
distribution capacities for agricultural products (for example, Atlantik Skopje, Badzo Bogdanci, AlMa Savik and 
Pego Agrofruit are among the successful companies in this regard). There are also several producers (Agrobar 
Vinica, Delta Metal Kavadarci, Agromehanika Bitola) of agricultural equipment and IT companies which create 
modern IT tools for smart agricultural production. 

Another key element to develop this sub-area is state support with an active role played by key government 
institutions (the Food and Veterinary Agency of the Republic of North Macedonia; the Ministry of Agriculture, 
Forestry  and  Water  Economy;  the  Agency  for  Financial  Support  in  Agriculture  and  Rural  Development;  the 
Ministry of Finance; the Ministry of Economy; and others) in terms of regulation and agricultural policy, as well 
as building greater capacities for utilisation of the ЕU Instrument for Pre-accession Assistance – IPA. Moreover, 
the government should create new public financing instruments for investments in new production capacities 
that would be characterised by high EU standards and fully implemented sanitary and phytosanitary measures, 
modern  technology  based  on  the  application  of  ICT  tools  and  solutions  (sensors,  data  loggers,  information 
systems  for  data  collection,  processing  and  management),  production  of  suitable  biodegradable  packaging, 
building  modern  storage  and  logistic  systems  which  are  missing  in  the  current  supply  chain.  The  role  of 
academia, clusters, research and innovation centres, as well as start-ups and innovative SMEs, is crucial for the 
future specialisation of this sub-area. 

According to the respondents, there are several additional challenges that the government should address in 
order to support the further development of this sector. The need for land consolidation and privatisation of 

14 Reports of the Ministry of Education and Science of North Macedonia, https://mon.gov.mk/category/?id=2061. 
15 Reports of the Fund for Innovation and Technology Development, https://fitr.mk/en/#. 
16 State Office of Industrial Property (SOIP), http://www.ippo.gov.mk. 
17 Reports of the Fund for Innovation and Technology Development, https://fitr.mk/en/#. 

21 

 
 
 
 
                                           
agricultural  land,  as  well  as  the  investments  in  infrastructure  (roads  and  irrigation  systems)  and  organised 
cultivation  of  primary  agricultural  products  along  with  complete  modernisation  as  foundations  to  increase 
productivity and yield per hectare of land represent some of these challenges. Additionally, the current approach 
of segregation of competencies across the agri-food policies between the Ministry of Agriculture, Forestry and 
Water Economy (MAFWE) – responsible for primary agricultural production – and the Ministry of Economy for 
food processing and trade is not in line with the concept of the EU’s Common Agricultural Policy, which implies 
integrated policy interventions ‘from farm to fork’18. The lessons learnt from the previous period have shown 
that the disintegration of state policies for the primary production, processing and trade of agricultural products 
leads to partial policy solutions and complicates the process of reaching consensual decisions in the common 
interest  of  all  value-chain  stakeholders.  This  does  not  help  to  overcome  one  of  the  main  problems  in  the 
agricultural sector, which is the prominent vertical disintegration in the supply chains. Therefore, the horizontal 
cross-sectoral connection should be intensified in this regard, especially within areas of marketing promotion, 
packaging,  storage  and  logistics,  the  implementation  of  ICT  solutions  for  managing  and  trading,  more  joint 
initiatives with the representatives of the tourism sector to promote local agricultural products, promotion of 
the mineral and  microbiological fertilisers production as well as promotion of biological and chemical agent 
production for combatting pests and diseases. There are several well-established storage and logistics centres 
for  agricultural  production  in  the  country  and  they  have  a  crucial  role  in  the  supply  chain  of  this  sub-area. 
However,  the  missing  piece  in  the  supply  chain  that  should  be  developed  in  the  future  is  better  marketing 
promotion of domestic products on international markets and the sector for packaging and branding. 

Moreover, the horizontal connection with the food processing industry represents another important step in the 
process of Smart Specialisation and ensures a circular economy approach by reutilising agricultural waste and 
turning it into high-added-value material. The biogas plants built by ZIK Pelagonija and Veze Sharri represent 
examples  of  practicing  the  circular  economy  model  in  the  agricultural  production.  There  are  several  other 
ongoing investments in building biogas plants which indicates that this sub-area is transforming by applying 
modern and sustainable concepts. 

This sub-area is connected with the machinery sector in terms of implementation of new agricultural equipment 
and new machines for production, as well as with the civil engineering sector in terms of construction of smart 
facilities for storage and logistics regarding agricultural products. AgroBar Vinica and Agromehanika Bitola are 
companies which produce agricultural equipment and machines, which are good examples that should be used 
in  other  parts  of  this  sub-area  (the  production  of  machines  and  equipment  for  the  production  of  different 
agricultural products). 

The agricultural sector was largely hit by the COVID-19 crisis through the shutting down of restaurants and the 
reduced  demand  for  fruit,  vegetables  and  meat.  There  were  also  issues  during  the  export  activities  of 
agricultural products in the first couple of months of the crisis (April and May 2020). However, the expected 
impact of the economic crisis caused by the COVID-19 pandemic on this subsector is not significant in terms of 
demand for agriculture products, number of workers or the value of export. Moreover, the crisis is not expected 
to have any serious effects on the future development of this sub-area in terms of the Smart Specialisation 
process and transformation to smart agriculture. The government should create a set of post-crisis measures 
that will be development-oriented with the single aim of boosting the process of transformation of this sector 
in terms of the implementation of new technologies, production methods, new products, etc. In this regard, the 
government should support the investment activities of big companies, as well as the innovative SMEs, which 
have limited access to finance. 

During the health and economic crisis caused by the COVID-19 pandemic, work in the agricultural and food 
sector  did  not  stop,  but  only  slowed  down  due  to  the  new  rules  on  restricted  movement  introduced  by  the 
Government of the Republic of North Macedonia in response to the pandemic. The biggest challenges facing 
the agricultural and food sector were the organisation and logistics of importing and exporting the products 
from this sector, as well as the organisation of current agricultural and production processes in enterprises due 
to limited working hours and movement. A total of 50.98% of companies faced cancellations/delays of orders, 
which shows the extent of the impact of the COVID-19 crisis on companies from this sector. Estimated losses 
in the agricultural  and  food  sector in the  first  quarter  of  2020, compared to the  first quarter  of  2019, are 
calculated at 22-40%. Therefore, the industry expected reduced profitability of 41-60% in 2020. Given that the 
agricultural and food sector is of vital importance and has the potential to be a driving force in the recovery of 

18 The Farm to Fork Strategy is at the heart of the European Green Deal aiming to make food systems fair, healthy 
 and environmentally-friendly. See more at https://ec.europa.eu/food/horizontal-topics/farm-fork-strategy_en 

22 

 
 
 
 
                                           
the economy, various financial instruments, in cooperation between banks and the state, provided in particular 
for export-oriented companies, are proposed in the short term. Additionally, in the long run, it is necessary for 
companies to adapt and improve their technology and application of knowledge, improve their specificity and 
then become more resilient to future similar challenges such as this health economic crisis19. 

  Sub-area 2 – Food processing with high added value 

The food processing industry is one of the primary manufacturing sectors in North Macedonia. Even though the 
country is net importer of food, the export performance and development potential of this sector is significant. 
The majority of respondents interviewed noted that the most important step for future Smart Specialisation in 
the country in this sector should be based on moving towards the production of high-added-value products, as 
well as healthy and organic food products and local food brands. 

The food processing sector shows growing trends in terms of number of companies, workers, turnover, exports 
and other indicators. The number of active companies in the food processing industry was over 1 700 in 2019 
(which is almost 23% of the total number of manufacturing companies), and these are located in almost every 
region (Skopje, Vardar, East, Pelagonija, Polog) of the country. The number of active companies grew by 10% in 
the period from 2016-2019. These companies have created more than 16 000 jobs, which is more than 10% 
of the total number of workers in the manufacturing sector. This number of workers shows slight growth over 
the last several years. At the same time, there is a positive trend in the companies’ total turnover (over 5% 
growth rate in the period 2016-2019)20. Moreover, the export value of the food processing industry has reached 
more than EUR 350 million (over 50% of the total turnover of the entire sector), which shows that this subsector 
has strong export performance. More importantly, according to the information from the interviewed companies, 
based on the growing trends in the global demand for food products, the export potential of high-added-value 
food products is immense and should be utilised, with the support of the government in the process of building 
comparative advantages by exporting these products to new markets and by including academia in the process 
of increasing the innovative capacity for the transformation of basic products into high-added-value products. 

The conclusion based on the results from the conducted interviews shows that there are numerous companies 
that successfully produce and sell a wide range of food products on the domestic and global markets, such as 
Vitaminka Prilep, Makprogres Vinica, Evropa Skopje, Donia Prilep, Cermat Bitola, Swisslion in the confectionery 
industry (wheat snacks, chocolate products, wafers, cookies and cakes, ice-cream, lokum and other products); 
Diam Gevgelija, Maks Strumica, Lars Shtip, Vipro Gevgelija in the canning industry (ajvar, lutenica, marmalade, 
jam); Veze Sharri Tetovo, Mik Sv. Nikole, Agria Veles, Pekabesko Skopje in the meat industry (processed meat 
products – beef salami, smoked beef, chicken fillet, hot dog and breast, pate and other products); Kadino Skopje, 
Zito Luks in the baking industry (frozen filo dough pastries, pasteurised breads); BiMilk, Zdravje Radovo, Sutash 
Skopje in the dairy  industry  (milk, buttermilk,  yogurt, butter, sour  cream  and  other  products);  Brilijant Shtip, 
Blagoj Gjorev Veles in the cooking oil industry (sunflower, olive cooking oil). Many of these companies could be 
classified as innovative SMEs that invest in new technologies and innovations, implement EU standards, have 
traditions  and  accumulated  knowledge  and  are  well-established  on  the  global  markets,  representing  their 
comparative advantages. This indicates that the food processing industry is a very dynamic sector from the 
aspect  of  technology  and  innovation  with  the  critical  mass  of  innovative  SMEs  that  have  the  capacity  to 
accelerate the future development of this sub-area. Additionally, there are seven active clusters (Agri-exporters 
cluster, ‘Wines of Macedonia’, Wine cluster – Enolozi, milling and baking industry cluster, food confectionary 
industry cluster, TWR Tikves Wine Route and Map F&V Cluster) and several business associations that have an 
important role in the development of different branches within the food processing industry. 

The results of the interviews showed that this sub-area has well-established supply chains. There are several 
wholesale/retail distributors (Dauti Komerc, Kam Market, Stokomak, Rudine, Kolid, Atlantic Trade and others) 
with well-established distribution networks, storage and logistic capacities, and these have an important role in 
the promotion and distribution of food products in the Western Balkans region, Bulgaria and other EU countries. 
Additionally,  there  are  several  initiatives  among  the  food  producers  (in  particular,  the  initiative  by  the 
confectionery industry) for creating international distribution networks to better promote food products, which 
could  represent  a  key  step  towards  further  internationalisation  of  this  sub-area.  Packaging  and  marketing 

19 Study on the effects on agriculture and the food industry caused by the health and economic crisis,COVID-19 with recommendations, 

https://biznisregulativa.mk/mk-MK/Pages/Publications,  
https://biznisregulativa.mk/Upload/Documents/THE%20EFFECTS%20ON%20AGRICULTURE%20AND%20THE%20FOOD%20INDUSTRY
%20CAUSED%20BY%20THE%20HEALTH%20AND%20ECONOMIC%20CRISIS%20COVID-19%20WITH%20RECOM.pdf. 

20 Own calculation based on official statistical data from the State Statistical Office of the Republic of North Macedonia. 

23 

 
 
 
 
 
                                           
promotion  are  parts  of  the  supply  chain  that  are  crucial  in  the  process  of  building  stronger  competitive 
advantages of the food processing sector on the global markets. 

This  sub-area  has  R&D  and  innovation  potential.  The  key  players  from  academia  are  the  Food  Institute 
(Department  of  Food  Security  and  Department  of  Fruit  and  Vegetable  Processing)  within  the  Faculty  of 
Agricultural  Sciences and Food  of  Ss.  Cyril  and  Methodius  University,  the Institute  for Food  Technology and 
Processing within Goce Delchev University, the Institute for Food within the Faculty of Veterinary Medicine - 
Skopje, the Faculty of Technology and Metallurgy (Department of Food Technology and Biotechnology) of Ss. 
Cyril and Methodius University - Skopje, the Faculty of Biotechnical Sciences of St. Kliment Ohridski University 
-  Bitola  and  the  Macedonian  Academy  of  Science  and  Arts  -  MANU.  There  are  over  200  professors  and 
researchers active in the institutes and research centres within these institutions. They play a key role in the 
transfer  of  new  technology,  in  the  implementation  of  new  innovative  production  techniques  and  new  EU 
standards,  the  development  of  new  products  as  well  as  in  testing  product  quality,  laboratory  accreditation, 
theoretical  research  and  in  issuing  quality  standards  for  production.  An  additional  argument  regarding  the 
existence of research and innovation capacities in this sub-area is the fact that there are 7 successfully finished 
H2020 projects in the field of food security, sustainable agriculture and forestry; more than 20 projects financed 
within the Fund for Innovation and Technology Development instruments in the field of food processing in the 
last  4  years;  and  more  than  10%  of  the  innovation  vouchers  (for  collaboration  between  academia  and  the 
business sector) awarded under the first FITD call were granted to the food processing sector. At the same time, 
there are many collaborative and applicative projects financed by the EU programmes, such as IPARD, to support 
innovative ideas in the food processing industry21. 

The stakeholders interviewed pointed out the following main strengths of this sub-area: 1) increasing number 
of new modern facilities and production capacities with highly flexible opportunities; 2) accumulated knowledge, 
experience and long production tradition; 3) natural resources; 4) CEFTA and other free trade agreements and 
huge international market opportunities; as well as the existing distribution network. Therefore, the development 
potential and untapped opportunities for further production specialisation and export diversification of this sub-
area  are  significant  and  should  be  utilised.  The  companies  and  faculties  interviewed  put  forward  several 
recommendations  based on  the challenges  addressed  that this sub-area is facing in  the  process  of  further 
Smart Specialisation. 

The main challenges addressed and recommendations based on these identified challenges are: 

 

 

 

 

 

 

increasing industrialisation – scale of production. Current production is on a smaller scale, investments 
to increase production capacity, as well as new investments to increase the production capacity for 
raw materials, are needed; 
increasing  diversity in food  production and export by using national and EU funds. There are  many 
possibilities that have not yet been utilised in the field of starting the production of new products by 
having a more active collaboration between academia and the business sector; 
increasing  automation  and  competitiveness  through  new  investments  in  modern  technology,  new 
organisation and business models; 
enhancing  the  quality  and  quality  control  of  final  products  by  implementing  new  ICT  management 
systems and digitalisation; 
increasing know-how of R&D by enhancing scientific and research capacities, as well as the cooperation 
between the business sector and academia; and 
better marketing promotion of traditional food products that characterise certain regions. This branch 
is dominated by smaller entities and could be promoted together with cultural and rural tourism. This 
area has great, but economically untapped, potential that should be utilised. 

The production of beverages as a part of the food industry has plenty of development potential, considering 
the fact that there is tradition, modern technology and experience in terms of trained labour and engineers for 
the production of high-quality beverages according to international standards. The export opportunities of beer 
and  non-alcoholic  beverages  are  limited  to  regional  markets,  while  the  export  activities  of  wine  are  highly 
internationalised – reaching the EU market and beyond. The key players in beer production are Pivara Skopje 
and  Prilepska  Pivarnica,  while  Kozuvchanka  Kavadarci,  Gorska,  Viva  Skopje,  Pivara  Skopje  and  Prilepska 
Pivarnica are the key players in the production of water and non-alcoholic beverages. On the other hand, there 
are many wine producers, but the key players are Tikvesh Kavadarci, Bovin, Stobi Gradsko, Popova Kula Demir 

21 Official Reports of the Fund for Innovation and Technology Development and the Ministry of Education and Science of North Macedonia, 

https://fitr.mk/en/# and https://mon.gov.mk/category/?id=2061. 

24 

 
 
 
 
                                           
Kapija, Ezimit Shtip  and others.  The  wine industry  has a long-standing tradition and its  products  are  highly 
praised on the international market. According to the data obtained by the Ministry of Economy, there are few 
active clusters for the production and promotion of wine as well as the promotion of wine tourism. ‘Wines of 
Macedonia’  (WoM)  is  the  organisation  that  unites  wine  producers  from  North  Macedonia,  committed  to  the 
promotion of the quality and image of the wine from North Macedonia across the world. This is a good example 
of how an important branch  of the country  should  be promoted and further  internationalised on the global 
markets. However, a considerable share of the producers still sells their products on the foreign markets directly 
to their trade partners without domestic wholesale companies. According to the information gathered from the 
interviews, there is an institutional obstacle to the development of the beer and wine production/retail sector. 
Due to some provisions, this is namely the sale of alcoholic beverages and wines in retail from 7. p.m. to 6 a.m. 
in winter and from 9 p.m. to 6 a.m. in summer is prohibited. This had a serious impact on beer and wine sales 
on the domestic market, but also on the sales of the filling stations in the summer period, usually generated by 
tourists transiting the country. Moreover, the rise in excises increased the price, thus reducing the demand while 
simultaneously allowing imports of foreign beer and wine. In addition, the licences reduce the interest of the 
retail network and negatively affect the demand for these products. This sub-area was seriously hit by the crisis 
resulting from the restrictions in the catering and tourism sector. On the other hand, the main challenge in the 
wine sector is to build competitiveness and a brand to export more bottled wine with high added value, and 
government support to brand the wines from North Macedonia and export bottled wines should be high on the 
priority list of the Agency for Foreign Investment and Export Promotion and other competent state institutions. 

Health  supplements,  healthy  food  and  organic  products  is  a  very  important  branch  of  the  food  processing 
industry when considering future global market trends. The key players in this branch of the business sector are 
Vitalia Skopje, BiMilk Bitola, Zoralek Kavadarci, Nelkoski Organic Food Ohrid, Replek Farm Skopje, Alkaloid Skopje, 
Agro Fila Shtip and a few smaller producers of organic fruit, vegetables and other organic products. The healthy 
and organic food segment showed positive development trends in the last period in terms of the number of 
companies that produce organic and healthy food, the number of products and brands that are developed. For 
example, Good Nature – healthy teas from Alkaloid Skopje, Floreo – different types of organic honey and organic 
honey products, organic dairy products; different types of healthy oils from Agro Fila, ZAUM – organic hazelnut 
paste and crème; Vitalia – organic and health products such as immune boosters, cereals, oatmeal, bars, snacks, 
sweeteners, beverages and teas; organic fruits and vegetables from  different small producers; and oil from 
cannabis. According to the data obtained by the Ministry of Economy there are a few active clusters in this area. 

This branch has critical strategic strengths such as natural resources, innovation capacity, geographic position, 
but there is untapped development potential that should be utilised by increasing the cooperation between the 
companies, the government and academia. Additionally, the health crisis caused by the COVID-19 pandemic 
and  people’s  increased  awareness  of  the  importance  of  healthy  and  organic  food  is  another  argument 
concerning the existence of development potential for this sub-area. This sub-area is closely related to the ICT 
sector  in  terms  of  implementation  of  new  business  and  organisation  models,  as  well  as  new  production 
processes based on ICT solutions, such as AI, Big Data and Business Analytics, IoT. At the same time, the food 
processing industry is related to the machinery sector in terms of using new machines and equipment, as well 
as being related to tourism in terms of wine tourism, gastronomic tourism and supplying traditional food. There 
are links with energy efficiency solutions and greening the industry, with a special focus on a circular economy. 

The impact of the economic crisis caused by COVID-19 on the food processing industry does not seem to be as 
serious as in other industrial sectors (in tourism, for example). This implies that the domestic demand is stable 
without bigger negative trends, which largely results from the government support in initiating the anti-crisis 
measure  called  ‘buy  domestic  products’.  At  the  same  time,  there  were  no  negative  effects  concerning  the 
declining number of workers and export activities. However, this sector experienced some indirect consequences 
such us problems with sick leave (which led to reduced production), delays in the delivery of raw materials and 
packaging, a decline in purchasing power, the slowdown of new investment projects, etc. According to the official 
statistical data, the industrial production of food and beverages experienced a decline of -5%, while export 
recorded a decline of -8% in the period from March 2020 to March 2021. On the other hand, the COVID-19 
pandemic had a positive impact on the sector by increasing consumers’ awareness of the need to maintain 
good health, increasing the consumption of healthy supplements and high-added-value food products. 

The  government  and  its  key  state  institutions  (the  Food  and  Veterinary  Agency  of  the  Republic  of  North 
Macedonia; the Ministry of Agriculture, Forestry and Water Economy; the Ministry of Economy; and others) could 
assist this sector in the process of recovery and stimulate further development in the post-crisis period through 
several actions: supporting international presentation, promotion and branding; engaging foreign experts in all 

25 

 
 
 
 
business  processes;  favourable  credit  lines  for  export  arrangements  and  for  increasing  competitiveness; 
assistance  in  standardisation  and  certification;  new  free  trade  agreements;  protection  against  unfair 
competition  and  transfer  prices;  customs  and  tax  relaxation  concerning  export-oriented  products;  de-
bureaucratisation of procedures; stimulation of cluster associations and other measures. 

4.2 Information and Communication Technologies (ICT) sector 

In  the  ICT  area,  the  interviews  were  conducted  with  9  representatives  of  the  business  sector  including  the 
Chamber  of  Commerce  for  Information  and  Communication  Technologies  –  MASIT,  as  the  largest  business 
association within the ICT sector; 3 representatives of academia (Faculty of Computer Science and Engineering 
within Ss. Cyril and Methodius University - Skopje, Faculty of Computer Science of Goce Delchev University - 
Shtip  and  the  Centre  for  Technology  Transfer  and  Innovation  –  INNOFEIT  within  the  Faculty  of  Electrical 
Engineering and Information Technologies at Ss. Cyril and Methodius University - Skopje); and the Agency for 
Electronic  Communications  as  a  government  institution.  The  majority  of  the  interviewed  stakeholders  are 
located in the Skopje region, while one academic institution is located in the East region and one company is 
located in the Vardar region. 

Table 5. List of interviewed stakeholders with proposed process ambassadors for the ‘Information and Communication 
Technologies sector’ area22 

No. 

Business sector 

Ambassador  Custom 

software 
development 

 ICT 
infrastructure 

1 

2 

3 
4 

5 
6 
7 
8 

9 
No. 
1 

2 

3 

No. 

1 

MAKEDONSKI TELEKOM 

A1 MAKEDONIJA 

INBOX 
KABTEL 

ULTRA & UNET GROUP 
EDUSOFT DOO SKOPJE 
INTERWORKS 
SEMOS 
Business association - cluster 
MASIT 
Academic sector 
GOCE DELCHEV UNIVERSITY, FACULTY OF 
COMPUTER SCIENCE 

CENTRE FOR TECHNOLOGY TRANSFER AND 
INNOVATION-INNOFEIT, Faculty for Electrical 
Engineering and Information Technologies - 
Skopje 
FACULTY OF COMPUTER SCIENCE AND 
ENGINEERING AT SS. CYRIL AND METHODIUS - 
Skopje 
Government sector 

AGENCY FOR ELECTRONIC COMMUNICATIONS 

Source: Authors. 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 
X 
X 
X 

X 

X 

X 

X 

X 

A focus group meeting was organised consisting of 3 ambassadors from the business sector (Ultra, Semos and 
Telekom), MASIT as the largest business association within the ICT sector, 4 representatives of the government 
sector  (Cabinet  of  the  Prime  Minister,  Ministry  of  Economy,  Ministry  of  Education  and  Science,  Ministry  of 
Information Society and  Administration and Cabinet of the Deputy Prime Minister) and  2 representatives of 
academia (professors from the Faculty of Computer Sciences and Engineering - Skopje and INNOFEIT – Faculty 
of Electrical Engineering and Information Technologies - Skopje). The focus group participants contributed to 

22 The classification is based on the proposed sub-area(s), while the ambassadors are identified in the process of interviews according to 

the results of the previously developed questionnaire. 

26 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                           
the  finalisation  of  the  strategic  sub-areas  and  the  clarification  of  some  of  the  open  questions  from  the 
interviews. The participants’ discussion in the focus group meeting was focused on several key questions related 
to the S3 process, such as questions about the innovation potential of start-ups and the role of innovative SMEs 
in  the  process  of  transforming  the  existing  concept  based  on  outsourcing  ICT  software  services  towards 
advanced ICT services and customised software development, as well as the question of building the digital 
infrastructure and improving the quality of education. 

Additionally, several sector studies were consulted in the qualitative analysis, such as the ‘ICT General Mapping 
Report for North Macedonia 2020’ and ‘Study for the effects on the private sector of the ICT industry affected 
by the health-economic crisis caused by the COVID-19 pandemic with recommendations for the management 
of consequences’23. 

The  results  of  the  qualitative  analysis  show  that  the  ICT  sector  was  one  of  the  most  dynamic  and  fastest 
growing sectors in the Republic of North Macedonia during the last decade. The growth rate in this area has 
been roughly 47% in the last 5 years. The IT industry is gaining importance in the overall economic development 
of the country. 

According  to  the  national  statistical  data  and  the  General  Mapping  Report  on  the  ICT  industry  in  North 
Macedonia, this area is a high performer in terms of the number of companies, number of employees, added 
value and exports. In 2019, the number of registered ICT companies was 2 198, which represents an increase 
of 8% compared to 2018. The number of employees in ICT companies in 2019 amounted to 15 514, which is 
a 7% rise in comparison with 2018, when this figure was 14 541 employees. The average number of employees 
per company is 7.46, with the possibility to soon decline to 7.17. If the interest in start-ups and new companies 
intensifies, and there is no solution to the education (supply) problem, the total number of employees in the 
next few years may grow even faster, but the average will further decrease. Exports are continuously growing 
– from EUR 121 million in 2014 to EUR 210 million in 2019 – but the export growth in the IT segment from 
EUR 60 million to EUR 179 million in the same period is even more impressive. If this trend continues with an 
average growth of 25%, in the next few years the IT segment will reach almost EUR 300 million. Moreover, 
63% of the total value (generated revenue in 2019) of the IT segment is exported and only 23% imported with 
a 41% share in the trade surplus, which again is highly positive24. 

More than half of companies (52%) are selling on both markets and the other 48% are solely selling on either 
the domestic or international market. If the answer is both, the international market usually dominates, since 
almost 84% of all companies are selling there, compared to the 68% selling on the domestic market. 

With regard to the type of service portfolio, the companies in the ICT industry are divided into five sub-segments 
(software and IT services, telecommunication, ICT manufacturing, ICT trade and other IT services). A large share 
of the companies (56% of the total) are concentrated in the ‘software and IT services’ sub-segment and 27% 
in ‘ICT trade’ and ‘ICT Manufacturing’25. 

According to the stakeholders interviewed, one group of IT companies is offering final products by developing 
their own solutions for final customers, while the other group is based on the ‘outsourcing’ business model. 
However, the majority of the IT companies try to combine these two business models by delivering final products 
and  outsourcing.  To  a  certain  degree,  it  is  positive  that  companies  offer  such  a  ‘final  product’  at  a  higher 
percentage,  considering  that  this  type  of  service  brings  added  value,  revenue  and  greater  profit  to  the 
companies. 

According to the ICT Export Report26 and findings from the conducted interviews, most of the IT companies do 
business internationally, and they generate revenue from exporting IT services abroad. The findings show that 
domestic IT companies are working in many different countries where they mostly have partners or sell directly, 
while a small share of the companies are subsidiaries. It is rather positive that almost all interviewed companies 
consider that there is future export potential. Considering that exports are the most valuable aspect of the IT 
segment,  the  previous  conclusion  follows  the  same  thread  that  companies  will  strive  to  develop  additional 
export potential27. 

The  ICT  segment  in  the  country  received  over  USD 65  million  in  FDIs  between  2003  and  2017  for  custom 
computer programming services, management services for computer facilities and software publishing28. The 

23https://biznisregulativa.mk/mk-MK/Pages/Publications. 
24 ICT INDUSTRY IN NORTH MACEDONIA GENERAL MAPPING REPORT, Skopje, North Macedonia | June 2020, MASIT. 
25 ICT INDUSTRY IN NORTH MACEDONIA GENERAL MAPPING REPORT, Skopje, North Macedonia | June 2020, MASIT. 
26 ICT EXPORT REPORT CURRENT SITUATION AND POTENTIALS June 2020 | Skopje, North Macedonia. 
27 ICT EXPORT REPORT CURRENT SITUATION AND POTENTIALS June 2020 | Skopje, North Macedonia. 
28 Seizing a brighter future for all – WB Systematic Country Diagnosis 2020. 

27 

                                           
ICT sector is increasingly attracting international companies such as Seavus (Sweden), Netcetera (Switzerland), 
M Soft (France), 6PM (UK/Malta), which are developing software in North Macedonia for export, while others 
provide customer support to multinational IT companies. Major international companies in South-East Europe 
that are present in North Macedonia are: S&T AG (Austria), Ness Technologies (Israel), Musala Soft AD (Bulgaria), 
Melon AD (Bulgaria), Matrix IT Ltd. (Israel), IN2 Group (Croatia), Endava Ltd. (UK), Dekra SE (Germany), Cisco 
Systems Inc. (USA), Asseco SA (Poland). A growing number of companies from neighbouring countries enter the 
labour market of North Macedonia in the outsourcing industry, without owning any offices or subsidiaries, by 
hiring freelancers or remote employees in North Macedonia29. 

At  a  time  of  COVID-19  crisis,  the  ICT  sector  demonstrated  strong  resilience.  Companies  from  this  sector 
reorganised themselves very quickly, mainly through working from home. This primarily led to investments in 
technical equipment and telecommunications infrastructure to create uninterrupted working conditions at home 
while maintaining  the level of quality set when performing work assignments from the office. On the other 
hand, the value of digital transformation has never been more significant. The application of digital technology 
in the newly created situation is invaluable to both the economy and the general population. Statistics show a 
massive  increase  in  accomplished  activities  through  digital  channels,  mainly  in  households  with  regard  to 
running the necessary errands and certainly in businesses, which inevitably moved to the application of specific 
tools,  be  it  communication  as  a  basic  need  or  to  improve  the  business  processes  and  the  overall  business 
activity. 

This section analyses the impact of the COVID-19 crisis on specific aspects of ICT companies’ operations, such 
as  the  cancellation  of  orders,  collection  of  claims,  liquidity,  productivity,  logistics  and  distribution  and 
administrative procedures. 

The results of the qualitative analysis related to COVID-19 effects on ICT companies states that the cancellation 
of orders, as a consequence of the COVID-19 crisis, has the biggest negative impact on their operations. As a 
result  of  the  crisis,  most  companies  expect  it  to  affect  their  performance  results  in  the  near  future.  This 
prediction  stems  from  companies’  expectations  of  a  reduction  in  sales  in  2021.  Therefore,  profitability 
expectations are similar, with an expected decline. 

The  majority  of  IT  companies  in  the  country  are  export-oriented30.  Most  of  them  export  their  services  and 
products to Europe, while others export further to the USA and Asia. Most of the interviewed ICT companies that 
export believe that the consequences of COVID-19 has had a significant impact on their operations. Many of 
them  say  that  their  operations  are  partially  affected,  followed  by  companies  whose  operations  are  barely 
affected or have not experienced any impact on exports. 

According to the results of the conducted interviews, almost all ICT companies noted that the COVID-19 crisis 
does not affect the number of their employees, while the others had to reduce their number of employees. 
However, during the crisis, there were a small number of companies which experienced employee growth. The 
predictions on the future impact on the number of employees affected by the COVID-19 crisis are similar to 
the  current  impact.  The  majority  of  employers  believe  that  the  situation  will  not  lead  to  a  reduction  in  the 
number of employees in the future, while a select few think that they will lay off a relatively small proportion 
of the employees. A rather significant percentage believes that the number of employees will increase in the 
post-crisis period. 

To mitigate the consequences of the COVID-19 crisis on employees in the ICT sector, companies believe that 
the government could choose from several measures to retain most of the jobs. Moreover, most companies 
consider that measures with a particular impact include the provision of interest-free loans, reduction of tax 
burdens and subsidies for part of an employee’s salary. Some of the measures concerning the effectiveness of 
the aforementioned are the reduction of social contributions, grant loans to maintain the liquidity and working 
capital of the companies, exemption from paying  pension insurance contributions, reduction of the advance 
payment  of  income  tax,  deferral  of  income  tax  payments,  provision  of  low-interest  loans,  securing  loan 
guarantees and working  capital loans and the acceptance of sick leave shorter than 30 days by the Health 
Insurance Fund (FHI)31. 

The  start-up  community  is becoming  increasingly  organised and active especially  in the ICT  industry.  A  few 
faculties have developed innovation centres intended to support start-ups in the ICT industry32. 

29 https://investnorthmacedonia.gov.mk/invest-ict/. 
30 ICT EXPORT REPORT CURRENT SITUATION AND POTENTIALS June 2020 | Skopje, North Macedonia. 
31 Study for the effects on the private sector of the ICT industry affected by the health-economic crisis caused by the COVID-19 pandemic 

with recommendations for the management of consequences, https://biznisregulativa.mk/mk-MK/Pages/Publications. 

32 https://www.eu-startups.com/2020/04/north_macedonia_skopje_ecosystem_at_a_glance/. 

28 

                                           
According to the information gathered through interviews and additional related analyses, we can conclude that 
companies are, for the most part, involved in outsourcing, but the future lies in the further development of 
customised software for domestic and foreign partners and advanced ICT services in close collaboration with 
the ICT support centres. ICT is seen as an important partner of the entire economy and society in the process 
of digital transformation of the industry and development of an e-society. 

ICT  has  shown  high  innovation  capacities.  Projects  from  the  ICT  industry  make  up  35%  of  the  portfolio  of 
projects granted through the Fund for Innovation and Technology Development in the last 4 years. Furthermore, 
the sector obtained 17 of the total number of granted projects through the latest instrument for innovation 
grants for collaboration between the university and the business sector33. 

Considering the broader area of the ICT sector, based on systematised data obtained from a number of sources 
(conducted interviews, focus group meetings, in-depth sectoral analysis, etc.), the following sub-area has been 
proposed:  Custom  software  development.  The  conclusions  of  the  conducted  interviews,  organised  focus 
group meetings and in-depth sectoral analysis for each defined sub-area are presented below. 

 

Sub-area 1 – Custom software development 

Software  development  is  a  very  dynamic  sub-area.  Start-up,  scale-up  and  other  SMEs  as  innovation-driven 
entities  become  particularly  important  in  the  development  process  of  this  sector,  with  a  crucial  role  in  the 
process of Smart Specialisation for this sub-area. 

In 2019, 1 234 companies were registered under Software and IT Services (which is 2% of the total number of 
registered companies in the country) and most of them are located in Skopje. The number of active companies 
has shown exceptional growth, rising by 55% between 2016 and 2019 or with an average growth of 16% in 
the  same  period.  Total  revenue  in  2019  amounted  to  EUR 272  million,  which  is  a  growth  of  80%  in  2019 
compared to 2016 and an average growth of 22.4% (2016/2019). Most of this revenue (over 85%) is generated 
through the export of ICT services (development of software solutions) to foreign markets. ICT companies sell 
software services in more than 60 countries. The growth of the net profit follows the growth of the operating 
income, from EUR 17.33 million in 2016 to EUR 41.91 million in 2019, and an average net profit margin of 
12% to 15%. According to some estimations based on the working hours in 2019, there are more than 8 500 
workers in this sub-area, which represents a growth of 69% in comparison to 201634. 

The aforementioned growth trends, as well as the existing potential and advantages such as skilled labour, high 
level of interest in ICT studies, high-paying positions, English language fluency, vibrant innovation ecosystems35 
– boosted  by efforts  from the Fund for Innovation and Technology Development (FITD) – in particular, high 
innovativeness in the sector, growing start-up society, experience in outsourcing, experience on international 
markets,  existing  support  infrastructure  at  the  universities  supporting  ICT  start-ups  (for  example,  INNOFEIT 
functions  as  a  local  hub  for  technology  transfer  at  the  Faculty  of  Electrical  Engineering  and  Information 
Technologies, and several start-ups and spin-offs have been formed and are active in the area), favourable 
business  conditions36  and  good  internet  infrastructure  show  that  software  development,  being  one  of  the 
fastest growing sub-areas, has significant development and export potential. 

The  academia  recognised  the  need  to  introduce  new  programmes  for  software  development,  integrating 
problem-based  learning  as  a  part  of  the  study  programmes.  Over  650  students  a  year  graduate  from  the 
universities in the country in the field of ICT and, today, it represents the main source of human resources for 
the rapid development of this sub-area. The demand for IT experts is high. In the period 2016-2018, 52 students 
at  the  state  universities  gained  PhDs  in  Electrical  Engineering,  Computer  Science  and  Information  and 
Communication Technologies. Many students continue their MA and PhD studies abroad. 

High  R&D  potential  is  demonstrated  by  the  number  of  international  projects,  local  activities  in  the  area  of 
contract research, digital transformation activities, as well as the support of the entire innovation ecosystem. 

The  professors  and  young  researchers  are  involved  in  international  research  projects  financed  by  EU  funds 
(Horizon  2020,  and  others)  and  national  projects  financed  by  the  Fund  for  Innovation  and  Technology 

33 Reports of the Fund for Innovation and Technology Development (FITD), https://fitr.mk/en/#. 
34 ICT industry in North Macedonia – General mapping report, Skopje, North Macedonia, June 2020. 
35 The innovation ecosystem within this area is based on well-established innovation centres and hubs, as well as business incubators and 
accelerators (for example, Centre  for Technology Transfer and Innovations – INNOFEIT, Business  Accelerator  UKIM -  BAU, Seavus 
Accelerator, SEEUTechPark, NewMan’s Business Accelerator, X Factor Accelerator, CEED Hub, YES Business Incubator, and others). 

36 WB Doing Business 2019 report ranks North Macedonia as 17 out of total of 190 economies, 

https://www.doingbusiness.org/en/rankings?region=europe-and-central-asia. 

29 

                                           
Development  (FITD),  and  other  donors  contributing  to  the  process  of  delivering  new  innovative  software 
solutions to almost all sectors in the economy (agriculture, manufacturing, energy sector, services). 

As an example, the ICT sector, under the ‘Horizon 2020’ programme, carried out 10 projects with 11 participants, 
receiving EUR 1.72 million37. Furthermore, North Macedonia became the 30th member of the European High-
Performance Computing Joint Undertaking (2019). The Faculty of Computer Science and Engineering within Ss. 
Cyril and Methodius University in Skopje – the designated institution in charge of the obligations under this Joint 
Undertaking, joined by  relevant institutions and national SMEs – was also awarded a  grant under a Horizon 
2020 call to establish a National High Performance Computing Competence Centre. 

ICT  has  shown  high  innovation  capacities.  Projects  from  the  ICT  industry  make  up  35%  of  the  portfolio  of 
projects granted through the Fund for Innovation and Technology Development (development of new software 
applications and ICT solutions in different industries). Moreover, the sector received 17% of the total number 
of projects through the latest instrument for collaborative grants between the university and business38. The 
key players in this sub-area from the business sector are Endava Skopje, Seavus Skopje, Ultra Skopje, Semos 
Skopje, Interworks Kavadarci, Edusoft Skopje, Nextsense Skopje, Asseco Skopje and others, which are largely 
located in Skopje. 

Relevant stakeholders from academia are the Faculty of Computer Science and Engineering within Ss. Cyril and 
Methodius University - Skopje (UKIM), the Faculty of Electrical Engineering and Information Technologies (FEEIT) 
within Ss. Cyril and Methodius University in Skopje, the Faculty of Computer Science of Goce Delchev University 
- Shtip, SEE University Tetovo, Faculty of Information and Communication Technologies – UKLO Bitola and their 
related centres  for  innovation and  business  support,  focused on  solving  industrial problems and finding ICT 
solutions as a custom software development. Other relevant stakeholders are the institutes, clusters, business 
accelerators and innovation hubs such as MASIT – IT cluster, Centre for Technology Transfer and Innovations – 
INNOFEIT,  SEEUTechPark,  NewMan’s  Business  Accelerator,  X  Factor  Accelerator,  CEED  Hub,  YES  Business 
Incubator and others. 

Additionally, there are several academies and centres in the informal educational system such as Brainster, 
Semos  Education,  Seavus  Education  and  Development  Centre,  and  many  others,  which  have  a  key  role  in 
educating young ICT professionals in different ICT fields. 

An example of the close cooperation between academia and the industry is the ‘Centre for Technology Transfer 
and  Innovations  -  INNOFEIT’  which  was  established  in  2018  by  the  Faculty  of  Electrical  Engineering  and 
Information Technologies (FEEIT), Ss. Cyril and Methodius University in Skopje (UKIM), as part of its efforts to 
close the gap between academic education and practical expertise, prepare its students to better cope with the 
industrial  challenges  ahead  and  stimulate  and  foster  intensive  contract  research  services  for  local  and 
international  partners.  INNOFEIT  is  a  hub  for  interaction  between  FEEIT  staff,  FEEIT  students  and  industrial 
partners,  enabling  connections  and  transfer  of  technology  as  well  as  novel  innovative  ideas  that  aid  the 
economic growth of the sector and society in general. As such, INNOFEIT plays an important part in the North 
Macedonia’s innovation ecosystem, being the catalyst for commercialisation of university ideas. 

In its 3-year existence, INNOFEIT’s operations can be summarised as: 

  5 research contracts for industrial partners amounting to over EUR 300 000 for R&D and technology 

transfer, 

  3 developed prototypes currently being commercialised by industrial partners, 
  6  innovation  vouchers  from  the  FITD  (the  highest  number  granted  to  a  single  stakeholder  in  the 

country), 
founder of an annual innovative interdisciplinary programme for UKIM students (INNO-SAE), 
founder of Business Accelerator UKIM (BAU), 
local partner for the EU4TECH and EU4TECH PoC projects, 
part of regional TT-networking initiative in the Western Balkans, 
the only R&D&I entity in the country mentioned in the EC progress reports published in 2019 and 2020, 
the first and currently only fully operational Digital Innovation Hub (DIH) in MK39. 

 
 
 
 
 
 

‘Startup Macedonia’, as an organisation for strengthening the start-up and innovation ecosystem predominantly 
in the field of ICT, supports the further growth of the sector. 

37 Reports of the Ministry of Education and Science of North Macedonia, https://mon.gov.mk/category/?id=2061. 
38 Reports of the Fund for Innovation and Technology Development (FITD), https://fitr.mk/en/#. 
39 http://inno.feit.ukim.edu.mk/. 

30 

                                           
This  sector  is  very  dynamic  with  many  SMEs  being  formed.  The  Fund  for  Innovation  and  Technology 
Development supported the establishment of several accelerators40. The Business Accelerator UKIM (BAU) was 
founded at the Ss. Cyril and Methodius  University in Skopje (UKIM) to promote entrepreneurship among the 
students and encourage them to form start-ups. BAU has already started investing and it is expected that the 
dynamic will intensify in the next 2 years. 

According to the interviews, outsourcing is dominating at present, but many companies are focusing on their 
specialisation related to custom software development in the following industries: e-solutions for production 
processes  and  services, banking, insurance, agriculture, energy,  etc.  All  markets  are  considered to  be  target 
markets.  Custom-developed  IT  solutions  have  potential  for  almost  all  sectors  in  the  economy  (agriculture, 
manufacturing, energy sector, services). This is part of their process for digital transformation, improving and 
automating processes. 

Most  of  the  ICT  companies  do  not  create  full  value  chains,  but  only  participate  in  the  production  of  some 
elements of the final software solutions. The number of companies that develop and export custom software 
is constantly increasing. 

At the interviews, the companies emphasised the following challenges as barriers to the further development 
of the sector and this sub-area: 1) taxation and high taxes and social contributions on top of salary; 2) regulatory 
policy  –  unsuitable  and  incomplete  institutional  and  regulatory  framework  concerning  building  digital 
infrastructure; 3) education – unsatisfactory level of skills and knowledge that the younger generations get 
from the secondary education system; 4) Brain Drain syndrome – emigration of high-skilled labour force to 
developed economies such as the USA and western Europe. 

Furthermore, with regard to the further growth and future Smart Specialisation of this sub-area, one of the 
main challenges addressed by the interviews in the field of research and innovation was the need to strengthen 
the cooperation between academia and the private sector in the process of building capacities to develop own 
software IT solutions for final consumers, instead of exclusively delivering outsourced ICT services. 

The existing cooperation predominantly involves the education programme, it was on the project basis and the 
innovation  and  research  potential  of  the  academia  is  therefore  still  not  adequately  utilised.  The  projects 
financed by the FITD, as well as the scientific and research centres in the faculties, are a very significant step 
forward,  but  the  government  should  assume  a  more  active  role  by  supporting  the  research  and  innovation 
potential. The government should increase the national funds for research and should  improve the national 
research infrastructure in the strategic area. Academia has critical innovation and research potential that should 
be utilised to further develop this sub-area. 

However, the general conclusion is that the majority of the ICT companies of North Macedonia in the software 
development sub-area have applied business models based on delivering software solutions and outsourcing 
software services for other multinational ICT companies, while a small proportion of them base their business 
activities on developing their own IT solutions for end consumers. The crisis caused by the COVID-19 pandemic 
increased the global and domestic demand for ICT services, especially the need for digitalisation of businesses, 
society and the public sector. Hence, this is a new opportunity to further develop this sub-area. 

The  EDP  as  a  subsequent  activity  under  the  development  of  S3  will  be  supported  by  ICT  companies. 
Ambassadors from the business sector, academia and the government sector were identified as key players 
who will participate in the EDP workshops. They have expressed interest in participating in the meetings. In their 
view, the meetings should be concise and productive and not last an entire day. They prefer online meetings of 
no longer than 2-3 hours. There were recommendations for further discussions in the EDP process about the 
potential of an additional sub-specialisation area related to advanced ICT services as a new trend on the global 
market for ICT services (Big Data and Business Analytics, IoT, Cloud) due to the rapid technology improvements 
and, on the other hand, increased interest from several domestic start-ups in this sub-area. However, the ECNM 
team  has  not  succeeded  in  providing  sufficient  evidence  of  the  existence  of  critical  mass  innovation  and 
scientific capacities, as well as the critical mass of companies during the qualitative analysis. Hence, we suggest 
this potential be additionally explored in the EDP in order to see if this sub-area could be part of the ICT area 
in the process of Smart Specialisation in the Republic of North Macedonia. 

ICT as a horizontal issue – digital transformation of businesses and society 

In the quantitative mapping, ICT was the only sector that was shown to have potential for Smart Specialisation 
in all three components: economic, innovation and scientific areas. ICT can be regarded as a potential priority 

40 https://fitr.mk/en/#. 

31 

                                           
 
domain for Smart Specialisation in the aforementioned area, as well as a horizontal issue relevant to the digital 
transformation  of  the  society  and,  in  particular,  the  digital  transformation  of  the  industry  in  terms  of 
implementing a new method of doing business by using ICT management systems and business solutions. 

ICT can be regarded as a horizontal area of extreme importance to the growth of the entire industry – the so-
called  Industry  4.0  –  by  developing  interconnectivity;  utilising  new  software;  better  business  processes  and 
models; digitalisation and automation of the industry; creating new added-value products and services; utilising 
the  new  potential  of  block  chains;  improving  safety  with  cyber  security  in  mind.  In  particular,  there  are 
opportunities in the segment of constructing smart systems for cooling and heating, lighting systems, access 
control,  smart  systems  for  monitoring  and  control,  digitalisation  and  automatisation  of  the  production 
processes, that is, management of industrial processes. Additionally, there is rapid growth in the demand for e-
services  in  the  business  and  public  sector,  medicine  (e-health  services),  trade  (e-commerce),  education  (e-
education), tourism and culture (e-tourism, creative industries), government (e-government) etc. 

ICT is very important to the digital transformation of the society, offering new opportunities for growth and 
promotion of many sectors such as tourism and creative industries by developing virtual tourism platforms and 
other ICT solutions for the promotion of various e-services. In the digitalised world, this sector is interlinked with 
all segments of society and should therefore receive strong support from the government. In this context, the 
government  should  make  several  steps  towards  meeting  this  strategic  goal:  1)  to  build  a  clear  regulatory 
framework harmonised with EU regulations and to increase institutional capacity in this field; 2) to build a robust 
and  modern  ICT  and  digital  infrastructure  aiming  for  easier  connectivity  by  developing  a  better  wired  and 
wireless  network  –  5G  network;  3)  to  transform  the  educational  system  and  set  it  on  a  course  towards 
information and technical sciences, as well as to develop lifelong learning; 4) to increase the level of digital 
literacy of the society; 5) to increase public investments in building and upgrading research infrastructure in the 
field of ICT; 6) to increase the cooperation between academia and business in the field of ICT by working on 
joint projects. 

4.3 Smart/Sustainable buildings and materials 

The  preliminary  defined  area  of  ‘Smart/Sustainable  buildings  and  materials’  included  14  interviews:  11 
interviews were conducted with representatives of the business  sector, 2 interviews with representatives  of 
academia (Faculty of Civil Engineering and Faculty of Technology and Metallurgy within Ss. Cyril and Methodius 
University - Skopje) and 2 interviews with  representatives of the  government  sector (Cabinet of the Deputy 
Prime Minister in charge of economic affairs and coordination with the economic sectors and the Ministry of 
Transport  and  Communications).  The  majority  of  the  stakeholders  interviewed  (10  stakeholders  from  the 
business sector, academia and government sector) come from the Skopje region; one interviewed company is 
located in the East region; two companies in the Vardar region and two companies in the Polog region. 

Table 6. List of interviewed stakeholders with proposed process ambassadors for the ‘Smart/Sustainable buildings and 
materials’ area41 

No. 

Business sector 

Ambassador 

Smart buildings 

1 
2 
3 
4 
5 
6 
7 
8 

9 

10 

11 

CEMENTARNICA USJE 
BIM AD SVETI NIKOLE 
KNAUF RADIKA 
BETON AD SKOPJE 
VARDAR DOLOMIT 
RENOVA TETOVO 
ADING  
GD GRANIT AD SKOPJE 

CIVIL ENGINEERING INSTITUTE 
MACEDONIA JSC SKOPJE 
AKTIVA SHTIP 

IGM TRADE KAVADARCI 

X 

X 
X 

X 

X 

X 

X 

X 

X 

X 

Sustainable 
materials 

X 
X 
X 

X 
X 
X 

41 The classification is based on the proposed sub-area(s), while the ambassadors are identified in the process of interviews according to 

the results of the previously developed questionnaire. 

32 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                           
No. 
1 

2 

No. 

1 
2 

Academic sector 
SS. CYRIL AND METHODIUS 
UNIVERSITY, FACULTY OF CIVIL 
ENGINEERING - SKOPJE 
SS. CYRIL AND METHODIUS 
UNIVERSITY, FACULTY OF 
TECHNOLOGY AND METALLURGY - 
SKOPJE 
Government sector 

MINISTRY OF TRANSPORT 
CABINET OF THE DEPUTY PRIME 
MINISTER RESPONSIBLE FOR 
ECONOMIC AFFAIRS AND 
COORDINATION WITH THE 
ECONOMIC SECTORS 

Source: Authors. 

X 

X 

X 
X 

X 

X 

X 

X 

X 

X 
X 

Additionally, a focus group meeting was organised, consisting of 3 ambassadors from the business sector (Ading 
Skopje, Granit Skopje, GIM Skopje, and TT Plast Skopje), 3 representatives of the government sector (Ministry of 
Economy and the Cabinet of the Deputy Prime Minister) and 2 representatives from academia (professors and 
researchers from the  Faculty  of Civil  Engineering -  Skopje, and the Faculty  of  Technology  and  Metallurgy  - 
Skopje).  The  focus  group  participants  contributed  to  the  finalisation  of  the  strategic  sub-areas  and  the 
clarification of some of the open questions from the interviews. The participants of the focus group meeting 
noted that this sub-area has significant economic and innovative potential. The representatives from academia 
presented arguments about the research and scientific capacities of this  sub-area, especially in the field of 
advanced materials and the development of smart construction solutions. 

Based  on  the  systematised  data  obtained  from  a  number  of  sources  (conducted  interviews,  focus  group 
meeting, existing sectoral studies, etc.), the ECNM team proposed the area of 'Smart/Sustainable buildings 
and materials’ to be one comprehensive area, consisting of two branches (smart buildings and sustainable 
materials). The ECNM team in the qualitative analysis phase did not succeed in finding sufficient evidence for 
the scientific and innovation potential to propose these branches as separate sub-areas. In the next phase they 
should be further elaborated. 

The conclusions from the conducted interviews and the recommendations from the focus group meeting are 
presented in the following section. 

The area of Smart/Sustainable buildings and materials encompasses: 

1)  sustainable  materials  (sustainable  building  materials;  nanomaterials  –  sensors,  composites, 
coatings; and new polymer-based materials), and  

2) smart buildings and smart construction solutions. 

The main goals of the Smart Specialization process in the field of sustainable materials are: 1) more efficient 
use  of  natural  resources  in  the  production  of  construction  materials,  especially  through  their  planned 
exploitation  (mining  potential)  and  development  of  innovative  technologies  that  enable  the  production  of 
construction materials from industrial waste abundant in North Macedonia, which is in correlation with fulfilling 
the goal of developing a concept of a green and circular economy; and 2) structural transformation and export 
upgrading by  commencing the production of products/materials with  higher added value. One truly relevant 
aspect with potential involves new materials, as sustainable materials, utilising existing resources and adding 
value to new construction products with the re-use of used construction materials and re-use of waste, as well 
as renewable, eco-friendly and healthy materials. This will enable the transition to a circular economy. 

There  are  830  active  companies  (producers  and  sellers  of  building  materials)  in  the  field  of  sustainable 
materials (which is 11% of the total companies in the manufacturing sector) with an upward trend in the last 
several years. These companies create more than 10 000 jobs, which is more than 6% of the total number of 
workers in the manufacturing sector42. The key players in the sustainable building materials segment from the 
business sector are Ading Skopje, Renova Djepchishte, Pofix Tetovo, Titan Skopje, Mermeren Kombinat Prilep, 

42 Own calculation based on official statistical data from the State Statistical Office of the Republic of North Macedonia, 

https://www.stat.gov.mk. 

33 

 
 
 
 
 
 
 
 
                                           
Tondah  Vinica,  Vardar  Dalomit  Gostivar,  Fragmat  Kumanovo,  which  are  predominantly  located  in  Skopje, 
Pelagonija  and  the  north-western  region.  A  large  proportion  of  these  companies  is  export-oriented  with 
significant comparative advantages in terms of well-established international relations and trade partners in 
regional  and  EU  markets,  accumulated  knowledge,  long-standing  tradition  and  adopted  modern  technology, 
natural mineral resources and a skilled workforce. 

As an illustration, the total export of building materials in 2019 surpassed EUR 400 million, which is more than 
6% of the country’s total exports43, showing that this sub-area is highly internationalised, but much of those 
exports are made up of products (minerals, stones, cement, marble, dolomite) that are characterised as products 
with  relatively  lower  added  value.  However,  there  are  some  outstanding  export  products  with  higher  added 
value  such  as:  admixtures,  grounding  and  sealing,  concrete  repair,  joint  sealants,  levelling  compounds, 
decorative coatings and mortars, adhesives, acryl, acryl colour, acryl finish, gypsum materials and other building 
materials. 

The  results  of  the  conducted  interviews  show  that  there  are  several  domestic  innovative  and  high-tech 
companies, such as Microsam Prilep and Plasma Skopje, as well as foreign companies, such as Jonson Matty 
Skopje, Kostal Ohrid, Aptive Skopje and others, which produce advanced materials based on the composites and 
nanostructured materials that produce composite materials, and several domestic innovative SMEs (TT Plast, 
VA PLAST, ING Plast), which produce new polymer-based materials and products for these companies. All these 
companies are highly innovative and export-oriented with a high level of potential for future development. The 
export value of the advanced materials and components is more than EUR 1.5 billion, which is more than 25% 
of the total exports of the country and this export segment has registered a significant upward trend in the last 
several years, showing that this sub-area is highly internationalised and has huge export potential44. 

However,  according  to  the  interviewed  companies  there  are  considerable  untapped  exports  that  could  be 
exploited by building comparative advantages in the production and export of products with high added value. 
Such products are plaster articles, additives for concrete and additives for cement, products and systems used 
for rehabilitation and reconstruction of reinforced concrete structures, protective coatings, fire protection for 
steel  construction  and  electric  installations,  modified  polymer  bitumen  products  for  civil  construction, 
waterproofing  membranes  for  building  construction,  different  components  based  on  nanostructures  and 
polymer-based materials. Hence, the government should create policies to build innovative and technological 
capabilities for commencing production of new semi-products and products from the basic chemical industry, 
which are missing in the value chain, by promoting the establishment of new innovative SMEs in those fields. 

There are several research institutions such as the Faculty of Technology and Metallurgy, the Faculty of Civil 
Engineering, the Faculty of Architecture, the Faculty of Mechanical Engineering within Ss. Cyril and Methodius 
University  in  Skopje,  the  SDEWES  centre  and  MANU,  which  work  on  scientific  and  research  projects  for 
technological innovations and the production of new building and advanced materials, as well as improvements 
to the quality of the existing materials. Additionally, there is an Institute for Advanced Composites and Robotics 
whose  mission  is  to  build  an  appropriate  research  infrastructure  for  the  development  of  fundamental  and 
applied science in the area of advanced composites and robotics through the interdisciplinary approach. 

The interviewed representatives from academia pointed out that the research institutions in the country related 
to  this  area  have  remarkable  results  in  terms  of  research  projects  (several  finished  and  ongoing  H2020 
projects),  a  number  of  published  papers  and  editing  in  highly  ranked  international  scientific  journals,  well-
established  links  and  cooperation  with  other  national  stakeholders  (municipalities,  government  institutions, 
NGOs,  businesses),  which  shows  that  the  innovation  and  research  capacities  and  potential  in  this  field  can 
contribute to the further development of this sub-area. The role of start-ups and SMEs in the development of 
this sub-area is still quite limited and we do not have information about any outstanding start-ups or other 
innovative SMEs in the field of building materials. Additionally, some international partnerships have already 
been established, in particular through active involvement in CEEPUS, MATERA, ERA-NET, EU-Robotics, etc. Links 
with similar clusters in European countries (Italy, Germany, Austria, Poland, the Czech Republic, Slovenia) and 
the Balkans (Croatia, Serbia, Romania, Bulgaria) have also been established in the field of sustainable materials. 
Such  links  will  serve  as  the  basis  for  cooperation,  in  particular  in  the  framework  of  territorial  cooperation 
projects. Furthermore, it is  rather  important that academia are  involved  in educational programmes for the 

43  Own  calculation  based  on  official  statistical  data  from  the  State  Statistical  Office  of  the  Republic  of  North  Macedonia, 

https://www.stat.gov.mk. 

44  Own  calculation  based  on  official  statistical  data  from  the  State  Statistical  Office  of  the  Republic  of  North  Macedonia, 

https://www.stat.gov.mk. 

34 

                                           
 
professional  development of human  resources, as  well as in  delivering training  and  lectures in this  field of 
energy efficiency. 

The  final  conclusion  based  on  the  results  of  the  conducted  interviews,  focus  group  meetings  and  in-depth 
sectoral analysis is that the field of sustainable building materials has high development potential stemming 
from  the  strategic  strengths,  such  as:  accumulated  knowledge  and  adopted  technology,  critical  mass  of 
companies competing on international markets, research and innovation capacities, natural resources that can 
be used appropriately for further development and Smart Specialisation. 

The second branch of this priority area is smart buildings and smart construction solutions as an especially 
important segment in increasing energy efficiency, being one of the country’s strategic goals. Smart buildings 
have unquestionable development potential as there are huge investments in infrastructure projects, as well as 
the construction of industrial facilities, new/modern individual and collective buildings, tourism accommodation 
facilities,  malls  and  business  representative  offices  by  using  sustainable  and  energy-friendly  materials  and 
developing  new  engineering  designs  and  solutions.  The  total  investments  in  buildings  constructed  in  2020 
reached  more  than  EUR 440  million  which  is  4%  of  the  country’s  GDP.  There  are  more  than  5 000  active 
companies in the construction sector (which is more than 5% of the total active companies in the country) with 
an upward trend in the last several years. These companies create more than 31 000 jobs, which is more than 
4% of the total number of workers in the entire economy45. 

The key players from the business sector in the field of infrastructure are Granit Skopje, Beton Skopje, Strabag, 
Pelagonija Gostivar, Ilinden Struga, while the key players in the field of civil engineering and smart buildings 
are Torax Skopje, Aktiva Shtip, Adora Inzenering Skopje, Golden Art Skopje, Nastel Skopje, Cevahir Skopje. They 
have extensive experience and tradition, accumulated knowledge and use adopted modern technology. 

The innovation and scientific potential is to some extent limited, but the Faculty of Civil Engineering and the 
Faculty of Architecture within Ss. Cyril and Methodius University in Skopje as key academic institutions in this 
field  have  the  capacity  to  deliver  professional  services  related  to  the  design  and  planning  of  specific 
infrastructure projects, such as seismic tests and designing routes, measuring the energy efficiency of buildings, 
as well as research capacities concerning construction-related techniques and modern building design. The Civil 
Engineering Institute Macedonia - Skopje is also worth mentioning, with expertise and knowledge in the field of 
infrastructure and civil engineering, especially in the field of designing new and smart construction solutions. 
Additionally, the Institute of Earthquake Engineering and Engineering Seismology is one of the oldest institutes, 
established in 1965. The institute  has  a long-standing  tradition in experimental, in-situ forced and  ambient 
vibration testing and an experimental laboratory for quasi-static and shaking table testing. It consists of three 
research laboratories: the Dynamic Testing Laboratory, Laboratory for Dynamics of Soils and Foundation and 
the Laboratory for Non-destructive Tests. 

However, the collaboration between academia and the business sector needs to be intensified, especially in the 
field of searching for new construction techniques and materials for energy-efficient and smart buildings. Some 
attempts  have  already  been  made  under  projects  financed  by  the  FITD  and  EU  funds.  One  example  of  a 
successful  collaboration  between  academia  and  the  business  sector  in  the  field  of  innovation  and  the 
implementation of innovative ideas in business that was pointed out during the interviews is the project by the 
Centre for Transfer of Technology and Innovation - INNOFEIT and TORAX, as an innovative SME, which develops 
and installs new smart photovoltaic modules for more energy-efficient buildings. This project involved several 
young researchers from the Faculty of Electrical Engineering and Information Technologies - Skopje. This case 
of  collaboration  between  academia  and  the  business  sector  in  the  field  of  innovation  and  creating  new 
innovative  products  should  be  applied  by  other  companies  (start-ups  and  spin-offs),  as  well  as  innovators, 
researchers and scientists. Additionally, according to data from the State Office of Industrial Property, 5% of 
the total number of patent applications in the last decade has come from this area46, while 4.9% of the projects 
financed by the FITD is also attributed to this area47. 

The key players in this sub-area from the government sector are the Ministry of Transport and Communication, 
the Cabinet of the Deputy Minister in charge of economic affairs and coordination with the economic sectors, 
the Ministry of Finance, the Ministry of Economy and the Technology Industrial Development authority. At the 
same time, there are several active NGOs and business associations such as the Association of Construction, 

45 Own calculation based on official statistical data from the State Statistical Office of the Republic of North Macedonia, 

https://www.stat.gov.mk. 

46 State Office of Industrial Property (SOIP), http://www.ippo.gov.mk. 
47 Reports of the Fund for Innovation and Technology Development, https://fitr.mk/en/#. 

35 

                                           
 
Building Materials and Non-metal Industries within the Economic Chamber of North Macedonia, the Macedonian 
Chamber of Certified Architects and Certified Engineers. 

The participants of the focus group meeting pointed out several challenges that this sub-area is facing in the 
process of future development: digitalisation, modernisation and building a high skills level with all types of 
construction workers. In that regard, it was mentioned that the Economic Chamber of Macedonia implemented 
a project from the framework programme of the EU - HORIZON 2020, as part of the Energy Efficiency call, the 
project ‘TowaRd market-based skills for sustAINable Energy Efficient construction’ (TRAINEE). The activities in 
the project aimed at the further promotion of the skills of middle- and senior-level professionals and blue-collar 
workers  in  the  area  of  sustainable  and  energy-efficient  construction  (400  people  trained  and  certified) 
throughout the entire value chain of the construction sector. In order to enhance the multidisciplinary approach 
to  sustainable  construction,  there  were  activities  to  initiate  the  Building  Information  Modelling  concept  at 
national  level.  Additionally,  the  interviewed  stakeholders  noted  that  the  new  innovative  energy  efficiency 
business models should be further stimulated with an adequate financial mechanism for investment in energy-
efficient buildings, and a new regulatory framework should be adopted that will promote the innovations by 
supporting new innovative SMEs since they are crucial to the further development of this field. 

This sub-area has strong horizontal connections with several other sectors, such as the ICT sector in the field 
of applying new ICT business solutions in smart buildings (the aforementioned example of TORAX and FEIT), as 
well as the production of sustainable materials mentioned above. Additionally, this sub-area is closely related 
to the energy sector (the aforementioned example of the TRAINEE project), chemical and mining industry (the 
example Ading Skopje, which used chemical raw materials/inputs and Vardar Dolimit, Renova Tetovo and Knauf 
Radika which used non-metallic minerals as inputs for the production of sustainable construction materials), 
transport, metalworking and machinery – the successful story of Activa Shtip and IGM Kavadarci concerning the 
construction of new modern industrial facilities based on the metal parts and structures that they produce was 
noted by the interviewed stakeholders as a good example of interconnections between the metalworking and 
smart  buildings  sub-area.  All  of  these  horizontal  industrial  linkages  illustrate  that  the  sub-area  of  smart 
buildings and smart construction solutions already has an established value chain which should be upgraded in 
the  process  of  Smart  Specialisation,  especially  in  the  field  of  smart  construction  solutions  and  engineering. 
However, the ECNM has not succeeded in collecting more detailed information about the value chain of this 
area by the interviewed stakeholders, so more attention needs to be paid to this question in the EDP in order to 
identify the missing parts of the value chain that should be supported in the Smart Specialisation process. 

These horizontal connections also exist in the field of research and innovation, not only in the business sector. 
There is a successful collaboration within joint research projects between the Institute of Chemistry - Skopje, 
Faculty  of  Technology  and  Metallurgy  -  Skopje,  Faculty  of  Civil  Engineering  -  Skopje,  Faculty  of  Mechanical 
Engineering - Skopje and the Faculty of Mining and Geology - Shtip. However, more effort should be invested in 
building additional research infrastructure through investments in new laboratories and research equipment for 
developing new innovative products/materials and testing the quality of the existing ones. 

This area is hit by the effects caused by the COVID-19 pandemic in terms of declining construction activities as 
a  result  of  disrupted  supply  chains  and  delayed  construction  projects.  However,  the  added  value  in  the 
construction sector did not record a negative trend in 2020 compared with 2019. On the other side, there are 
positive trends in industrial production and the export value of building and other materials despite the global 
crisis. Additionally, no decrease in the number of workers in the field of production of construction materials 
has been recorded, while a decline of 4% is recorded in the construction sector in 2020 compared with the 
previous year48. 

The companies interviewed suggest a set of measures to support the companies in this area during the crisis 
period  and  actions  to  boost  development  in  the  post-crisis  period.  Some  of  those  potential  measures  are: 
increasing  government  spending  on  infrastructure  projects  –  in  consideration  of  the  local  experienced 
contractors;  the  promotion  of  local  companies  to  perform  in  major  infrastructure  and  government  projects; 
government  support  for  R&D  activities  to  develop  new,  efficient,  durable  and  high-added-value  materials; 
covering the cost of issuing CE certification for products; and government support for the promotion of domestic 
SMEs’ exports. 

48 Own calculation based on official statistical data from the State Statistical Office of the Republic of North Macedonia, 

https://www.stat.gov.mk. 

36 

                                           
4.4 Electrical equipment and mechanical parts 

The  qualitative  analysis  involved  15  interviews  with  representatives  of  the  business  sector,  predominantly 
export-oriented companies, including  MAMEI -  Macedonian Association of Metal  and  Electrical  Industry as a 
business association, with three representatives of academia (Faculty of Electrical Engineering and Information 
Technologies and Faculty of Mechanical Engineering within Ss. Cyril and Methodius University in Skopje, and the 
Faculty of Mechanical Engineering of Goce Delchev University - Shtip) and two representatives of government 
institutions (Department for Industrial Policy within the Ministry of Economy and the Cabinet of the Deputy 
Prime Minister in charge of economic affairs and coordination with the economic sectors). 

Most of the interviewed stakeholders (10 stakeholders from the business sector, academia and government 
sector)  are  located  in  the  Skopje  region,  four  interviewed  companies  are  located  in  the  East  region,  four 
companies in the Vardar region and two companies in the Southwest region. 

Table 7. List of interviewed stakeholders with proposed process ambassadors for the ‘Electrical equipment and 
mechanical parts’ area49 

No.  Business sector 

Ambassador 

Metal and 
mechanical 
products 

Electrical and 
automotive 
components 

1 
2 
3 
4 

5 
6 
7 
8 
9 

10 
11 
12 
13 
14 

2 

3 

RADE KONCHAR SERVICE 
RADE KONCHAR TEP 
FAKOM 
SMELT-ING 

BRATSTVO INOX OHRID 
KOSTAL OHRID 
TM SHTIP 
AKTIVA SHTIP 
RADE KONCHAR – KONTAKTORI AND 
RELEI 
ZAVAR COMPANY 
IGM TRADE 
LEOV COMPANY VELES 
DINAMO HIT VELES 
AGRO BAR VINICA 
Business associations 
MAMEI 

GOCE DELCHEV UNIVERSITY, 
FACULTY OF MECHANICAL 
ENGINEERING - SHTIP 
FACULTY OF ELECTRICAL 
ENGINEERING AND INFORMATION 
TECHNOLOGIES - SKOPJE 
UNIVERSITY SS. CYRIL AND 
METHODIUS IN SKOPJE 
FACULTY OF MECHANICAL 
ENGINEERING, UKIM SKOPJE 

1 
No.  Academic sector 
1 

No.  Government sector 
1 
2 

MINISTRY OF ECONOMY 
CABINET OF THE DEPUTY PRIME 
MINISTER RESPONSIBLE FOR 
ECONOMIC AFFAIRS AND 

X 
X 
X 

X 

X 
X 

X 
X 
X 
X 

X 

X 

X 

X 
X 

X 
X 
X 
X 
X 

X 
X 

X 

X 

X 

X 
X 

X 

X 

X 

X 

X 

X 

X 

49 The classification is based on the proposed sub-area(s), while the ambassadors are identified in the process of interviews according to 

the results of the previously developed questionnaire. 

37 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                           
COORDINATION WITH THE 
ECONOMIC SECTORS 

Source: Authors. 

Additionally,  a  focus  group  meeting  was  organised  consisting  of  3  ambassadors  from  the  business  sector 
(Kostal Ohrid, IGM Kavadarci and Rade Konchar TEP Skopje), 3 innovative SMEs (TT Plast, VA Plast, INGPlast), 3 
representatives of the government sector (Cabinet of the Prime Minister, Ministry of Economy and Cabinet of 
the  Deputy  Prime  Minister)  and  2  representatives  of  academia  (professors  from  the  Faculty  of  Mechanical 
Engineering - Skopje and the Faculty of Technology and Metallurgy - Skopje). 

The focus group participants contributed to the finalisation of the strategic sub-areas and to the clarification 
of some of the open questions from the interviews. The participants of the focus group meeting noted that this 
area  has  significant  economic  and  innovative  potential.  The  representatives  from  academia  presented 
arguments about the research and scientific capacities of the identified sub-areas, especially in the field of 
machinery  and  electrical  engineering,  while  the  participants  from  the  business  sector  noted  that  there  is  a 
critical mass of innovative and export-oriented companies which show that North Macedonia has a comparative 
advantage in this area. In addition, the results from the in-depth sectoral analysis of the export performance 
of North Macedonia and export opportunities based on product space methodology conducted by the Economic 
Chamber  of  North  Macedonia  were  used  to  support  the  findings  from  the  qualitative  interviews  and  the 
recommendations from the focus group meeting. 

Based on systematised data obtained from the conducted interviews, the recommendations from the focus 
group meeting and the results of the in-depth sectoral analysis, one proposal is that this priority area for Smart 
Specialisation  should  be  named  ‘Electrical  equipment  &  mechanical  parts’.  It  is  considered  to  be  one 
comprehensive area consisting of two sub-fields: 1) metal and machinery products and 2) electrical parts 
and products and automotive components. During the qualitative analysis phase, the ECNM team did not 
succeed in finding sufficient evidence for the scientific and innovation potential to propose these branches as 
separate  sub-areas.  However,  the  ECNM  team  proposed  the  question  about  the  opportunities  for  defining 
separate sub-areas within the proposed priority area to be further elaborated in the next phase. 

This proposed priority area for Smart Specialisation includes metal parts and products; electrical components 
and equipment; machinery, machinery tools and engine parts; mechanical appliances; as well as automotive 
parts and components. This area also includes the transformation and upgrade of several strategic industries 
(metalworking, machinery, electrical engineering industry and others) by automation and the digitalisation of 
production and the business processes. 

There  are  more  than  1080  active  companies  in  this  area,  831  companies  in  the  metalworking  sector,  153 
companies in the machinery sector, 102 companies in the electrical engineering industry – which covers 13.5% 
of the total number of companies in the manufacturing sector. The majority of these companies are SMEs that 
continually invest in new technology and adopt new methods of production. This sub-area creates more than 
18 599 jobs, which is over 12% of the total number of workers in the manufacturing sector. Additionally, there 
was significant growth in the number of workers in the last period. More than 7 500 jobs were created in the 
period 2016-2019, which represents an annual growth of 22% in the period analysed50. 

The production of metals and metal products (metal structures, steel pipes in various shapes, storage tanks, 
heat  exchangers,  mixers,  metal  furniture  parts)  makes  a  significant  contribution  to  the  economy  of  North 
Macedonia in terms of added value, export, employment and other indicators. There are over 870 companies in 
this sector, which is 11% of the total registered companies in the manufacturing sector51. A large share of these 
companies are located in Skopje and the Vardar region. 

Key companies in the sector are: Fakom Skopje, IGM Kavadarci, FZC 11 Oktomvri, Dojran Steel, Brako Veles, RZ 
Institute Skopje, Zavar Skopje, Metalopromet Strumica, Smelt-ING Veles and other companies. IGM Kavadarci, 
Brako Veles and Fakom Skopje are examples of success stories noted in the interview process in the field of 
automation and digitalisation of the production and business processes as a step towards Industry 4.0. IGM 
began constructing a smart factory for the production of sophisticated metal pipes, while Brako and Fakom 
invested in new cutting-edge technology for the production of high-added-value metal products based on fully 
automated system management. 

50  Own  calculation  based  on  official  statistical  data  from  the  State  Statistical  Office  of  the  Republic  of  North  Macedonia, 

https://www.stat.gov.mk. 

51  Own  calculation  based  on  official  statistical  data  from  the  State  Statistical  Office  of  the  Republic  of  North  Macedonia, 

https://www.stat.gov.mk. 

38 

                                           
This  branch  generated  EUR 66  million  gross  added  value  (GVA)  in  2019  and  the  annual  growth  rate  has 
averaged 11% over the last 5 years. Such a significant growth had a positive impact on the relative share of 
the sector’s GVA in the manufacturing sector, from 4% in 2015 to 4.5% in 2019. With regard to the number of 
workers, the trends are considerably positive. According to the official data, over 4 000 jobs in the metalworking 
sector were created in the last 5 years52. These growing trends are expected to continue in the next  period 
considering the rising demand for metal products on the global markets and the current investments in new 
technology and production capacities on the part of several domestic companies such as IGM Kavadarci, Brako 
Veles, Fakom Skopje and others. 

This branch has significant export performance. Total exports in this branch in 2019 generated by 158 export 
companies  reached  EUR 230  million,  which  is  more  than  80%  of  the  total  turnover  for  the  entire  sector. 
Additionally,  the  sector  has  comparative  advantages53  in  the  production  and  export  of  20  products  (metal 
structures, steel pipes in various shapes, storage tanks, heat exchangers, mixers, pressure vessels and other 
metal parts). However, the main weaknesses are the high export concentration (the top 10 exporting products 
create more than 90% of total exports) and the unfavourable position of the export products in the global value 
chain54.  There  are  many  products  in  the  supply  chain  for  which  the  companies  possess  latent  comparative 
advantages  and  potential  to  start  production  and  export.  Such  products  are:  different  metal  parts  for 
constructions  (railway  or  tramway  track  constructions  from  iron  or  steel;  rails,  check  and  track  rails;  switch 
blades; crossing frogs; point rods; sleepers, fish-plates; chair wedges; sole plates; bedplates; ties), machinery 
(metal machine parts), furniture (sanitary, table, kitchen, other household articles and parts thereof), energy 
(tubes, radiators for central heating) as well as other metal products such as tanks, casks, drums, cans, boxes 
and similar containers. 

The  machinery  sector,  which  includes  the  production  of  machinery  parts  and  tools  as  well  as  mechanical 
appliances,  makes  a  significant  contribution  to  the  economy  of  North  Macedonia  in  terms  of  added  value, 
exports, employment and other indicators. There are over 153 companies in this sector, which represent 2% of 
the total registered companies in the manufacturing sector. The majority of the companies are located in Skopje. 
Key companies in the sector are Johnson Matty, Mikrosam Prilep, Zavar Skopje, Rade Konchar Services, Agrobar 
Vinica, Dinamo Hit Veles and other companies, while the main products are machinery for filtering or purifying 
gases,  parts  of  the  machinery  for  heading,  polyester  and  metal  boxes,  metal  cable  trays  and  other  metal 
products,  stainless-steel  household  dishes,  composite  machining,  machinery  for  agricultural  production, 
pressure reactors, vacuum vessels and other products. 

The  machinery  sector  generated  EUR 145  million  gross  added  value  (GVA)  in  2019  and  showed  an  annual 
average growth rate of 5% over the last 5 years. The relative share of the sector’s GVA in manufacturing has 
dropped, but it is still high (around 34%). With regard to the number of workers, the trends are considerably 
positive. According to the official data, more than 16 000 jobs were created in the machinery sector in the last 
5 years (from 12 500 workers in 2015 to 28 000 workers in 2019)55. 

This area shows significant export performance. Total exports of the machinery sector in 2019 generated by 
48 exporting companies reached EUR 677 million, which is over 90% of the total turnover of the entire sector. 
Additionally,  there  are  more  than  40  export  products  with  a  value  above  EUR 200,000,  while  only  12  with 
comparative advantages, according to the estimations based on the Revealed Comparative Advantages (RCA) 
index. This shows that there is a high export concentration in terms of the number of export products (the top 
10  export  products  create  more  than  95%  of  the  total  exports)  and  export  companies  (the  top  10  export 
companies create over 90% of the total exports)56. Even though the main export products are well-positioned 
in the value chain and are characterised as products of medium complexity, there is plenty of room in the supply 
chain that could  be covered  by export diversification (increasing the number of export products) and export 
upgrade (export products with higher added value). Some of these products are different types of machines or 
parts/accessories for machines such as parts and accessories solely/principally suited for machine use ; plates, 
cylinders and other printing components; winches and capstans; machine tools for working wood, cork, bone, 
hard rubber, hard plastics or similar hard materials; agricultural, horticultural, forestry, poultry-keeping, bee-
keeping  machinery;  machine  tools  for  working  stone,  ceramics,  concrete,  asbestos-cement;  machinery  for 

52  Own  calculation  based  on  official  statistical  data  from  the  State  Statistical  Office  of  the  Republic  of  North  Macedonia, 

https://www.stat.gov.mk. 

53 According to the estimations based on the Revealed Comparative Advantages (RCA) index. 
54  Identification  of  development  opportunities  and  potentials  for  export  diversification  and  structural  transformation  of  the  North 

Macedonia’s economy, Economic Chamber of North Macedonia, Skopje, 2020, working document. 

55 Ibid. 
56 Ibid. 

39 

                                           
 
washing,  cleaning,  wringing,  drying,  ironing,  pressing,  bleaching,  dyeing,  dressing,  finishing,  coating  or 
impregnating textile yarn; machine tools for working any material by removing material; and other products. 

The strategic strengths of the companies in this branch – such as the accumulated knowledge, human capital, 
extensive experience and tradition, adopted cutting-edge technology and established global market relations – 
provide  immense  opportunities  for  further  export  promotion  by  starting  production  of  the  aforementioned 
products that are missing from the supply chain. 

The production of electrical parts and products is one of the priority branches in this sub-area represented 
by capital- and high-technology- intensive industries. The country has a long-standing history of electronic-
component  manufacturing  dating  back  to  the  1960s  when  Rade  Konchar  Skopje  and  Emo  Ohrid  were 
established. They were privatised and transformed during the period of transition and today several successful 
companies stem from these two Yugoslavian brands. Rade Konchar TEP, Rade Konchar Services, Rade Konchar 
Relei and Kontraktori Skopje, Dast Ohrid (part of Bratstvo Inox Ohrid) and TM Shtip are the key players in this 
sector. They produce different types of electronic parts for electricity networks such as insulators, low-voltage 
distribution switch boards, distribution transformers, disconnectors, automatic power factor correction devices, 
etc. Additionally, there are several producers (Dinamo Hit Veles, Leov Veles, Frinko Bitola) of electrical apparatus 
such as electric heaters, boilers, refrigerators, boasting a long-standing tradition, which are well established on 
the  foreign  markets.  Lastly,  the  entry  of  several  multinational  companies  (Dräxlmaier  Kavadarci,  Gentherm 
Prilep,  Key  Safety  Systems  Kichevo,  Kondevo  Shtip  and  others)  as  producers  of  electrical  cables,  sound-
signalling equipment, electrical capacitors, other electrical products and parts for the automotive industry has 
dramatically changed the structure of this branch. 

Total exports of this branch reached EUR 862 million in 2019, which represents 15% of the total exports from 
the country. This illustrates that this sub-area has strong export performance, and it is one the most important 
export sectors for North Macedonia. However, there is a high export concentration in terms of the number of 
export companies (only 37 export companies, the top 10 of which create more than 92% of the total exports) 
and  the  number  of  export  products  (only  34  export  products  with  a  value  above  EUR 200,000)57.  The 
stakeholders interviewed noted many products that the companies in this branch produce and export as having 
a comparative advantage. Some of those products are: relays, switches, contractor assemblies, suspension and 
jointing  equipment  for  electrical  distribution  networks,  consoles  and  insulation  sockets,  electrical  epoxy 
insulators, measuring transformers and other electrical parts and products. This indicates that this branch is 
predominantly export-oriented and has a high internationalisation level. However, a proportion of the production 
of  electrical  components  and  equipment  is  sold  on  the  domestic  market,  specifically  intended  for  EVN 
Macedonia, which is the national company for energy distribution and supply. 

The  production  of  automotive  components  has  been  the  most  dynamic  emerging  sub-area  in  North 
Macedonia  in  the  last  decade.  The  results  of  the  conducted  interviews  show  that  there  are  more  than  30 
companies – such as  Lear Tetovo, Technical Textiles Shtip, Key Safety Systems Kichevo, Amphenol Kochani, 
Adient  Shtip,  Van  Hool  Skopje,  Kondevo  Shtip,  ODV  Electric  Struga,  LTH  Ohrid,  Kostal  Ohrid,  Dräxlmaier 
Kavadarci, Gentherm Prilep, Kemet Skopje, Kromberg & Schubert Bitola, Marquardt Veles and many others – 
that set up large export-oriented production facilities in the country as Tier-1 and Tier-2 suppliers of electrical 
components and parts to the European, Russian and Turkish markets, among others. Many of these companies 
have already reinvested multiple times, which indicates that this sector has development potential. 

The  investments  of  foreign  companies  in-  and  outside  of  the  Technological  Industrial  Development  Zones 
(TIDZs) predominantly from the automobile industry have created more than 30 000 jobs, which is 20% of the 
total manufacturing jobs, and generate EUR 187 million of added value in the economy, which is 13% of the 
added value of the entire manufacturing sector58. 

More importantly, this sector is highly export-oriented and the export value in 2019 reached EUR 350 million, 
excluding the export of electrical and machinery parts that are used in vehicles. The electrical and automotive 
parts are one of the fastest growing export sectors with a high internalisation level, primarily as a result of the 
FDIs located in- and outside of the TIDZs in the country. 

The key institutions from academia are the Faculty of Mechanical Engineering and the Faculty of Technology 
and Metallurgy within Ss. Cyril and Methodius University - Skopje, the Faculty of Mechanical Engineering within 
Goce Delchev University - Shtip and the Faculty of Technical Sciences of St. Kliment Ohridski University - Bitola. 
Over 150 professors and researchers are active in these research institutions. They play an essential role in the 

57  Identification  of  development  opportunities  and  potentials  for  export  diversification  and  structural  transformation  of  the  North 

Macedonia’s economy, Economic Chamber of North Macedonia, Skopje, 2020, working document. 

58 Reports of the North Macedonia Free Zones Authority, http://investnorthmacedonia.gov.mk. 

40 

                                           
transfer  and  adaptation  of  new  technology,  implementation  of  new  innovative  methods  and  processes, 
development of new products, implementation of Total Quality Management systems (TQM) as well as in the 
creation of qualified engineers. Additionally, there are several laboratories, such as the Laboratory for Electrical 
Measurements (LEM) within the Faculty of Electrical Engineering and Information Technologies - Skopje as a 
national reference laboratory for calibration of reference standards for electrical energy and power, providing 
measurement traceability and unity of measurements in this segment of legal metrology. Academia are actively 
involved  in  many  research  and  applicative  international  and  H2020  projects  in  the  field  of  advanced 
manufacturing  and  processing,  as  well  as  mechanical  engineering59:  over  84  projects  financed  by  the  FITD 
instruments in the field of engineering and technology in the last 4 years, and more than 17% of innovation 
vouchers (for collaboration between academia and the business sector) awarded under the first FITD call which 
were  granted  in  the  metals,  machinery  and  electrical  sector60.  One  of  the  success  stories  of  collaboration 
between  academia  and  the  business  sector  is  the  project  ‘Increasing  the  export  competitiveness  of  the 
metalworking,  machinery  and  electrical  industry  through  improvements  of  the  production  and  technological 
capabilities  of  selected SMEs’  financed  by the FITD and  the World  Bank, where  four  innovative SMEs  (Rade 
Konchar TEP, Bratstvo Inox Ohrid, Agrobar Vinica and TM Shtip) transferred new technology and implemented 
new production methods through the technical support of academia. 

At the same time, there are several collaborative and applicative projects financed by EU programmes, such as 
the  IPA  to  build  the  capacities  of  the  domestic  SMEs  in  this  sub-area.  Good  examples  are  FENI  Industry 
Kavadarci,  BUCIM  Radovish,  Makstil  Skopje  as  companies  which  have  already  participated  in  several  EU-
financed projects in cooperation with the Faculty of Technology and Metallurgy - Skopje, as well as the project 
financed through the IPA Competitiveness and Innovation Framework Programme which aimed at increasing 
competitiveness of the local SMEs in order to improve the cooperation with foreign companies, where several 
domestic innovative SMEs were involved in cooperation with the Faculty of Mechanical Engineering - Skopje. 
However, there is plenty of room to improve the R&D capacity in this sub-area by building stronger research 
networks, creating a national research fund that will support research and applicative projects and by motivating 
young researchers in technical sciences. These success stories show that this sub-area is very dynamic from a 
technological and innovation point of view and the innovative SMEs have a crucial role in its development. 

Additionally, according to data from the State Office of Industrial Property, 13% of the total number of patent 
applications in the last decade were recorded in this priority area61, while 19% of the approved FITD project 
volume also comes from this area. 

The cooperation of the private sector with vocational secondary schools such as SSU Koce Metalec - Skopje and 
SSU 8 Septemvri - Skopje regarding the development of a qualified workforce to meet the requirements of the 
industry is of great importance. The companies from this sector actively participate in the process of developing 
educational  programmes,  which  involves  practical  classes  in  the  production  plants  and  factories.  This  is 
important for the creation of qualified workers that will be able to participate in the new production process 
based on the concept of Industry 4.0. 

With regard to the representatives of the business sector, MAMEI – the Macedonian Association of Metal and 
Electrical Industry and the Association of the Metalworking, Mechanical and Electrical Engineering Sector of the 
Economic Chamber of North Macedonia have an important role in offering support and quality business services 
that  would  accelerate  the  development  process  in  this  area.  The  recently  created  association  for  advanced 
technologies, as a part of the Chamber of Commerce of North Macedonia, includes participants from key foreign 
companies that are involved in this business and their focus is on enabling further collaboration and growth in 
the area of advanced technologies. On the other hand, there are several important governmental institutions 
that support the development of this sub-area: the Ministry of Finance; the Ministry of Economy; Technological 
Industrial  Development  Zones;  the  Cabinet  of  the  Deputy  Prime  Minister  in  charge  of  economic  affairs  and 
coordination with the economic sectors; the Agency for Foreign Investment and Export Promotion; and the Fund 
for Innovation and Technology Development (FITD). 

The results from the interviewed stakeholders and the additional existing studies62 suggest that this sub-area 
has significant development and export potential considering the strategic strengths, such as its geographic 
location in Europe and attractiveness to FDIs, an appropriate business climate, macroeconomic stability and low 
tax rates. Among the main comparative advantages of the domestic companies in this area are also production 

59 Reports of the Ministry of Education and Science of North Macedonia, https://mon.gov.mk/category/?id=2061. 
60 Reports of the Fund for Innovation and Technology Development and reports of the Ministry of Education and Science of North Macedonia,  

https://fitr.mk/en/# and https://mon.gov.mk/category/?id=2061. 
61 State Office of Industrial Property (SOIP), http://www.ippo.gov.mk. 
62 Positioning FYR Macedonia for the Global Economy: The Impact of Reforms and Investment Promotion in the Automotive Components 

Manufacturing sector, WB, 2017. 

41 

                                           
flexibility  and  capabilities  for  quick  adaptation  in  accordance  with  market  requirements  and  the  regional 
opportunities  for  connecting  with  companies  from the immediate region,  with the aim of exporting  to third 
markets, as well as accumulated knowledge and long-standing tradition in manufacturing, skills and resource 
endowments, and relatively cheap labour compared to other EU countries. However, quotas imposed by the EU 
on steel pipes and sections, institutional weaknesses and the inefficiency of public institutions (Public Revenue 
Office, Customs Administration, regulatory bodies), as well as the shortage of a qualified workforce (engineers), 
are the main challenges to the further development of this sub-area. Another challenge is the weak industrial 
links  between  the  domestic  SMEs  and  the  foreign  investors,  and  the  need  for  further  technological 
modernisation of domestic companies through more active involvement of academia. 

According  to  the  stakeholders  interviewed,  the  government  should  have  a  more  active  role  in  building  the 
competitiveness  of  the  domestic  companies  by  supporting  investments  in  new  technology,  machinery  and 
equipment in order to optimise the production process and to implement the concept of Industry 4.0 based on 
AI, IoT, Big Data and Business Analytics as global trends. Investments in building skills and a qualified workforce 
by improving the vocational education system and through the installation of new quality management systems 
are the key steps towards a structural transformation and further Smart Specialisation within this sub-area. 
Additionally,  the  government  should  support  the  development  of  modern  R&D  infrastructure  (R&D  and 
innovation centres, knowledge alliance and science parks), support start-ups and innovative SMEs by creating a 
friendly environment and stimulate young researchers by financing industrial masters and doctoral degrees 
related to real business and industrial problems. 

The  crisis  caused  by  the  COVID-19  pandemic  had  serious  negative  implications  on  this  sub-area  both  on 
domestic and global markets. There was a massive decline in industrial production and exports (more than 30%) 
in the second and third quarter of 2020 (March-October), while the situation improved during the last quarter 
of 2020. Nevertheless, companies have succeeded in saving most of the jobs as a result of government support, 
but  it  remains  unpredictable  how  long  the crisis  will persist at a global  level, and  how it will reflect on the 
companies in this sub-area. These companies view this crisis as an opportunity for additional development and 
transformation according to the new trends, which would inevitably end up on the global supply chains. In that 
regard, the government should support this sub-area in the post-crisis period through several actions such as: 
1)  the  provision  of  favourable  credit  lines  through  the  Development  Bank  of  North  Macedonia,  intended  to 
support the investment projects in modernisation and digitalisation of the production processes, and to support 
export activities including the provision of guarantees, purchase of export receivables and customs debts; 2) 
the consideration of a possibility to coordinate and reduce the tariff rates to the level of EU import rates. This 
is essential, given that some companies pay high import duties on raw materials coming out of the EU, which 
significantly increases the cost of their production process. In terms of customs charges, the reduction of duties 
on machinery from non-EU countries should be seriously considered. This could provide a powerful impetus to 
the companies in their technological modernisation and production upgrade. 

With regard to cross-sectoral connections, individual industries in this priority area are horizontally linked in the 
supply chain, which increases the opportunities for structural inter-sectoral transformation, avoiding shifting 
from only one product with lower added value to other products with high added value, by upgrading production 
and technological capabilities. The companies interviewed noted that there are strong industrial backward and 
forward linkages between the metalworking and machinery sector, the metalworking sector and the production 
of transport equipment, as well as between the machinery and electrical engineering sector. Some branches of 
this sub-area, such as the machinery sector, are closely related to the agriculture and the food processing sector 
as well as the civil engineering sector. Several examples were presented in the interview process as arguments 
for  the  strong  cross-sectoral  correlations,  such  as  the  case  of  AgroBar  Vinica,  that  produces  agricultural 
equipment and parts for transportation equipment; Zavar Skopje, that produces equipment for food processing 
industries; Brako Veles, that produces mechanical parts for the automobile industry and for small hydropower 
plants;  while  Fakom  Skopje,  Metalo-promet  Strumica,  Aktiva  Shtip,  IGM  Kavadraci  produce  metal  parts  and 
structures for the construction industry. 

There  are  enormous  opportunities  concerning  the  digitalisation  and  automation  of  business  and  industrial 
processes  by  using  advanced  ICT  services  such  as  AI,  IoT,  Big  Data  and  others.  In  particular,  there  are 
opportunities in the segment of constructing smart systems for cooling and heating, lighting systems, access 
control, smart systems for monitoring and control, digitalisation and automatisation of the production processes 
–  that  is,  the  management  of  industrial  processes.  There  are  also  several  success  stories  of  cross-sectoral 
relations  between  this  sub-area  and  the  ICT  sector  in  the  field  of  integration  of  ICT  solutions  to  optimise 

42 

industrial  processes.  Examples  are  Duna  Computers,  Kabtel  Skopje  and  other  ICT  companies  that  carry  out 
successful industrial projects with the companies from this sub-area63. 

Finally,  the  defined  sub-areas  have  huge  development  potential  that  could  be  utilised  by  overcoming  the 
addressed challenges, for example: through reforms in the educational system with a focus on practical and 
technical skills; increasing the technological and production capabilities of the domestic companies as a fairly 
important  step  towards  Industry  4.0;  bridging  the  gap  between  foreign  investors  and  domestic  companies; 
increasing  innovation and  R&D  capacity; and  boosting  the  cooperation between academia and the business 
sector. 

4.5 Sustainable tourism and catering 

The preliminary defined area of ‘Sustainable tourism and catering’ involved 18 interviews: 15 interviews were 
conducted with representatives of the business sector, 1 interview with representatives of academia (Faculty 
of Tourism and Hospitality - Ohrid) and 2 interviews with representatives from the government sector (Ministry 
of Economy and the Agency for Promotion and Support of Tourism). The interviewed stakeholders are located 
in different regions of the country: 2 interviewed stakeholders are located in the Southwest region, 1 company 
is located in the East region, 1 company is located in the Vardar region, while 13 stakeholders (most of them 
from academia and the government sector) are located in the Skopje region. 

Table 8. List of interviewed stakeholders with proposed process ambassadors for the ‘Sustainable tourism and catering’ 
area64 

No. 

Business sector 

Ambassador 

Sustainable tourism 
and catering 

1 
2 

3 
4 

5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
No. 
1 

No. 

1 
2 

MAKEDONIJA TURIST 
HOTEL AMBASSADOR M 

TA FIBULA AND HOTEL IZGREV STRUGA 
ТАSiMONIUM TRAVEL (INCOMING) 

TA BALKAN PRIME (INCOMING) 
HOTEL ALEKSANDAR PALACE 
TOURIST GUIDE 
HOTEL ARKA 
ENJOY BALKANS 
HOTEL SIRIUS 
NEGORSKI BANJI 
HOTEL STONE BRIDGE AND HILTON 
MOUNTAIN EXPERIENCE LLC 
AURORA RESORT AND SPA 
RESTAURANT OREOV LAD 
Academic sector 
FACULTY OF TOURISM AND HOSPITALITY 

Government sector 

MINISTRY OF ECONOMY 
AGENCY FOR PROMOTION AND SUPPORT OF 
TOURISM 

Source: Authors. 

X 
X 

X 
X 

X 
X 

X 
X 
X 

X 

X 
X 

X 
X 

X 
X 

X 
X 
X 
X 
X 
X 
X 
X 
X 
X 
X 

X 

X 
X 

In  addition,  a  focus  group  meeting  was  organised  consisting  of  3  ambassadors  from  the  business  sector 
(Makedonija Turist, TA Fibula, Metropol Ohrid), 2 representatives of the government sector (Ministry of Economy 
and the Cabinet of the Deputy Prime Minister) and 2 representatives of academia (professors from the Faculty 

63 However, the ECNM team have not succeeded in collecting more detailed information about the cross-innovation potential of this area, 

so this part should additionally be addressed in the EDP. 

64  The  classification  in  the  table  is  based  on  the  proposed  sub-area(s)  and  the  defined  branches  within  those  sub-areas,  while  the 

ambassadors are identified in the interview process according to the previously developed questionnaire. 

43 

 
 
 
 
 
 
 
 
 
 
                                           
of Tourism and Hospitality – Ohrid and the Faculty of Tourism and Business Logistics – Shtip). The focus group 
participants contributed to the finalisation of the strategic sub-areas and the clarification of some of the open 
questions from the interviews. The participants’ main conclusion in the focus group meeting indicated that this 
area is very important to the North Macedonia’s economy in terms of the number of companies, total turnover, 
number of workers and other indicators. Additionally, the participants concluded that tourism is one of the most 
strategic sectors for the country with huge opportunities and significant potential for future development. 

Based on systematised data obtained from a number of sources (conducting interviews, focus group meetings, 
sectoral studies, etc.), the following potential priority area is proposed: Sustainable tourism and catering. 
Below are the main findings of the conducted interviews and the focus group meeting conclusions related to 
this preliminary priority area. Even though the findings indicate that this area has significantly contributed to 
the  economy  of  North  Macedonia  and  has  a  critical  mass  of  firms  with  development  potential,  sufficient 
evidence has not been found of innovation and scientific potential. Hence, the ECNM team and the national 
working group suggest that these issues be additionally explored during the EDP process in order to provide a 
clearer picture on whether this preliminary area has enough potential for Smart Specialisation. 

The tourism sector plays a significant role in the national economy. The most developed types of tourism in 
North Macedonia are: lake tourism; mountain tourism; cultural and religious tourism (churches, monasteries, 
mosques, museums, archaeological sites); event tourism; alternative tourism; city tourism; wine tourism; health 
and spa tourism; and other types of tourism. Rural, village and mountain tourism have great potential as tourism 
categories, considering that even international statistics on the growth rate of these activities in the domestic 
market before the coronavirus period – and even during the coronavirus period – showed that mountain tourism 
registered  high  growth  rates  (30-40%  before  the  coronavirus  crisis,  against  4%  mass  tourism)65.  The 
interviewed  stakeholders  noted  that  North  Macedonia  offers  various  types  of  mountain  products,  being  a 
generally mountainous country. Foreign tourists always regard these types of organised tourism arrangements 
in North Macedonia positively and highly. National parks, the advantage of having endemic species of birds and 
animals that live there, the thriving flora and fauna still represent untapped potential in terms of developing 
tourist attractions in the national parks, adhering to all measures for nature protection. 

In the past 10 years, the tourism sector has been on the rise and has seen an increase of about 140%. The 
average annual increase in tourists is 15%66. These growing trends are a result of the fact that the country has 
established a new approach towards building modern and sustainable tourism with an active role of government 
institutions. In recent years, the number of tourists on the country registers has been continuously growing, with 
the number of tourists in 2010 amounting to 586 241 going up to 1 126 935 in 2018, which is a 92% increase. 
With regard to domestic tourists, their number in 2010 was 324 545, and 419 590 in 2018, or a 29% increase. 
In 2015, our country was visited by 485 530 foreign tourists, whereas in 2019, this number was 757 593. We 
can conclude that in the last 5 years, the number of foreign arrivals has constantly increased, whereas the 
number of domestic tourists, although showing growth, is still unsatisfactory. 

With regard to the number of nights spent in the analysed period, we observed that the figure reached  2.4 
million in 2015 and went up to 3.3 million in 2019. In 2015, domestic tourists spent 1.3 million nights in total, 
and 1.7 million in 2019. On the other hand, foreign tourists in 2015 spent 1 036 383 nights in total, reaching 
a number of 1.5 million in 201967. Similar to the number of visitors, there is an evident increase in the number 
of  nights  spent  by  foreign  tourists  in  comparison  to  the  nights  spent  by  domestic  tourists.  In  this  regard, 
comprehensive analyses are necessary in order to undertake measures for domestic tourists to extend their 
stay, but also to maintain the upward trend of nights spent by foreign tourists in this country. Major destinations 
that  attract  tourists  in  the  Republic  of  North  Macedonia  are  the  lakes,  mountain  resorts,  spa  centres,  wine 
regions  and  the  city  of  Skopje.  Basically,  most  of  the  domestic  and  foreign  tourists  visit  the  two  prime 
destinations in the country, Ohrid and Skopje. The touristic offer in Ohrid is characterised by lengthier stays 
owing to organised holidays, and tourists that visit Skopje stay for a shorter period (tourism related to business 
activities). 

According to the official national statistics, the total number of enterprises in the tourism and hospitality sector 
in 2018 was 4 494, 3 899 of which were in activities relating to meal preparation and food services (being 
activities  with  the  largest  share),  followed  by  accommodation  facilities  and  travel  agencies  –  305,  travel 

65  Own  calculation  based  on  official  statistical  data  from  the  State  Statistical  Office  of  the  Republic  of  North  Macedonia, 

https://www.stat.gov.mk. 

66  Own  calculation  based  on  official  statistical  data  from  the  State  Statistical  Office  of  the  Republic  of  North  Macedonia, 

https://www.stat.gov.mk. 

67  Own  calculation  based  on  official  statistical  data  from  the  State  Statistical  Office  of  the  Republic  of  North  Macedonia, 

https://www.stat.gov.mk. 

44 

                                           
organisers (tour operators) and other booking services as well as related activities – 290. The results of the 
interview process show that the key players from the tourism business sector are Metropol Ohrid, Hotel Drim 
Struga, Inex Gorica, Izgrev Struga, Sileks Ohrid, Istatov Dojran, Romantic Dojran, Lateraca Dojran, Polin Dojran 
in the field of lake tourism; Aurora Resort and Spa Berovo, Manastir Berovo, Fershped Mavrovo, Slavia, ELEM 
Popova Shapka, Montana Palas Krushevo in the field of mountain tourism; Tikvesh Restaurant Kavadarci, Stobi 
Gradsko, Popova Kula, Vila Marija – Demir Kapija, Kamnik Skopje, Dalvina Strumica in the field of wine tourism. 
There are many professional tourist guides in almost every tourist destination in the country, as well as incoming 
travel agencies such as Fibula Travel, Karaci Skopje, Badem Tour, Maksan, Ohrid Holiday and others. 

The companies in this sub-area have comparative advantages in attracting domestic and foreign tourists. Some 
of those advantages are: rich culture and tradition, natural resources for different kinds of tourism, favourable 
climate conditions, gastronomy and traditional food, UNESCO destinations, a qualified working force and the 
country’s  favourable  geographic  location.  The  largest  share  in  turnover  generated  by  the  enterprises  in  the 
tourism and hospitality sector including activities related to meal preparation and food service in 2017 was 
EUR 220 million; turnover of travel agencies, tour operators and other booking services in the same year was 
EUR 110 million; while accommodation facilities come third with a turnover of EUR 77 million. The total turnover 
of the entire sector, including all services, surpassed EUR 470 million, which shows how important this sector is 
to  the  national  economy68.  More  importantly,  the  majority  of  these  revenues  are  based  on  foreign  tourists, 
indicating that this sector has a high internationalisation level. There are foreign tourists from many countries, 
but they predominantly come from Serbia, Albania, Bulgaria, Germany, the Netherlands and other countries. 

According to official national statistics concerning the size of the enterprises in this sector in 2019, most of the 
accommodation  facilities  and  food  service  activities  were  micro-,  small  and  medium-sized  enterprises, 
predominantly  enterprises  with  1-9  employees,  followed  by  enterprises  with  10-19  employees  as  well  as 
enterprises with 20-49 employees. Observing the structure of the enterprises, those with 50-249 were the least 
common, and in 2015 there was only one existing enterprise with over 250 employees69. 

According to the number of  employees in the tourism and hospitality sector in 2019, the activities of meal 
preparation and food service claimed the largest share, followed by accommodation facilities, travel agencies, 
tour operators and other booking services, while related activities came in third place. 

The results of the interviews suggest that tourism has potential for innovation and further growth. There are 
companies that invest in innovative and creative solutions, aiming to establish tourism and certain locations in 
the country as attractive tourist destinations, often in cooperation with the Faculty of Tourism and Hospitality 
in Ohrid and the Agency for Promotion and Support of Tourism and the tourism and hospitality sector within 
the Ministry of Economy in the Government of the Republic of North Macedonia. Plans for tourism development 
regarding  ten  destinations  across  North  Macedonia  were  developed  under  the  Local  and  Regional 
Competitiveness Project (LRCP) (based on the programme for the support of innovation and North Macedonia’s 
competitive activities), financed by the European Union and carried out through the office of the World Bank in 
the Republic of North Macedonia, with a goal to ‘improve the capacity of the government and public entities to 
foster  tourism  growth  and  facilitate  destination  management.’  Another  important  policy  document  is  the 
National Tourism Strategy of the Republic of North Macedonia. 

The tourism sector should support research and innovation activities that will focus on social innovation based 
on  rich  cultural  heritage  and  local  creativity  by  promoting  a  complex  network  of  environmentally  friendly 
activities  and  consumer-friendly  services  that  will  consider  the  sustainable  use  of  natural  resources  and 
introduction  of  innovative  tourism  programmes.  The  tourism  sector  is  a  multidisciplinary  sector  with  great 
potential for structural transformation of many subsectors. It contributes to the preservation of local traditions 
and  culture  including  handicrafts  and  heritage  structures.  In  addition,  tourism  activities  create  an 
entrepreneurial environment and increase the number of SME and job opportunities. Equally important are the 
opportunities created by the increasing demand for local products, especially in relation to the domestic tourism 
sector (using eco-tourism as a tool to foster the transition to organic farming). This area is characterised by 
well-established  supply  chains,  including  retailers  of  agricultural  products  and  food,  transportation  firms, 
marketing and travel agencies, tourist guides, hotels, restaurants, traditional and small local stores (food service 
and local products), firms for entertainment services. 

Travel agencies (primarily in the segment of incoming tourism) as a particularly important part of the supply 
chain invest in new programmes – websites on tours that tourists follow on their own, connected via GPS. In 

68  Own  calculation  based  on  official  statistical  data  from  the  State  Statistical  Office  of  the  Republic  of  North  Macedonia, 

https://www.stat.gov.mk. 

69  Own  calculation  based  on  official  statistical  data  from  the  State  Statistical  Office  of  the  Republic  of  North  Macedonia, 

https://www.stat.gov.mk. 

45 

                                           
cooperation with the Faculty of Information Science and Computer Engineering (FINKI), they invest in destination 
mapping, ICT technology mountain guides; they map the route and supplement it with the places to be visited. 
The  package  is  formed, and  the tour is investigated  independently.  It  concerns young people that travel  by 
themselves  with  low-cost  carriers,  book  by  themselves  and  investigate  by  themselves.  To  conquer  market 
segments that have not yet been tapped into, travel agencies invest in innovations, aiming to automate parts 
of the processes. By following the processes in tourism, new and attractive services are being created called 
‘creating experiences’, which are part of the tourism arrangement programmes and which provide a competitive 
advantage. They also invest in human capital aiming to create services and programmes that attract tourists. 

Travel agencies play a very important role in attracting tourists. However, the government should support the 
capacity-building process of the domestic tour operators so as to undertake larger organisations and groups 
and bring foreign tourists directly and independently to North Macedonia, but also to the regional economies – 
Albania, Bulgaria, Serbia, Kosovo, Romania, Montenegro, etc. – instead of doing so via intermediaries. The second 
part  of  the  supply  chain  is  hospitality.  According  to  the  budget,  hospitality  is  the  largest  domain,  but  not 
according to the product offering, although there is potential. 

According to the information from the conducted interviews, there are investments in gastronomy, innovative 
solutions to save electrical energy and regulate wastewater in accordance with environmental protection. There 
are no proper records on the turnover and the effects of tourists in the segment of restaurant operations, which 
complicates  the  perception  of  the  visibility  of  the  role  and  the  impact  of  restaurant  operations  on  the 
development of the sector. 

The third part involves hotels located in tourist spots such as Ohrid, Dojran, Mavrovo, Berovo, Krushevo and 
Skopje. According to statistics, hotels have the largest share in the tourism and hospitality sector. According to 
the interviewed stakeholders, hotel capacities invest in innovative solutions, for example: in new wastewater 
treatment plants with a broader impact on the environment; in infrastructure to secure water from rainwater; 
in electricity by placing photovoltaic panels; in heating and cooling systems that apply the highest international 
standards for energy conservation and environmental protection. Through stimulation and cooperation with the 
populations in rural areas, they use the products from domestic agricultural and food production. They make 
procurements from the local population which contributes to a reduction in the emigration of people from the 
rural regions. However, the main challenges to intensifying this cooperation and building the capacity for the 
development  of  rural  tourism  are  the  weak  infrastructure  network  and  undeveloped  rural  areas  in  many 
potential tourist regions within the country. Hotel operators also invest in the promotion of service quality by 
process  automation,  IT  solutions  and  the  installation  of  property  management  systems  (integration  of  all 
aspects related to the guest). Hotel facilities in Skopje are still at the highest level of development in terms of 
the hotel business. 

The  chain-brand  hotels  and  several  large  hotels  in  the  capital  city  meet  infrastructural  preconditions  for 
congress tourism. The brands transfer know-how to the country, which positively reflects on the development 
of  human  resources.  Active  programmes  are  being  followed  on  how  to  treat  guests,  employee  training  to 
increase the market value of the employees. However, there is a shortage of high-category hotels in the tourist 
centres, Ohrid, Mavrovo and Dojran. There is also a shortage of spa hotels across the country. 

Cross-sectoral relations. Tourism and hospitality are connected to more than 15 other economic branches 
through  their  operations.  Cooperation  with  the  agricultural  and  food  sector,  apart  from  business  entities, 
involves individual farmers participating as part of the value chain of the products of North Macedonia. The 
development of organic agriculture and tourism is also a related priority70. 

There is untapped cooperation potential between the hotels and the wine producers. Wine routes have been 
mapped and they have promotional potential, especially along the Corridor 10, for developing into wine roads 
that would represent attractive tourism offerings. In addition, connecting wine tourism with accommodation in 
rural areas also holds potential for wine tourism. 

The  eco-friendly  hotels,  through  cooperation  and  communication  with  agriculture  and  forestry,  initiated  the 
possibility of combining several species of flora that may survive in the hotel environment. Cooperation with 
the health sector exists in terms of practising medical massage (spa and wellness) and introducing medical 
technologies. Only the spas from all thermal water resources are being utilised, and these are classified as 
health rehabilitation. There is informal health tourism in the bordering regions. 

70 However, the ECNM team have not succeeded in collecting more detailed information about the cross-innovation potential of this area, 

so this part should additionally be address in the EDP process. 

46 

                                           
Key players in the field of science are the Faculty of Tourism and Hospitality – Ohrid, the Faculty of Tourism 
and Business Logistics within Goce Delchev University in Shtip, Skopje and Gevgelija, as well as the Faculty of 
Tourism – Skopje. There are over 80 professors and researchers working in these research institutions. They 
carry  out scientific and  research  projects  concerning  the  promotion and  development  of the tourism sector, 
development of series of guidebooks (on religious tourism, tourism potential in the region, significant events in 
the  Republic  of  North  Macedonia,  Ottoman  monuments,  guidebooks  on  rock  climbing,  flavours  of  North 
Macedonia,  gastronomic  experience,  Via  Egnatia)  with  the  active  engagement  of  professors.  There  are  also 
several research projects of the Faculty of Tourism and Business Logistics – Shtip in the field of tourism and 
gastronomy financed by EU programmes, as well as 16 projects in the field of tourism and hospitality financed 
by the FITD71. However, there is no trace of H2020 projects in this area. Key players from the civil sector are 
the Tourism and Hospitality Association of the Chamber of Commerce of North Macedonia, Hotel Association of 
Macedonia  –  HOTAM,  Chamber  of  Commerce  of  Tourism,  National  Association  for  Incoming  Tourism  in 
Macedonia – NAITM. They play an active role in the development of this sector and could be essential for Smart 
Specialisation in this sector. 

The interviewed stakeholders noted the necessity to connect with the ICT sector in order to implement new 
innovative solutions to develop tourism and hospitality. The hospitality and tourism sector should pay special 
attention to this segment. Diverse building architecture should initiate value-added activities, with the objective 
to increase attractiveness, save energy, protect the environment, etc., which would contribute to sustainable 
development. The connection to the ICT sector may  contribute to a new innovative approach in the sector’s 
offering and achieve economic prosperity by applying big data analytics and artificial intelligence. Developing 
offerings in accordance with the needs and requirements of the individual users in the tourism sector, which 
could  be  in  the  segment  of  science  and  research  or  EU-funded  projects,  are  exclusively  intended  for  the 
development of hospitality and tourism in North Macedonia. 

With regard to science and research and EU-funded projects to develop hospitality and tourism, the segment 
of  virtual  reality  is  of  special  importance  in  terms  of  using  3D  animations  to  explore  cultural  heritage  and 
monuments. 

The  tourism  and  hospitality  sector  was  seriously  affected  by  the  health  and  economic  crisis  caused  by  the 
COVID-19 pandemic in terms of the dramatic decline in the number of tourists, revenue and number of workers. 
According to the official statistical data and the analyses  conducted  on the effects of the COVID-19 crisis, 
revenue reduced by over 30% in 2020, in comparison to 2019; many jobs in this sector were lost, while the 
number of tourists sharply reduced72. The recovery process for this sector is still unpredictable, and it depends 
on the country’s ability to deal with the pandemic, as well as the globally applicable circumstances. However, 
the impact of the crisis on tourism and hospitality will be the main challenge for further development of this 
sub-area and will slow down the process of Smart Specialisation in this sub-area. 

The interviewed companies suggest a set of measures that the government should take in order to mitigate 
the negative effects in this sector. Some of those measures are: the extension of favourable credit lines through 
the  Development  Bank  of  North  Macedonia  to  maintain  the  liquidity  of  the  companies  in  the  tourism  and 
hospitality sector; reducing VAT from 18% to 10%; providing salary subsidies for the companies that show a 
decline in their revenues of over 20-30% during 2021; providing health protocols for some of the branches, 
such as wedding organisers; issuing new tourist vouchers for domestic tourists; as well as providing favourable 
conditions for foreign tourists during the upcoming tourist season. 

General conclusion. Strengths that stimulate growth of the sector in the country’s general economy are the 
E75 north-south road  connection with Greece, Serbia and central Europe; high awareness of being a tourist 
destination in regional economies; transit tourism; a relatively good price-quality ratio and competitive tourism 
product; natural resources and cultural heritage. 

This high level of potential for tourism development is predetermined by the scale and the diversity of tourism 
resources (natural, anthropogenic and man-made) and infrastructure. If these resources are adapted, they can 
be  used  in  support  of  tourism,  which  may  ensure  dispersion  in  tourism  production  and  will  represent 
considerable  potential  for  the  multiplication  of  the  economic  effects  of  tourism  via  the  designated  export 
destination, ensuring that a larger number of municipalities and citizens feel the economic benefits of tourism. 

Prospects  in a regional context offer  significant opportunities.  Initially, considering  its  location, much of the 
regional tourist traffic passes through North Macedonia, which provides an opportunity for offerings that would 

71 The reports from of the Fund for Innovation and Technology Development (FITD), https://fitr.mk/en/#. 
72 Study for the effects on the private sector of the tourism sector affected by the health-economic crisis caused by the COVID-19 pandemic 

with recommendations for the management of consequences, https://biznisregulativa.mk/mk-MK/Pages/Publications. 

47 

                                           
attract  transit  tourists  to  short  stays.  The  strong  demand  for  regional  tours  is  another  indicator  of  the 
attractiveness of the cross-border offerings in the area of culture, history and religion. Balkan economies share 
a common history and largely shared culture, making the development and promotion of these experiences at 
regional level quite beneficial to the entire region, especially for North Macedonia, being situated in the centre 
of the Balkans. A third key opportunity is the access to good practices from the region by sharing good examples 
from the area of rural tourism and nature activities, culinary and traditional living offerings. Drawing on ideas 
and models from the neighbouring economies is more effective and easier to implement due to the culture 
similarities and the surroundings. 

Tourism is the sector with substantial economic potential for North Macedonia, which represents a possibility 
for quick positive results even after the end of the crisis, such as the one caused by the ongoing pandemic. 
However, it requires support to open new markets, develop GIS tourist maps for urban and rural areas, develop 
applications  on  various  topics  from  tourism  with  electronic  maps  according  to  interests  (for  example,  wine 
routes, mountain and biking trails, religion) and the designated development loans for tourism in rural areas 
and  marketing.  However,  the  ECNM  team  has  not  succeeded  in  finding  more  evidence  for  the  existence  of 
research and innovation capacities, so the limited innovation potential may be the most binding constraint in 
the process of Smart Specialisation in this area. 

4.6 Energy for the future 

The preliminary defined area of ‘Energy for the future’ involved 14 interviews: 8 interviews were conducted with 
representatives of the business sector; 3 interviews with representatives of academia (Faculty of Mechanical 
Engineering  and  Faculty  of  Engineering  and  Computer  Sciences  within  Ss.  Cyril  and  Methodius  University  – 
Skopje and the Macedonian Academy of Science and Arts – MANU) and 3 interviews with representatives of the 
government sector (the President of the Energy and Water Services Regulatory Commission, the Director of the 
Energy Agency of the Republic of North Macedonia and the Head of the Energy Department under the Ministry 
of Economy). 

The majority of the interviewed stakeholders are located in the Skopje region (13); one company is located in 
the Vardar region and one company in the Polog region. 

Table 9. List of interviewed stakeholders with proposed process ambassadors for the ‘Energy for the future’ area73   

No. 

Business sector 

Ambassador 

1 
2 
3 

4 

5 
6 
7 
8 

No. 
1 

2 

3 

PIXEL GROUP 
EMK MALI HIDRO ELEKTRANI 
CAMEL SOLAR 

MALI HIDROELEKTRANI – FERO 
INVEST 
FONKO HYDRO 
THOR 
ARESE SOLUTIONS 
ELEKTRO SHARRI 

Academic sector 
SS. CYRIL AND METHODIUS 
UNIVERSITY, FACULTY OF 
MECHANICAL ENGINEERING – 
SKOPJE 
SS. CYRIL AND METHODIUS 
UNIVERSITY, FACULTY OF 
ELECTRICAL ENGINEERING AND 
INFORMATION TECHNOLOGIES 
MACEDONIAN ACADEMY OF 
SCIENCE AND ARTS – MANU 

X 
X 
X 

X 

X 

X 

Energy for the 
future 
X 
X 
X 

X 

X 
X 
X 
X 

X 

X 

X 

Cross-sectoral 
connections 
Manufacturing 

Sustainable 
materials 
Metalworking 
and machinery 
Services 

Services 
Smart 
agriculture 

X 

X 

X 

73  The  classification  in  the  table  is  based  on  the  proposed  sub-area(s)  and  the  defined  branches  within  those  sub-areas,  while  the 

ambassadors are identified in the interview process according to the previously developed questionnaire. 

48 

 
 
 
 
 
 
 
 
 
 
 
                                           
No. 

Government sector 

1 

2 

3 

ENERGY AND WATER SERVICES 
REGULATORY COMMISSION 
ENERGY AGENCY OF THE 
REPUBLIC OF NORTH MACEDONIA 

MINISTRY OF ECONOMY 

Source: Authors. 

X 

X 

X 

X 

X 

X 

X 

X 

A  focus  group  meeting  was  organised,  consisting  of  3  ambassadors  from  the  business  sector  (Fero  Invest, 
Camel Solar and Pixel Group), 3 representatives of the government sector (Energy Agency of the Republic of 
North Macedonia,  Ministry  of Economy  and Cabinet of the  Deputy  Prime  Minister) and  2  representatives  of 
academia (professors from the Faculty of Electrical Engineering and Information Technologies – Skopje and 
MANU).  The  focus  group  participants  contributed  to  the  finalisation  of  the  strategic  sub-areas  and  the 
clarification of some of the open questions from the interviews. The participants’ main conclusion in the focus 
group meeting was that this area has a huge development opportunity that should be used. There are several 
aims that were pointed out:  

- the first one is the transformation to green energy by using the renewable energy sources;  

- the second aim is increasing energy efficiency and environmental protection;  

- the third aim that was noted was building the production capacities of some parts of energy equipment, such 
as turbines, electrical equipment, photovoltaic panels and other parts. 

Based on systematised data obtained from a number of sources (conducted interviews, focus group meetings, 
additional studies, etc.), the ECNM proposes the following area as an area for Smart Specialisation: ‘Energy for 
the future’. This area is considered to be a horizontal one, because it has strong cross-sectoral relations with 
other  proposed  priority  areas  and  is  in  line  with  the  process  of  greening  the  industry  and  protecting  the 
environment. Within this area, the following potential fields needing additional research have been identified: 
biomass/biogas, solar energy, hydro energy, wind energy. 

Below are the main findings of the conducted interviews and focus group meetings related to this preliminary 
priority area. The overall conclusion for this area is that there is economic, scientific and innovation potential, 
but the main problem is that this area does not have the capacity to create higher added value; it is not export-
oriented and there is no critical mass of firms in each branch. 

However,  this  area  has  strong  cross-sectoral  connections  with  other  defined  strategic  areas  (ICT,  smart 
agriculture  and  food  processing,  electrical  equipment  and  mechanical  parts,  as  well  as  smart/sustainable 
buildings and materials). Due to these cross-sectoral links with other vertical priorities, the ECNM team and the 
national  working  group  suggest  that  this  area  be  horizontally  supported  within  the  EDP  workshops.  The 
companies within the different branches of the defined sub-area could contribute to successful implementation 
of the Smart Specialisation concept in North Macedonia by creating added value for other strategic areas. 

Developing the sustainable energy sector by using renewable energy sources (RES) is one of the main priorities 
of  the  Government  of  the  Republic  of  North  Macedonia.  Hence,  the  new  2020-2040  Strategy  for  Energy 
Development will focus on the transition to a low-carbon economy by developing every renewable energy source 
(hydro, wind, solar, biomass/biogas, etc.). The country’s total nameplate capacity of renewable energy sources 
is  730.5 MW,  562 MW  of which  stem  from  big  hydroelectric power  stations (over  10 MW), 109 MW  derived 
from small hydroelectric power stations (under 10 MW), 36.8 MW from wind parks, 18.5 MW from photovoltaics 
and 6.9 MW from biogas, making North Macedonia one of the leading countries in the region in the renewable 
energy sources segment. The total nameplate capacity of renewable energy sources surpassed 40% of the total 
installed capacity of the entire energy sector or 35% of the total gross production of electricity in the country 
from all sources74. This area has a significant impact on the national economy in terms of its contribution to 
the  GDP,  number  of  companies,  jobs  and  other  indicators.  In  fact,  the  energy  sector’s  relative  share  in  the 
national  GDP  is  around  3.5%,  while  most  of  this  added  value  is  generated  by  renewable  energy  source. 
Additionally, this area generated more than 9 000 jobs and 3% of the total number of companies in the whole 
industry sector are companies from this area. The growth of this area through investments in new renewable 
energy projects will have significant multiplicative effects on the national economy because it is horizontally 

74 Strategy for Energy Development of the Republic of North Macedonia until 2040. 

49 

 
 
 
 
                                           
related to many sectors such as construction, machinery, trade and others. Furthermore, it will have positive 
effects on environmental protection and benefits in terms of substituting the import of electricity. 

The findings of the qualitative analysis show that the significant progress in the hydroelectric energy sector 
has been made in the past 15 years under the plan to increase the share of renewable energy sources. Over 
100 small  hydroelectric  power stations  have been  built,  and  today  North  Macedonia  is  a regional leader in 
hydropower  energy in terms  of the relative share of the  total installed  energy  capacity. With regard  to the 
utilisation  of  hydropower  potential,  the  strategic  projects  in  the  country  are  Chebren  and  Galishte.  The  last 
tender bidding for the Chebren project showed considerable interest on the part of private investors, however, 
the state should have a clear strategy for selecting the optimal model and technical solution that would provide 
the largest long-term benefit to the country. Additionally, granting concessions for small hydroelectric power 
stations undergoing a stage of design, planning or construction and the potential for new concessions regarding 
this type of hydroelectric power stations across the country is a significant component of the development of 
the energy sector using renewable energy sources. 

Key players from the business sector in this branch are: AD ESM Skopje (as a national energy company), EMK 
Skopje, Fero Invest Skopje, FONKO Hydro and other smaller investors. FONKO Hydro and Fero Invest Skopje are 
both  investors  in  small  hydroelectric  power  stations,  as  well  as  companies  for  designing,  construction  and 
managing hydroelectric power stations. Additionally, Fero Invest manufactures some metal (metal structures) 
and mechanical parts (turbines) for hydroelectric power stations, and it has already accumulated knowledge 
and expertise for designing and developing unique solutions and building, optimising, managing and maintaining 
small hydroelectric power stations. 

According to the interviewed stakeholders and conclusions from the focus group meeting, the main strategic 
advantages of this sub-area are: the country’s hydropower potential; accumulated know-how and experience 
of  the  existing  investors  that  could  be  used  for  further  development  of  this  sector;  interest  from  foreign 
investors;  existing  historical  database  on  hydrology  that  provides  foreseeability  and  consistency  to  the 
projections about the production of electrical energy; and the considerable profitability of the investments in 
small hydroelectric power stations. With regard to the strategic advantages pointed out during the interview 
process, it could be concluded that this branch has development potential.  

It  should  be  also  mentioned  that  the  new  Energy  Law  established  the  framework  for  developing  the 
photovoltaic sector, where, by introducing premium tariffs, tenders were put out for granting concessions 
related to investments on state land with projected nominal power of 35 MW where the state had the obligation 
to facilitate the institutional procedures, including MEPSO’s obligation to provide appropriate connections to the 
photovoltaic power station75. 

According to the information collected during the interview process, there are several companies and investors 
which showed a keen interest at the bidding stage to construct the photovoltaic power station in the municipality 
of Makedonski Brod, which generated inflow in the state budget of EUR 28 million. There was less interest in 
the concessions concerning investments in photovoltaic power stations on private land due to the higher risk in 
ensuring a connection and numerous institutional obligations that are quite complex and demand longer periods 
of time. Nevertheless, premium tariffs and concessions were granted for the construction of photovoltaic power 
stations, which render the development of this sector increasingly certain. Moreover, the state company AD ESM 
Skopje  is  starting  a  project  to  transform  TEC  Oslomej  into  a  photovoltaic  power  station  with  a  nameplate 
capacity  of  2x40 MW,  following  the  principle  of  public-private  partnership.  There  is  an  ongoing  process  of 
construction and commissioning of a  photovoltaic power station with a nameplate capacity of 10 MW, with 
investment by AD ESM. Additionally, the company’s plan is to use the same principle to gradually transform TPP 
Bitola by initially shutting down the first unit and, eventually, the remaining two units in the following 15 years, 
whereby the country would completely abandon the production of electrical energy from fossil fuels. However, 
this plan must proceed together with the provision of a suitable alternative in the segment of ensuring security 
and stability of the energy sector. 

According to the interviewed stakeholders, the new Energy Law laying down the installation of photovoltaic 
panels of up to 4 MWh on individual households and of up to 400 MWh on commercial buildings is of no less 
importance to the development of this branch. These possibilities for additional institutional facilitation and 
bylaws could provide an opportunity for households and legal entities to secure proprietary energy sources that 
are cheaper, which would certainly reduce the burden on the entire energy system. In this regard, increasing the 
nominal power  from 4 MWh to 6 MWh for collective buildings by  using the new technologies for combining 

75 Energy Law and Law on Energy Efficiency, https://economy.gov.mk. 

50 

                                           
 
thermal pumps to heat water would increase the interest in investments in photovoltaic systems on collective 
buildings.  Furthermore,  there  is  an  increasing  number  of  companies  (such  as  Arese  Solutions  Skopje,  Solar 
Spektar, Sector Cert Macedonia, Tim Inzenering, EKO Solar Shtip and others) with a critical mass of accumulated 
knowledge and experience in engineering and the installation of photovoltaic and thermal systems. 

The main strategic strengths to develop this branch are the accumulated knowledge and innovation capacity of 
several manufacturers/producers of thermal collectors and photovoltaic panels. An example of good practice in 
the field of innovation is the case of Plasma, as a scientific and research centre, the innovations of which are 
commercialised together with Camel Solar. Moreover, the cooperation between Plasma as a manufacturer of 
solar collectors and the Pixel Group as a manufacturer of photovoltaic panels resulted in the development of 
an innovative product: the hybrid photovoltaic collector and combined hybrid systems, a project supported by 
the Fund for Innovation and Technology Development – FITD. This illustrates that the innovative SMEs have a 
crucial role in the development of this branch. 

On  the  other  hand,  the  key  obstacles  to  further  development  of  this  sector  are  the  unsatisfactory  level  of 
scientific and research capacities, lack of qualified workforce, incomplete harmonisation with EU standards in 
terms of issuing certificates for fitters of solar and photovoltaic systems, the lack of institutional and regulatory 
capacity, etc. 

With regard to wind power, the national energy company AD ESM Skopje has already installed a wind park 
with nominal power of 36.5 MW, which proved to be an exceptionally profitable project and the company now 
plans to expand the capacity to 50 MW. Additionally, concessions with feed-in tariffs  were granted to three 
private  investors  with  foreign  capital  on  locations  in  the  municipalities  of  Sveti  Nikole,  Demir  Kapija  and 
Gevgelija with projected nominal power of 100 MWh. These investments are in their initial stages; however, in 
accordance with the dynamics, they are expected to start on the realisation soon. Moreover, there is interest by 
a foreign company in investing in a huge wind park with a nameplate capacity of 400 MW in the municipality 
of  Kriva  Palanka,  but  there  are  ongoing  preliminary  examinations  and  analyses  regarding  this  potential 
investment. All of these upcoming and potential investments may surpass EUR 500 million in the next period, 
which  suggests at the  development potential of this sub-area. This will also stimulate the construction and 
machinery sector, being interconnected sectors. 

With regard to biogas and biomass as renewable energy sources, two power stations already exist with a 
total nameplate capacity of 7 MW (Elektro Sharri – Tetovo and ZIK Pelagonija – Novaci) and concessions were 
granted (temporary  status of preferential producers) for construction of new similar power stations with an 
additional nameplate  capacity  of 11 MW.  These ongoing  projects  are in strategic partnership with  domestic 
companies and foreign companies where the possibilities for the transfer of technology and  knowledge are 
certain regarding the capacity of the domestic companies. However, we should highlight that the capacities are 
limited due to the limited amount of waste as a main input material in the production process. In this regard, a 
study should be conducted to investigate the total amount of waste from all farms in the country, its power 
density, and of course, the amount of other materials of plant origin in order to define the future development 
opportunities in this sector. 

The key institutions from academia in this area are the Faculty of Mechanical Engineering – Skopje, the Faculty 
of Electrical Engineering – Skopje and the Macedonian Academy of Science and Arts (MANU). We do not have 
detailed information about the number of researchers in the field of renewable energy, but there are several 
prominent professors/researchers with strong international scientific references. 

The information collected from the interviewed stakeholders shows that the cooperation between the business 
sector and academia is primarily in the field of development feasibility and other types of technical studies 
(searching for new innovative technical solutions in the design, planning and construction of hydroelectric power 
stations),  as  well  as  in  several  R&D  projects.  An  example  can  be  found  in  one  Horizon  2020  project  on 
redesigning turbine assembly for greater flexibility in the production process, which is a project carried out by 
the  Faculty  of  Mechanical  Engineering  within  Ss.  Cyril  and  Methodius  University  along  with  other  European 
universities.  There  are  also  several  other  H2020  projects  in  the  field  of  renewable  energy,  climate  action, 
environment and 20 projects financed by the FITD in the field of energy and energy resources. Additionally, 
there are several new NGO initiatives for programmes for social innovation in the field of renewable energy 
and energy efficiency76. For illustration, in the period 2014-2020, according to an internal database review by 
the Ministry of Education and Science, 37% (EUR 5.06 million) of the total EU financial contributions (EUR 13.7 
million) under Horizon 2020 for North Macedonia were associated with projects focused on various topics from 

76 Reports from the Fund for Innovation and Technology Development (FITD), https://fitr.mk/en/#, and the Ministry of Education and Science 

of North Macedonia, https://mon.gov.mk/category/?id=2061. 

51 

                                           
energy-thematic areas (28 participations or 25% of the total number of awarded projects). Most of the spending 
was used for the following topics: secure, clean and efficient energy – in the amount of EUR 3.8 million (21 
participants)  –  while  the  rest  of  the  projects  covered  activities  under  climate  action,  environment  resource 
efficiency and raw materials, as well as smart, green and integrated transport (EUR 1.3 million). In terms of 
sector involvement,  most of  the  spending was  used  by the  private  sector, i.e. 9 SMEs  participated with net 
contributions  of  EUR 1.6  million. Public sector  and research  institutions (e.g. education) participated with 10 
projects  and  EUR 1.5  million,  while  higher  education  took  part  in  5  projects  with  EUR 0.9  million.  Other 
institutions such as associations or the Chamber of Commerce participated with EUR 1 million. 

According to data from the State Office of Industrial Property, 6% of the total number of patent applications in 
the  last  decade  came  from  this  area77,  while  6.6%  of  the  total  approved  budget  of  the  FITD  for  financing 
projects  was  allocated  to  this  area78.  This  indicates  that  there  are  already  existing  scientific  and  research 
capacities, but with insufficient evidence on the innovation potential of the start-ups and other innovative SMEs. 
However, the case of Thor in the field of wind power and Fero Invest in the field of biogas, which are in the 
initial phase of building capacities by accumulating and transferring knowledge from abroad, shows that in one 
branch of this sub-area North Macedonia has not yet created a critical mass of innovation capacities. On the 
other side, in the field of hydroelectric and photovoltaic/solar branches, several innovative SMEs possess critical 
knowledge of designing solutions, manufacture and installation of hydroelectric and photovoltaic/solar systems. 
The  findings  obtained  from  the  interview  process  show  that  the  government  and  regulatory  institutions, 
including  the  Energy  Agency  of  the  Republic  of  North  Macedonia  and  the  Ministry  of  Transport  and 
Communications, are willing to eliminate the identified obstacles and to improve the business environment in 
order to boost the development of the renewable energy sector. 

The key players in the civil sector are the North Macedonia’s Energy Association – MEA, Association of Power 
Supply Industry, North Macedonia’s solar association PVMAK and others. 

The level of internationalisation is low in terms of exporting electricity. With regard to the export of equipment 
for hydropower stations and technical services of design and construction, Fero Invest has export experience 
and makes internationalisation efforts, boasting several  successful  projects in Georgia, Albania, Kosovo and 
other  economies  in  the  region.  Moreover,  investing  in  new,  small  hydroelectric  power  stations  is  a  rather 
attractive business for foreign investors, which could make a positive contribution to the national economy. 
Additionally, the Pixel Group and Plasma are companies with successful international experience in the field of 
production and installation of photovoltaic and solar power stations and systems. However, we do not have 
detailed information on the export value of these systems for hydroelectric and photovoltaic/solar stations. 

The main findings of the conducted interviews and focus group meetings is that the objective of the ‘Energy 
for the future’ area is to apply innovation and scientific potential in order for the country’s dependence on the 
import of electrical energy to be reduced by using renewable energy sources, to provide greater environmental 
protection  by  applying  smart-eco  solution  systems  and  to  boost  local  economic  development  by  new 
investments in renewable energy projects in local regions. 

The ‘Energy for the future’ area has cross-sectional cooperation with the construction sector concerning the 
construction activities related to investments in renewable power stations, as well as a strong connection with 
smart  buildings in the field  of energy efficiency.  There  are several  good  examples  of  such a  cross-sectoral 
cooperation: the collaboration between Granit Skopje (as the biggest construction company in the country) and 
Fero Invest in the field of hydropower, as well as the cooperation between Intebako and Torax in the field of 
smart and energy-efficient buildings. Additionally, this area has strong horizontal links with machinery and the 
electricity sector in the field of production of different parts such as turbines and other mechanical parts of the 
hydroelectric,  photovoltaic  power  stations,  metal  structures  for  wind  power  stations  as  well  as  electrical 
equipment for all renewable power stations. Other notable collaborations include those between Fero Invest 
and Brako Veles in the field of production turbines and other metal parts for hydropower stations, as well as 
the cooperation between Bratstvo Inox Ohrid, TM Shtip, Rade Konchar Kontraktori and Relei as producers of 
electrical equipment, and EVN and MEPSO as national energy companies for the distribution of electricity. At 
the same time, the management and control systems of the hydroelectric, photovoltaic, wind, biomass/biogas 
power stations are supported by ICT software solutions, which implies that there is also a close connection to 
the ICT sector. In addition, biomass/biogas is closely related to the circular economy, while photovoltaic/solar 
power is connected to smart agriculture and food processing. 

77 State Office of Industrial Property (SOIP), http://www.ippo.gov.mk. 
78 Reports of the Fund for Innovation and Technology Development, https://fitr.mk/en/#. 

52 

                                           
 
All  of  these  energy  sector  horizontal  industrial  linkages  with  other  sectors,  as  well  as  the  well-established 
electricity network and the existence of electricity traders such as EVN Home, EDS and other smaller traders, 
suggest that eco-smart energy sources have well-established elements within the value chain which could be 
further  analysed  in  the  process  of  Smart  Specialisation.  However,  the  ECNM  team  has  not  succeeded  in 
collecting  more  detailed  information  about  the  cross-innovation  potential  of  this  area,  so  this  topic  may 
additionally need to be elaborated in the EDP. 

This area is not directly hit by the crisis caused by COVID-19 pandemic in terms of production, the number of 
workers, investment and other indicators. However, this sub-area could be one of the most important sectors 
for the economic recovery of the country in the post-crisis period because there are several ongoing investment 
projects which will have positive effects on the national economy. In this context, the government and state 
institutions should create a set of measures to boost the development of this sub-area in the post-crisis period. 
Some  of  those  measures  are  improvements  to  the  institutional  and  regulatory  capacity,  more  public 
investments in renewable energy, improvements in the vocational education system, increasing state capacities 
to better utilise the EU funds for renewable energy. The new Energy Law and the established framework for 
renewable  energy  sources,  the  country’s  natural  resources,  high  level  of  interest  of  domestic  and  foreign 
investors in renewable energy projects as well as the government’s development strategy for this sector and 
the  commitment  of  the  state  institutions  (agencies,  regulatory  bodies,  ministries)  demonstrate  that  the 
development potential in this sector will be explored and utilised. 

However, it should be noted that there are several serious deficiencies in the energy sector: 1) the country is 
still a net importer of electricity; 2) the use of fossil fuels for electricity production causes serious environmental 
problems; 3) there is a notable loss of electricity within the electricity distribution system as a consequence of 
problems in the transmission infrastructure – the costs for which are covered by the consumers, which increases 
electricity  price;  4)  the  renewable  energy  sources  are  still  insufficiently  used  (solar,  wind  and  hydropower 
potential). 

There is a growth potential for this sector, which appears to be attractive for foreign investments, as well as 
significant  potential  for  further  development  of  production  of  electricity  with  renewable  energy  sources. 
Directions for further development of innovation and research efforts exist, but these are not adequately utilised 
so to provide sufficient justification for standalone S3 domain. There is also insufficient evidence on innovation 
potential of start-ups and SMEs in this area. On the other hand, the potential for cross-sectoral innovation with 
other priority domains is high. Having in mind all these findings, we propose that ’Energy for the future’ is to be 
included in the EDP as a horizontal area supporting the development of identified vertical domains. 

53 

 
 
 
 
 
5  Conclusions  and  recommendations  for  the  Entrepreneurial  Discovery 

Process 

5.1 Proposal of areas and sub-areas for the EDP 

The Republic of North Macedonia continued the process of the development of a Smart Specialisation strategy, 
showing commitment to evolving their policies for economic growth based on innovation and specialisation. The 
qualitative analysis was performed in the period September 2020 – March 2021. The analysis involved more 
than 100 stakeholders in further discussions and analysis on the proposed specialisation areas, derived from 
quantitative  mapping  of  economic,  innovative  and  research  potential.  The  interviews  were  held  in  difficult 
circumstances,  due  to  the  negative  socio-economic  effects  of  the  COVID-19  pandemic  and  changes  in  the 
priorities of companies and their way of functioning, and unclear growth perspectives. 

The  main  aim  of  the  qualitative  analysis  was  to  better  elaborate  the  proposed  priority  areas  of  Smart 
Specialisation in North Macedonia that should be further subjects of the entrepreneurial discovery process. The 
qualitative  analysis  used  input  from  interviews  with  relevant  actors  from  the  business,  scientific  and 
government  sector;  focus  group  meetings  for  each  proposed  area;  and  the  findings  from  different  existing 
sectoral studies. Another objective of the qualitative analysis was to understand the challenges caused by the 
COVID-19 pandemic crisis as well collecting information for the development of the EDP. After processing all 
information obtained from a number of sources, the ECNM team proposes the following vertical priority areas 
and sub-areas as being subject to further elaboration within the EDP: 

1) Smart agriculture and food processing with high added value 

- Smart agriculture (sub-area) 
- Food processing with high added value (sub-area) 
2) Information and Communication technologies (ICT) sector 
- Custom software development (sub-area) 
- (Advanced ICT services (potential sub-area)) 

3) Smart/Sustainable buildings and materials 

4) Electrical equipment & machinery parts. 

In general, the information gathered confirmed the relevance and importance of the proposed areas for Smart 
Specialisation. 

The ECNM team, based on the analysis of the systematised data obtained from a number of sources, made a 
proposal to rename the domain from ‘Sustainable food and beverage production and value chains’ as initially 
proposed  by the S3 working group of North  Macedonia to ‘Smart agriculture and food processing with high 
added value’. This proposal was made due to insufficient evidence for emphasising the sustainability element 
in  the  agri-food  sector.  The  proposal  also  includes  division  into  the  following  two  sub-areas:  1)  ‘Smart 
agriculture’ and 2) ‘Food processing with high added value’. 

In the quantitative analysis, the ICT sector was the only  sector that was shown to have potential for Smart 
Specialisation in all three components: economic, innovation and R&D areas. ICT can be regarded as a potential 
priority domain for Smart Specialisation. Considering the broader area of the ICT sector, based on systematised 
data  obtained  from  a  number  of  sources  (conducted  interviews,  focus  group  meetings,  in-depth  sectoral 
analyses,  etc.),  one  sub-area  has  been  proposed:  ‘Custom  software  development’.  The  ECNM  team  also 
recommends that another sub-area is additionally explored in the EDP, which is ‘Advanced ICT services’, being 
a sub-specialisation area related to new trends on the global market for ICT services (Big Data and Business 
Analytics, IoT, Cloud) and due to rapid technology improvements and, on other hand, due to increased interest 
from domestic start-ups in this sub-area. 

In  the  new  digitalised  world,  ICT  is  interlinked  with  all  segments  of  society  and  industry.  It  is  of  extreme 
importance to the digital transformation of society and especially the digital transformation of the industry in 
terms of implementation of a new method of doing business by using ICT management systems and business 
solutions. ICT is offering new opportunities for growth and promotion of many sectors, such as tourism and 
creative industries, by developing virtual tourism platforms and other ICT solutions for the promotion of various 
e-services. ICT should be seen as a separate area for Smart Specialisation, but also as a horizontal area for 
Smart Specialisation due to its specificities and cross-sectoral interrelatedness. It was also concluded that the 
COVID-19 pandemic did not have a substantial effect on the economic, innovation and scientific potential of 
the ICT industry. 

54 

With  regard  to  the  area  of  Smart/Sustainable  buildings  and  materials,  the  ECNM  team,  based  on  the 
systematised data obtained from a number of sources (conducted interviews, focus group meetings, existing 
sectoral studies, etc.), proposed that this area be seen as a comprehensive priority domain with two sub-fields 
(smart buildings / construction solutions and sustainable materials). During the qualitative analysis phase, the 
team did not succeed in finding sufficient data for the economic, scientific and innovation potential to propose 
these sub-fields as separate S3 sub-areas. It is suggested that they should be further investigated during the 
EDP, focusing in particular on: 1) smart buildings and smart construction solutions and 2) sustainable materials 
(sustainable  building  materials;  nanomaterials  –  sensors,  composites,  coatings;  and  new  polymer-based 
materials). One highly relevant field with potential concerns new materials, as sustainable materials, utilising 
existing resources and adding value to new construction products with the re-use of used construction materials 
and the re-use of waste, as well as renewable, eco-friendly and healthy materials. This process is important 
due to enabling the transition to a circular economy. The conclusion regarding the COVID-19 pandemic was that 
its effect would be substantial on the economic, innovation and scientific potential of this area if the measures 
that would compensate the lack of export were not implemented. 

With regard to the area Electrical equipment and mechanical parts, based on the systematised data obtained 
from the conducted interviews, the recommendations from the focus group meeting and the results of the in-
depth sectoral analysis, one proposal by the ECNM is that the potential area for Smart Specialisation – Electrical 
equipment and mechanical parts – should be considered to be one comprehensive domain consisting of two 
sub-fields: 1) Electrical parts and products and automotive components and 2) Metal and machinery products. 
This domain proposed for Smart Specialisation includes metal parts and products; electrical components and 
equipment; machinery, machinery tools and engine parts; mechanical appliances; as well as automotive parts 
and components. In the qualitative analysis phases, the ECNM team did not succeed in finding sufficient data 
for the economic, scientific and innovation potential to propose these sub-fields as separate S3 sub-areas. It is 
suggested that they should be further investigated during the EDP. It could be concluded that the COVID-19 
pandemic did have a substantial effect on the economic, innovation and scientific potential of this area, but it 
also  accelerated  the  transition  when  a  crisis  is  seen  as  an  opportunity  for  additional  development  and 
transformation. 

These four areas are proposed as vertical areas for Smart Specialisation, having economic capacities, as well 
as scientific and innovative potential to be further elaborated in order to create a new niche market for their 
specialisation. The overall conclusion is that the COVID-19 pandemic did not critically affect the four priority 
domains suggested for the EDP. Moreover, it is perceived as a source of opportunity that will be marked by 
those willing to transform according to new trends, which will inevitably emerge on global markets. The further 
process  of  designing RIS3 and the future  EDP could  be one  of the main  catalysts  that would facilitate  this 
transformation. 

The ECNM team did not succeed in finding enough information concerning existing critical mass of firms that 
would create a base for the justification of the Energy for the future as the vertical priority area for Smart 
Specialisation. It should be mentioned that there are a lot of initiatives in the research sector, which present a 
good  base  for  further  growth.  However,  this  area  has  strong  cross-sectoral  connections  with  other  defined 
strategic areas (ICT, smart agriculture and food processing, electrical equipment and mechanical parts, as well 
as smart/sustainable buildings and materials). Due to these cross-sectoral links with other vertical priorities, 
the ECNM team suggests that this area should be further explored as a potential horizontal area for Smart 
Specialisation. This means that the component for climate change, decarbonisation, energy efficiency, green 
economy  and  new  methods  of  energy  production  should  be  discussed  in  all  proposed  areas  for  Smart 
Specialisation within the EDP workshops. The companies within the eco-smart energy sources, as a potential 
sub-area,  could  contribute  to  the  successful  implementation  of  the  Smart  Specialisation  concept  in  North 
Macedonia by creating additional value for other strategic vertical areas. 

Lastly, the findings of  the  qualitative analysis  related to Sustainable  tourism and catering as a  preliminary 
proposed area in the quantitative analysis indicate that this area provides a significant contribution to the North 
Macedonia’s  economy.  However,  there  is  little  evidence  of  any  innovation  implemented,  which  could  be 
enhanced with the demonstration of outstanding innovative products, services and business models. The added 
value  and  growth  of  this  sector  is  not  significant.  In  addition,  value-chain  and  regional/international 
competitiveness are not fully elaborated and the dynamics of the sector and role of SMEs are insufficiently 
covered. With regard to the stakeholders in this area, the number of actors from the academic sector should be 
increased and the success stories, facts and figures should be related to stakeholders from businesses and 
academia active in this area, and not the entire tourism sector. The tourism sector was negatively affected by 
the COVID-19 crisis and the recovery process is still unpredictable for this sector. The impact of the crisis on 

55 

tourism and hospitality will remain the main challenge for further development of this sub-area and will also 
hamper possible Smart Specialisation processes in this area. 

The  EDP  should  also  take  into  account  the  link  between  Smart  Specialisation  and  the  sustainability  and 
inclusiveness  dimension,  including:  digital  and  green  transition  of  the  economy;  environmental,  climate  and 
energy  challenges;  societal  challenges;  and  health  challenges,  in  particular.  Adequate  identification  of  S3 
development  priorities  may  enable  the  consolidation  of  research  capacities  and  infrastructure,  gathering  a 
critical  mass  of  researchers  and  innovators  that  would  work  together  on  strategically  significant  topics  of 
research and  development,  with  a view to achieving research  excellence and strengthening the potential  of 
domestic products for commercialisation. In addition, S3 may also enable the development of new economic 
sectors  through  investments  in  research  and  innovation  in  areas  that  contain  strategic  potential  within  the 
national framework. 

5.2 Priority area justification elements to be further improved in the next stage 

There are certain elements related to the justification of priority areas and sub-areas that need to be addressed 
during  the  EDP.  They  should  be  the  focus  of  the  upcoming  stakeholder  dialogue  workshops.  The 
recommendations for improving this field are given below per priority area and sub-areas. 

1) Priority area – Smart agriculture and food processing with high added value  

Sub-area – Smart agriculture 

- 

- 

- 

- 

- 

Additional  examples  should  be  given  of  outstanding  innovative  products,  production  or 
business models where smart agriculture (sensors, smart tools & machines) is already being 
implemented, demonstrating that some potential already exists. These examples would show 
the direction in which other stakeholders should develop in order to improve competitiveness, 
optimise processes, reduce costs and increase added value. 

The regions with the strongest stakeholder presence should be clearly indicated. The regional 
distribution of other key stakeholders could also be indicated. Instead of simply listing regions, 
a map or similar illustrative representation of regional coverage could be provided. 

It could be better described how dynamic the identified sectors are and what is the role of 
start-up, scale-up and other small and medium companies in their development. The role of 
SMEs  should  be  better  elaborated,  e.g.  examples  of  small  producers  implementing  new 
technologies could be given. 

Insights on missing elements of the value chain (not the supply chain) should be provided. It 
should be analysed whether there are any international brokers and wholesalers that could 
be skipped or replaced by national wholesalers to retain more added value in the country. 

It  should  be  explained  how  companies  from  North  Macedonia  can  compete  with  similar 
companies from the macro-region, but also at global level. Comparative strengths and specific 
niches with no or few competitors from the region could be highlighted. 

-  While the critical mass of stakeholders and their outputs is well elaborated, the identification 
of stakeholders could be improved by expanding the list of from the business sector to beyond 
producers. This implies that the value chain is short, producers export themselves and there 
are  no  key  national  wholesalers  facilitating  sales  on  international  markets  or  innovative 
companies developing  sensors, smart  tools  and  machinery  and software  facilitating  smart 
and cost-effective production. 

Sub-area – Food processing with high added value 

- 

- 

Additional examples should be given of outstanding innovative products, services or business 
models in research, development, production or sales of food, beverages, health supplements, 
etc.  that  prove  there  is  already  some  existing  potential.  These  examples  would  show  the 
direction  in  which  other  stakeholders  should  develop  in  order  to  improve  competitiveness, 
optimise processes, reduce costs and increase added value. 

The  desired  future  position  in  the  global  value  chain  is  provided,  however  insights  on  the 
current position could also be elaborated. 

56 

- 

- 

- 

- 

- 

The regions with the strongest stakeholder presence should be clearly indicated. The regional 
distribution of other key stakeholders could also be indicated. Instead of simply listing regions, 
a map or similar illustrative representation of regional coverage could be provided. 

To prove the dynamics of the sub-area, figures, e.g. growth of the number of SMEs should be 
provided or at least examples of several best-case growing SMEs given. 

It  should  be  explained  how  companies  from  North  Macedonia  can  compete  with  similar 
companies from the macro-region, but also at global level. Comparative strengths and specific 
niches with no or few competitors from the region should be highlighted; 

Insights into the specificities of the global market and trends in technologies and business 
models could be provided; 

The critical mass of stakeholders from the academic sector and their R&I potential should be 
strengthened  (e.g.  by  the  share  of  total  research  FTEs,  recent  international  publications, 
intellectual  property  rights,  number  of  international  competitive  projects  won,  cases  of 
successful collaboration with industry or successful spinoffs, etc.) and the identification of key 
stakeholders from the academic sector could be improved by adding concrete success stories, 
fact and figures. 

2) Priority area – Information and communication technologies sector  

Sub-area – Custom software development 

- 

- 

- 

- 

- 

An explanation on how companies in custom software development grown on a larger scale 
could be provided. Additionally, best-case examples could be given in order to prove that there 
is a certain existing potential. It is essential that the focus does not remain on FDI-related 
companies performing  outsourcing  for their mother  companies abroad  due to the  cheaper 
labour force in North Macedonia. 

The regions with the strongest stakeholder presence should be clearly indicated. The regional 
distribution of other key stakeholders could also be indicated. Instead of simply listing regions, 
a map or similar illustrative representation of regional coverage could be provided. 

It  should  be  explained  how  companies  from  North  Macedonia  can  compete  with  similar 
companies  from  the  macro-region,  but  also  on  a  global  level.  Comparative  strengths  and 
specific niches with no or few competitors from the region should be highlighted. 

Concrete  success  stories, facts  and  figures  related to business  and  academic  stakeholders 
involved in custom software development should be provided. 

The  elaboration  of  potential  EDP  stakeholders  could  be  provided  in  terms  of  their  role, 
motivation and contribution to this particular sub-area. 

3) Priority area – Smart/sustainable buildings and materials 

- 

- 

- 

- 

- 

Additional examples should be given of outstanding innovative products, services or business 
models in research, development, production or sales of smart/sustainable building materials 
that can support the view that there is already some existing potential. These examples should 
show how the main goals of Smart Specialisation were already implemented and should also 
indicate  in  which  direction  other  stakeholders  should  develop  in  order  to  improve 
competitiveness, optimise processes, reduce costs and increase added value. 

An explanation on which parts of the value  chain (not the supply chain) are present in the 
country and which are missing could be added. 

Figures on export should be more focused on the exports undertaken by companies in this 
area. 

The regions with the strongest stakeholder presence should be clearly indicated. The regional 
distribution of other key stakeholders could also be indicated. Instead of simply listing regions, 
a map or similar illustrative representation of regional coverage could be provided. 

It  should  be  explained  how  companies  from  North  Macedonia  can  compete  with  similar 
companies from the macro-region, but also at global level. Comparative strengths and specific 
niches with no or few competitors from the region could be highlighted. 

57 

-  Detailed  information  on  the  potential  for  cross-sectoral  innovation  and  on  international 

competitiveness strengths should be provided. 

- 

- 

- 

The dynamics of the sector and role of SMEs could be elaborated more consistently. 

Insights into the specificities of the global market and trends in technologies and business 
models could be provided. 

The identification  of key  stakeholders from could be improved  and  more  concrete  success 
stories, fact and figures related to the stakeholders active in this area could be added.  

4) Priority area – Electrical equipment and mechanical parts 

- 

- 

- 

- 

- 

- 

- 

Some figures related to export performance, number of employees, gross added value are 
provided  for  the  entire  metalworking  sector,  machinery  sector  and  electrical  engineering 
industry. However, providing clearly distinguished figures related only to the most innovative 
companies from the electrical equipment and mechanical parts priority area would improve 
the justification. 

An explanation on which parts of the value chain are present in the country and which are 
missing should be added. 

The regions with the strongest stakeholder presence should be clearly indicated. The regional 
distribution of other key stakeholders could also be indicated. Instead of simply listing regions, 
a map or similar illustrative representation of regional coverage could be provided. 

The explanation on competitiveness on international and regional level should be enhanced. 
It  should  be  explained  how  companies  from  North  Macedonia  can  compete  with  similar 
companies  from  the  macro-region,  but  also  on  a  global  level.  Comparative  strengths  and 
specific niches with no or few competitors from the region could be highlighted. 

The dynamics of the sector and role of SMEs could better be demonstrated. 

Insights into the specificities of the global market and trends in technologies and business 
models should be provided. 

The  identification  of  key  stakeholders  could  be  improved.  Business  clusters  are  indeed 
typically registered as non-profit organisations; however, they represent business interest and 
therefore cannot be considered as a civil sector stakeholders. 

5.3 Detailed analysis of suggested preparatory steps 

The EDP was a new topic for all interviewed individuals and they expressed a willingness to learn about the 
concept of entrepreneurial policymaking, promoting a broader consultation with local business and  research 
institutions. All of them expressed an interest in being part of the dialogue and discussions, understanding that 
there are opportunities for the creation and strengthening of networks and collaboration partnerships between 
businesses, academia, civil society and the government that would result in finding new development solutions, 
new market opportunities, new innovations and new funds to support ideas and projects. It should be noted, 
however, that adding more stakeholders from the government and academia in the future EDP would improve 
the structure of the workshops and reduce the potential bias caused by a high prevalence of stakeholders from 
the  business  helix.  Additionally,  the  gaps  mentioned  in  the  stakeholder  input  need  further  attention  and 
segments of the future EDP workshops should be dedicated to gathering some of the missing data. 

The EDP is enabling their active participation in the creation of a forward-looking document. This will bring new 
innovation and  growth opportunities for them, for the domain and  for the region. They are jointly willing to 
discuss their potential (resources) and find solutions to facing the challenges of global competition, the green 
and digital transition of the economy and society as well as new challenges caused by the COVID-19 crisis. The 
key benefit is bringing together all relevant stakeholders in the development of a joint vision for growth and 
concrete measures and actions needed to reach the pre-defined goals. 

The identification and involvement of the right representatives from businesses, academia, public institutions 
and civil society, who are willing to share their knowledge and ideas, remains a challenge. Another issue to be 
considered is how sufficient financial resources will be secured for the implementation of the defined priority 
actions after the EDP. At the same time, the restrictions to personal communication in this time of the COVID-

58 

19 pandemic is identified as an additional challenge. This will impose on-line communication, and the need for 
very well-organised and focused meetings that will last only a few hours. 

According to the information collected in the interview process, there are several recommendations for the EDP 
in order to adjust it to the needs and abilities of stakeholders: 

 
EDP workshops should be organised once per month and last half a day (not more than 2-3 hours); 
  with regard to the invitation to participate in the meetings, the interviewed stakeholders have different 
expectations.  Some  prefer  an  unofficial  invitation,  while  the  others  prefer  formal  invitation  by  the 
government institution. Such invitations can be sent by email; 

 

  with regard to the preferential place of the EDP workshops, the majority of stakeholders prefer the 
workshops to be organised in Skopje, but some of them prefer to be outside of the capital city. The 
majority  of  interviewed  parties  expressed  a  readiness  to  participate  in  the  workshops  in  different 
regions of North Macedonia; 
due to restrictions imposed as a result of the COVID-19 pandemic, most of the stakeholders would 
prefer on-line meetings; 
the discussions must be productive so the content and details regarding the method of work should be 
accurately prepared prior to the workshop, in dialogue with the stakeholders; 
the stakeholders are ready to send in-depth feedback from any workshop and they are ready to provide 
suggestions and comments in order to improve the efficiency of the workshops. 

 

 

The  RIS3  design  can  only  be  successful  with  a  high  level  of  stakeholder  participation.  The  S3  Framework 
highlights the need for high standards of continuous and active stakeholder participation. Stakeholders should 
come from businesses, academia, the government and civil sector and need to engage in intensive constructive 
dialogue. To reduce the risk of potential failure in securing the required stakeholder participation, the process 
leading  to  stakeholder  dialogue  needs  to  provide  crucial  input  for  the  EDP  to  be  successful.  This  requires 
feedback on the following questions: 

  What are the preliminary priority areas and their basic characteristics? 
  Who are the relevant stakeholders in these areas? 
  What are the preferences of the relevant stakeholders regarding the execution of the EDP? 

The strengthening of promising priority domains justification should be considered in preparation for the EDP. 
In this regard, the following aspects divided per priority area should be taken into account. 

1) Priority area – Sustainable food and beverage production and value chains 

 

Sub-area – Smart agriculture 

Insights into what the missing parts of the value chain are should additionally be provided. It should be 
analysed whether there are any international brokers and wholesalers that could be skipped or replaced by 
national wholesalers to retain more added value in the country. 

 

Sub-area – Food processing with high added value 

The  desired  future  position  in  global  value  chain  is  provided;  however,  further  insights  into  the  current 
position should be provided. It should be also explained how companies from North Macedonia can compete 
with similar companies from the macro-region, but also at global level. 

2) Priority area – Information and Communication Technologies (ICT) 

 

Sub-area – Custom software development 

The competitiveness at international and regional level should be further elaborated. 

3) Priority area – Smart/Sustainable buildings and materials 

 

Sub-area – Smart/Sustainable building materials 

Insights into what the missing parts of the value chain are should additionally be provided. Insights into 
the  specificities  of  the  global  market  and  trends  in  technologies  and  business  models  could  also  be 
provided. 

4) Priority area – Electrical equipment & mechanical parts 

 

Sub-area: –Electrical equipment & mechanical parts 

59 

Insights into what the missing parts of the value chain are should additionally be provided. Insights into 
the  specificities  of  the  global  market  and  trends  in  technologies  and  business  models  could  also  be 
provided. 

A common need for all priority areas and sub-areas is that further efforts should be invested in elaborating on 
how companies from North Macedonia can compete with similar companies from the macro-region, but also at 
global level.  Additionally, it is  recommended that  comparative strengths  and  specific  niches  with  no  or few 
competitors from the region are further highlighted. 

5.4 Key topics to be discussed within the thematic EDP workshops 

According to the S3 Framework, the EDP process should include a series of thematic workshops organised for 
each priority domain. No less than the following thematic workshops should be organised and attended by the 
required number of working group members: 

 
 
 
 

EDP kick-off, 
SWOT analysis, 
vision, and 
policy mix (objectives and actions with indicators). 

In addition, organising  the  final  EDP  workshop is recommended,  as it provides the opportunity for the RIS3 
design team to get additional feedback from stakeholders on the main inputs for the future strategy document. 

The EDP kick-off workshop is intended to officially announce the process of stakeholder dialogue, attract and 
motivate stakeholders and provide grounds for future collaboration between the priority domains. The main 
recommended actions are to present all priority domains, a clear value proposition for all types of stakeholders 
and to collect suggestions for cross-innovation initiatives. The SWOT analysis workshop is primarily intended to 
obtain stakeholders’ input for the analysis of the current state-of-the-art of each priority domain and to further 
justify the selected domains. The key recommended actions for this type of workshop are to define strengths, 
weaknesses,  opportunities  and  threats  for  priority  (sub-)areas;  enhance  the  definition  of  priority  domains 
(justification and definition of sub-areas); discuss cross-innovation; and discuss COVID-19-related issues. With 
regard to the vision workshop, this is mainly intended to co-create a future vision of each priority domain, main 
strategic goals to reach the vision and to establish the final definition of priority domains. It should include the 
following actions: provide a joint vision statement of all stakeholders; define strategic goals that lead to the 
vision;  provide  a  final  definition  of  priority  domains  (justification  and  definition  of  sub-areas);  elaborate  on 
cross-innovation; and discuss COVID-19-related issues and organisation of the working group after the EDP is 
concluded. Finally, the policy mix workshop’s purpose is to get stakeholder input on specific policy objectives 
that will support the achievement of strategic goals, the input on preferred policy action and indicators that will 
monitor  the  performance  of  the  policy  mix.  The  key  recommended  actions  are  to  define  SMART  strategic 
objectives and specific policy objectives that lead to them, as well as defining policy actions with indicators. 

The final (joint) workshop is intended to get additional feedback from stakeholders on the overall input for the 
RIS3 strategy document. It should include presenting stakeholder input and an action plan with next steps, and 
plans for the implementation of a continuous EDP, i.e. definition of activities of working groups after the EDP is 
concluded. 

Additional recommendations that will facilitate the execution of EDP workshops include defining invitations, 
documentation, marketing and management protocols for the EDP; developing well-thought-out scenarios for 
every workshop in order to get the desired input from all stakeholders; and securing an adequate number of 
experienced and skilful facilitators. 

5.5 Key stakeholders that should be invited to working groups during the EDP 

Relevant stakeholders need to be identified for each priority domain. They include key players in value chains, 
innovative companies, cluster members, chambers of commerce and other business associations, researchers 
and organisations from related fields. They can be identified through desk research and interviews or a more 
objective  network  analysis  of  scientific  and  innovation  cooperation.  Another  ‘objective’  network  analysis  of 
scientific  and  innovation  cooperation  that  may  help  in  identifying  the  stakeholders  includes  the  analysis  of 
recent R&I public calls within programmes launched by the Fund for Innovation and Technology Development, 
Horizon 2020 or OECD green vouchers. 

60 

Optimally, at least 40-50 stakeholders for each priority area should be identified and they should all meet the 
specific  criteria  to  be  considered  relevant.  They  should  possess  in-depth  knowledge  of  the  sector,  including 
knowledge about its position in the global value chain, competitiveness at global and regional level, trends, key 
actors and best-case examples of (open) innovation activities. Ideally, they should also demonstrate a proactive 
attitude and willingness to share ideas, have a good reputation in the community and an extensive personal 
network. 

Past experience  in  the EU  Enlargement and  Neighbourhood  Region  emphasised  the  potential  impact on  the 
perception and behaviour of innovation ecosystem stakeholders by ‘influencers’. Namely, there may be widely 
recognised individuals in different preliminary priority areas that better understand the S3 concept and are truly 
willing to participate in it. They are often willing to promote the S3 process and secure the participation of other 
stakeholders in the EDP, to provide substantial feedback on the design process and its content and to dedicate 
more resources for RIS3 implementation. It is important that the identification of these ‘ambassadors’ starts at 
the quality analysis stage, through qualitative analysis interviews. They should come from industry, academia 
and the government sector of all preliminary priority areas. 

EDP working groups should be ideally composed of at least 30 stakeholders that all formally agreed to join. 
The composition of the working group should have the following structure: 

a. 

b. 

c. 

d. 

managers of major companies and SMEs (at least 50% of stakeholders), 

relevant researchers (no less than 10%), 

government officials (no less than 10%), 

civil organisations. 

It is important to include at least 10% of stakeholders from academia and at least 10% from the government 
sector. 

It is also important to have proactive stakeholders from the government sector on-board from the beginning of 
the  process.  The  importance  of  their  presence  is  usually  underestimated,  but  their  input  is  crucial  for  the 
development of a feasible S3 policy mix that can also be implemented later on. 

5.6 Adequate promotion of the EDP to ensure stakeholder involvement 

The RIS3 design process at the EDP stage should become fully visible; however, it is very important that it is 
not aggressively promoted. The main reason for this is because S3 is normally characterised as the consultative 
process among top stakeholders from industry and academia. As such, it becomes attractive to anyone who 
may see the EDP as an opportunity for individual promotion without actually contributing to the quality of the 
process. This continuous presence of such ‘imposters’ can hamper the participation of key stakeholders. Another 
reason is that the S3 is not a neutral policy; it is about prioritising and its promotion at the RIS3 design stage 
should therefore be focused on attracting and retaining key stakeholders. 

A balanced communication campaign should be developed by professionals and should include some important 
elements,  such  as  clearly  defined  objectives,  defined  target  groups,  communication  channels,  brand 
management, uniform messages and similar elements. Some of the key messages that have to be developed 
and used by all coordinators and facilitators in the process should answer important questions, such as: What 
is S3 and who is it for? What are the main benefits & expected engagement? What is the role of the government? 
Process  ambassadors,  web  pages,  targeted  events  and  social  media  can  serve  as  primary  communication 
channels, while the content could include international testimonials and best practices from the EDP and video 
interviews from events. 

5.7 Resources management 

Resources  needed  to  conduct  the  RIS3  design  process  according  to  the  JRC  framework  are  often 
underestimated. The  process becomes increasingly resource-demanding at the quality analysis stage, where 
extensive expert support in different priority areas is needed. Only the preparation of the EDP process plan, 
organisation and implementation of the EDP workshops demands significant human and financial resources. 
However, a lack of resources for the RIS3 design can seriously hamper the quality and fluidity of the process. 
The EDP stage is very complex with a great number of activities. It is also lengthy and can be even further 
extended if insufficient resources are employed. 

61 

Human resources for EDP should normally include national S3 coordinators and an accompanying team, local 
expert team members, a local policy expert, a local analytical expert, facilitators, junior staff and a technical 
assistance expert. Service providers are also needed for professional planning and the execution of services 
that  are not specific  to the  EDP  but are  essential  for  the  quality  execution of the EDP stage. These service 
providers should support the national S3 team in planning and executing a media campaign, event management 
and IT support. 

62 

 
 
 
6  Conclusions 

The assessment of the conformity of the qualitative analysis process with the methodology showed that the 
process was carried out in a satisfactory manner. Deficiencies were identified, mainly in terms of comprehensive 
and uniform data collection and structured documentation of stakeholder input, as well as the use of additional 
data  sources  and  referencing.  However,  this  was  also  due  to  the  fact  that  stakeholder  input  could  not  be 
obtained face-to-face due to the COVID-19 pandemic, and, perhaps more importantly, due to the lack of deeper 
knowledge of local stakeholders on the topics discussed during the interviews. 

The  results  of  the  assessment  of  the  justification  of  the  promising  priority  domains  indicate  that  there  is 
currently  enough  evidence  that  four  preliminary  priority  domains  should  be  proposed  for  the  EDP.  These 
domains  are:  1)  Sustainable  food  and  beverage  production  and  value  chains;  2)  the  Information  and 
Communication  Technologies  (ICT)  sector;  3)  Smart/Sustainable  buildings  and  materials;  and  4)  Electrical 
equipment  and  mechanical  parts.  It  is  strongly  recommended  that  justification  of  these  priority  domains  is 
further  enhanced  through  the  future  EDP.  There  is  insufficient  data  for  justifying  sustainable  tourism  and 
catering and energy for the future as vertical priority domains for the EDP, although it should be emphasised 
that additional data was lacking due to difficulties encountered during the data collection, as described in the 
previous paragraph. 

The overall conclusion is that the COVID-19 pandemic did not have a critical impact on the four proposed priority 
domains for the EDP. Moreover, the pandemic is seen as a source of opportunities that can be exploited by 
those willing to adapt to new trends that will inevitably emerge on global markets. The continued process of 
designing  RIS3  and  the  future  EDP  could  be  one  of  the  primary  catalysts  that  would  facilitate  this 
transformation. 

The work conducted within the qualitative mapping exercise and its outputs provided a better understanding of 
the stakeholder network in the identified priority areas and sub-areas. This is one of the most critical sources 
for preparing for the upcoming stakeholder dialogue in the next stage of the Smart Specialisation process. As 
this stage features diverse arrangements and comprehensive interactions between stakeholders, this document 
presents very important suggestions and recommendations for conducting the EDP in an efficient manner. It 
should, however, be emphasised that more detailed recommendations will be developed as part of dedicated 
training on the EDP which is organised before the launch of the EDP, in accordance with the S3 Framework. 

63 

 
 
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2020. 

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of  implementation  and  prospects  for  the  future’,  Regional  Studies,  ISSN  0034-3404,  Vol.  54(10),  2020,  pp. 
1323–1327, JRC121922. 

GIZ,  Mapping  economic,  innovative  and  scientific  potential  in  the  Republic  of  North  Macedonia,  NCDIEL, 
September 2019. 

Guzzo, F. and Gianelle, C., The impact of Smart Specialisation on the governance of research and innovation 
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Kyriakou, D., Palazuelos Martínez, M., Periáñez-Forte, I. and Rainoldi, A. (eds.), Governing Smart Specialisation, 
Routledge, UK, 2016, ISBN 9781315617374. 

Marques  Santos,  A.,  Edwards,  J.  and  Neto,  P.,  Smart  Specialisation  Strategies  and  Regional  Productivity, 
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Masit, ICT industry in North Macedonia – General mapping report – Skopje, North Macedonia, June 2020, 2020. 

Masit, ICT export report – Current situation and potentials – June 2020, North Macedonia, 2020. 

Matusiak,  M.  and  Kleibrink, A. (eds.),  Supporting  an Innovation Agenda  for  the Western Balkans  – Tools and 
Methodologies,  Publications  Office  of  the  European  Union,  Luxembourg,  2018.  ISBN  978-92-79-81870-7, 
doi:10.2760/48162, JRC111430. 

OECD,  ‘Unleashing the Transformation Potential for  Growth in the Western Balkans’,  Global Relations  Policy 
Insights, 2019. 

Radovanovic, N. and Benner, M., Smart Specialisation and the Wider Innovation Policy Context in the Western 
Balkans,  EUR  29918  EN,  Publications  Office  of  the  European  Union,  Luxembourg,  2019,  ISBN  978-92-76-
12550-1, doi:10.2760/380898, JRC118199. 

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The World Bank Group, FYR Macedonia Systematic Country Diagnostic: Seizing a Brighter Future for All, 2018.  

The  World  Bank  Group,  Positioning  FYR  Macedonia  for  the  Global  Economy:  The  Impact  of  reforms  and 
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64 

 
 
 
 
 
Annex 

Proposed  list  of  stakeholders  for  the  future  entrepreneurial  discovery  process 
(EDP) 

Below  is  the  list  of  proposed  stakeholders  for  the  future  entrepreneurial  discovery  process  (EDP)  in  North 
Macedonia. The list is based on the information collected through the interview process, focus group meetings 
as well as consultations with external experts. 

Table 10. List of key proposed stakeholders and process ambassadors for the EDP for the ‘Smart agriculture and food 
processing with high added value’ priority area 

No. 

BUSINESS SECTOR 

Ambassadors 

Smart 
agriculture 

Food processing with 
high added value 
x 

Cross-
sectoral 

x 
x 
x 
x 

x 
x 
x 
x 
x 

x 
x 

x 
x 
x 

x 

x 
x 

x 

x 

x 

x 

x 

x 

x 
x 
x 
x 

1. 

2. 
3. 
4. 
5. 

  MIK SVETI NIKOLE, Sveti 

Nikole 

  PIVARA AD, Skopje 
  PEKABESKO, Skopje 
  BRILIJANT Shtip 
  MLEKARA AD BITOLA , 

Bitola 

  KOZUVCANKA, Kavadarci 
  FLOREO, Kavadarci 
  LARS, Shtip 
  MAKPROGRES DOO, Vinica 

6. 
7. 
8. 
9. 
10.    VITAMINKA, Prilep 
11.    VEZE SHARRI, Tetovo 
12.    VITALIA, Skopje 
13.    VIVAKS, Skopje 
14.    EVROPA, Skopje 
15.    EKO OAZA SAMANDOV, 

Shtip 

16.    OAZA ALKALOIDI, Shtip 
17.    SWISSLION, Skopje 
18.    SOLETA, Skopje 
19.    MLEKARA ZDRAVJE 

RADOVO, Skopje 

20.    KADINO INDUSTRY GROUP, 

Skopje 

21.    VV TIKVESH, Skopje 
22.    ZITOLUKS, Skopje 
23.    ZIK PELAGONIJA, Bitola 
No. 

ACADEMIC SECTOR 

24.    FACULTY OF VETERINARY 
MEDICINE, Skopje 
25.    FACULTY OF TECHNOLOGY 
AND METALLURGY, Skopje 

26.    FACULTY OF AGRICULTURAL 
SCIENCE AND FOOD, Skopje 
27.    CENTER FOR TRANSFER OF 
TECHNOLOGY – UGD, Shtip 
BUSINESS ASSOCIATIONS 

No. 

28.    ASSOCIATION FOR 

x 

AGRICULTURAL AND FOOD 
INDUSTRY, Skopje 

65 

Ambassadors 

x 
Smart 
agriculture 

Food processing with 
high added value 

x 

x 

x 

Ambassadors 

Smart 
agriculture 

Food processing with 
high added value 

X 

X 
X 

Cross-
sectoral 
X 

X 

X 
Cross-
sectoral 
X 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
No. 

GOVERNMENT SECTOR 

Ambassadors 

29.    CABINET OF THE PRIME 
MINISTER IN THE 
GOVERNMENT OF THE 
REPUBLIC OF NORTH 
MACEDONIA, Skopje 
30.    MINISTRY OF AGRICULTURE, 
FORESTRY AND WATER 
ECONOMY, Skopje 
31.    FOOD AND VETERINARY 

AGENCY OF THE REPUBLIC 
OF NORTH MACEDONIA, 
STARTUP MACEDONIA, 
Skopje 

32.    FUND FOR INNOVATION 
AND TECHNOLOGY 
DEVELOPMENT, Skopje 

Source: Authors. 

x 

x 

Smart 
agriculture 

Food processing with 
high added value 

Cross-
sectoral 
X 

X 

x 

X 

Table 11. List of key proposed stakeholders and process ambassadors for the EDP for the ‘Information and 
Communication Technologies (ICT)’ priority area 

No. 

BUSINESS SECTOR 

Ambassadors  Custom software 

development 

Cross-
sectoral 

1. 
2. 
3. 
4. 
5. 
6. 
7. 
8. 
9. 
10. 
11. 
12. 
13. 
14. 
15. 
16. 
17. 
18. 
19. 
No. 

20. 

21. 

22. 

23. 

No. 

MAKEDONSKI TELEKOM, Skopje 
A1 MACEDONIA, Skopje 
INBOX, Skopje 
KABTEL, Skopje 
ULTRA & UNET GROUP, Skopje 
EDUSOFT DOO, Skopje 
INTERWORKS, Kavadarci 
SEMOS, Skopje 
ELEVATE GLOBAL, Skopje 
NEOTEL, Skopje 
NEOCOM, Skopje 
ASSECO SEE, Skopje 
INPLAYER, Skopje 
ELIKOSOFT, Skopje 
PIKSEL, Skopje 
SIMIT, Skopje 
IT LABS, Skopje 
NEXTSENSE, Skopje 
GIS DATA, Skopje 
ACADEMIC SECTOR 

x 

x 

x 
x 

x 

x 

x 
x 

x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
Ambassadors  Custom software 

x 

development 
x 

x 

x 

x 

GOCE DELCHEV UNIVERSITY, FACULTY OF 
COMPUTER SCIENCE, Shtip 
CENTRE FOR TECHNOLOGY TRANSFER AND 
INNOVATION-INNOFEIT, Skopje 
SS. CYRIL AND METHODIUS UNIVERSITY, 
FACULTY OF ELECTRICAL ENGINEERING AND 
INFORMATION TECHNOLOGIES, Skopje 
FACULTY OF COMPUTER SCIENCE AND 
ENGINEERING, SS. CYRIL AND METHODIUS 
UNIVERSITY, Skopje 
BUSINESS ASSOCIATION 

x 

x 

x 

66 

Cross-
sectoral 
x 

x 

x 

x 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STARTUP MACEDONIA, Skopje 

24. 
25.  MASIT ICT CHAMBER, Skopje 
GOVERNMENT SECTOR 
No. 
CABINET OF THE PRIME MINISTER IN THE 
26. 
GOVERNMENT OF THE REPUBLIC OF NORTH 
MACEDONIA, Skopje 

27.  MINISTRY OF INFORMATION SOCIETY AND 

28. 

29. 

ADMINISTRATION 
FUND FOR INNOVATION AND TECHNOLOGY 
DEVELOPMENT, Skopje 
AGENCY FOR ELECTRONIC COMMUNICATIONS, 
Skopje 

x 
x 

x 

x 

x 

Source: Authors. 

x 
x 

x 

x 

x 

x 

Table 12. List of key proposed stakeholders and process ambassadors for the EDP for the ‘Smart/Sustainable buildings 
and materials’ priority area 

No. 

BUSINESS SECTOR 

Ambassadors 

Smart/Sustainable 
buildings and materials 

Cross-
sectoral 
x 

x 

x 

x 
x 
x 
x 

x 
x 
Ambassadors 

x 

x 

x 

1. 
2. 
3. 
4. 

5. 
6. 
7. 
8. 
9. 
10. 
11. 
12. 
13. 
14. 
15. 
16. 
17. 
18. 
19. 
No. 

20. 

21. 

22. 

No. 

PIXEL GROUP, Skopje 
APTIVE, Skopje 
CAMEL SOLAR, Skopje 
MALI HIDRO ELEKTRANI – FERO INVEST, 
Skopje 
VA PLAST, Ohrid 
INGPLAST DOOEL, Ohrid 
TETEPLAST, Skopje 
TECHNICAL TEXTILES, Shtip 
ARESE SOLUTIONS, Skopje 
KEMET ELECTRONICS, Skopje 
CEMENTARNICA USJE, Skopje 
TORAX, Skopje 
BIM AD SVETI NIKOLE, Sveti Nikole 
KNAUF RADIKA, Skopje 
BETON AD Skopje 
VARDAR DOLOMIT, Gostivar 
RENOVA, Tetovo 
ADING, Skopje 
GD GRANIT AD Skopje 
ACADEMIC SECTOR 

CIVIL ENGINEERING INSTITUTE 
MACEDONIA JSC Skopje 
SS. CYRIL AND METHODIUS UNIVERSITY, 
FACULTY OF MECHANICAL 
ENGINEERING – Skopje 
SS. CYRIL AND METHODIUS UNIVERSITY, 
FACULTY OF CIVIL ENGINEERING, Skopje 
GOVERNMENT SECTOR 

23.  MINISTRY OF TRANSPORT AND 

24. 

COMMUNICATIONS, Skopje 
ENERGY AND WATER SERVICES 
REGULATORY COMMISSION OF THE 
REPUBLIC OF NORTH MACEDONIA, 
Skopje 

x 

x 
x 
x 
x 

X 
x 
x 
x 
x 

x 
x 
x 

Smart/Sustainable 
buildings and materials 

x 

x 

x 

x 
Cross-
sectoral 
x 

x 

x 

Cross-
sectoral 
x 

x 

Ambassadors 

Smart/Sustainable 
buildings and materials 

x 

x 

67 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25. 

CABINET OF THE PRIME MINISTER IN 
THE GOVERNMENT OF THE REPUBLIC OF 
NORTH MACEDONIA, Skopje 

26.  MINISTRY OF ECONOMY, Skopje 

27. 

28 

No. 

FUND FOR INNOVATION AND 
TECHNOLOGY DEVELOPMENT, Skopje 
ENERGY AGENCY OF THE REPUBLIC OF 
NORTH MACEDONIA, Skopje 
BUSINESS ASSOCIATIONS 

x 

x 

x 

Ambassadors 

Smart/Sustainable 
buildings and materials 

29.  MACEDONIAN ENERGY ASSOCIATION – 

Skopje 

30.  MACEDONIAN SECTION OF THE 

x 

x 

INTERNATIONAL CENTRE FOR 
SUSTAINABLE DEVELOPMENT OF 
ENERGY, WATER AND ENVIRONMENT 
SYSTEMS (SDEWES), Skopje 

Source: Authors. 

x 

x 

x 

Cross-
sectoral 
X 

X 

Table 13. List of key proposed stakeholders and process ambassadors for the EDP for the ‘Electrical equipment and 
machinery parts’ priority area 

No. 

BUSINESS SECTOR 

Ambassadors 

x 

x 

x 

x 
x 

x 
x 

x 
x 

1. 

  RADE KONCAR SERVICE, 

Skopje 

2. 

  RADE KONCAR TEP, 

Skopje 

3. 
4. 
5. 
6. 
7. 
8. 
9. 

  FAKOM, Skopje 
  SMELT-ING, Skopje 
  BRATSTVO INOX, Ohrid 
  KOSTAL, Ohrid 
  TM SHTIP, Shtip 
  AKTIVA, Shtip 
  RADE KONCAR – 

KONTAKTORI AND RELEI, 
Skopje 

10.    ZAVAR COMPANY, Skopje 
11.    IGM TRADE, Kavadarci 
12.    LEOV COMPANY, Veles 
13.    DINAMO HIT, Veles 
14.    AGROBAR, Vinica 
15.    BRAKO, Veles 
16.    MIKROSAM, Prilep 
17.    MALI HIDRO ELEKTRANI 
– FERO INVEST, Skopje 

18.    APTIVE, Skopje 
19.    TECHNICAL TEXTILES, 

Shtip 

20.    KEMET ELECTRONICS, 

Skopje 

21.    ATOM SANTEX, Kochani 
22.    PN METAL, Ohrid 
23.    TAB MAK, Probistip 

Metal & 
mechanical 
parts 

Electrical equipment 
& automobile 
components 
x 

Cross-
sectoral 

X 

X 

X 

X 

x 

x 
x 

x 

x 

x 
x 

x 

x 

x 

x 
x 
x 

x 

x 
x 

x 
x 
x 
x 

x 

68 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
No. 

ACADEMIC SECTOR 

Ambassadors 

Metal & 
mechanical 
parts 

Electrical equipment 
& automobile 
components 

Cross-
sectoral 

24.    GOCE DELCHEV 

UNIVERSITY, FACULTY 
OF MECHANICAL 
ENGINEERING, Shtip 

25.    SS. CYRIL AND 

x 

X 

X 

METHODIUS UNIVERSITY 
FACULTY OF 
MECHANICAL 
ENGINEERING, Skopje 
BUSINESS 
ASSOCIATIONS 

No. 

Ambassadors 

Metal & 
mechanical 
parts 

Electrical equipment 
& automobile 
components 

Cross-
sectoral 

26.    MAMEI, Skopje 
27.    STARTUP MACEDONIA, 

Skopje 
GOVERNMENT SECTOR 

No. 

x 

Ambassadors 

X 
X 

Metal & 
mechanical 
parts 

Electrical equipment 
& automobile 
components 

Cross-
sectoral 

28.    CABINET OF THE PRIME 
MINISTER IN THE 
GOVERNMENT OF THE 
REPUBLIC OF NORTH 
MACEDONIA, Skopje 
29.    FUND FOR INNOVATION 
AND TECHNOLOGY 
DEVELOPMENT, Skopje 

x 

30.    MINISTRY OF ECONOMY, 

x 

Skopje 

Source: Authors. 

x 

X 

X 

Table 14. List of key proposed stakeholders and process ambassadors for the EDP for the ‘Sustainable tourism and 
catering’ potential priority area 

No. 

BUSINESS SECTOR 

Ambassadors 

1. 
2. 

3. 
4. 

5. 
6. 
7. 
8. 
9. 
10.   
11.   
12.   
13.   
14.   
15.   

  MAKEDONIJA TURIST 
  HOTEL AMBASSADOR M 

TA FIBULA AND HOTEL IZGREV STRUGA 
ТА SiMONIUM TRAVEL (INCOMING) 

TA BALKAN PRIME (INCOMING) 

  HOTEL ALEKSANDAR PALACE 

TOURIST GUIDE 

  HOTEL ARKA 

ENJOY BALKANS 
HOTEL SIRIUS 
NEGORSKI BANJI 
HOTEL STONE BRIDGE AND HILTON 
MOUNTAIN EXPERIENCE LLC 
AURORA RESORT AND SPA 
METROPOL OHRID  

x 

x 

x 

x 

x 

69 

Sustainable 
tourism & catering 
x 
x 

Cross-
sectoral 

x 
x 

x 
x 

x 
x 
x 
x 
x 

x 
x 

X 

X 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16.   
17.   
18.   
19.   
20.   
21.   
No. 

22.   

23.   

24.   

No. 

25.   

26.   
27.   

28.   

No. 

29.   

30.   

AURORA SPA AND RESORT 
SILEKS OHRID 
MONTANA PALAS KRUSHEVO 
ISTATOV DOJRAN 
STOBI 
BISTRA MAVROVO 
ACADEMIC SECTOR 

FACULTY OF TOURISM AND HOSPITALITY – 
OHRID 
FACULTY OF TOURISM AND BUSINESS 
LOGISTIC – SHTIP 
FACULTY OF TOURISM AND BUSINESS – 
SKOPJE 
BUSINESS ASSOCIATIONS  

ASSOCIATION OF TOURISM AND 
HOSPITALITY – SKOPJE 
ASSOCIATION OF HOTELS – HOTAM 
CHAMBER OF COMMERCE FOR TOURISM – 
SKOPJE 
NATIONAL ASSOCIATION FOR INCOMING 
TOURISM IN MACEDONIA – NAITM 
GOVERNMENT SECTOR 

x 
x 
x 
x 
x 
x 
Sustainable 
tourism & catering 

x 
Ambassadors 

x 

Ambassadors 

Sustainable 
tourism & catering 

x 

x 

Ambassadors 

Sustainable 
tourism & catering 

AGENCY FOR PROMOTION AND SUPPORT OF 
TOURISM 
MINISTRY OF ECONOMY 

x 

Cross-
sectoral 
X 

X 

X 

Cross-
sectoral 
X 

X 
X 

x 

Cross-
sectoral 
X 

X 

Source: Authors. 

70 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
List of abbreviations and definitions 

AAGR 

Average annual growth rate 

AI 

BA 

Artificial intelligence 

Business analytics 

CEFTA 

Central European Free Trade Agreement 

CSD 

Custom software development 

ECNM 

Economic Chamber of North Macedonia 

EDP 

FITD 

FTE 

GDP 

Entrepreneurial discovery process 

Fund for Innovation and Technological Development 

Full-time equivalent 

Gross domestic product 

GERD 

Gross domestic expenditure on research and development 

GI 

Geographic indication 

GVA 

Gross value added 

H2020  Horizon 2020 

ICT 

IM 

IoT 

IPO 

KET 

LFS 

LQ 

Information and Communication Technologies 

Information management 

Internet of Things 

Intellectual Property Office 

Key enabling technologies 

Labour Force Survey 

Location quotient 

MICE  

Meetings, incentives, conferences, exhibitions 

NACE 

French  Nomenclature  statistique  des  activités  économiques  dans  la  Communauté  européenne 
(Statistical classification of economic activities in the European Community) 

NGO 

Non-governmental organisation 

NUTS 

Nomenclature of Territorial Units for Statistics 

OEM 

Original equipment manufacturer 

PGPB 

Plant growth-promoting bacteria 

PoC 

R&D 

R&I 

RCA 

Proof of concept 

Research and development 

Research and innovation 

Revealed comparative advantage 

RIS3 

Research and innovation strategy for Smart Specialisation 

S3 

SBS 

Smart Specialisation 

Structural business statistics 

SMEs 

Small and medium enterprises 

VR 

Virtual reality 

WoS 

Web of Science 

71 

List of tables 

Table 1. Mapped industries with economic/innovation and scientific potential ................................... 9 

Table 2. Grouping of the industrial sectors .........................................................................10 

Table 3. List of interviewed stakeholders ...........................................................................17 

Table 4. List of interviewed stakeholders with proposed process ambassadors for the ‘Sustainable food and 
beverage production and value chains’ area ........................................................................18 

Table 5. List of interviewed stakeholders with proposed process ambassadors for the ‘Information and 
Communication Technologies sector’ area ..........................................................................26 

Table 6. List of interviewed stakeholders with proposed process ambassadors for the ‘Smart/Sustainable 
buildings and materials’ area .........................................................................................32 

Table 7. List of interviewed stakeholders with proposed process ambassadors for the ‘Electrical equipment 
and mechanical parts’ area ...........................................................................................37 

Table 8. List of interviewed stakeholders with proposed process ambassadors for the ‘Sustainable tourism 
and catering’ area .....................................................................................................43 

Table 9. List of interviewed stakeholders with proposed process ambassadors for the ‘Energy for the future’ 
area .....................................................................................................................48 

Table 10. List of key proposed stakeholders and process ambassadors for the EDP for the ‘Smart agriculture 
and food processing with high added value’ priority area ..........................................................65 

Table 11. List of key proposed stakeholders and process ambassadors for the EDP for the ‘Information and 
Communication Technologies (ICT)’ priority area ...................................................................66 

Table 12. List of key proposed stakeholders and process ambassadors for the EDP for the ‘Smart/Sustainable 
buildings and materials’ priority area ................................................................................67 

Table 13. List of key proposed stakeholders and process ambassadors for the EDP for the ‘Electrical 
equipment and machinery parts’ priority area ......................................................................68 

Table 14. List of key proposed stakeholders and process ambassadors for the EDP for the ‘Sustainable 
tourism and catering’ potential priority area ........................................................................69 

72 

 
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doi:10.2760/231671

ISBN 978-92-76-49385-3