This chapter assesses policy performance across 13 dimensions key to SME growth and competitiveness as part of the SME Policy Index 2026 assessment cycle. For each dimension, scores are benchmarked against the 2022 assessment to track progress over time, situated within the regional distribution of results and contextualised relative to economy’s own performance profile across dimensions. Results are disaggregated by sub-dimension and thematic block, with comparisons drawn to regional averages throughout. The analytical sections identify recent achievements and persistent gaps underpinning score changes, while implementation reviews for each sub-dimension document key developments recorded during the assessment period against recommendations issued in the previous cycle. The chapter is intended as a practical reference for policymakers, offering a structured overview of areas where measurable progress has been achieved and areas where challenges remain. It is to be read in conjunction with the cluster section of the economy profile, which sets out forward-looking recommendations to support continued reform efforts.
SME Policy Index for Western Balkans and Türkiye 2026 – Economy Profile for North Macedonia
Abstract
Overview of North Macedonia’s performance on Dimension 1
North Macedonia received an overall score of 3.40 for Dimension 1 (Figure 1.1), marking a substantial increase compared with the previous assessment cycle (2.39). This places the economy in a mid-ranking position (fourth highest), slightly below the regional average (3.72), and positions Dimension 1 among its stronger-performing policy areas.
The sharp increase in the score was partly driven by improvements recorded across all thematic blocks in both sub-dimensions; given the very low baseline in the previous assessment cycle, foundational advances translated into greater score gains. To a significant extent, the increase is also attributable to methodological revisions and more comprehensive data collection, which enabled a more thorough assessment of North Macedonia’s performance.
Sub-dimension 1.1: Entrepreneurial learning
Performance in this sub-dimension rose from 2.34 in 2022 to 3.40 in 2026, indicating clear progress towards a more robust environment for supporting entrepreneurial learning among students. Improvements were observed across all three thematic blocks, with the most pronounced gains in implementation and monitoring and evaluation; the planning and design block was already relatively more advanced in the previous assessment cycle.
At the planning stage, the policy framework has become more articulated and internally coherent. Notably, North Macedonia is among the few economies in the Western Balkans and Türkiye (WBT) region where key strategic documents (e.g. SME Strategy 2025‑2030, National Development Strategy 2024-2044, draft Education Strategy 2026-2032) explicitly address entrepreneurial learning across all levels of education, rather than concentrating primarily on upper secondary or tertiary education. Such coverage points to a more comprehensive and sequenced approach to competence development and reinforces the cross-sectoral importance of entrepreneurship education. A growing emphasis on innovation-oriented entrepreneurial learning, reflected in the integration of emerging themes such as artificial intelligence, green competences and knowledge-based entrepreneurship, further demonstrates a strengthened policy commitment. Despite this progress, policy objectives remain dispersed across multiple strategies and measures, although the recent establishment of the Co-ordinating Body for Entrepreneurial Education could provide a more formalised partnership structure for entrepreneurial learning and help centralise related efforts (Table 1.1). However, as long as strategic objectives continue to be fragmented across policy documents, risks of overlapping responsibilities and uneven implementation persist, potentially undermining coherent, system-wide delivery.
Implementation of entrepreneurship education has continued to progress, particularly through the expansion of practical learning opportunities that enable students to develop entrepreneurial skills and knowledge. Initiatives such as Junior Achievement and the Best Business Concept for Green Innovation offer valuable real-world exposure and reflect good practice. However, their impact remains constrained by limited and uneven coverage, as provision is still largely concentrated at the secondary education level, restricting broader and more equitable participation across the education system. At the same time, the effectiveness of the cross-curricular approach is weakened by gaps in teacher preparation and ongoing support. The absence of dedicated pre-service training on entrepreneurship limits teachers’ capacity to deliver entrepreneurial learning across subjects, while in-service training opportunities remain largely confined to teachers of specialised entrepreneurship-related courses. As a result, many teachers expected to integrate entrepreneurial competences into other curricular areas do so without sufficient guidance or pedagogical support, constraining consistent and system-wide implementation.
System-level monitoring and evaluation of entrepreneurial learning are gradually emerging but remain limited in scope and coherence. The Bureau for the Development of Education conducts annual professional assessments in selected subjects, such as “Innovation and Entrepreneurship” and “Financial Literacy”, which provide partial oversight; however, these reviews do not capture entrepreneurial competences embedded across non-dedicated subjects, despite the intended cross-curricular approach. A positive development was the finalisation in December 2025 of the study, “Analysis of Financial Literacy in Primary Education.” Although not focused explicitly on entrepreneurial skills, the study, based on extensive survey data, identified scope to further integrate financial literacy across both compulsory and elective subjects, reinforcing its role as a core component of entrepreneurial competence. In parallel, attempts to strengthen outcome monitoring through a tracer study under the “EU for Youth” Sector Reform Agreement have so far produced limited added value, as the absence of an official report and very low response rates constrain the reliability and policy relevance of the findings.
Sub-dimension 1.2: Women’s entrepreneurship
North Macedonia scored 3.40 on Sub-dimension 1.2 on women’s entrepreneurship, marking an increase from 2.46 in 2022.
Planning and design increasingly rely on cross-linkages between core policy documents, notably the SME Strategy 2025-2030, which now serves as the principal framework guiding support to women entrepreneurs and women-led businesses, and the Reform Agenda 2024-2027. Despite these advances, the policy framework is still one of the weaker ones in the WBT region. There is no successor to the Strategy for Women’s Entrepreneurship 2019-2023 and while a stand-alone strategy is not strictly necessary, the existing strategic documents provide a less comprehensive and less targeted approach to supporting women entrepreneurs. The planned Roadmap for the Development of Women Entrepreneurs, foreseen under the SME Strategy, could help address this gap by providing a basis for more detailed measures and programmes; however, its development had not yet started at the time of writing.
Institutional co-ordination also remains limited. There is no formalised policy partnership in place despite the commitment in the Action Plan for the SME Strategy (2025-2027) to convene four meetings of the National Platform for Women’s Entrepreneurship per year in 2026 and 2027. While this represents a potential foundation for a more structured, cross-governmental approach, so far there is little evidence of concrete operationalisation beyond this single measure.
Implementation has increased, reflecting the government’s more active and co-ordinated approach to support women entrepreneurs through a combination of financial and non-financial instruments. On the access to finance side, key actors such as the Ministry of Economy, the Development Bank of North Macedonia, and the European Bank for Reconstruction and Development have expanded dedicated tools and financial products targeting women entrepreneurs. These efforts have been complemented by non-financial support, including training and mentorship that address core business needs such as financial literacy and more innovation- and technology-oriented skills. In particular, participation in programmes focused on green and digital transitions, such as “Women in eNergy” and “WOMEN 5.0: Women Entrepreneurs in a Digital Future” (both delivered by the Association of Business Women), has increased compared to the previous assessment cycle.
Despite these positive developments, the overall reach of support programmes remains limited and does not yet adequately address barriers to entry faced by women entrepreneurs across the economy. As a result, improvements in implementation have not translated into stronger outcomes, with women’s business ownership remaining persistently low: in 2025, only 11% of firms were majority women-owned, indicating substantial untapped entrepreneurial potential (Figure 1.2).
Percentage of women-owned firms
Note: The WBT average includes Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, Serbia and Türkiye.
Monitoring and evaluation capacities remain weak, limiting the ability to assess the effectiveness of support programmes for women entrepreneurs. While the former Agency for the Promotion of Entrepreneurship undertook some evaluation activities – which are expected to continue under its successor, the Agency for Innovation Activity, Scientific and Technological Development and Entrepreneurship – there is little evidence of systematic monitoring and evaluation of women’s entrepreneurship policies. This absence of comprehensive progress or final implementation reports for the Strategy for Women’s Entrepreneurship 2019-2023, which was never fully evaluated, illustrates this. The lack of ex post assessment has constrained the identification of priority areas for future action and limited the extraction of lessons that could inform successor policy frameworks, including targeted measures under the SME Strategy to improve enabling conditions for women-led businesses.
Instead, progress within this thematic block has been driven primarily by efforts to strengthen the availability of gender-disaggregated data. In this regard, the SME Strategy introduces commitments to establish a dedicated data panel on women-owned SMEs using the National Bank’s Credit Register (Table 1.2) and to ensure compliance with the Women Entrepreneurs Finance Code, a global initiative aimed at improving access to finance for women-led SMEs. Under the Code, data on access to credit for women-owned enterprises have also been prepared, contributing to improved transparency and evidence for policy design.
Overview of North Macedonia’s performance on Dimension 2
North Macedonia scored 2.81 for Dimension 2 (Figure 1.3), which is a decline from 3.03 in the previous cycle, and lags the new regional average of 2.97. As in previous cycles, this remains one of the economy’s weakest areas, underscoring the need for more targeted policy action.
Since 2022, North Macedonia’s score reflects limited progress in strategic planning and improving bankruptcy procedures focused on prevention and second-chance opportunities. While planning and design remain unchanged across sub-dimensions, implementation has, on average, improved only marginally. Monitoring and evaluation have seen no progress, indicating a continued weakness in follow-through.
Sub-dimension 2.1: Preventive measures
Performance in this sub-dimension has declined considerably from 2.80 in 2022 to 2.24 in 2026. While planning and design saw modest improvement, progress in performance, monitoring and evaluation, now weighted more heavily in this cycle, remains limited.
The legislative framework still lacks the long-anticipated Insolvency Law, which has been expected since 2022 to introduce an early warning system for financially distressed firms and to support timely resolution. This gap is acknowledged in key policy documents, including the Reform Agenda 2024-2027 and the draft SME Strategy 2025-2030, which plan to establish such a system by June 2026. To this end, the draft Insolvency Law is expected to be finalised within 2026, alongside a dedicated by-law for the EWS and provisions for preventive restructuring to enable pre-insolvency solutions.
The new law under preparation (Law for early warning system, pre-bankruptcy restructuring and insolvency) is expected to introduce a reorganisation procedure as a form of preventive restructuring,1 aimed at addressing financial distress early and increasing small and medium-sized enterprise (SME) survival rates (Table 1.3). Chambers of commerce are envisaged to provide advisory support under this framework, and until the finalisation of the EWS, measures and activities to be included in that system will be defined with support through the EU Technical Assistance and Information Exchange. However, monitoring and evaluation systems are absent, limiting feedback into the policy cycle, particularly for SME-focused measures.
Sub-dimension 2.2: Survival and bankruptcy procedures
North Macedonia scored 3.07 on Sub-dimension 2.2 on survival and bankruptcy procedures, down from 3.36 in 2022. The decline reflects ongoing delays in aligning legislation with the needs of SMEs, particularly regarding simplified and expedited insolvency procedures. Implementation progress remains limited, and monitoring and evaluation mechanisms are still underdeveloped.
With the new Insolvency Act still in its final drafting stage, businesses must rely on either debt reorganisation or out-of-court settlements. The current legal framework does not support preventive restructuring before insolvency, and out-of-court settlements remain rare due to a lack of incentives (Table 1.4). An accelerated procedure is available only for small claims of up to MKD 1 million (approximately EUR 16 000).
Although debtors are required to propose out-of-court settlements and a board is appointed by the Ministry of Economy and Labor, no data are available on their use. Open bankruptcy cases remain above pre-COVID levels (see Figure 1.4), pointing to possible delays, more complex cases, or increased filings, highlighting challenges in implementing efficient procedures.
As of 2024, liquidation procedures take an average of 30 months, broadly in line with regional and EU averages,2 while reorganisations take less time, averaging 20 months. Both processes cost around 10% of the estate, notably higher than in Bosnia and Herzegovina (5-7%) and Montenegro (2%) (World Bank, 2024[5]). However, the lack of historical data underscores the need to establish regular monitoring systems and to assess policies to improve procedures based on identified gaps.
Total number of bankruptcy proceedings opened and not concluded
Sub-dimension 2.3: Promoting second chance
North Macedonia scored 2.60 on Sub-dimension 2.3 on promoting second chance for SMEs, up from 2.00 in 2022. This reflects advances in policy planning and design since the last cycle, but implementation of second-chance programmes remains pending, and monitoring and evaluation mechanisms are not yet operational.
The upcoming SME Strategy 2025-2030 includes a dedicated measure to promote second chance for entrepreneurs (Table 1.5), with five activities set to begin in 2026.3 The goal is to support business restarts through targeted awareness campaigns, mentoring and stronger networks for entrepreneurs who failed, led by the Agency for Innovation, Scientific and Technological Development and Entrepreneurship and the Ministry of Economy and Labor. The strategy also plans to build the capacity of trainers and consultants supporting SMEs. While entrepreneurs in North Macedonia face no civic or economic barriers to restarting, the lack of safeguards could enable misuse, highlighting the need for clear legal definitions as support systems are developed.
Overview of North Macedonia’s performance on Dimension 3
North Macedonia scored 3.49 in Dimension 3 (Figure 1.5), confirming the downward trend already observed in the previous cycle, when it scored 3.79. Although performance now falls below the regional average of 3.77, Dimension 3 continues to perform slightly above North Macedonia’s average score across the other policy dimensions.
Compared to 2022, North Macedonia’s performance has declined across all three sub-dimensions, reflecting limited implementation capacity despite a relatively well-developed institutional and regulatory framework. Structural constraints persist, notably in inter-institutional co-ordination, systems for collecting data on medium-sized enterprises (SMEs), and the absence of quality-assurance mechanisms for key policy instruments. In addition, the prolonged absence of an SME policy action plan since 2021 has weakened the foundations for sustained and coherent policy implementation.
Sub-dimension 3.1: Institutional framework
North Macedonia’s score for this sub-dimension declined to 3.68 in 2026, from 3.97 in 2022. Although the economy continues to rank highest among Western Balkans and Türkiye (WBT) economies on World Bank and World Intellectual Property Organization (WIPO) indicators of governance quality for private-sector development,4 performance within the SME-oriented framework has deteriorated, reflecting delays in the operationalisation of the restructured institutional and strategic architecture (World Bank, 2024[7]; WIPO, 2025[8]).
Since the last assessment, North Macedonia’s SME policy architecture has entered a phase of institutional and strategic transition. In July 2025, the adoption of the Law on Innovation Activity, Scientific and Technological Development and Entrepreneurship marked a formal consolidation of institutional support within a single authority (Official Gazette of North Macedonia, 2025[9]). The establishment of the Agency for Innovation, Scientific and Technological Development and Entrepreneurship (INOVA) as a unified body for entrepreneurship support, innovation and technological development led to the discontinuation of the former dedicated agencies. At the strategic level, the SME Strategy 2018-2023 has formally concluded, and the Ministry of Economy and Labour has finalised the National SME Strategy 2025-2030, developed through a multi-stakeholder working group with technical support from the EU Delegation to the Republic of North Macedonia. Although adopted in August 2025, detailed implementation arrangements for the initial phase were still under preparation at the time of this assessment.
More broadly, the strategic framework for private sector remains fragmented across multiple sectoral strategies, including the Growth Acceleration Plan 2022-2026, the Export Promotion Strategy 2024-2027 the Smart Specialisation Strategy (2024-2027), and the Strategy for development of the ICT (2025-2030), which together shape an articulated policy landscape despite still presenting room for harmonisation. In light of the high share of informality, the government of North Macedonia, with the analytical and technical support of the United Nations Development Programme, has also developed a Strategy on the Formalisation of the Informal Economy for 2023-2027.
Implementation of the National SME Strategy 2025-2030 has not yet commenced, as operational delivery mechanisms and execution arrangements are still being established following its adoption. In the previous strategic cycle (2018-2023), the absence of a structured monitoring and accountability mechanism, combined with the failure to adopt an action plan for the second half of the strategy period, led to a progressive deterioration of delivery capacity. From 2022 onwards, SME support under the Ministry of Economy became increasingly fragmented across multiple initiatives, highlighting the need for a more integrated, data-driven and performance-oriented approach to SME support (IBF Impact, 2024[10]). Similar limitations were evident under the predecessor strategy for formalisation, with half of the planned measures (37 out of 74) remaining entirely unexecuted at the end of the period (Ministry of Finance, 2023[11]). While implementation under the Growth Acceleration Plan 2022-2026 is progressing more effectively, several more recent strategies will require timely and co-ordinated execution to avoid further policy fragmentation and administrative capacity dilution.
Monitoring and accountability have remained structural weaknesses during the implementation period of the previous strategy. For the current strategic cycle, a more comprehensive and accountable framework appears to be in place. The Ministry of Economy and Labour has already prepared the first annual report for 2025, which has received a positive opinion from the General Secretariat. However, the report has not yet been made publicly available, as it is pending government approval, and no evidence has been provided of expanded data systems (Table 1.6).
Sub-dimension 3.2: Legislative simplification and regulatory impact assessment
North Macedonia’s performance for Sub-dimension 3.2 dropped to 2.96 from 3.27 in the previous assessment. This decline is primarily driven by weaknesses in implementation, notably the reduced practical use of regulatory impact assessment (RIA), and the absence of a framework for legislative simplification, which weakened the effectiveness of otherwise established formal structures.
In North Macedonia, the RIA framework is formally well established and broadly aligned with EU standards, while a centralised framework for regulatory simplification has long been lacking. The last systematic government-led regulatory simplification initiative dates back to 2006, and only two stand-alone simplification measures have been adopted and fully implemented since 2023 (OECD, 2025[12]). Although administrative services have been partially streamlined through the central online portal Uslugi.gov.mk, user uptake remains modest relative to the population. Previous efforts to reduce administrative burdens on SMEs, including the mapping of 377 para-fiscal fees and the intention to rationalise at least 28 of them, were positively assessed in 2022 but remain incomplete, despite an original completion target of June 2025 (European Commission, 2025[13]). In line with the Reform Agenda (Reform 4.1.1), the government has foreseen a reduction of administrative burdens by half for at least 50 SME-related procedures (Ministry of European Affairs, 2024[14]). Yet, the absence of a simplification strategy and the weak integration of RIA into policy design continue to undermine the system’s capacity to prevent the accumulation of new administrative burdens (OECD, 2025[12]).
Practical application of RIA remains infrequent and of limited quality. In terms of evidence-based policies, North Macedonia ranks second-lowest among Western Balkan economies (OECD, 2024[15]). Although RIA is mandatory for all primary legislation following the regular legislative procedure, only 88 of the 193 draft laws prepared by the government in 2024 were subject to RIA (Figure 1.6) (European Commission, 2025[16]). This reflects the extensive reliance on shortened legislative procedures (not requiring RIA), which accounted for 77.8% of government-sponsored acts in 2023, the highest share in the Western Balkan economies (OECD, 2025[12]; Assembly of North Macedonia, 2023[17]). When RIAs are conducted, they are generally limited in analytical depth, with weak use of cost-benefit analysis, scenario modelling and qualitative impact assessment tools, and limited integration of SME-specific considerations, despite SMEs being particularly exposed to disproportionate compliance costs (OECD, 2025[12]). Stakeholder accessibility also remains constrained: only one-third of draft acts in 2024 were published on the ENER platform, which continues to face recurring technical and usability issues (European Commission, 2025[16]).
Note: The sharp increase in laws not subject to regulatory impact assessment (RIA) is primarily driven by the growing use of shortened legislative procedures, which are exempt from mandatory RIA requirements.
Source: (OECD, 2025[12]).
Monitoring and quality-control arrangements remain fragmented and institutionally unsettled. While the new Rules of Procedure of the Parliament of North Macedonia, adopted in May 2024, introduce the possibility for the parliament to request impact assessments for draft acts (Assembly of North Macedonia, 2023[18]), the extent to which this provision will translate into systematic practice remains uncertain. Oversight responsibility for RIA is shifting from the Ministry of Public Administration (formerly MISA) to the General Secretariat of the Government, but the transition is gradual and has created overlapping mandates and institutional ambiguity, with both bodies currently sharing quality-control functions (Table 1.7).
Sub-dimension 3.3: Public-private consultations
For Sub-dimension 3.3 on public-private consultations (PPCs), North Macedonia scored 3.56, down from 4.07 in 2022. This decline reflects ongoing difficulties in ensuring the quality and effectiveness of consultation practices. Although the procedural framework remains among the most advanced in the region, significant gaps persist in inclusiveness, transparency and consistent implementation.
In North Macedonia, public consultations on draft laws are conducted exclusively through ENER. The procedure is mandatory for all acts adopted under the standard legislative process and requires a minimum consultation period of 30 days, in line with EU standards and exceeding regional practice. However, as observed with RIA, practical implementation is undermined by the increasing use of shortened legislative procedures. In 2023, 70 out of 90 laws adopted by parliament (77.8%) followed the shortened procedure, thereby bypassing the consultation requirement (Assembly of North Macedonia, 2023[17]). Among all the acts subject to PPC, only half were published on ENER and made available for consultation, dropping further to just one-third in the first half of 2024. In this regard, performance varies considerably across line ministries, from those that publish all acts under their responsibility to those that publish only a small share. This is compounded by the relatively low rate of comments on successfully published acts, indicating weaknesses in stakeholder engagement practices. Unsurprisingly, the share of citizens in North Macedonia perceiving adequate involvement of the private sector and civil society in policy development is among the lowest in the region (OECD, 2025[12]).
Since 2021, the General Secretariat of the Government of North Macedonia has prepared annual reports on public consultations for draft laws and on the use of ENER, which are made publicly available on the website of the Unit for Cooperation with Non-governmental Organisations (www.nvosorabotka.gov.mk). However, the reports remain limited to presenting descriptive statistics on consultations, without providing quality control or a systematic monitoring mechanism (Table 1.8). They also do not include any disaggregated data or feedback on private-sector participation, making it difficult to assess SMEs’ inclusion in policy development.
Overview of North Macedonia’s performance on Dimension 4
North Macedonia scored 3.63 on Dimension 4 (Figure 1.7), a marginal shift from 3.61 in the previous cycle. Although performance remains around the regional average of 3.75, this progress positions Dimension 4 among the more advanced policy areas within North Macedonia’s assessment profile.
North Macedonia’s performance on Dimension 4 reflects an advanced state of administrative digitalisation and continued efforts to streamline public-business interactions. Recent reforms have expanded the legal and institutional foundations for e-government, interoperability, and open data, while progress in online service delivery and corporate procedures indicates improved efficiency. However, limited evidence-based monitoring mechanisms and low business awareness of digital tools continue to constrain overall impact.
Sub-dimension 4.1: Digital government services for SMEs
North Macedonia’s score for Sub-dimension 4.1 on digital government services increased slightly, from 3.22 in 2022 to 3.44 in 2026, reflecting some improvements in the institutional framework for e-government and the digitalisation of additional services. While the range of services continues to expand, mechanisms to monitor service usage among small and medium-sized enterprises (SMEs) and to systematically use evidence to evaluate and improve existing services remain limited.
North Macedonia’s Smart/MK: Digital Macedonia 2030 Strategy serves as the overarching framework for advancing e-government, outlining measures to expand online services, enhance interoperability, and promote data-driven administration. It also emphasises business-oriented digitalisation through initiatives that simplify procedures, introduce digital identities, and encourage cross-institutional data exchange. The Public Administration Reform Strategy 2023-2030 and the National ICT Strategy 2023-2027 also reinforce these priorities, focussing on interoperability and the adoption of digital-by-default principles. The Open Government Partnership (OGP) National Action Plan 2024-2026 and the Government’s Transparency Strategy 2023-2026 outline open-data priorities, underscoring the need to publish reusable, high-value datasets to promote innovation and accountability. Full harmonisation of the OGP Action Plan with the European Union’s Open Data and Re-use of Public Sector Information Directive, however, remains pending (European Commission, 2024[19]). The Law on Electronic Documents, Electronic Identification and Trust Services, aligned with the EU eIDAS Regulation, and the Law on Electronic Management (2019), provide the legal basis for digital service delivery and the once-only principle. The Ministry of Digital Transformation leads co-ordination of digital government services, while the Ministry of Information Society and Administration (MISA), the Ministry of Economy, the National ICT Council, and the Agency for Electronic Communications also oversee different policy aspects. This structure risks overlapping mandates and diluted accountability.
North Macedonia’s national e-service portal (uslugi.gov.mk) currently provides over 200 e-services to citizens and businesses, including business registration, licensing and selected tax procedures (Nikolik, 2024[20]; Balkan Insight, 2024[21]; Ministry of Digital Transformation, 2025[22]). To support uptake, a Practical Guide for Using Online Public Services was developed in 2025 under the Smart Balkans Project, providing step-by-step instructions for users navigating digital public services (Smart Balkans Project, 2025[23]). While authorities have announced plans to expand the scope of services, these plans have not yet been implemented in practice (European Commission, 2024[19]). The e-portal includes separate sections for both citizens and companies visible on the dashboard, with services grouped by business needs or lifecycle stages. However, these services are not SME-specific: they are designed to apply uniformly across the business population, and there is currently no dedicated catalogue of e-services targeting SMEs. Although SMEs are the main users and indirect beneficiaries, most available solutions remain general-purpose administrative tools rather than services tailored to SME needs. The once-only principle is operational across several registries, including the Central Registry, the Public Revenue Office, and the Agency for Real Estate Cadastre, enabling secure data exchange between institutions (EPI, 2025[24]). Moreover, data.gov.mk provides 280 datasets from over 50 public institutions (Ministry of Digital Transformation, 2025[25]), although SME reuse remains unrecorded.
Monitoring and evaluation frameworks for digital government remain at an early stage (Table 1.9). The government has not yet established a central dashboard or key performance indicators database focussed on SME engagement with digital public services. Open-data monitoring is conducted under the Open Data Strategy managed by MISA (EPI, 2023[26]), and while publication of datasets is tracked, there is no public evidence of structured mechanisms for business feedback or systematic institutional responses to reuse by SMEs (European Commission, 2024[19]).
Sub-dimension 4.2: Company registration
North Macedonia scored 4.63 on Sub-dimension 4.2 on company registration, unchanged from its 2022 rating of 4.62. The economy maintained or improved its performance across all policy aspects, with the increased relative weight of the lowest-performing thematic block offsetting these gains (see Methodology).
Company registration continues to be managed by the Central Registry of the Republic of North Macedonia (CRRNM) through a one-stop-shop system, allowing procedures to be completed entirely online. However, the mandatory use of a qualified e-signature increases both the cost and complexity of the process for entrepreneurs. Moreover, the subject’s personal identification number (PINS) is legally recognised as a unique identifier by state bodies and organisations. However, a separate identification number is still needed for tax purposes (a “personal tax number”). According to the 2024 Business Ready report, the time required to complete the registration process in North Macedonia decreased to 12 days, compared to 15 days in the previous assessment (World Bank, 2024[5]). However, there is no evidence of any change in the number of administrative steps (six) required to finalise the registration, as no new data have been reported since 2020 (World Bank, 2020[27]). While company registration incurs no fee, the total cost of the process is estimated at approximately MKD 12 000 (approximately EUR 195). The minimum founding capital for limited liability companies remains set at EUR 1, unchanged since the previous assessment.
The Central Register is responsible for producing quarterly reports and statistical analyses related to company registration. Its Statistical Bulletin, published on the CRRNM website, provides an overview of macroeconomic data derived from the register. Building on these reporting activities, a strategic vision to adjust and improve services has been set out in the Development Strategy of the Central Register 2023-2027. The competent ministries and agencies monitor the implementation of company registration and the related legal framework, though effectiveness is constrained by inter-institutional co-ordination challenges, including the absence of automated updates to company information (World Bank, 2024[5]).
Sub-dimension 4.3: Business licensing
North Macedonia’s performance on Sub-dimension 4.3 on business licensing has declined from 3.75 in the previous assessment to 3.45 in 2026. The decrease, observed across policy areas, reflects limited progress in improving licensing procedures, assessed against more demanding standards.
In North Macedonia, the issuance of business licences and permits is administered independently by each competent agency or institution, although the services are centralised and digitalised on the National e‑Services Portal (https://uslugi.gov.mk), which has been operational since 2022 (Table 1.10). A centralised portal is a first step toward a more efficient licensing process, as it provides access to standardised, harmonised data, enabling more comprehensive exchange and interoperability. However, according to the 2024 Balkan Barometer, businesses in North Macedonia report the lowest awareness of e-government services in the region and rank second-to-last in the use of digital services for licence applications (RCC, 2024[28]).
Sub-dimension 4.4: Tax compliance procedures for SMEs
As reported in the SME Policy Index 2022, a personal income tax (PIT) reform was announced, mainly to introduce an 18% tax rate instead of the flat 10% rate for income exceeding MKD 1.08 million (~EUR 17 560). This reform has since been abandoned (Official Gazette No. 274/2022). The 10% flat rate continues to apply to employment and self-employment income, providing stability and simplicity in tax compliance, but it is also limiting the progressivity of the tax system. As in the previous cycle, self-employed workers continue to pay a 28% social security contribution (SSC) rate on net income, with the minimum SSC base set at 50% of the average wage. This minimum base can be burdensome for low-income self-employed individuals, creating incentives to underreport income or engage in informal work. Since 2022, the base for the payment of mandatory monthly SSCs in North Macedonia has increased from 12 to 16 average wages. However, this expansion has had only a limited direct impact on most SMEs.
In 2025, North Macedonia’s Public Revenue Office (UJP) released The Strategic Plan 2025-2027 as part of an institutional effort to modernise and better enforce tax collection (Table 1.11). The strategy recognises the heavy burden on taxpayers: retrospective audits, high costs, long calculation times and a high risk of calculation errors. In response, it promises to improve electronic services (invoicing, filing, payments, correspondence) and to increase tax revenue by curbing the informal economy and expanding the number of value-added tax (VAT)-registered taxpayers. While improved digitalisation and taxpayer services could reduce the burdens and costs of compliance, stricter compliance and base broadening may increase the effective tax and compliance burden for some SMEs, especially those operating close to thresholds, those with informal income, or those with limited accounting capacity.
Overview of North Macedonia’s performance on Dimension 5a
North Macedonia received an overall score of 3.87 on Dimension 5a on business support services (BSS) (Figure 1.8), reflecting a moderate decline from its previous score of 4.03. While this places North Macedonia towards the lower end of the Western Balkans and Türkiye (WBT) range, its score remains closely aligned with the regional average of 4.07 and Dimension 5a continues to represent an area of relative strength compared to the economy’s performance in the other dimensions.
This decline reflects North Macedonia’s ongoing efforts to build a more coherent and strategically driven system of BSS, though progress remains uneven. Planning and design arrangements remain relatively strong, as recent reforms, anchored in the SME Strategy 2025-2030, signal a stronger policy focus on innovation, digitalisation and inclusiveness and mark a gradual shift toward an integrated national framework. Institutional co-ordination and programme design have become more structured, with growing alignment between public and private support channels. However, persistent gaps in regional outreach, limited private sector participation and output‑focused evaluation continue to constrain effectiveness. Notable progress has been made in areas flagged in the 2022 assessment, particularly in needs-based planning and feedback mechanisms, though stronger outcome-oriented monitoring and evaluation are still needed (OECD, 2022[30]).
Sub-dimension 5a.1: Business support services provided by the government
North Macedonia’s performance on this sub-dimension has improved moderately, from 3.92 in 2022 to 4.11 in 2026 (Figure 1.8). This improvement reflects stronger planning and design arrangements, supported by a clearer strategic framework and more structured programme architecture. However, implementation and monitoring and evaluation challenges persist, limiting the translation of policy improvements into consistent delivery outcomes.
Planning and design arrangements have improved following the adoption of the SME Strategy (2025-2030) and its accompanying Action Plan 2025-2027, informed by broad consultations and SME needs assessments5 (Table 1.12). The framework provides a more structured scope for BSS, delivery mechanisms and target groups, with a stronger emphasis on digitalisation, green transition, export readiness and inclusive entrepreneurship. Planned interventions extend beyond generic advisory support introducing modular and sector-specific training,6 tailored services, and digital tools designed to improve outreach, increase efficiency and enable regionalised delivery through entrepreneurship centres (Government of North Macedonia, 2024[31]). The framework for SME support is led by Agency for Innovation, Scientific and Technological Development and Entrepreneurship (INOVA), which succeeded the former Agency for the Support of Entrepreneurship (APPRM) and the Fund for Innovation and Technology Development (FITD), following the adoption of the Law on Innovation, Scientific and Technological Development, and Entrepreneurship in 2025.7 Under the new framework, INOVA has taken over all obligations, assets and staff of the FITD and APPRM, consolidating responsibility for non-financial and financial support to enterprises, in co-operation with the Ministry of Education and Science and the Ministry of Economy and Labour. Despite higher allocations in 2025 of around MKD 42.8 million (EUR 695 000)8 signalling stronger government commitment to SME support, co-ordination remains uneven, as donor-funded initiatives are not yet fully integrated into national framework, and the planned co-ordination unit within the Ministry of Economy and Labour was still not operational at the time of assessment.
Implementation of BSS has remained broadly stable, with delivery becoming more structured and diversified, targeting different stages of enterprise growth through five core measures – self-employment, voucher-based consultancy, standardised mentoring, entrepreneurial training and regional information points9 – increasingly linked to the economy’s digital and green transition objectives.10 In 2023, the APPRM supported the preparation of 2 077 business plans, leading to nearly 1 800 new businesses; delivered mentoring to 59 enterprises (24% of which were women-owned); and issued 39 vouchers for a total of MKD 1.49 million. In addition, its Info Point network provided guidance to 630 entrepreneurs across 9 regional centres (APPRM, 2023[32]). At the same time, outreach mechanisms have expanded through mobile Info Points (Box 1.1) and co-operation with municipalities and external providers to reach underserved regions. Despite this tangible progress, coverage gaps remain, particularly in rural areas and among microenterprises, where donor-supported projects such as the Green Business Facility and EU for SMEs continue to serve as primary delivery channels. Persistent challenges, including limited promotional visibility,11 legal restrictions on publishing disaggregated beneficiary data,12 and co-financing requirements and administrative complexity, continue to limit uptake and transparency, leaving service sustainability dependent on donor-financed interventions and highlighting the need for more integrated, demand-responsive delivery mechanisms. Additionally, while the APPRM introduced pilot assessments and feedback surveys to better align programmes with SMEs’ needs, a foreseen comprehensive economy-wide needs-assessment system has yet to be operationalised.
Monitoring and evaluation practices have progressed gradually, with the current framework still insufficiently developed to support performance-based policymaking. While INOVA (previously APPRM) conducts regular follow-up surveys, feedback forms and beneficiary questionnaires to track participation, turnover and employment effects, these instruments remain focused primarily on immediate outputs rather than longer term outcomes. Feedback data have informed minor procedural changes, such as extending training duration and maintaining post-programme mentoring, but no independent evaluations have been conducted since the 2019 Japan International Cooperation Agency (JICA) mentoring review.13 Persistent legal restrictions continue to limit the publication of disaggregated beneficiary data, constraining transparency and the scope for cross-programme learning. However, the new strategy foresees a more comprehensive, outcome-based monitoring and evaluation framework,14 including mid-term and final evaluations, expected to strengthen evidence-based policymaking once implemented (Table 1.12).
To expand the territorial reach of entrepreneurship services, the former Agency for the Support of Entrepreneurship (APPRM) launched Mobile Info Points in 2023 as a pilot outreach mechanism targeting municipalities without permanent regional offices. Operated in co-operation with local governments and regional development centres, the mobile units provide on-site information, advisory support and assistance with applications for APPRM programmes, particularly in the Northeast, Polog and Pelagonia regions, where small and medium-sized enterprise (SME) service coverage has been limited. Each unit follows a rotating schedule across municipalities, distributing materials, collecting beneficiary feedback, and promoting self‑employment and training measures.
The initiative is designed to improve accessibility for microenterprises, women and youth entrepreneurs in rural and underserved areas. Its continuation and revision were confirmed under the Action Plan for the implementation of the SME Strategy for the period (2025-2027), which allocates MKD 450 000 (EUR 7 317) for the operation of Info Points annually. Under the new institutional framework established by the Law on Innovation, Scientific and Technological Development, and Entrepreneurship (2025), responsibility for the initiative now lies with the Agency for Innovation, Scientific and Technological Development and Entrepreneurship, which is expected to further integrate Mobile Info Points into the planned network of permanent regional entrepreneurship centres foreseen under the SME Strategy 2025-2030, supporting more sustained and decentralised service delivery.
Sources: Information provided by the APPRM during the assessment cycle; Government of North Macedonia (2025[33]).
Sub-dimension 5a.2: Government initiatives to stimulate private business support services
North Macedonia’s performance on this sub-dimension has declined significantly, falling from 4.13 in 2022 to 3.64 in 2026, indicating a clear setback. This decline reflects weakening implementation and a marked deterioration in monitoring and evaluation, which outweighed relatively stable planning and design arrangements. While the policy framework for private BSS provision is still in place, persistent gaps in market development, performance oversight and institutional co-ordination have constrained service quality, consistency and outreach.
The new strategy positions private BSS as a core instrument for SME competitiveness and innovation, emphasising the accreditation of private consultants, co-financing schemes for advisory services and the creation of a national framework for monitoring BSS performance. These measures aim to shift from donor-dependent delivery models toward a sustainable, nationally integrated system, where private providers complement public programmes in supporting digitalisation, green transition and export readiness. Nevertheless, the private consultancy market remains narrow, with limited commercial demand outside subsidised schemes, reflecting low SME purchasing power and limited awareness of advisory benefits.
Implementation of private BSS measures has weakened since the previous assessment, indicating a clear setback in the consistency and effectiveness of delivery. While private BSS provision remains relatively structured on paper and continues to be co-ordinated by INOVA (previously APPRM) in co-operation with regional centres and certified private providers, this has not translated into sustained improvements in service reach or performance. Initiatives such as the Voucher Counselling Scheme15 and the Standardised Mentoring Programme16 continue to serve as the main channels for engaging certified consultants and mentors in providing tailored support to SMEs, including advisory and mentoring in business planning, digitalisation, export readiness and green transition. Efforts to digitalise delivery tools, including the online Consultants Catalogue,17 new training-of-trainers and recertification modules, have strengthened transparency, quality assurance and professionalisation within the system. These developments signal a gradual shift toward a more hybrid and market-oriented support ecosystem, where public oversight is complemented by private sector expertise. However, these measures have not offset deeper structural weaknesses in implementation. The absence of national standards for consultancy practice, limited performance monitoring and fragmented co-ordination with donor-driven initiatives continue to constrain service consistency and outreach, which remains concentrated in urban areas (APPRM, 2023[32]).
Monitoring and evaluation score has weakened markedly since the previous assessment, reflecting the system’s inability to generate evidence for learning and policy adjustment. While INOVA (previously APPRM) continues to prepare annual implementation reports and conducts digital follow-up and end-up surveys at 6- and 24‑month intervals to assess client satisfaction and service effectiveness (APPRM, 2023[32]), these tools remain largely focused on internal reporting and immediate outputs. While these efforts represent a step toward structured performance monitoring, data integration and cross-programme analysis are still limited, and no independent evaluations have been conducted. Although the new strategy foresees the introduction of a standardised national framework for BSS performance measurement, including unified indicators and outcome‑oriented evaluation, this framework has not yet been operationalised. While donor- and partner-led programmes often include more robust evaluation components, these practices remain project-based and are not systematically integrated into the national monitoring framework. As a result, monitoring remains fragmented and output-focused, constraining evidence-based policymaking and contributing to the observed deterioration in performance.
North Macedonia scored 3.85 on Dimension 5b (Figure 1.9), which is a moderate decrease from its score of 3.97 in the previous cycle. This places the economy below the Western Balkans and Türkiye (WBT) average of 4.05 and towards the lower end of the regional range for this dimension. Despite this decline, Dimension 5b remains a mid-performing policy area for North Macedonia relative to other dimensions, reflecting generally solid foundations of the procurement system.
The decline since 2022 reflects moderate deterioration in both planning and design and implementation, partly offset by progress in monitoring and evaluation (Figure 1.9). While the public procurement framework remains institutionally sound, these developments indicate uneven progress in translating the strategic and legal foundations into consistently strong implementation outcomes. However, the economy continues to trail the regional average, underscoring the need to reinforce implementation practices and competitive conditions.
Developments since 2022
The dynamics of the public procurement market in North Macedonia reflect continued adjustments in both size and structural composition. The share of public procurement in gross domestic product remained stable at 9% in 2024, unchanged from 2022. Small and medium-sized enterprises (SMEs) continue to have a strong presence, receiving 81.26% (81.19% in 2022) of contracts by number and 57.13% by value in 2024 (59.55% in 2022) (Public Procurement Bureau, 2022-2024[34]). The use of competitive procedures remains high, with negotiated procedures without prior publication accounting for just 2% of total procedures in 2024, down from 7% in 2022. A concerning trend is the continued decline in the average number of bids per procedure, which dropped from 3.01 in 2022 to 2.82 in 2024 (Figure 1.10) (Public Procurement Bureau, 2022-2024[34]). A high share of tenders continued to receive only one bid since the previous assessment, with 32.99% in 2024 (31.8% in 2022). The share of contracts awarded based on the best price-quality ratio remains low, standing at 5.4% in 2024 (4.69% in 2022) (Public Procurement Bureau, 2022-2024[34]). Survey responses from the OECD Support for Improvement in Governance and Management (SIGMA) 2024 Assessment revealed that many economic operators declined to participate in public procurement due to the perception that procedures were tailored to specific bidders (OECD, 2025[12]).
North Macedonia scored 4.31 in planning and design, marking a slight decline from 4.44 in 2022 due to emerging gaps in the legal framework. The Strategy for Improving the Public Procurement System in the Republic of North Macedonia for the Period 2022-2026 includes goals to support SME participation in public procurement (Public Procurement Bureau, 2022-2026[35]). The Public Procurement Law (PPL) demonstrates a high level of compliance with relevant EU legislation and includes provisions for dynamic purchasing systems and electronic catalogues. However, the electronic procurement system does not yet provide the technical conditions for using these tools in practice, and the current action plan does not define a clear timeframe for their implementation. Additionally, inconsistencies between the PPL and the EU acquis remain, such as the use of negative references for the automatic exclusion of economic operators (blacklisting) (Table 1.13). The use of self-declarations, an important mechanism for facilitating SME participation, is not available in all procedures. In addition, the Corridor VIII and X-d projects continue to raise concerns about the use of the Law on Strategic Investments to bypass public procurement regulations (European Commission, 2024[19]).
As the core instrument of transparency and e-procurement, the Electronic System for Public Procurement (ESPP) continues to play a vital role in the procurement process. The ESPP remains the central point of transparency of procedures and implementation of electronic procurement. Legal protection of economic operators is ensured by the State Commission for Public Procurement Appeals, in accordance with the PPL. However, no information is available regarding average or median decision-making times.
North Macedonia scored 3.77 in implementation, marking a slight decline from 3.92 in 2022 due to gaps in stakeholder engagement. The institution responsible for implementing public procurement legislation is the Public Procurement Bureau (PPB), which has continued to provide support tools, including advisory services, manual preparation and a help desk. However, training programmes are primarily focused on contracting authorities, with no structured or regular training for economic operators, including SMEs. There is also room for improvement in terms of private-sector participation in the development of strategic and legal frameworks, as well as in the preparation of more targeted policy instruments, such as training curricula and implementation guidelines (Public Procurement Bureau, n.d.[36]).
North Macedonia’s performance in monitoring and evaluation improved moderately, with the score increasing to 3.56 in 2026 from 3.40 in 2022, bringing it slightly above the WBT average of 3.35. This reflects the PPB’s continued, regular collection and analysis of data on public procurement procedures. However, persistent gaps remain: data on the proportion of public contracts paid on time or on the use of sustainable criteria are not currently collected. While the PPB collects general data on obstacles faced by economic operators across various activities, it provides no analytical overview specifically addressing the challenges SMEs encounter in accessing public procurement procedures.
Overview of North Macedonia’s performance on Dimension 6
North Macedonia received an overall score of 3.27 for Dimension 618 (Figure 1.11), a performance stable compared to the previous cycle (3.24)19. North Macedonia remains the second-best performer in the Western Balkan and Türkiye (WBT) region, in line with the regional average of 3.21. Overall, Dimension 6 represents a moderate performance area for the economy, suggesting scope to further strengthen small and medium-sized enterprises’ (SMEs) access to finance.
The stability of North Macedonia’s score since 2022 reflects steps to improve access to bank finance, notably through the continued operation of credit guarantee schemes and credit lines. However, an incomplete legal framework for alternative financing sources, such as private equity, crowdfunding and microfinance, coupled with persistent gaps in microfinance, continues to constrain access to finance in North Macedonia.
Sub-dimension 6.1: Bank finance
North Macedonia scored 3.72 on Sub-dimension 6.1, a performance broadly stable compared to the 2022 assessment cycle (3.81).20 Beyond the greater emphasis on monitoring and evaluation in the score calculation, this performance mainly reflects the development of policies facilitating access to credit for SMEs, such as credit guarantee schemes, despite gaps in asset registration systems.
Creditor rights in North Macedonia are broadly aligned with the EU acquis and have been strengthened since the last assessment cycle. This improvement primarily reflects the strength of the credit infrastructure and the gradual development of policies to enhance bank financing. These measures could be more targeted at SMEs, however, and lack a systematic evaluation of their effectiveness.
North Macedonia’s banking system benefits from a well-developed credit information infrastructure that supports sound lending practices. The National Bank of the Republic of North Macedonia (NBRNM) establishes and maintains an electronic public Credit Registry, to which banks are required to report credit-risk exposures, and individuals can access their own Credit Registry report via the National e-Services Portal. In parallel, the Credit Bureau of North Macedonia complements public reporting by integrating a broader set of liabilities, including bank and non-bank products, as well as selected utility and service-payment obligations (e.g., telecommunications, energy, and communal charges).
North Macedonia has established comprehensive systems for asset registration; however, movable assets cannot be registered online, and the legal framework does not explicitly permit the use of intangible assets as collateral. The Real Estate Cadastre Agency manages cadastral data, which is digitalised and covers the entire territory of North Macedonia. Meanwhile, the register of pledges over movable assets is administered by the Central Registry of the Republic of North Macedonia, which automatically updates information for each transaction. However, there is no online platform for their registration, which poses difficulties for the collateral filing process.
The increase in North Macedonia’s score also reflects progress in developing policies to facilitate business access to credit. However, these initiatives remain insufficiently targeted at SMEs and lack systematic evaluation of their effectiveness. The Development Bank of North Macedonia (DBNM) implements most of these instruments, including the Credit Guarantee Fund, launched in 2021, which, is becoming an increasingly important financial tool of the DBNM, with, at the time of writing, EUR 46 million of approved loans allocated to 570 projects (Development Bank of North Macedonia, 2025[37]) (see Figure 1.12). The DBNM also manages several credit lines amounting to EUR 62 million in 2024, financing 278 projects (Development Bank of North Macedonia, 2025[37]).21 These operations are expected to expand significantly following the launch of the Loans for Investments and Development programme in 2025, which mobilises EUR 250 million from the Government of North Macedonia through a loan from the Hungarian Export-Import Bank, alongside EUR 50 million from the Council of Europe Development Bank (CEB). However, these programmes face two key shortcomings: a limited focus on SMEs and the absence of impact evaluation. Among the DBNM’s instruments, only the AFD, CEB, EIB, and DBNM credit lines, covering permanent working capital, investment, and export loans, have an explicit SME orientation. Similarly, the Credit Guarantee Fund has two of its three guarantee windows targeting export-oriented companies (Development Bank of North Macedonia, 2025[38]). Although the DBNM’s operations are regularly monitored and externally audited, no impact assessments have yet been conducted to evaluate the effectiveness of its programmes in improving access to bank finance, particularly for SMEs.
Notes: ”Approved guarantees” refer to commitments by the Credit Guarantee Fund to cover part of the risk of approved loans if the borrower defaults. “2022” refers to the fourth quarter value, and the same applies to 2023 and 2024.
Source: Development Bank of North Macedonia (2025[39]).
Sub-dimension 6.2: Non-bank finance
North Macedonia scored 2.92 in Sub-dimension 6.2, up from 2.7122 in the 2022 assessment cycle. Beyond methodological adjustments, this progress mainly reflects efforts to align the legal frameworks of key non-bank financing instruments with the EU acquis, despite persistent gaps in areas such as crowdfunding and private equity.
North Macedonia has taken steps to strengthen its capital market framework, yet it remains unused by SME. The economy operates both a stock exchange and a sovereign bond market, but they remain small, illiquid, and unable to attract significant investor interest. To address these challenges, the government adopted the Financial Market Development Strategy 2022–2024, aiming to boost demand for domestic securities, increase participation by individual and institutional investors, and expand equity and debt offerings by aligning more closely with the EU acquis. A key outcome of the strategy is the adoption and entering in force of the Law on Financial Instruments and the Law on Prospectus and Transparency Obligations for Issuers of Securities in 2025, designed to strengthen investor protection and market transparency in line with EU standards. However, these efforts have not improved SME access to the stock market. The Stock Exchange of North Macedonia offers a dedicated segment for small joint-stock companies, requiring a minimum capital of EUR 250 000 and one year of audited financial statements (compared to EUR 10 million and three years for the top-tier listing). Despite these more flexible conditions, no SMEs have yet been listed on the exchange, suggesting the need for additional measures to stimulate their participation.
A dedicated legal framework for private equity and venture capital funds remains absent in North Macedonia, and programmes supporting their development remain limited. The Law on Investment Funds cover collective investment vehicles, but there is no dedicated Law on Alternative Investment Funds, as it is being prepared with no timeline communicated. To foster the development of private equity and venture capital, North Macedonia approved the 2022-2026 Accelerated Economic Growth Plan, which plans to launch a EUR 27 million investment fund focused on startups and innovative companies, but implementation details remain outstanding. In addition, an ecosystem of domestic actors, such as the Startup Club Skopje, Zephyr Business Angels, and the CEED Hub Skopje’s Investment Readiness Program, offers complementary business development services alongside financing, which indirectly supports their development. Despite overall limited support, available data indicate that private investment in venture capital is on an upward trend in North Macedonia, reaching USD 7.4 million in 2024 (approximately EUR 6.4 million) (Dealroom, 2025[40]), up from USD 460 000 in 2019 (approximately EUR 395 000). As a recent development for venture capital, the authorities have prepared a dedicated legal framework for business angel investing. In 2025, the Ministry of Economy published a draft law on ‘business angel’ individual investors that would introduce tax incentives (including relief on dividends and capital gains) for qualifying investments in start-ups. However, at the time of writing, the draft has not yet been adopted, and the implementation timeline remains uncertain.
North Macedonia currently lacks a dedicated legal framework for crowdfunding, leaving such activities in a regulatory grey area. The economy’s Fintech Strategy for Financial Regulators 2023–2027 acknowledges crowdfunding as an emerging financial technology not yet covered by existing laws and signals intent to modernise oversight and support innovative finance. However, no legislative initiative is underway to establish a tailored framework for crowdfunding.
The legal framework for factoring has advanced significantly since the last assessment cycle, but its uptake remains low due to limited programmes supporting its development (Table 1.15). In July 2023, amendments to the Law on Financial Companies strengthened the regulatory framework governing non-bank financial institutions, including those providing factoring services. The new provisions introduced higher capital requirements, clearer governance standards, and transparency obligations for financial companies, while formally recognising factoring activities within the legal system. These changes are expected to enhance market integrity and investor confidence by improving oversight and contractual certainty between SMEs and factoring providers. Despite efforts to harmonise the legal frameworks with the EU acquis, factoring volumes remain modest, at EUR 62 million in 2024 (0.4% of GDP), well below the EU average of 11.9% in 2023 (FCI, 2024[41]). The absence of active policy measures, such as tax incentives, promotion programmes and dedicated training opportunities, constrains the further development of factoring, possibly reflecting the lack of initiatives encouraging businesses to use these financing instruments and ongoing challenges in financial literacy, as only 23% of SMEs in North Macedonia have declared to be familiar with factoring in 2022 (OECD, 2023[42]).
The leasing regulation has also advanced further with amendments to the Law on Leasing, implemented in August 2022, that explicitly address offences and penalties and reduce transaction costs for leasing contracts. In tandem with this legal progress, leasing volumes have grown substantially, accounting for 1.2% of GDP in 2023 (approximately EUR 168 million), up from 0.62% in 2017 (EUR 62.3 million) (National Bank of the Republic of North Macedonia, 2024[43]), though this level remains below the EU average of 2.05% in 2023 (Leaseurope, 2024[44]).
Sub-dimension 6.3: Financial inclusion
North Macedonia scored 2.39 in Sub-dimension 6.3, slightly down from 2.5423 in 2022. reflecting remaining gaps in the strategic framework and policies promoting financial inclusion, and the absence of a dedicated legal framework for microfinance.
The Strategy for Financial Education and Financial Inclusion (2021-2025) and the associated annual action plans24 provide the main policy framework for improving financial literacy in North Macedonia (Table 1.16). The NBRNM remains the leading institutional actor: it coordinates the implementation of the Strategy, includes financial literacy in its Strategic Plan 2025-2027, and reports on related activities in its annual reports (National Bank of the Republic of North Macedonia, 2025[45]). In 2024, the NBRNM also signed a Memorandum of Cooperation with the European Bank for Reconstruction and Development (EBRD) to support women entrepreneurs under the Women in Finance Code. Financial literacy efforts are further complemented by non-governmental initiatives, such as CEFE’s FinYes project (CEFE, 2024[46]), targeting young people. Finally, as of February 2026, an evaluation of the 2021-2025 Strategy is ongoing, alongside preparation of the next strategic framework, with no timeline for future adoption.25
Microfinance is not subject to NBRM regulation and data collection, making it difficult to evaluate its scope. Nevertheless, some entities engage in microcredit activities, notably the long-standing microcredit foundation Horizonti, established in 2000, which has provided financial support to more than 10 000 clients, including small business owners (Horizonti, 2025[47]). In November 2023, Horizonti was further supported by a EUR 2 million credit line from the CEB to develop its activities (Council of Europe Development Bank, 2024[48]).
Overview of North Macedonia’s performance on Dimension 7
North Macedonia received an overall score of 3.54 on Dimension 7 (Figure 1.13), a score which has remained stable since 2022 when it was 3.58, placing the economy below the Western Balkans and Türkiye (WBT) regional average of 3.86 and among the lower scoring economies for this dimension. Dimension 7 has become one of North Macedonia’s mid-scoring policy areas, reflecting mounting pressures on the quality infrastructure (QI) system despite continued alignment efforts in selected areas.
North Macedonia’s performance points to a QI framework that retains solid foundations but faces increasing challenges in strategic steering and institutional capacity. The largely stable overall score reflects contrasting developments across the three sub-dimensions. While overall co-ordination and general measures (Sub‑dimension 7.1) have weakened noticeably, both harmonisation with the European Union (EU) acquis (Sub-dimension 7.2) and small and medium-sized enterprises’ (SMEs) access to standardisation (Sub‑dimension 7.3) have improved over the assessment period, supported by continued legislative alignment and awareness-raising activities.
Sub-dimension 7.1: Overall co-ordination and general measures
North Macedonia’s performance in overall co-ordination and general measures declined between assessment cycles, decreasing from 3 in 2022 to 2.45 in 2026, and remaining well below the WBT regional average of 3.86. This deterioration reflects the absence of renewed strategic frameworks for QI and persistent fragmentation in institutional co-ordination, which have weakened planning capacity and limited progress in aligning general measures with EU requirements.
North Macedonia’s co-ordination framework for quality infrastructure has remained fragmented. The Internal Market Division of the Ministry of Economy continues to oversee QI activities, but the last joint QI strategy expired in 2015 and individual strategies on accreditation and metrology lapsed in 2020 without renewal. The National Programme for Accession remains the guiding document for legislative harmonisation, yet it lacks specific operational mechanisms for co-ordination among QI bodies. In practice, this fragmentation limits coherence between technical regulation, accreditation and standardisation activities. The absence of a comprehensive QI strategy means that institutional priorities are determined on an ad hoc basis, with limited resource planning and follow-up monitoring. The absence of an overarching framework slows horizontal legislative harmonisation and weakens cross-agency accountability.
SME-facing support services remain limited. There is still no single contact point or integrated portal offering consolidated information on product requirements, EU market access procedures or conformity assessment obligations. While the Standardization Institute of the Republic of North Macedonia (ISRSM) maintains a small SME section on its website and the Chamber of Commerce provides occasional guidance, awareness and usability among smaller firms remain low. The OECD 2022 recommendation to create a centralised SME information portal thus remains largely unimplemented (Table 1.18).
Sub-dimension 7.2: Harmonisation with the EU acquis
North Macedonia’s performance in harmonisation with the acquis remained broadly stable between assessment cycles, with a marginal increase from 3.68 in 2022 to 3.70 in 2026. It remains, however, below the WBT regional average of 4.02. This overall stability reflects diverging developments across the QI system. Performance has improved notably in market surveillance, supported by increased inspection activity and enforcement efforts, while more modest improvements have also been recorded in metrology and standardisation. By contrast, technical regulations, accreditation and conformity assessment have declined moderately, reflecting delays in strategic renewal capacity constraints.
The area of technical regulations remains a moderate gap for North Macedonia. The Law on Technical Requirements for Products and Conformity Assessment (amended in 2022) remains the key legislative instrument, but no new horizontal strategy or action plan for acquis harmonisation has been adopted (Table 7.1). The delay in approving a new Quality Infrastructure or Product Safety Strategy undermines coherence across QI institutions and weakens prioritisation of human and financial resources. Additionally, missing evaluations of technical regulations and limited information about training needs for implementing institutions, together with a lack of an SME-specific platform about new measures, slows North Macedonia’s pace of convergence towards the EU Single Market framework and hinders SMEs’ compliance capacity.
Standardisation has moderately improved. The ISRSM achieved near-complete alignment with EU standards, adopting 99.63% of CEN and 99.83% of CENELEC standards in 2025, up from 97% in 2022. These improvements were further complemented by the adoption of the National Strategy for Standardisation for 2025-2029, a successor to the 2020-2022, setting out clear economic and non-economic priorities and addressing stakeholder and future standardisation needs (Institute of Standardisation of the Republic of North Macedonia, 2025[49]). It has also expanded co-operation with universities and technical faculties to include standardisation modules in engineering courses and continues to promote awareness through public campaigns. However, the high adoption rate masks structural constraints: the ISRSM’s staff remains limited, with 25 employees. Although EU standards are formally transposed, their practical use remains limited, leaving many small firms unable to access or interpret them without guidance or translated materials undermining their ability to integrate standards into production or demonstrate compliance for export. This is further compounded by the absence of SME-specific objectives in the national strategy, leaving a significant gap in targeted support for the businesses most in need of standardisation guidance.
Accreditation faces some capacity constraints. The Institute for Accreditation of North Macedonia is a full member of the European co-operation for Accreditation (EA) and the International Accreditation Forum and remains an EA Multilateral Agreement (MLA) signatory in five fields (testing, calibration, inspection, management system certification and product certification). However, staffing has not improved, leaving the institute overstretched to supervise more than 250 conformity assessment bodies. The 2020 Strategic Plan has expired, and the lack of a renewed framework limits the institute’s ability to expand into new accreditation areas. This shortage directly affects SMEs, as it can delay accreditation processes and increase certification costs. Smaller firms often face longer waiting periods or are forced to rely on foreign-accredited bodies, which raises costs and slows access to the EU market.
Conformity assessment has seen a slight decline since the previous assessment, yet performance remains strong, as the area was already at a relatively high level. Around 260 accredited conformity assessment bodies operate nationally, a figure that has remained broadly unchanged since 2022. However, this has not been translated into effective coverage for SMEs in highly regulated sectors such as personal protective equipment, construction materials and ATEX equipment. As a result, SMEs continue to rely on foreign-notified bodies, facing higher certification costs and longer processing times. The policy framework provides limited targeted support: there is no dedicated SME-focused web page or portal facilitating access to conformity assessment services, nor are there measures specifically designed to ease SMEs’ access to conformity procedures. While reimbursement schemes exist, they remain small in scale and administratively complex, and have not been sufficient to offset the cost burden associated with accessing foreign conformity assessment services.
Metrology has improved slightly since the last assessment, partially thanks to the Bureau of Metrology preparing a Metrology Strategy 2025-2030, although it has not yet been formally adopted. Staffing has declined slightly since 2022, and digitalisation remains minimal, with no IT department or online calibration database in place. This, in turn, weakens service reliability and hampers recognition of domestic calibration results abroad. The lack of an adopted strategy and outdated equipment limit the Bureau of Metrology’s ability to meet new EU standards and support SMEs that depend on precise measurement for certification and exports.
Market surveillance has improved since the previous assessment, driven by increased enforcement activity. While the legislative framework remains based on Regulation 765/2008 rather than the newer EU Regulation 2019/1020, the State Market Inspectorate has strengthened operational performance. According to a 2025 press release by the Ministry of Economy, the inspectorate carried out 669 inspections, exceeding its target by 40%; issued 222 administrative decisions; and closed 18 unregistered operators for non-compliance with applicable laws. Nevertheless, progress remains constrained by limited digitalisation and outdated procedures, and the European Commission’s 2024 Enlargement Report highlighted reductions in staff and IT capacity, underscoring the continued need for modernisation and stronger enforcement mechanisms (European Commission, 2024[19]).
Sub-dimension 7.3: SMEs’ access to standardisation
North Macedonia’s performance in SMEs’ access to standardisation moderately increased between assessment cycles, from 3.73 in 2022 to 3.89 in 2026, marginally above the WBT regional average of 3.81. This moderate increase reflects continued awareness-raising activities and support schemes, despite persistent gaps in outreach, SME participation and monitoring mechanisms, alongside limited progress in expanding and systematising financial support.
Awareness-raising activities have expanded, notably through the ISRSM’s 31 training sessions delivered between 2020 and 2024 and various events organised in co-operation with the Chamber of Commerce, engaging around 800 participants in total. However, publicly available information on their regional coverage and levels of SME participation remains limited, with outreach efforts concentrated in major urban centres and weaker coverage in smaller cities and rural areas. Furthermore, current participation remains modest compared to SME demand, indicating that existing outreach has not reached a broad SME base. In parallel, the ISRSM’s co-operation with universities to promote education on standardisation represents a positive longer term investment in skills development.
The ISRSM also provides online access to standards catalogues and offers discounted prices for SMEs participating in technical committees. Nevertheless, SME engagement remains limited and largely concentrated among a small number of medium-sized, export-oriented firms. In addition, there is no central portal that consolidates information on applicable standards, certification procedures and available support schemes for SMEs (Table 7.2). Finally, while monitoring of firms’ participation in technical committees is present and SMEs account for almost 45% of participants, no systematic and regular evaluation is conducted, making it difficult to determine whether participation mechanisms effectively address SMEs’ needs.
Financial support remains available through two main programmes: the Agency for Entrepreneurship Support voucher scheme, which provides subsidies for standardisation-related costs, and the Ministry of Economy’s Programme for Competitiveness, which co-finances up to 60% of SME certification costs, capped at MKD 100 000 (approximately EUR 1 600). While these schemes have helped reduce costs, they remain modest in scale (fewer than 60 firms benefited from them between 2019 and 2021), and no updated data have been reported since. Uptake is not systematically monitored, and administrative procedures can be lengthy, discouraging smaller firms from applying. Monitoring gaps are largely due to the limited number of staff and the absence of a systematic evaluation practice within SME support programmes.
Overview of North Macedonia’s performance on Dimension 8a
North Macedonia received an overall score of 3.19 on Dimension 8a (Figure 1.14). Although this represents a significant improvement compared to the previous assessment (2.26), the economy ranks fifth in the region and remains below the Western Balkans and Türkiye’s regional average of 3.44. Moreover, Dimension 8a remains one of the economy’s lower-scoring area, lower scoring dimensions, underlining significant scope for improvement, particularly in skills intelligence.
The increase in North Macedonia’s overall score since 2022 reflects more concerted efforts across all three thematic blocks, largely driven by the adoption of the new SME Strategy 2025-2030, which introduces more advanced approaches to planning, implementation and monitoring. At the same time, part of the improvement also reflects methodological revisions and improved data collection, which provided a more robust evidence base for scoring in this assessment cycle.
Developments since 2022
Planning and design have advanced notably, particularly through a strengthened strategic framework for skills intelligence. The Employment Strategy 2021-2027 – already in place during the previous assessment cycle – continues to provide a foundation, now complemented by new measures in the SME Strategy 2025‑2030 targeting SME skills, such as training needs assessments, as well as provisions in the draft Education Strategy 2026-2032 and the Smart/MK 2030 Strategy aimed at skills demand forecasting. Together, these developments signal a sustained commitment to strengthening both skills assessment and anticipation, contributing to a more robust evidence base. This progress is particularly important given the current lack of forward-looking tools, which has tended to result in a largely reactive approach to skills policy. Institutional arrangements are also expected to improve with the recent merger of the Agency for Entrepreneurship (APPRM) and the Fund for Innovation and Technology Development into the Agency for Innovation Activity, Scientific and Technological Development and Entrepreneurship. The new institution is expected to assume a central role in skills intelligence and enterprise skills, potentially strengthening co-ordination and delivery in this area (Table 1.19).
The policy environment for social enterprises has also seen modest progress. Although the Strategy for the Development of Social Enterprises has been in place since the last assessment cycle, the draft SME Strategy’s dedicated measure on supporting social entrepreneurship further signals the growing recognition of the sector. In addition, efforts are under way to prepare a dedicated Law on Social SMEs. However, while these steps provide a strong foundation, key provisions necessary for effective implementation (e.g. legal definition of social enterprises, clear procedure for granting such status) are still lacking.
Implementation progress has largely been shaped by the gradual strengthening of the SME skills ecosystem, with training provision remaining the principal delivery channel. Digital upskilling initiatives led by the former APPRM, particularly in tourism and hotel management, together with broader training offered through the INNOFEIT European Digital Innovation Hub, have expanded SMEs’ access to basic and more advanced skills development (Table 1.19). Initial steps have also been taken to integrate green transition considerations into business planning seminars. However, the overall approach remains fragmented and modest in scale, limiting its transformative potential. Without a more coherent and comprehensive training offer, covering a wider pool of SMEs and providing greater depth in digital and green competencies, current provision is unlikely to fully support SMEs in exploiting the opportunities of these twin transitions. Participant feedback reinforces this assessment: although nearly 80% reported acquiring skills to develop digital and green business models, many indicated a need for longer or more specialised training focused explicitly on these areas (APPRM, 2024[50]).
More broadly, skills development is constrained by persistently low levels of adult engagement in lifelong learning, despite its recognition as a policy priority, most notably through the adoption of the Adult Education Strategy 2025-2030. Key enabling measures (e.g. micro-credentials, flexible learning pathways, financial incentives) have yet to be deployed at scale, limiting SMEs’ capacity to adapt to evolving skills demands. These shortcomings are particularly consequential given that unemployment remains disproportionately concentrated among individuals with lower levels of educational attainment (Figure 1.15).
Notes: Data are from 2023. It is important to note that North Macedonia employs an integrated primary and lower secondary education model.
Performance in monitoring and evaluation has improved, albeit from a very low baseline in the previous assessment cycle. APPRM had established relatively robust monitoring practices for the measures financed through its annual programme. However, the analytical depth of this monitoring was limited, as it relied predominantly on participant feedback from training programmes rather than on systematic outcome or impact indicators. While such feedback provided insight into participant satisfaction and the quality of course delivery, it did not capture more substantive results, including changes in skills and competencies, effects on productivity or business performance, progression into further learning or overall cost-effectiveness. Moreover, the absence of systematic evaluation constrains the ability to assess the broader impact of training interventions on SMEs’ performance, limiting their potential to inform programme refinement, despite such evaluations being foreseen under the SME Strategy 2025-2030. Data collection also remains uneven: although the State Statistical Office gathers relevant statistics, significant gaps persist, including the lack of a comprehensive database on in‑demand skills, skills gaps among SMEs and consistently defined indicators to assess the impact of social economy activities.
Overview of North Macedonia’s performance on Dimension 8b
North Macedonia received an overall score of 3.30 on Dimension 8b (Figure 1.16). After previously recording a high score of 3.77, performance has declined, bringing the economy’s score in line with the Western Balkans and Türkiye’s regional average (3.27). As a result, innovation policy for SMEs now represents a more moderate area of performance for North Macedonia, indicating scope to further strengthen the policy mix and implementation for SME innovation.
Alongside methodological changes increasing the weight of monitoring and evaluation in the scoring, the decline in North Macedonia’s score mainly reflects persistent challenges in the co-ordination between implementing institutions and the evaluation of the policy framework, limited development of institutional support services for SME innovation, such as technology extension services infrastructure for established SMEs, nascent tax incentives supporting innovation and the limited development of collaboration mechanisms between research institutions and SMEs.
Sub-dimension 8b.1: Policy framework for innovation
North Macedonia’s performance in the policy framework for innovation has weakened, from 4.14 in 2022 to 3.45 in 2026. In addition to methodological changes that place a greater weight on monitoring and evaluation, this result reflects ongoing weaknesses in inter-institutional co-ordination and in the limited evaluation of the policy framework.
Resulting from the merger of the Fund for Innovation and Technology Development (FITD) and the Agency for Promotion of Entrepreneurship, the new institution, INOVA (Agency for Innovation Activity, Scientific and Technological Development and Entrepreneurship), became North Macedonia's innovation agency in August 2025. INOVA’s activities are guided by three complementary strategic documents that shape North Macedonia’s SME innovation policy framework. The Smart Specialisation Strategy (S3) 2024-2027 serves as the central framework for innovation policy, promoting research, development, and innovation in priority sectors such as smart agriculture, ICT, Industry 4.0 and sustainable materials and buildings, while recognising SMEs as key drivers of a knowledge-based and green economy. Its Action Plan 2024-2025 outlines 21 measures to strengthen the innovation ecosystem, including actions to enhance business–academia collaboration, support start-ups and improve the legal framework for business innovation. The forthcoming National SME Strategy 2025-2030 and its action plan complement this approach by seeking to reinforce the national entrepreneurial ecosystem, with targets to support 800 SMEs and start-ups between 2024 and 2027 and to increase SME research and development spending to 0.55% of gross domestic product (GDP) by 2027. Finally, the National Development Strategy 2024-2044 provides the long-term vision, positioning innovation as one of four cross-cutting development pillars and a cornerstone of North Macedonia’s transition towards a digital and sustainable economy.
While the creation of INOVA has simplified the institutional set-up by consolidating key innovation and entrepreneurship functions, co-ordination of the innovation policy framework remains in a transition phase, hindering its implementation. The new Law on Innovation Activity, Scientific and Technological Development and Entrepreneurship foresees a Council for Innovation, Scientific and Technological Development and Entrepreneurship chaired at the highest political level and including the relevant line ministries, complemented by three expert members. The government is advancing the council’s establishment and it is expected to become operational shortly; however, as of February 2026, the Council’s set-up is still ongoing, as the public call to appoint the expert members was launched in early December 2025 (Table 1.20). This transitional co-ordination landscape also affects smart specialisation governance. The S3 outlines a multi-level governance structure, comprising a strategic decision level, an operational level, and a continuous entrepreneurial discovery process with SMEs at its core, and its action plan envisages steps to formalise this framework. However, there is no evidence of its full operationalisation, such as published membership lists and meeting records. This lack of co-ordination, combined with limited budget allocations (European Commission, 2024[53]), risks undermining the implementation and impact of the S3.
While North Macedonia has developed a wide range of data able to track the performance of SME innovation and is able to monitor the implementation of its innovation policies, the evaluation of the innovation policy framework remains a general weakness (Table 1.20). Monitoring relies largely on input indicators, while evidence on outcomes and impact remains limited. The forthcoming council could strengthen governance, but dedicated procedures for systematic ex-post evaluation are still needed to assess effectiveness and alignment with policy objectives (European Commission, 2024[53]).26
Sub-dimension 8b.2: Government institutional support-services for innovative SMEs
North Macedonia achieved a score of 3.21 on Sub-dimension 8b.2, down from 3.51 in 2022. In addition to methodological changes that place a higher weight on monitoring and evaluation, this decline reflects the limited development of institutional support services for SME innovation, coupled with the lack of policy evaluation of existing schemes.
North Macedonia’s start-up ecosystem is a relatively well-balanced mix of incubation and acceleration support programmes. At the time of writing, its start-up ecosystem comprises five incubators and seven accelerators, most of which are concentrated in Skopje.27 The creation of incubation and acceleration programmes remains financially supported by INOVA, up to a maximum of EUR 500 000, or a maximum of 75% of the total cost. While the FITP financially supported the establishment and operations of the accelerators X Factors, Seavus, and UKIM during the last assessment cycle, no new incubator or accelerator has been established in North Macedonia, except for the donor-funded ClimAccelerator, which supports green innovation. Finally, the impact of North Macedonia’s incubator and accelerator infrastructure on SME innovation and start-up development remains unassessed, as no formal evaluation has yet been conducted.
Support for established SMEs through technology extension services remains limited in scale and scope. These services are financed under the FITD’s Co-financed Grants for Technological Extension and implemented by three providers: the private firms Snevel and Pro Plan, and the Economic Chamber of North Macedonia. As in the previous assessment cycle, no dedicated evaluation has been undertaken to measure their effectiveness or long-term impact on business innovation.
Sub-dimension 8b.3: Government financial support for innovative SMEs
North Macedonia scored 3.47 on Sub-dimension 8b.3, which is lower than in the previous assessment (3.84). In addition to methodological changes that place a greater weight on monitoring and evaluation, this change in score reflects weaknesses in the evaluation of direct financial support for innovation, and the still very limited number of indirect incentives.
North Macedonia continues to provide crucial financial support for SMEs, but weaknesses in monitoring and evaluation have emerged since the last assessment cycle. The FITD is a pillar of the economy’s Growth Acceleration Plan 2022-2026 and remains the leading public institution financing SME innovation in North Macedonia, with its budget increasing substantially since the previous assessment, driven by higher state allocations. In 2024, the FITD’s direct financial support reached EUR 10.6 million, up from EUR 7.2 million in 202228, and comprised seven active grant schemes targeting early-stage innovation, the commercialisation of innovation, and technological development for established businesses.29 However, despite its growing financial capacity, the effectiveness of the FITD’s operations has not been evaluated since 2021. The merger of the FITD with the National Agency for Promotion of Entrepreneurship in August 2025, to form INOVA, may provide an opportunity to reintroduce more systematic monitoring and evaluation practices.
While significant efforts have been made to expand direct financial support for innovation, progress in developing indirect incentives remains limited. The Law on VAT exempts scientific research activities from value-added tax, but no broader fiscal measures explicitly encourage investment in research and development. Some other steps have been taken to support innovation, notably by strengthening early-stage innovation financing, as the Ministry of Economy prepared a draft Law on Business Angel Investing in 2025. However, at the time of writing, the draft has not yet been adopted, and the implementation timeline remains uncertain.
Sub-dimension 8b.4: SME and research institution collaboration and technology transfer
North Macedonia scored 2.92 in Sub-dimension 8b.4, a slight decrease from the 2022 assessment (3.22). In addition to methodological changes that place greater emphasis on monitoring and evaluation, this decline reflects the limited development of collaboration mechanisms between research institutions and SMEs, including the innovation voucher scheme, and gaps in the intellectual property rights framework that promote collaboration between researchers and businesses.
Innovation vouchers in North Macedonia have not advanced beyond the pilot stage during the current assessment cycle (Table 1.21). Following the 2020 pilot, the FITD launched an innovation voucher scheme in 2024, covering up to 80% of project costs, capped at MKD 500 000 (around EUR 8 000). With a total budget of EUR 240 000, the programme supported 20 projects, monitored by a commission of 3 FITD representatives.
Efforts to strengthen the research and innovation infrastructure supporting business–academia collaboration are ongoing but progressing slowly (Table 1.21). The S3 2024-2027 places a strong emphasis on this area under Strategic Objective 2: Improve the Innovation Ecosystem. However, the accompanying action plan focuses primarily on conducting feasibility studies to establish new innovation and technology centres and centres of excellence, with only EUR 400 000 allocated in 2026 to support their creation. Similarly, the SME Strategy Action Plan 2025-2027 outlines preparatory steps for the opening of a technology park in 2026-2027, including an updated feasibility study and further analytical work on complementary infrastructure (accelerators, hubs, and innovation zones). In contrast, the Center for Technology Transfer and Innovations, operational since 2018 at the University Ss. Cyril and Methodius, has become a cornerstone of the national innovation ecosystem. It hosts the Business-Technology Accelerator UKIM and offers co-working space, mentoring, proof-of-concept research, and matchmaking between firms and researchers. Additionally, the European Institute of Innovation and Technology recently opened its first Innovation Hub in North Macedonia, enhancing the participation of SMEs, start-ups, and universities in EU-funded innovation networks and collaborative projects.
The intellectual property framework does not specifically promote collaboration between researchers and businesses or include measures to incentivise patent commercialisation. Technology transfer practices, therefore, remain nascent, with only a few university-based centres supporting cooperation between research and industry. Although donor-funded initiatives such as TEMPUS and GTZ helped establish early technology transfer centres at universities in Skopje and Bitola, higher-education institutions still lack dedicated technology transfer offices, as their establishment is not mandated under the Law on Higher Education or the Law on Scientific Research.
Overview of North Macedonia’s performance on Dimension 9
North Macedonia scored 3.01 on Dimension 9 (Figure 1.17), a slight decline from 3.16 in the previous assessment cycle, and below the regional average of 3.16. This drop, primarily linked to strategic reshuffling, makes Dimension 9 one of the economy’s weakest areas, highlighting the need to reinforce policy efforts in this field.
The decline in North Macedonia’s overall score since 2022 reflects challenges in shifting from strategic planning to effective implementation. While planning and design improved in Sub-dimension 9.1, performance in this area declined in Sub-dimension 9.2. However, the main drop stems from delays in implementing measures in the small and medium-sized enterprise (SME) greening framework and the absence of robust monitoring and evaluation processes across both sub-dimensions.
Sub-dimension 9.1: Framework for greening policies targeting SMEs
Performance in this sub-dimension remained largely unchanged, from 2.80 in 2022 to 2.74 in 2026. While progress was observed in planning and design, it has not been matched by improvements in implementation or monitoring and evaluation.
Since 2022, the SME Strategy has been revised for 2025-2030 to strengthen support for SMEs’ green transition. Other key strategies adopted since the last assessment include the Smart Specialisation Strategy 2024-2027, which emphasises the role of SMEs in driving sustainability in priority sectors, and the 2024 National Energy and Climate Plan, which introduces targeted measures to support SME participation in the energy transition. In 2024, a circular economy roadmap co-developed with the OECD was adopted and is being integrated into strategic frameworks. In this regard, SMEs still see untapped potential in expanding support to boost resource efficiency (see Figure 1.18).
SMEs’ preferred support for resource efficiency
Notes: n=498 SMEs. Question: “Which of the following would help your company the most to be more resource efficient?”. Multiple answers were possible. The survey responses were obtained through fieldwork conducted between 3 and 24 June 2024.
Source: (European Commission, 2024[54]).
Notably, implementation remains a key gap. No progress reports have been published for the previous SME Strategy (2018-23) or for the newly adopted strategies yet. There is also a lack of concrete data on allocated or mobilised budgets, and while private sector associations such as the Chamber of Commerce were formally represented in the working group responsible for the preparation of the SME Strategy 2025–30, there is currently no concrete evidence of active collaboration with the government on greening measures. As a result, the status of key initiatives, such as the Hybrid Fund for the Digital and Green Transition under the Plan for Accelerated Growth (2022-26), remains unclear.
Due to insufficient monitoring and evaluation, the government is now working to establish a more structured system, particularly for the SME Strategy, while also aiming to improve coordination among responsible institutions (see Table 1.22).
Sub-dimension 9.2: Incentives and instruments for SME sustainability
North Macedonia scored 3.23 on Sub-dimension 9.2 on incentives and instruments for SME sustainability, down from 3.46 in 2022. This decline reflects the weaker design of regulatory instruments targeted at SME greening compared to the last assessment cycle, as well as continued gaps in monitoring and evaluation systems.
Some implementation efforts have taken place, such as donor-supported promotion of environmental management systems30 and co-financing for SME sustainability reporting in 202431. The Ministry of Economy and Labor and the Coordination Body for Social Responsibility previously awarded national prizes for environmental commitment, but no data have been reported since 2022. Progress on implementing market-based instruments, such as ecolabels, also remains absent, with limited SME feedback hindering the design of targeted schemes (see Table 1.23). However, momentum is increasing. The Agency for Innovation, Scientific and Technological Development and Entrepreneurship (INOVA) launched a green grant scheme in February 2026, with its first call planned for mid-2026. Alongside new co-financing instruments for green innovation enabled by the Law on Innovation Activity, Technological Development and Entrepreneurship, this is likely to accelerate the implementation of SME Strategy green objectives.
In the absence of stronger monitoring and evaluation, however, there is still no evidence on the effectiveness of SME support for the green transition. This is concerning given that consultations for the new SME Strategy revealed strong demand from SMEs for support instruments that ease administrative burden. As (financial) incentives expand, such as through the EUR 22 million green grant scheme launched by INOVA, tracking impact is becoming increasingly critical and a growing priority for the government.
Overview of North Macedonia’s performance on Dimension 10
North Macedonia received an overall score of 3.87 on Dimension 10, indicating a broadly steady level of performance since its previous score of 3.88 (Figure 1.19). This score remains above the Western Balkans and Türkiye (WBT) regional average of 3.76, placing Dimension 10 among North Macedonia’s better performing areas relative to several other policy dimensions.
Export promotion has progressed through new strategic frameworks and digital tools while integration into global value chains (GVCs) and e-commerce development advance more slowly amid persistent implementation and monitoring gaps. The trajectory is positive but structurally incomplete, marking a system that has moved from fragmentation to co-ordination, yet not fully to integration.
Sub-dimension 10.1: Export promotion
North Macedonia’s performance on this sub-dimension has declined moderately since 2022, falling from 4.52 in 2022 to 4.35 in 2026 (Figure 1.19), reflecting a transition phase in which strengthened policy design and co-ordination have yet to fully translate into sustained implementation and measurable export outcomes. While the policy framework for export promotion has been strengthened and co-ordination arrangements clarified, progress in implementation and outcome-oriented monitoring has not kept pace, weighing on overall performance.
The strategic architecture for small and medium-sized enterprise (SME) internationalisation has progressed, notably with the Export Promotion Strategy 2024-2027 and the SME Strategy 2025-203032 positioning export competitiveness as a strategic priority of national SME policy and SMEs as drivers of value-added growth and internationalisation.33 The new export framework, adopted in January 2024, introduces a five-pillar model focused on the business environment, awareness, export readiness, promotion and financing supported by indicators and clearer co-ordination between the Ministry of Economy, Invest North Macedonia34 and other key partners (Ministry of Economy, North Macedonia, 2024[55]). The new framework also broadens its sectoral scope, doubling the number of priority sectors from four to eight35 to strengthen alignment with innovation, sustainability and green transition priorities. However, the expanded scope and institutional ambition has not yet been matched by an equally strong operational design, as co-ordination mechanisms are still being consolidated, prioritisation across an expanded set of sectors remains uneven, and financing remains largely annual and donor-dependent, without a dedicated multiannual funding mechanism to ensure predictability and sustainability.36
Implementation of export promotion measures has expanded in scope but declined in effectiveness. While delivery is now formally structured under the Export Promotion Strategy 2024-2027 and its Action Plan 2024‑2025,37 execution remains uneven across instruments and target groups. The portfolio now integrates newly introduced capacity-building, mentoring and market entry support through initiatives such as the Export Accelerator, Destination Advisors and Export Champions Awards, each targeting SMEs at different stages of export readiness.38 The launch of the Invest North Macedonia Export Portal in 202339 marked a milestone in digitalisation (Box 1.2), while inclusiveness has improved through targeted support for women-, youth- and rural-led enterprises in co-operation with chambers of commerce and municipalities. Outreach functions were transferred from regional export centres to economic counsellors in diplomatic missions, enhancing international representation but reducing local-level engagement. Partnerships with Swiss Import Promotion Programme, the European Bank for Reconstruction and Development (EBRD), and the United Nations Development Programme40 continue to strengthen institutional capacity and SME competitiveness. However, implementation remains challenged by the absence of defined export performance targets and limited reach among micro and rural exporters, limiting the depth and sustainability of support efforts. This is echoed in the economy’s export performance, where the SME export performance index declined from 65.9 to 53.1 between 2014-2016 and 2020-2023 (relative to the European Union benchmark of 100), underscoring the gap between institutional progress and competitiveness gains (OECD, 2025[56]).
The introduction of key performance indicators under the Export Promotion Strategy has strengthened monitoring of export promotion. Under the co-ordination of the Ministry of Economy and aligned with institutional reporting cycles, the Export Promotion Strategy gathers indicators that track SME participation, trainings and export diversification. The State Statistical Office has expanded SME trade data to include size, sector and partial gender disaggregation since 2022. However, monitoring remains largely output-oriented, with no independent evaluation, cost-benefit analysis or publicly available annual reports, limiting evidence-based assessment of programme impact and efficiency.
Launched in 2023, the Invest North Macedonia Export Portal represents the economy’s first integrated digital platform for exporters, developed under the Export Promotion Strategy 2024-2027. The platform serves as a one-stop digital gateway for small and medium-sized enterprises (SMEs), combining a business-to-business marketplace, an export-readiness self-assessment tool and sector-specific market intelligence reports to help firms identify opportunities and connect with foreign buyers. It is fully integrated with the national e-services portal (uslugi.gov.mk), streamlining access to export-related administrative services and support programmes.
The portal was conceived to strengthen SME export readiness and enhance visibility in international markets. It also supports data-driven policymaking, as Invest North Macedonia uses portal analytics to monitor user activity, tool uptake and sectoral trends, feeding into annual reporting frameworks. In its first operational year, over 200 SMEs registered profiles and accessed online tools, signalling growing engagement with digital export promotion channels.
Although still in the early phase of deployment, the portal marks a major step toward the digitalisation of export support delivery, improving transparency, outreach and efficiency. Its continued expansion – particularly through linkages with trade fairs, matchmaking events and international partner platforms – is expected to enhance SME competitiveness and reduce barriers to market entry.
Sub-dimension 10.2: Integration of SMEs into global value chains
Performance on this sub-dimension has risen moderately, from 3.36 in 2022 to 3.63 in 2026 (Figure 1.19). This improvement reflects stronger implementation and a marked recovery in monitoring and evaluation from a low base, which more than offset a decline in planning and design scores. While strategic frameworks for SME integration into GVCs are in place, delivery has advanced unevenly and monitoring systems remain insufficiently developed to fully capture supplier linkages and spillover effects.
SMEs’ integration into GVCs has become an explicit policy goal across North Macedonia’s competitiveness architecture. The SME Strategy and its Action Plan 2025-2027 introduce, for the first time, supply-chain development programmes as a structural instrument for supplier upgrading, with two pilot schemes planned to involve around 20 SMEs41 (Government of North Macedonia, 2025[58]). Complementary actions under the Export Promotion Strategy 2024-202742 support cluster development and sophistication to facilitate entry into European and regional supply chains (Ministry of Economy, North Macedonia, 2024[55]). Together with the National Development Strategy 2022-2042, these frameworks provide a coherent design foundation for future supplier development and GVC integration measures. However, despite a robust forward-looking policy framework, the planned programmes lack dedicated budgets or regional targeting mechanisms and are not yet fully operational.
Despite clearer strategic anchoring, practical delivery has advanced unevenly, with implementation concentrated on digitalisation, finance and standards compliance rather than direct linkage programmes. The Agency for Innovation Activity, Scientific and Technological Development and Entrepreneurship (INOVA) and the Ministry of Economy and Labour, following the consolidation of responsibilities previously held by the Agency for Promotion of Entrepreneurship and the Fund for Innovation and Technological Development, play a central role in implementing SME upgrading instruments. Flagship initiatives such as the Go Digital initiative and the Green Finance Facility have been launched since the last assessment to strengthen SME readiness for participation in global and regional value chains43 while government-supported programmes, including the Competitiveness Support Programme and INOVA’s voucher and mentoring schemes, subsidise international certification (ISO, HACCP, HALAL) and managerial training. In parallel, the Ministry of Education and Science finances scientific projects supporting business–academia cooperation in line with the priorities of the Smart Specialisation Strategy. These efforts have produced 4-5 reported SME‑multinational enterprise linkages and training for around 60 SMEs, although participation remains concentrated among medium-sized, export-oriented firms, and systematic mapping of clusters and supplier networks is still missing.44 Co-ordination has strengthened through closer co-operation between the Ministry of Economy and Labour and INOVA, supported by technical partnerships with the European Union, EBRD and the World Bank Group, and Invest North Macedonia has strengthened its operational aftercare functions, including supplier search assistance and information services. However, the Supply-Chain Development Programmes under the SME Action Plan have yet to materialise; and uptake remains limited and largely donor-driven, with cluster and supplier-mapping activities still missing (Table 1.24).
Monitoring and evaluation systems have weakened, despite the newly introduced digital tools,45 independent audits and SME feedback loops providing a clearer view of programme uptake and efficiency. These changes have enabled incremental policy adjustments, such as simplified administrative procedures, enhanced co‑ordination among implementing institutions, and a stronger emphasis on digital and green transition measures. However, monitoring remains largely output-based, with no systematic supplier mapping, limited data on SME-multinational enterprise linkages, and no formal evaluation of spillovers or cost effectiveness.
Sub-dimension 10.3: Promoting the use of e-commerce
Since 2022, North Macedonia’s performance on Sub-dimension 10.3 has decreased from 3.33 in 2022 to 3.04 in 2026 (Figure 1.19), reflecting gaps in implementation and monitoring despite continued policy and legislative progress. While the government has modernised the regulatory framework and introduced digital trade measures, in its strategic frameworks, the absence of a comprehensive e-commerce strategy with SME-oriented measures, limited government-led support programmes, and weak monitoring and evaluation mechanisms continue to constrain progress in this area.
In policy planning and design, North Macedonia has strengthened the legal and strategic framework for digital trade, but with limited SME-specific targeting. The Export Promotion Strategy 2024-2027 explicitly recognises e-commerce as a driver of export diversification through Measure 3 (facilitation and digitisation of cross-border e-commerce procedures) and Measure 20 (support for optimising exporters’ digital presence via online marketing and e-platforms). These actions are supported by a dedicated budget of MKD 4.6 million (approximately EUR 75 000), marking the first public funding allocated specifically to digital trade promotion. Earlier reforms also laid important groundwork: amendments to the Law on E-Commerce and the Law on Electronic Signature (2020) improved legal certainty around electronic authentication, contract formation and intermediary liability. In parallel, the Law on Payment Services and Payment Systems (in force since 2023) transposes the EU Revised Payment Services Directive, the Second Electronic Money Directive and the Payment Accounts Directive, while the Law on Consumer Protection (2022) aligns national rules with EU consumer directives, strengthening user rights, price transparency and dispute-resolution obligations in online trade. However, institutional responsibilities remain dispersed across the Ministry of Economy and Labour, the Ministry of Digital Transformation, INOVA, and other bodies, creating risks of overlapping mandates and limited strategic coherence.
Implementation has progressed unevenly since 2022. Measures under the Export Promotion Strategy Action Plan 2024-2025 include the establishment of a national e-commerce domain compliant with the EU Import Control System 2, implemented by the Customs Administration, and promotional activities to encourage SMEs’ participation in international online marketplaces. Some complementary actions are supported through the Agency for Promotion of Entrepreneurship, including budgeted workshops on SME digitalisation and mentoring services for export readiness and internationalisation. However, most practical support for SME e-commerce adoption continues to be delivered through business associations and donor-funded initiatives. The E-Commerce Association of North Macedonia plays a central role through training, awareness campaigns and targeted projects such as Digitally Fit for E-Commerce, while the CEFTA E-Commerce for All platform provides regional guidance on cross-border online trade (MECA, 2024[59]; ECommerce4All, 2022[60]). Despite these efforts, co-ordination mechanisms between public institutions and non-governmental actors remain informal, and the scale of available programmes remains limited relative to SMEs’ needs.
Monitoring and evaluation of e-commerce policies remain underdeveloped. North Macedonia does not yet operate a dedicated mechanism to track SME engagement in online trade or to assess the effectiveness of e‑commerce promotion measures. Although the Export Promotion Strategy refers to contextual indicators, it does not include specific performance metrics for its digital trade interventions, and no public implementation reports have been published since its adoption. The State Statistical Office collects enterprise-level data on e‑buying and e-selling, but they remain limited in scope. Feedback from SMEs is gathered mainly through E‑Commerce Association of North Macedonia and project-based initiatives, with no evidence of systematic integration into policymaking. As a result, the government lacks a robust evidence base to assess policy impact, identify structural barriers or tailor future support instruments to SMEs’ e-commerce needs (Table 1.25).
Overview of North Macedonia’s performance on Dimension 11
North Macedonia achieved an overall score of 3.10 on the new Dimension 11 (Figure 1.20), placing it above the Western Balkans and Türkiye’s regional average of 3.00 and indicating solid foundations for SME digital transformation.
Performance across the three sub-dimensions is uneven: results are the strongest in Sub-dimension 11.1 on digital policy foundations, reflecting newly adopted strategies and closer alignment with European Union (EU) priorities. Sub-dimension 11.2 on digital safety shows intermediate development, with strengthened legal frameworks but still limited SME-oriented support, while Sub-dimension 11.3 on the use of advanced technologies reflects weaker performance, as implementation efforts remain concentrated in pilot initiatives and innovation niches. Overall, a solid policy direction for SME digitalisation is in place, but its translation into broad-based transformation is constrained by the scale of funding instruments and by still-developing delivery and monitoring capacities. Dimension 11 is one of North Macedonia’s mid-performing dimensions.
Sub-dimension 11.1: Digital policy foundations
North Macedonia obtained an overall score of 3.47 on Sub-dimension 11.1, placing it among the top performers in the WBT region in this policy area. This result primarily reflects the strength of the economy’s policy and strategic foundations for SME digital transformation as well as the gradual expansion of implementation instruments, despite remaining gaps in scale, coverage and monitoring.
North Macedonia has developed comparatively strong planning and design foundations for SME digital transformation, with a maturing strategic architecture that positions digitalisation as a core competitiveness lever. The National SME Strategy 2025-2030 is the first framework to place digital transformation at the centre of SME policy under the strategic objective on the green and digital transition, with a dedicated budget of MKD 366 million (approximately EUR 6 million), although the funding scale remains modest relative to the investment needs associated with more advanced solutions. Complementary strategies, including Smart/MK: Digital Macedonia 2030, the ICT Strategy 2023-2027 and the Smart Specialisation Strategy 2024-2027, also address SME digitalisation through measures on infrastructure, skills and innovation ecosystems, but focus mainly on horizontal enablers rather than tailored SME instruments. Policy co-ordination is formally anchored within the Ministry of Digital Transformation and shared with the Ministry of Economy and the newly established Agency for Innovation, Scientific and Technological Development and Entrepreneurship (INOVA), marking a step towards a clearer, more dedicated co‑ordination mechanism for SME digital transformation.
Implementation of SME digital transformation policies in North Macedonia has expanded in recent years, but delivery has remained uneven. The Fund for Innovation and Technological Development (FITD) has served as the main financial mechanism, providing co-financed grants ranging from MKD 1 million to MKD 12.3 million (≈EUR 25 000-EUR 200 000) for start-ups, technology adoption and digitalisation projects (INOVA, 2026[61]) (Box 1.3). While these schemes play an important role, their limited scale constrains more transformative investments, and reliance on co-financing may structurally limit access for resource-constrained firms. In parallel, the Development Bank of North Macedonia has expanded credit support to SMEs, disbursing EUR 62.3 million in 2024 across 278 projects and operating dedicated credit lines for green and digital investments, including the French Development Agency’s (AFD) facility of EUR 50 million and a European Investment Bank-backed SME credit line of EUR 100 million. Donor-backed initiatives, such as the Go Digital in the Western Balkans programme implemented by the European Bank for Reconstruction and Development and EU and loan facilities through Sparkasse and NLB Skopje, complement government support but reach only a fraction of SMEs (WBIF, 2025[62]; EBRD, 2025[63]). To address the limited integration between advisory support, technical assistance and finance, in mid-2025 the government adopted a new Law on Innovation, Scientific and Technological Development and Entrepreneurship, establishing INOVA as a single body for innovation and entrepreneurship support, which absorbed the mandates and resources of both the FITD and the former Agency for Support of Entrepreneurship.
The Fund for Innovation and Technological Development (FITD) has been instrumental in advancing the digital transformation of small and medium-sized enterprises (SMEs) in North Macedonia through its co-financed technological extension grants. This programme offers financial support covering up to 50% of the total project budget, with a maximum contribution of MKD 30.8 million (approximately EUR 500 000). The remaining funds are provided by the SMEs themselves, ensuring shared investment in innovation.
These grants are designed to assist SMEs in adopting innovative technologies and advanced processes, thereby improving operational efficiency and competitiveness. The programme encompasses two phases: Phase 1 involves diagnostics and the development of an improvement plan while Phase 2 focuses on the implementation of the plan. In cases where an improvement plan already exists, SMEs can apply directly for Phase 2 funding.
Beneficiary SMEs have been predominantly operating in Industry 4.0, with total public investment reaching approximately EUR 928 000 and complemented by around EUR 1.35 million in private co-investment, reflecting a meaningful leverage of private financing alongside public support. While the programme demonstrated strong potential, the call is no longer active, and there is limited public information on whether it will be continued or replaced by a similar instrument. This gap highlights the need for continuity in financing mechanisms to ensure sustained SME engagement in digital transformation.
Source: (Interreg Europe, 2025[64]).
Monitoring and evaluation remain less developed despite the new institutional set-up. While the Law on Innovation, Scientific and Technological Development and Entrepreneurship assigns oversight functions to the Council for Innovation, Scientific and Technological Development and Entrepreneurship and operational monitoring responsibilities to INOVA, a comprehensive and unified monitoring framework has not yet been established. The Council, whose establishment is expected in the near term in line with the provisions of the new law, will be responsible for proposing indicators for innovation and technology development programmes; in the meantime, INOVA is responsible for monitoring and evaluating the instruments it implements. However, these arrangements do not yet constitute a mechanism that systematically tracks SME digitalisation outcomes across programmes and delivery channels. Additionally, the consolidation of former institutions into INOVA has not yet been matched by integrated reporting across advisory services, financial instruments and innovation support schemes.
Sub-dimension 11.2: Digital safety
North Macedonia obtained a score of 3.12 on Sub-dimension 11.2, reflecting solid legal and strategic foundations for digital safety and growing alignment with EU standards. This performance is driven by progress in cybersecurity and communications regulation but is moderated by the still limited translation of these frameworks into targeted tools for SMEs and gaps in monitoring and evaluation.
North Macedonia has strengthened its legal and strategic foundations for digital safety with a framework that increasingly aligns data protection, communications and cybersecurity regulations with EU standards. In 2025, parliament adopted two key laws shaping the future of a secure and transparent digital society: 1) the new Law on Electronic Communications, which strengthens user rights, transparency and the protection of personal data in electronic communications; and 2) the first Law on Security of Networks and Information Systems, which establishes a governance framework for cybersecurity covering critical infrastructure and digital service providers that process and store data. Cybersecurity priorities are further embedded in the Cybersecurity Strategy 2025-2028 and its accompanying Action Plan 2025-2027, which set out concrete measures on governance, risk management and capacity building, including provisions for public-private co-operation. Together these instruments strengthen legal certainty and digital trust. However, the framework remains primarily oriented toward large operators and critical infrastructure, and SMEs still lack tailored compliance tools, dedicated financial incentives or systematic awareness programmes to help them meet rising cybersecurity requirements, limiting the practical impact of these reforms for smaller firms.
Implementation of these frameworks is gradually expanding but remains largely project-based. The Personal Data Protection Agency plays an active role in awareness-raising and corrective measures, although sanctions are applied selectively, which may limit incentives for SMEs to prioritise compliance. Practical guidance for smaller firms (e.g. standardised toolkits, model documentation or sector-specific risk assessments) remains limited, and there are not yet any dedicated funding schemes to offset compliance costs or promote cybersecurity upgrades. In cybersecurity, capacity-building efforts are supported by EU-funded and civil society initiatives, including the CyberSEE project, the Metamorphosis Foundation, the CYBER‑IS association and several universities, which provide training and awareness-raising activities for businesses (CE, 2025[65]; Metamorphosis Foundation, 2025[66]; CYBER-IS, 2025[67]). Yet, while these initiatives contribute to a growing support ecosystem, they remain dependent on project-based funding, indicating scope to further institutionalise and scale practical support for SMEs.
Monitoring and evaluation of digital safety policies in North Macedonia are formally under the competence of the Ministry of Digital Transformation. Under the SME Strategy 2025-2030, a dedicated working group has been established to monitor implementation, including indicators to assess the impact of financial incentives on SME digitalisation and cybersecurity. The strategy also foresees an external independent evaluation and two in-depth assessments of progress in 2027 and 2030, which are expected to provide a clearer evidence base on policy outcomes. In parallel, the Cybersecurity Strategy 2025-2028 includes an assessment of the current state of cybersecurity and is accompanied by an Action Plan 2025-2027 setting out measures to achieve its objectives. The Smart/MK: Digital Macedonia 2030 Action Plan contains indicators related to digital trust and security. While these arrangements provide an initial structure for oversight, systematic public reporting and SME-specific evidence remain limited, constraining the ability to assess effectiveness and translate policy objectives into measurable resilience gains for enterprises.
Sub-dimension 11.3: Use of advanced technologies
North Macedonia obtained a score of 2.16 on Sub-dimension 11.3, indicating that while policy frameworks increasingly recognise advanced and emerging technologies, their translation into SME-oriented instruments remains limited. This result reflects the absence of dedicated tools to support broad-based SME adoption of emerging and sustainable technologies, alongside implementation efforts that are still concentrated on start-ups and innovation niches rather than the wider SME environment.
North Macedonia’s strategic framework references advanced and emerging technologies, yet dedicated and operational pathways for SME adoption of artificial intelligence (AI), the Internet of Things and data-driven innovation remain limited. The Smart Specialisation Strategy 2024-2027 identifies emerging technologies in sectors such as agriculture, city modernisation and energy, marking a step toward embedding AI within national innovation priorities, but it does not define explicit SME targets. Similarly, the SME Strategy 2025‑2030 recognises advanced digitalisation as a driver of competitiveness under its green and digital transition objective, yet concrete measures to support SME adoption of frontier technologies remain scarce. The Smart/MK: Digital Macedonia 2030 Strategy includes Priority Area 4 on Business, Innovation, New Technologies and Artificial Intelligence, with a specific objective to support the development and application of AI in the start-up and technology sector; however, this focus does not explicitly extend to the broader SME population or provide detailed pathways linking digital adoption with green or sustainability-related concerns. The forthcoming Artificial Intelligence Strategy 2025-2030 is expected to prioritise ethical AI, digital trust and ecosystem development, creating an opportunity to introduce operational instruments such as SME demonstration projects, co-financing for AI adoption and targeted skills training. Its impact will depend on translating strategic ambition into concrete, SME-oriented measures that also support the green transition.
Implementation efforts related to AI and emerging technologies have so far been concentrated mainly among start-ups and innovation-oriented firms, leaving the broader SME base at an early stage of adoption. The FITD has financed pilot projects in automation, AI-based services and data-driven solutions through co-financed grants (FITD, 2021[68]), while donor-backed initiatives such as the Western Balkans Digital Innovation Hub Network and the European Digital Innovation Hub INNOFEIT EDIH further expanded access to expertise and test‑before-invest environments (European Commission, 2025[69]; INNOFEIT EDIH, 2025[70]). These opportunities, however, remain largely concentrated in Skopje, where most innovation actors are based, limiting accessibility for SMEs in other regions. Accelerators such as Seavus, YES and Business Accelerator UKIM also offer a foundation for experimentation but remain heavily reliant on donor funding and short-term projects (WB Info Hub, 2023[71]; 2023[72]; Business Accelerator UKIM, 2023[73]). Efforts to promote the sustainable use of digital technologies are emerging but remain limited: recent initiatives such as the Decarbonisation Guide for Small Businesses and advisory programmes of the Agency for Promotion of Entrepreneurship support awareness-raising and practical guidance on linking digitalisation with energy efficiency and green business practices, but financial incentives for SMEs to invest in digital tools for sustainability purposes remain modest and fragmented (EIB, 2025[74]; APPRM, 2025[75]). This environment is expected to evolve with the establishment of the National Centre for Artificial Intelligence “Vezilka”, which aims to promote responsible and trusted AI applications across priority areas such as language and culture, healthcare, energy, public administration, and agriculture, pointing toward more structured and potentially SME‑relevant support for advanced technologies (MDT, 2025[76]).
Monitoring and evaluation mechanisms for advanced and sustainable adoption of digital technologies are yet to be developed. There are currently no government-defined indicators to measure SME engagement with AI, the Internet of Things or other emerging technologies, nor systems to track their impact on productivity or sustainability. However, under the SME Strategy 2025-2030, evaluation is planned for 2027 and 2030, which could provide the first structured insights into the adoption of advanced technologies and their business impact. In the area of sustainable digitalisation, North Macedonia’s frameworks, such as the National Energy and Climate Plan 2021-2030 and the National SME Strategy, highlight the importance of technology for decarbonisation but lack operational monitoring systems.
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← 1. “[…] Preventative restructuring frameworks such as pre-insolvency regimes […] can assist the debtor in the assessment of the extent of risks involved, allow debtors and creditors to intervene early and if needed, negotiate informally before insolvency starts (Bricogne et al., 2016[77]). The lack or limited use of such measures can push viable firms experiencing temporary financial distress into formal insolvency proceedings” (Adalet McGowan and Andrews, 2018[78]).
← 2. According to the European Commission (2022[79]), the outcomes of insolvency procedures vary significantly across Member States, with average recovery times ranging from 0.6 to 7 years as of 2022. As of 2024, liquidation procedures in Bosnia and Herzegovina last an average 12 months, while reorganisations take 18 months. In Montenegro, both procedures typically last 24 months (World Bank, 2024[5]).
← 3. All starting between 2026 and 2027: 1) creating a database of entrepreneurs who failed in their first attempt to be successful entrepreneurs; 2) creating a brochure to promote second chance; 3) conducting training and advisory lectures on running a business for entrepreneurs who failed in their first attempt and who want to open their own business again; 4) providing business mentoring support for entrepreneurs who are reopening their businesses; 5) providing support in organising presentations that share examples and practices that contributed to a failed business.
← 4. The World Bank’s Worldwide Governance Indicators “regulatory quality” indicator measures perceptions of the government’s capacity to design and implement policies and regulations that support private-sector development, including the predictability, transparency and effectiveness of regulatory frameworks affecting business activity, investment, competition and market functioning. The WIPO Global Innovation Index “regulatory quality” indicator for the private sector captures the quality of the regulatory environment for entrepreneurship and innovation, assessing the extent to which regulations facilitate business creation, innovation activity, market access and private-sector-led growth.
← 5. The preparation of the strategy was informed by a preliminary SME needs assessment carried out in co-operation with the EU for SMEs Development project, mapping gaps in access to advisory, digital and green support services across regions. The Action Plan 2025-2027 foresees institutionalising this process through a biannual national needs assessment led by the APPRM and the SME Observatory, ensuring continuous alignment of support measures with SME demand.
← 6. Modular training under the APPRM’s annual programmes includes entrepreneurship, business planning, financial management, digital marketing and green transition modules, often delivered in co-operation with universities, secondary vocational schools and private providers. Sector-specific trainings focus on tourism, ICT, manufacturing and construction, while tailored services target specific groups such as women, youth, returnees and rural entrepreneurs. The 2025 programme further expands thematic coverage to include artificial intelligence, digital transformation and circular economy topics, supported through regional entrepreneurship centres and digital learning tools.
← 7. Official Gazette No. 154/2025.
← 8. This refers only to the budget of APPRM.
← 9. The APPRM Programme 2025, aligned with the Strategy for Development of Small and Medium-Sized Enterprises 2025‑2030, marks a significant expansion in scope and structure. With a total allocation of MKD 42.8 million (EUR 695 000), almost double the amount in 2022, it organises support under five thematic pillars: digitalisation, green economy, entrepreneurial skills, gender inclusion and self-employment development. The programme introduces enhanced mentoring and voucher schemes, new training modules on artificial intelligence and sustainable business, and the planned E-platform for entrepreneurship services to facilitate broader and more efficient outreach.
← 10. Flagship initiatives such as Digital SME and Digital Rural Woman promote e-commerce readiness and digital literacy, while the voucher-based consultancy scheme offers up to MKD 50 000 (EUR 810) per enterprise for expert advisory and mentoring services.
← 11. According to North Macedonia’s responses to the 2026 SME Policy Index questionnaire, legal and budgetary rules restrict the APPRM from using public funds for advertising individual beneficiaries or commercial promotion of support services. As a result, communication is limited to generic programme information approved by the Ministry of Economy.
← 12. Publication of detailed beneficiary data is constrained by the Law on Personal Data Protection (Official Gazette No. 42/20), which limits the disclosure of enterprise-level or gender-disaggregated information in public reports.
← 13. The Standardised Mentoring Programme builds on the model developed under the JICA Technical Cooperation Project “Strengthening the Business Support System for SMEs in the Republic of North Macedonia” (2015-2019), which trained over 60 mentors and established standardised methodologies for SME mentoring. See: https://www.jica.go.jp/english/about/basic/structure/overseas/balkan/others/__icsFiles/afieldfile/2025/03/19/Republic_of_North_Macedonia.pdf.
← 14. The SME Strategy 2025-2030 and its Action Plan 2025-2027 foresee the establishment of a comprehensive, outcome-based monitoring and evaluation framework co-ordinated by the Ministry of Economy and the APPRM. It will introduce outcome-oriented key performance indicators, mid-term (2027) and final (2030) evaluations, and digitalised data collection through the SME Observatory. The framework also foresees integrating data from relevant institutions (the APPRM, the Fund for Innovation and Technological Development, the Employment Service Agency, and the State Statistical Office) to strengthen evidence-based policymaking and transparency.
← 15. Introduced by the APPRM in 2022 and scaled up in 2023, the Voucher Counselling Scheme engages accredited private consultants to deliver co-financed advisory services to SMEs and start-ups. Support covers business planning, digitalisation, green transition and export readiness, with individual vouchers providing up to MKD 50 000 (approximately. EUR 810) per enterprise. In 2023, the scheme operated through 8 regional business support centres with 159 authorised consultants, issuing 66 vouchers that provided approximately 1 482 hours of consultancy to 39 SMEs. See: https://apprm.gov.mk/Voucher.
← 16. Operating since 2019 under the JICA framework, this publicly funded measure provides structured mentoring for entrepreneurs through a pool of accredited mentors. In 2023, the programme delivered 2 275 hours of mentoring to 59 SMEs, 24% of which were women-owned. Recent updates introduced new certification and mentor-reauthorisation modules, strengthening professional standards and linking mentoring to the national advisory ecosystem.
← 17. The online Consultants Catalogue (https://apprm.gov.mk/ConsultantsCatalog) was digitalised in 2023 to increase transparency and accessibility for SMEs seeking accredited experts. Complementary digital tools, including training-of-trainers (CRTT) and mentor recertification modules, enhance service quality and ensure consistency across regional providers. These upgrades form part of the APPRM’s broader digitalisation of programme delivery, foreseen in the SME Strategy 2025-2030 and Action Plan 2025-2027.
← 18. Dimension 6 has undergone significant structural and methodological changes to reflect the emergence of new policy instruments supporting access to bank finance, the diversification of financing instruments available to firms, and the increasing policy emphasis on monitoring, evaluation and effective implementation. These changes were also introduced to ensure closer alignment with the latest OECD and EU standards and good practices in assessing access to finance policies.
As a result of these changes, scores from the 2022 and 2026 assessment cycles are not directly comparable. However, to preserve the benchmarking nature of the exercise and ensure analytical continuity, the 2022 scores for Dimension 6 and its sub-dimensions were recalculated using the 2026 assessment framework and structure. This enables an illustrative assessment of score evolution between the two cycles and allows the 2026 scores to be used as benchmarks, subject to the limitations arising from the revised structure and methodology of the dimension.
← 19. The original 2022-Dimension 6 score calculated using the previous methodology was 3.90.
← 20. The original 2022 bank finance score, calculated using the previous methodology and comprising the 2022 bank finance thematic blocks, was 3.14.
← 21. Resources financing the credit lines have been provided by international donors such as the EIB (EUR 39.2 million), the AFD (EUR 12.5 million), the German Development Bank (EUR 0.6 million), and the DBNM’s own funds (EUR 8.7 million) (Development Bank of North Macedonia, 2025[37]).
← 22. The original 2022 non-bank finance score, calculated using the previous methodology and comprising the 2022 non-bank finance thematic blocks, was 2.45.
← 23. The thematic blocks “Financial literacy” and “Microfinance institutions” were part of different sub-dimensions in 2022. Their underlying scores remained unchanged; they were simply recalculated using the methodology of the 2026 edition.
← 24. The 2024 action plan is provided under the following link: https://www.nbrm.mk/ns-newsarticle-sprovedeni-aktivnosti-za-finansiska-edukacija-i-finansiska-inkluzija-vo-2024-godina.nspx.
← 25. CEFE stands for Competency-based Economies through Formation of Enterprise.
← 26. Entering into force in July 2025, the Law on Innovation, Scientific and Technological Development and Entrepreneurship provides an opportunity to strengthen this area, as it mandates the Council for Innovation, Scientific and Technological Development and Entrepreneurship to propose indicators for monitoring to the government and evaluation of innovation programmes, including technology development services. For more details, see Parliament of the Republic of North Macedonia (2025[80]).
← 27. North Macedonia’s business incubators are: Youth Entrepreneurial Service Foundation Incubator Skopje (World Economic Forum, 2025[4]), SEEUTechPark-Tetovo (launched in 2013) (World Economic Forum, 2024[3]), Startup Club Skopje (2023[2]), CEED Hub Skopje (2016) (World Economic Forum, 2022[1]), HEMI Incubator (Ministry of Economy and Labor of North Macedonia, 2025[6]). North Macedonia’s business accelerators are: Business Impact Lab (2024[7]), X Factor Accelerator (European Commission, 2024[19]), Business-technology Accelerator UKIM (APPRM, 2024[50]), Seavus Accelerator (Employment Service Agency of the Republic of North Macedonia, 2024[51]), .Wave (2025[52]), Accelerate2030 (European Commission, 2024[54]), Circular ClimAccelerator North Macedonia (Clim Accelerator, 2025[81]).
← 28. Information provided by the government of North Macedonia for this assessment.
← 29. Three grant schemes are under the framework of the “Support Program through Pillar 3 of the Economic Growth Plan of the Government of the Republic of North Macedonia” (co-financed grants for technological development to overcome the consequences of COVID-19, co-financed grants for technological development, and co-financed grants to enhance innovation) and four which used to be funded by the World Bank (co-financed grants for start-ups and spin-offs; co-financed grants for commercialisation of innovations; co-financed grants for technological extension; and co-financed grants for the establishment, operation and investments in business technology accelerators).
← 30. The government reports that since 2022, promotional activities to encourage the use of environmental management systems among SMEs have been carried out with donor support by the Ministry of Economy and Labour, the Ministry of Environment and Physical Planning, and the Chambers of Commerce. However, no specific data on outcomes or targets achieved have been made available, making it difficult to assess the effectiveness of these efforts.
← 31. Through Program for support of competitiveness of manufacturing industry and social responsibility, implemented by the Ministry of Economy and Labour, companies can receive cofinancing to cover the costs associated with preparing reports on their ESG performance or compliance with European Sustainability Reporting Standards.
← 32. The SME Strategy 2025-2030 positions SME internationalisation as one of the core levers for competitiveness and sustainable growth. Building on the Export Promotion Strategy 2024-2027, the SME Strategy integrates export performance into its broader policy framework for innovation, digitalisation and access to finance. One of its six strategic goals – “Fostering SME competitiveness through innovation and internationalisation” – explicitly targets the expansion of SMEs in foreign markets.
The strategy’s key measures include:
enhancing export readiness and market diversification through mentoring, capacity building and e-commerce support
improving SME access to finance for export-related investments via the Development Bank and the Fund for Innovation and Technological Development
facilitating international partnerships through the EEN, cluster initiatives and cross-border co-operation
strengthening institutional co-ordination with Invest North Macedonia to align export promotion with innovation and digital transformation programmes.
The Action Plan 2025 operationalises these objectives through indicators such as the number of SMEs engaged in international markets, participation in export-oriented projects and the volume of SME exports. However, despite these advances, the strategy notes limited SME internationalisation capacity, particularly among micro and rural firms, and highlights the need for stronger co-ordination with export promotion programmes and longer term budget planning to sustain results.
← 33. The Export Promotion Strategy of the Republic of North Macedonia 2024-2027 explicitly identifies micro, small and medium‑sized enterprises as its principal target group. Section 1.3 (“Objectives and target groups”) defines SMEs as the key drivers of export growth and competitiveness, with all measures under the Action Plan designed to enhance their internationalisation capacity, market diversification and access to finance. The Action Plan 2024-2025 further specifies that priority beneficiaries include “exporting and potential exporting SMEs, particularly in sectors with high innovation potential and value-added capacity.” With this new strategy, support is advanced with policies and measures aimed at the following segments: an improved business environment for export promotion; improved information and encouragement of the domestic enterprises to start exporting or to promote their exports; building and strengthening overall export capacities; greater promotion and connection of domestic export capacities; and facilitated and increased access to finance through favourable credit lines for exporters and export risk management.
← 34. The Export Promotion Strategy 2024-2027 assigns Invest North Macedonia a central role in implementing export promotion measures, including trade fairs, business-to-business (B2B) missions and international marketing, in co-ordination with the Ministry of Economy, the Development Bank of North Macedonia, and the Fund for Innovation and Technological Development. The agency also co-operates with economic counsellors abroad to strengthen international outreach. Institutional consolidation with the Directorate for Technological Industrial Development Zones is planned under public administration reform to enhance export and investment promotion synergies.
← 35. Based on the responses received from national stakeholders, sectors covered are automotive and electrical equipment, ICT, agri-food and beverage processing, textiles and apparel, pharmaceuticals and medical devices, metal and precision mechanics, renewable energy technologies, and tourism and hospitality services.
← 36. Based on the responses received, stakeholders consulted during strategy preparation, including chambers of commerce, sector associations and SME representatives, highlighted insufficient and unpredictable funding as one of the main barriers to effective implementation.
← 37. Key measures (A10-A30) include: A10 – “Export Champions” awards and conference; A13 – Online registry of export support tools; A15 – Establishment of “Export Ombudsman” for complaints and feedback; A18 – E-tool for export readiness self‑assessment; A25-A26 – Support for international trade fairs and B2B events; A27 – Publication of export success stories; A30 – “Destination advisors” providing expert market entry guidance.
← 38. Key initiatives include: the Export Accelerator, a mentoring programme linking SMEs with international experts; Destination Advisors, foreign market consultants providing tailored export entry guidance; Export Champions Awards, annual recognition of high-performing exporters; Export Ombudsman, an online mechanism for addressing exporter feedback and complaints; Digital Registry of Export Support Tools, a centralised information platform integrated with the Invest North Macedonia Export Portal (https://export.investnorthmacedonia.gov.mk), which also offers a B2B marketplace and export-readiness self‑assessment tool.
← 39. See: https://export.investnorthmacedonia.gov.mk.
← 40. The Swiss Import Promotion Programme provides advisory and capacity-building assistance to Invest North Macedonia, including support for SME participation in international trade fairs and training on sustainability and circular economy practices. EBRD supports SME digitalisation and gender-responsive entrepreneurship through its Go Digital and Women in Business programmes, while the United Nations Development Programme implements youth entrepreneurship and regional competitiveness initiatives aligned with SME internationalisation objectives.
← 41. These will be implemented by the Ministry of Economy and Labour in co-operation with INOVA, the Directorate for Technological Industrial Development Zones and universities, and aligned with the Smart Specialisation Strategy 2024-2027.
← 42. Under Objective 4.2 of the Export Promotion Strategy 2024-2027, two measures (17 and 18) were introduced to promote cluster development and firm-level sophistication as pathways for SME participation in GVCs. These measures focus on strengthening business networks, supplier upgrading and compliance with international standards to enhance SME competitiveness. See the Export Promotion Strategy 2024-2027, available at: https://portal.mdt.gov.mk/post-body-files/strategii-met-file-w2OJ.pdf).
← 43. The Go Digital Programme – a EUR 4 million credit line from EBRD via Sparkasse Bank Skopje launched in 2024 – supports SME investments in automation, digitalisation and process modernisation. The Green Finance Facility, introduced under the United Nations Joint Programme on Financing the Sustainable Development Goals in 2023, provides concessional loans to SMEs adopting energy-efficient and sustainability-compliant technologies.
← 44. Information provided by the government of North Macedonia during the assessment period.
← 45. Since 2022, the Ministry of Economy and the Agency for Promotion of Entrepreneurship have introduced digital monitoring and reporting systems to track SME support measures in real time. These tools aim to improve co-ordination, transparency and data accuracy across implementing institutions and are complemented by the Smart Specialisation Strategy 2024-2027 monitoring framework, which provides a structured digital platform for performance tracking and evaluation across competitiveness and innovation policies.