Digital transformation is reshaping how SMEs compete, but requires more than access to technology. This cluster examines whether the right conditions are in place for SMEs to navigate this transition successfully. It looks at how policies are designed and implemented to support SME digitalisation and productivity, how they build the digital safety environment that underpins trust and resilience, and how they support SMEs in moving beyond basic digital tools toward more advanced and sustainable technologies; assessing in each case whether policy ambition is matched by effective delivery and measurable outcomes at firm level.
SME Policy Index for Western Balkans and Türkiye 2026 – Economy Profile for North Macedonia
Abstract
Digital transformation is increasingly recognised as a key driver of small and medium-sized enterprise (SME) productivity, innovation and competitiveness in North Macedonia, yet its impact depends on whether firms operate within an enabling policy and institutional environment. While digital tools can help SMEs improve operational efficiency, reach new markets and adopt more data-driven business models (OECD, 2021[1]), these benefits only materialise when favourable conditions are in place, including skills development systems, organisational support structures, interoperable digital frameworks, and access to advisory and financial services (OECD, 2025[2]; 2019[3]). Public policy thus plays a central role in determining whether SME digitalisation remains limited to the use of basic tools or evolves into deeper, productivity-enhancing and structural transformation (OECD, 2024[4]).
Strategic visibility of digital transformation has grown in North Macedonia, with new policy frameworks placing a greater emphasis on SME digital upgrading and transformation. While ambitions have expanded and institutional arrangements are evolving, gaps remain in translating strategic objectives into sufficiently scaled, co-ordinated and SME-tailored financial and skills support, limiting the pace and depth of firm-level digital transformation. This section assesses whether the foundational conditions for SME digital upgrading are in place by examining North Macedonia’s policy and institutional frameworks, the structure and scale of financial support for digitalisation, and the availability of digital skills development opportunities for SMEs.
4.1.1. Strengthening policy and financial support for SME digital transformation
As SME digital transformation hinges on progress across skills, infrastructure, digital innovation systems and access to finance, the design and effectiveness of policy frameworks and delivery mechanisms remain decisive in shaping outcomes in North Macedonia. SMEs typically face higher fixed costs of adoption, limited internal expertise and greater challenges in sequencing investments, making them more reliant than larger enterprises on coherent public support to derisk and guide digital upgrading (OECD, 2021[1]). Digital transformation can, therefore, be seen as a policy-intensive process: progress depends not only on the availability of individual instruments, but on the extent to which governance arrangements align incentives, reduce fragmentation and provide predictable pathways from basic adoption to productivity-enhancing transformation (OECD, 2019[3]). In this context, well co-ordinated and sufficiently resourced policy and financial support mechanisms are essential to enable SMEs in North Macedonia to advance along this trajectory.
North Macedonia’s strategic frameworks recognise the transformative potential of SME digital transformation. An important development took place in October 2025, when the Ministry of Digital Transformation presented the new ICT Development Strategy: Smart/MK 2030, together with its Action Plan 2025-2027 (Table 4.1). The strategy now serves as the central framework for advancing digitalisation and innovation within enterprises, with one of the priority areas placing a greater emphasis on SME upgrading than any previous government framework. One of the strategy’s specific objectives focuses explicitly on SME digitalisation, while additional objectives aim to increase the number and growth potential of ICT start-ups able to secure external financing and to promote the development and application of artificial intelligence (AI) as a key enabler of innovation in the start-up and technology sectors. Smart/MK 2030 also sets ambitious targets for 2030, including achieving 75% enterprise uptake of cloud, AI or big data solutions, and ensuring that more than 70% of SMEs reach at least a basic level of digital maturity. Although the Action Plan does not allocate budgetary resources to individual measures, the resources for its implementation are embedded in North Macedonia’s draft Budget for 2026. Notably, this includes EUR 9 million in dedicated funding for the Agency for Innovation, Scientific and Technological Development and Entrepreneurship (INOVA), created through the merger of the Fund for Innovation and Technology Development (FITD) and the Agency for Promotion of Entrepreneurship (APPRM), alongside further allocations under the Ministry of Economy and Labour and the Ministry of Digital Transformation. Implementation of Smart/MK 2030 is thus supported through multiple budget lines rather than one single financing instrument.
Notes: The table considers all policy frameworks that are relevant for SME digitalisation or digital transformation.
1. A strategy sets the overall vision, strategic objectives and long-term priorities for a given policy area whereas an action plan operationalises these priorities by defining concrete measures, responsible institutions, timelines and (where available) indicative budgets. In other words, the strategy explains what the government intends to achieve while the Action Plan details how it will be implemented. Action plans, therefore, serve as the main reference point for assessing the extent to which strategic commitments translate into measurable, on-the-ground interventions.
2. An indirect SME targeting approach refers to strategies that do not contain SME-specific measures, instruments or implementation mechanisms, but instead pursue economy-wide objectives from which SMEs may benefit. While such strategies may support areas relevant to SMEs (e.g. innovation, digital infrastructure or skills), they do not explicitly account for SME-specific constraints, capacities or policy needs.
Source: Information provided by the government of North Macedonia during the assessment period.
In parallel, the SME Strategy 2025-2030 and its Action Plan 2025-2027 complement the Smart/MK 2030 framework by positioning digital transformation as a core driver of SME competitiveness under the strategic objective on green and digital transition. Built on three pillars, the strategy dedicates Pillar 3 specifically to advancing this agenda in alignment with the European Union’s Digital Compass 2030. This marks a notable improvement compared to the previous SME Strategy 2018-2023, which did not consider SME digital transformation. The new framework places an emphasis on improving the regulatory environment, strengthening advisory and awareness-raising services, and developing financial instruments to support technology adoption. Implementation of these measures is backed by a budget of MKD 366 million (approximately EUR 6 million).
Additional strategic documents reinforce digital ambitions, though with more indirect effects on SMEs. The ICT Strategy 2023-2027 prioritises infrastructure and connectivity, establishing an important foundation for digital adoption but offering few SME-targeted interventions. Similarly, the Smart Specialisation Strategy 2024-2027 identifies ICT as both a vertical and horizontal priority, with measures supporting the technological and green transition of the economy. However, its enterprise-related provisions remain oriented toward broader innovation ecosystem development rather than tailored pathways to advance the digital transformation of SMEs.
Taken together, these strategies indicate a clear shift toward embedding digital transformation in North Macedonia’s broader economic and innovation agenda, with greater recognition of SMEs than in previous policy cycles. The emergence of Smart/MK 2030 and the new SME Strategy marks progress in aligning digital, innovation and competitiveness objectives, and in setting measurable long-term targets. However, SME support remains dispersed across multiple frameworks and budget lines, with limited articulation of a single, integrated pathway for SME digital upgrading. As a result, while strategic ambition has increased, the effectiveness of implementation will depend on whether these parallel strategies can be translated into coherent, adequately resourced and SME-tailored instruments in practice.
Implementation capacity, in turn, is closely shaped by institutional arrangements. Policy co-ordination for SME digital transformation is formally anchored in the Ministry of Digital Transformation, established following the June 2024 government reorganisation that split the former Ministry of Information Society and Administration into the Ministry of Digital Transformation and the Ministry of Public Administration. Co‑ordination responsibilities are shared with the Ministry of Economy and INOVA, while the APPRM, through its 2025 Programme, organises awareness-raising workshops on the potential and benefits of digitalisation for SMEs. Taken together, this newly established structure marks a positive step towards a clearer and more dedicated mechanism for addressing digital transformation objectives, with institutional roles more explicitly defined and better aligned with the cross-cutting nature of digitalisation. Nevertheless, the effectiveness of this framework will ultimately depend on how coherently these actors operate in practice, and on the extent to which SMEs are able to navigate, access and benefit from the support on offer. It thus remains to be seen whether the new arrangements will translate into more tangible, co‑ordinated and widespread digital transformation outcomes for the SME sector.
Looking at financial support, North Macedonia offers a growing set of incentives for SME digitalisation and digital transformation (Table 4.2). The former Fund for Innovation and Technological Development (FITD) was the main financial support mechanism for SMEs in North Macedonia, with programmes such as the co-financed grants for technological development, grants focused on start-ups and spin-offs, and programmes for digital transformation support. While grant sizes varied depending on the scheme, they ranged from MKD 1 million to MKD 12.3 million (≈ EUR 25 000 to EUR 200 000), covering activities such as awareness raising, ICT adoption and innovation support. Building on this foundation, the newly established Agency INOVA has taken over and expanded the financial support landscape. Under the new law governing INOVA, financial instruments supporting digitalisation and digital transformation of SMEs are embedded both in its regular financial instruments and through the dedicated Grant Scheme Greening Business Facility, a EUR 25 million project with an agreement signed through January 2030. Donor-driven instruments, such as the Go Digital in the Western Balkans and loan support through the NLB and Sparkasse Banks in Skopje, further complement government support, although their reach is currently limited (WBIF, 2025[5]; Vlajcic, 2025[6]). Moreover, the Development Bank of North Macedonia also provides dedicated loans of EUR 5 000-100 000 to finance digitalisation and digital transformation projects (DBNM, 2025[7]). In 2024, it disbursed EUR 62.3 million in loans supporting 278 projects, mainly among SMEs, indicating that bank‑based instruments represent a significant channel of public financial support for enterprise upgrading (DBNM, 2024[8]). Additionally, the Development Bank of North Macedonia manages other international credit lines that can be used for digital and green investments, including a EUR 50 million credit line from the French Development Agency and a EUR 100 million European Investment Bank credit line for SME working capital and investment loans (DBNM, 2025[9]; 2025[10]).
Notes: The table includes an overview of government and donor financial support for SME digital transformation.
* According to the new Law on Innovation Activity, Scientific and Technological Development and Entrepreneurship (Official Gazette 154/2025 of 29.07.2025), the Fund for Innovation and Technological Development has ceased to exist as a legal entity and has been replaced by the Agency for Innovation, Scientific and Technological Development and Entrepreneurship.
Overall, until now, the scale of North Macedonia’s available public funding for SME digital transformation was modest relative to the costs of more transformative digital investments. European benchmarks indicate that the implementation of enterprise resource planning or large-scale automation projects often require budgets averaging from EUR 5 000 to EUR 8 000 per user and representing 3-6% of annual turnover for SMEs (EPR Scout, 2021[11]; European Investment Bank, 2019[12]). Although the offered grants can meaningfully support smaller scale upgrades or pilot projects, they are unlikely to fully finance end-to-end transformations such as comprehensive enterprise resource planning deployment, automation or full cloud migration. North Macedonia’s financial support for SME digitalisation is thus still taking shape, and it remains to be seen if new incentives will manage to fully address SMEs’ needs.
4.1.2. Assessing the digital maturity of SMEs in North Macedonia
Assessing digital readiness in North Macedonia requires looking beyond headline adoption figures to understand how far SMEs are integrating digital tools into their core business processes. International evidence suggests that digital uptake among smaller firms often remains gradual and fragmented, with many relying on basic solutions that improve visibility or administration but do not substantially transform productivity or business models, thus highlighting the importance of targeted public support for deeper technological upgrading (OECD, 2023[13]). Experience from other countries also shows that when policy frameworks combine skills development, advisory services and accessible financing in a co-ordinated manner, SMEs are more likely to adopt higher value digital applications and engage more effectively in digital markets (OECD, 2021[1]; OECD, 2023[13]).
Looking at the demand side, an OECD survey administered to among SMEs in the Western Balkans and Türkiye (WBT; see Annex B for more information) shows that digital adoption by SMEs in North Macedonia predominantly focuses on basic digital technologies. All surveyed SMEs used at least one basic digital tool, exceeding the WBT average of 93% (OECD, forthcoming[14]). About 82% of surveyed SMEs have a company website, while 41% use social media (Figure 4.1). Yet, the integration of technology into core business processes remains limited. Less than 6% of surveyed SMEs use enterprise resource planning or customer relationship management systems, and none report using advanced data analytics (OECD, forthcoming[14]). This pattern mirrors a broader trend observed across the WBT region, where digital adoption among SMEs remains largely operational rather than strategic, driven more by short-term needs than by long-term transformation objectives (OECD, forthcoming[14]). Similar dynamics are also evident across OECD Member countries, where the gap between SMEs and larger firms is most pronounced not in basic e-commerce adoption, but in the uptake of more sophisticated digital technologies, such as data analytics, automation and AI, which require deeper organisational change and managerial capacity (OECD, 2021[15]).
Source: OECD (forthcoming[14]).
These patterns are particularly pronounced among small firms. Microenterprises, which account for 85% of all SMEs in North Macedonia (MAKSTAT, 2022[16]), tend to prioritise low-cost, easy-to-use tools that meet immediate operational needs. Firm size remains a key determinant of digital readiness, with resource constraints and capability gaps continuing to limit smaller firms’ ability to progress beyond entry-level digital adoption.
Against this backdrop, understanding SMEs’ motivations for going digital is as important as tracking their adoption rates, as it sheds light on the depth of digital awareness and ambition. Survey results indicate that most surveyed SMEs report adopting digital tools for operational purposes: 53% to expand their customer base, 53% to automate internal processes and 29% to improve the monitoring of the businesses’ activities (OECD, forthcoming[14]). About 41% of surveyed SMEs use digital tools to increase domestic sales, a share in line with the WBT average of 43% (OECD, forthcoming[14]). Strategic drivers remain less pronounced: about 12% of surveyed SMEs use digital tools to reach global markets, and a similar amount leverage them for innovation or new business models (Figure 4.2). Together these findings suggest that while surveyed SMEs increasingly recognise the short-term efficiency and market benefits of digitalisation, only a small share considers them to be drivers of long-term competitiveness or structural transformation.
Notes: This excludes respondents who cited “We don’t use digital tools” in the previous question. See Figure 4.1.
Source: OECD (forthcoming[14]).
One factor that helps to explain this limited strategic orientation is SMEs’ low awareness of public support for digitalisation. In North Macedonia, 88% of surveyed SMEs are unaware of government digitalisation support programmes, a share significantly higher than the WBT average of 17% (OECD, forthcoming[14]). Moreover, surveyed SMEs in North Macedonia rarely exploit digitalisation for workforce transformation or organisational innovation; none of the surveyed SMEs reported the use of digital tools to increase teleworking or flexible work mechanisms; and only 6% adopt digital tools to comply with government regulations (OECD, forthcoming[14]). Together these findings suggest that limited awareness of public support, combined with a narrow operational use of digital tools, constrains SMEs’ ability to move beyond basic adoption toward more strategic organisational and workforce transformation.
Furthermore, SMEs in North Macedonia note several major challenges to their digital tools uptake: they face high upfront costs, limited access to dedicated finance and shortages of in-house expertise. About 65% of surveyed SMEs cite the cost of acquiring, maintaining and repairing tools as significant barriers to digitalisation (OECD, forthcoming[14]). Additionally, 35% and 29% of respondents point to the costs and time needed for training, respectively, and as an immediate consequence, 24% of SMEs cite lack of digital skills as a challenge (Figure 4.3), (OECD, forthcoming[14]). These challenges could become more prominent over time if access to advisory services remains limited and if strategic planning within firms remains absent, thereby preventing SMEs from moving beyond entry-level adoption of digital tools.
Note: “None” refers to respondents who reported no challenges related to digital tool use (i.e. they did not cite any of the listed challenges), regardless of whether they use digital tools.
Source: OECD (forthcoming[14]).
Overall, digital adoption among SMEs in North Macedonia remains largely operational, limiting the longer term productivity and competitiveness gains associated with deeper digital transformation.
4.1.3. Enhancing digital skills and capacities
Across OECD Member countries, digital transformation is increasingly shaped not only by access to technology, but by firms’ capacity to mobilise digital, managerial and problem-solving skills to redesign processes, adopt data-driven decision making and integrate emerging technologies (OECD, 2024[4]). Skills have thus become a core enabler of effective digital uptake rather than a supporting factor. This shift poses particular challenges for SMEs, which are less likely than large firms to invest in structured digital training, yet face heightened exposure to skills obsolescence as automation, AI and platform-based business models spread across sectors (OECD, 2021[1]; European Commission, 2023[17]).
These dynamics are especially salient in North Macedonia, where a growing share of jobs now requires at least basic digital competences (European Commission, 2023[17]). For SMEs, evidence points to a persistent skills gap, reflecting a mismatch between competencies developed through the formal education system and those demanded in the labour market (Lozanoska, Piperkova and Djambaska, 2020[18]). Firms report shortages in transversal skills like problem-solving, initiative and adaptability, as well as in specialist digital competencies (UNDP, 2024[19]). As a result, skills constraints increasingly limit SMEs’ capacity to adopt and integrate digital tools and to respond to evolving market demands.
OECD survey evidence reinforces these findings: over 23% of surveyed SMEs in North Macedonia identify digital skills shortages as a barrier to digital transformation (OECD, forthcoming[14]). A key challenge relates to limited in-house expertise: around 24% of surveyed SMEs rely on internal IT specialists while 47% depend on external consultants when digital expertise is needed, which is in line with the OECD sample (OECD, 2024[20]).
These skills gaps also reduce the effectiveness of public support measures. Nearly 24% of surveyed SMEs report insufficient internal digital skills to deploy new digital tools effectively, the second highest rate in the region after Serbia (Figure 4.4) (OECD, forthcoming[14]). At the same time, firms that benefit from technical assistance often lack access to follow-up finance. This misalignment between financial support and capacity building reduces the long-term impact of digitalisation initiatives, as many SMEs struggle to progress beyond initial tool adoption. While outsourcing digital services can be a cost-effective solution for smaller firms with intermittent needs, the absence of complementary strategic guidance limits their ability to embed digital technologies into core business processes.
Source: OECD (forthcoming[14]).
At the system level, only about 35% of adults in North Macedonia possess at least basic digital skills, a share well below the EU average of 55% (Eurostat, 2021[21]). Lifelong learning participation also remains low, with 2.6% of adults engaging in formal or non-formal training in 2022, significantly below the EU average in 2024 of 13.5% (Eurostat, 2024[22]). This indicates an urgency for digital skills development, which would also help North Macedonia meet EU Digital Compass objectives, including to have 80% of adults with digital skills by 2030 (MAKSTAT, 2022[23]; European Commission, 2021[24]). Taken together, these figures suggest that current skills levels are insufficient to support a broad-based digital transition. Closing this gap will require sustained investment in adult learning and targeted digital upskilling, and in particular for the SME workforce, if North Macedonia is to approach EU Digital Compass targets and strengthen enterprise competitiveness.
While North Macedonia’s strategic frameworks explicitly recognise digital skills as a policy priority, their emphasis is primarily placed on education, innovation and broader economic transformation objectives. In particular, the Smart Specialisation Strategy 2023-2027, the Strategy for Innovative Entrepreneurship 2021-2027 and the Education Strategy 2018-2025 together form a complementary framework, with the Education Strategy laying the foundations for early and continuous skills development, the Smart Specialisation Strategy linking digital skills to structural transformation priorities, and the Strategy for Innovative Entrepreneurship highlighting their role in supporting start-ups and innovative firms. Recent institutional developments further strengthen this co-ordination: the new Education Strategy 2026-2032, recently adopted by the government, reinforces digital skills development through measures covering digital literacy, AI integration in teaching, strengthened digital competencies for teachers and digital infrastructure support in schools, in coherence with the National ICT Strategy (Ministry of Education and Science of North Macedonia, 2025[25]). As a result, despite a relatively well-developed strategic framework for digital skills, the absence of measures explicitly targeting SMEs limits its effectiveness in supporting firm-level digital upgrading in practice.
In practice, this strategic gap is only partially offset by existing programmes and initiatives related to SME digital skills development, which remain limited in scale and scope. Efforts have been primarily undertaken by the APPRM, whose 2025 programme includes targeted training for teachers and professors of entrepreneurship and business subjects, focusing on digital and green entrepreneurship and aimed at strengthening entrepreneurial learning capacities in secondary and higher education (APERM, 2025[26]). Moreover, North Macedonia’s participation in regional and EU-supported programmes, such as the SELFIEforTEACHERS initiative, underlines efforts to develop digital employment profiles and enhance teacher training. The initiative, with the objective of informing policies, included a study with responses from over 400 surveyed teachers (see Cluster 4) (ETF, 2024[27]). However, the initiative primarily targets the education sector and does not directly address the specific digital skills needs of SMEs. In parallel, donor- and non-governmental organisation-supported initiatives have been important drivers of SME skill‑building. Programmes like the Learn4SMEs project (Box 4.1), which led to the establishment of the Smart Learning Factory in Skopje, as well as INNOFEIT EDIH’s digital skills initiatives, have delivered trainings, workshops and advisory services tailored to SMEs from various sectors and their employees. While these programmes help bridge immediate gaps, their reliance on external funding or project-based interventions can limit their scalability and continuity, leaving SMEs without stable and predictable access to structured digital upskilling opportunities.
The Smart Learning Factory Skopje (SLFS) was created through the Learn4SMEs project entitled “Learning Factory for Improving Digital Competitiveness and Industry 4.0 Readiness of SMEs in the Balkans” funded by EIT Manufacturing and co-financed by the European Union. Launched in 2023 at the Faculty of Mechanical Engineering, “Ss. Cyril and Methodius” University, SLFS offers a state-of-the-art simulation environment where students, small and medium-sized enterprises (SMEs), and professionals can gain hands-on experience on the use of digital technologies.
SLFS provides training in Lean methodologies (e.g. 5S, Kaizen), process mapping, productivity improvement, digital transformation and simulation tools, all delivered in a highly interactive, lab-style setting. Since its launch, SLFS has welcomed over 1 000 visitors, engaged around 40 companies and trained more than 450 participants in digital learning courses. Over 3 000 learning modules have been completed, reflecting strong engagement and demand for advanced manufacturing skills.
The programme has already achieved tangible results: companies have realised cost savings of up to EUR 20 000 through workplace optimisation, annual savings of EUR 26 000 with a 5-month return on investment, a 20% increase in production output, a 42% reduction in cycle times and the introduction of procedures for ensuring 100% quality control.
As one of North Macedonia’s first learning factories, SLFS embodies a dynamic bridge between theoretical learning and practical SME application. By actively engaging local SMEs in immersive training and immersive prototyping, it helps derisk digital transformation projects and boost Industry 4.0 readiness. The collaboration also stimulates student-industry partnerships and positions SLFS as a regional hub in the EIT Manufacturing ecosystem.
Sources: EIT (2024[28]); TU Wien (2023[29]).
The way forward
Enhance targeted support to accelerate SME digital maturity. Most SMEs in North Macedonia remain at early stages of digital adoption, relying primarily on basic tools for accounting or marketing. Policy efforts should shift from promoting entry-level uptake towards supporting progression to process-oriented1 and data-driven solutions, particularly in sectors with high productivity and export potential such as manufacturing, agri-food and retail. This could be achieved by introducing dedicated digital transformation windows within existing INOVA grant schemes complemented by vouchers for advisory, integration and change management services. To strengthen uptake, sector-specific demonstration projects and mentoring delivered through digital hubs could further help make the business case for advanced tools more tangible, illustrating their value for efficiency gains, scaling and export readiness.
Consolidate and scale SME-focused digital skills programmes. Despite growing awareness of digital skills needs, support for digital upskilling in North Macedonia remains fragmented and largely driven by time-bound and donor-led initiatives. Support should therefore focus on consolidating SME digital skills development within mainstream vocational education and training, and adult learning frameworks, ensuring coherence with the Digital Skills Strategy and Education Strategy 2030. Expanding financial incentives, such as training vouchers or SME co-financing for digital literacy programmes; formalising partnerships with universities and chambers of commerce; and sectoral organisation could help scale delivery and improve reach. In parallel, more targeted support for management-level and sector-specific digital competences would enable SMEs to better link technology adoption with strategic planning, organisational change and long-term business growth (Box 4.2).
France has developed a structured and scalable approach to small and medium-sized enterprise (SME) upskilling through Bpifrance, the public investment bank, notably via its “SME Acceleration” programme. Rather than focusing solely on basic digital literacy, the programme targets growth-oriented SMEs and combines management training, digital transformation and strategic leadership development.
The programme offers participating firms a 12-18 month support pathway, combining:
collective and individual training modules on digital technologies, data use and organisational transformation
strategic coaching for SME managers focused on growth planning, innovation and digital transition
peer learning and networking among SMEs facing similar scale-up challenges.
Training is delivered in partnership with business schools, universities and sector experts, ensuring strong links between applied knowledge and business needs. Public co-financing reduces costs for participating SMEs, making advanced training accessible beyond large firms.
By embedding digital skills into broader management and leadership development, the programme helps SMEs move from basic technology adoption to strategic digital transformation, supporting productivity growth and long-term competitiveness. This integrated model can be particularly relevant for North Macedonia as it illustrates how public authorities can consolidate fragmented training initiatives into a coherent, demand-driven skills ecosystem for SMEs.
Sources: OECD (2025[30]); BPIfrance (2023[31]).
Once the basic enabling conditions for digital adoption are established, the key issue becomes whether SMEs are able to translate digitalisation into tangible productivity improvements. Evidence shows that productivity growth among SMEs depends less on the mere use of digital tools and more on how effectively firms integrate them into sales channels, innovation processes and organisational structures, and how they use them to engage with markets (OECD, 2023[13]; 2021[1]). Across the OECD and the European Union, SMEs that combine e-commerce with digital innovation and internal process reorganisation are more likely to expand their market reach, diversify revenue streams and improve efficiency. On the other hand, firms that adopt digital tools only superficially face a higher risk of falling behind as competitive pressures increase (OECD, 2023[32]; European Commission, 2024[33]). In this sense, digitalisation generates productivity gains not only through online presence alone, but when digital sales, innovation activities and organisational change are mutually reinforcing, enabling firms to scale up and compete beyond local markets (OECD, 2023[13]; 2021[1]).
In North Macedonia, digitalisation has yet to translate into broad-based productivity gains among SMEs (OECD, forthcoming[14]). Despite a stronger strategic emphasis on digital transformation, most SMEs only use digital tools for basic tasks, with firm-level productivity continuing to depend largely on structural factors such as skills, financial capacity and firm size (Jovanovic, 2018[34]). This section sheds light on how e‑commerce adoption and innovation activities can contribute to SME productivity in North Macedonia, the key conditions for enabling firms to expand markets, strengthen competitiveness and sustain growth in an increasingly digital economy.
4.2.1. Leveraging the use of e-commerce and online platforms to drive SME growth
E-commerce and online platforms represent a key channel through which digitalisation can translate into higher SME productivity. Embedding online sales into core business operations rather than treating them as supplementary tools allows firms to lower transaction costs, expand their customer base and make more systematic use of data for strategic decision making (OECD, 2025[35]). SMEs that adopt hybrid business models combining physical and online sales channels tend to have greater productivity gains by improving operational efficiency, reaching wider markets and supporting more data-driven management practices (OECD, 2023[32]). These firm-level gains are more and more important in a context where digital platforms are increasingly reshaping market access, trade patterns and firms’ participation in value chains (OECD, 2025[36]). Against this backdrop, North Macedonia’s SME productivity stood at EUR 10 900 in 2019, well below the EU average of EUR 42 600 (European Commission, 2021[37]), highlighting the need to accelerate SME digital transformation as a means to boost efficiency, innovation and convergence with EU productivity levels.
Despite the productivity potential associated with digital and hybrid sales models, OECD survey evidence suggests that e-commerce use among SMEs in North Macedonia remains shallow and fragmented. Among surveyed SMEs that engage in online sales, 65% use their own company website as a sales channel, while 53% rely on social media and 12% use other platforms (Figure 4.5), (OECD, forthcoming[14]). However, none of the surveyed SMEs reported using third-party marketplaces for online sales (OECD, forthcoming[14]). This pattern suggests a preference for easily accessible and low-cost digital channels over more structured and scalable e-commerce solutions, potentially constraining SMEs’ ability to expand beyond local markets and fully exploit the productivity gains associated with online platforms.
Note: No SMEs reported using third-party marketplaces.
Source: OECD (forthcoming[14]).
Moreover, surveyed SMEs in North Macedonia indicate challenges revolving e-commerce revenue generation: all surveyed SMEs reported that online platforms generated less than 30% of their revenues and 65% stated online sales accounted for less than 10% of their overall transactions. These figures underline the unexplored potential of e-commerce as a growth lever for North Macedonia’s SME sector.
At the policy level, the government has taken moderate but tangible steps to strengthen the legal and institutional framework for digital commerce, with an increasing focus on cross-border e-commerce and SME participation. The Export Promotion Strategy 2024-2027 and its Action Plan 2024-2025 include digital trade measures under a special objective on optimised digital presence abroad, supported by a budget of MKD 4.6 million (≈ EUR 75 000) from the Ministry of Economy. Key measures include the facilitation and digitisation of export procedures for cross-border e-commerce, the implementation of an e-commerce domain compliant with the EU Import Control System 2, and support for enterprises to expand online marketing and sales through foreign e-platforms. The Ministry of Economy, through its Department for Industrial Policy and Export Promotion, co-ordinates these activities in collaboration with the Customs Administration and engages periodically with business associations such as the E-Commerce Association of North Macedonia (MECA) to promote e-commerce training and outreach.
While no formal implementation report for the Action Plan 2024-2025 has been published to date, budget allocations provide partial evidence that selected measures are being operationalised. In particular, the APPRM allocated MKD 450 000 annually in 2024 and 2025 for workshops raising SME awareness of digitalisation (Action A16), and MKD 3.5 million in 2024 and MKD 3.2 million in 2025 for mentoring services aimed at strengthening SME export readiness and internationalisation (Action A25) (Ministry of Economy of North Macedonia, 2024[38]).
In parallel, amendments to the Law on E-Commerce and the Law on Electronic Signature (2020) laid the foundation for alignment with EU standards, improving legal certainty around electronic authentication, contract formation and intermediary liability. More recently, two key reforms – the Law on Payment Services and Payment Systems (adopted in April 2022 and in force since January 2023) and the Law on Consumer Protection (adopted in November 2022) – have brought North Macedonia alignment with the EU acquis. The Law on Payment Services and Payment Systems transposes the Payment Services Directive, the Second Electronic Money Directive and the e-Payment Accounts Directive, thereby introducing new safeguards on user rights, transparency of fees and the entry of non-bank electronic money institutions. The Law on Consumer Protection harmonises legislation with EU consumer directives, defining clear trader obligations for price labelling, defect liability and dispute resolution in physical and online trade. Together these reforms modernise the regulatory environment for e-commerce and enhance consumer and payment security in line with EU standards.
Despite these regulatory improvements, evidence of targeted programmes to support SMEs in building and scaling their online presence remains limited. In this context, non-state actors have played a particularly important role in promoting SME engagement in e-commerce. MECA has emerged as a leading driver of SME e-commerce use in North Macedonia, serving as a central point of contact for firms seeking to expand their online presence, sales and customer reach. Through regular trainings, awareness campaigns and networking events, MECA has raised awareness of the opportunities offered by e‑commerce for citizens and businesses (MECA, 2022[39]). Its annual E-commerce Conference, bringing together nearly 3 000 participants, 800 businesses and stakeholders from over 30 countries, has become a recognised platform for digital commerce dialogue in the WBT region and beyond (MECA, 2024[40]). In addition to these ongoing activities, MECA implements targeted capacity-building initiatives such as the Digitally Fit for E-Commerce project (Box 4.3), which provides tailored support to SMEs transitioning to online sales. More recently, MECA has developed the eCommerce4All platform through donor support, building on an earlier platform launched in 2020 with support from the United States Agency for International Development (eCommerce4all, 2025[41]; 2025[42]). The platform provides guidance and services to firms engaged in e-commerce but does not directly involve SMEs in the design or implementation of public policies related to digital trade. Co-ordination mechanisms between public institutions and non-governmental actors such as MECA remain informal, which can impact the coherence and scale of available support relative to SMEs' needs. Recognising the limited scale of public support for SME e-commerce uptake, the government announced new efforts in 2025 to promote e-commerce through improved policies, enhanced interoperability of public systems and reductions in administrative burdens for online businesses (Ministry of Digital Transformation of North Macedonia, 2025[43]).
The Digitally Fit for E-Commerce project, implemented by the E-Commerce Association of North Macedonia with support from the United States Agency for International Development’s EDGE project, is a practical initiative aimed at empowering micro, small and medium-sized enterprises (MSMEs) in North Macedonia to enter the e-commerce landscape.
Delivered in three phases, the programme first assessed participating SMEs’ digital skill needs. It then provided tailored, in-person training in areas such as digital marketing, branding and e-store set-up. The final phase supported businesses in launching sales channels by opening e-shops on local or regional marketplace platforms.
The project supported 30 MSMEs operating in sectors such as wood products, textiles, agriculture and tourism. More than 30 e-stores were opened on local marketplace platforms and participating firms reported improved digital skills and increased online sales. In addition, the programme facilitated networking and linkages between SMEs and key actors from the e-commerce community.
This initiative combines training, real-world application and platform integration to make e-commerce tangible and achievable for SMEs lacking prior digital experience. It exemplifies how focused support can help traditional businesses leap from offline operations to online sales channels, promoting inclusive digital engagement.
Source: MECA (2024[44]).
4.2.2. Fostering innovation and collaboration for SME productivity
Digitalisation not only contributes to productivity through expanded sales channels but through its interaction with innovation and knowledge diffusion as well. SMEs that innovate using digital and data-driven tools tend to have greater productivity gains, more resilience and higher growth potential, as innovation improves products, processes and overall efficiency (Hall, Lotti and Mairesse, 2012[45]; Mohnen, Polder and Van Leeuwen, 2018[46]). However, these benefits are unevenly distributed and tend to accrue primarily to firms with stronger organisational capacity, skills and intangible assets (Brynjolfsson and McAfee, 2011[47]). Similar patterns persist across the European Union, with SMEs facing structural barriers such as limited finance, weaker technology transfer and lower absorptive capacity (European Commission, 2024[33]). In North Macedonia, understanding how policy frameworks and institutional support enable SMEs to engage in digital innovation is, therefore, central to assessing whether the economy can turn strategic ambition into broad-based productivity growth rather than progress concentrated among a small group of digitally advanced firms.
North Macedonia has sought to build an enabling policy and institutional environment for SME-driven innovation. The former FITD served as the central vehicle, deploying a mix of co-financing instruments for research and development (R&D), technology adoption, and business model innovation. Its grants reached over 1 000 projects, while flagship schemes such as the Co-financed Grants, including those for Start-ups and Spin-offs and Support for Technology Advancement, focused on providing support for business digitalisation, AI-based services and green technologies (FITD, 2021[48]). While this reach demonstrated a growing demand, the relatively small scale of funding available under some of the grants – such as the Grant for Start-ups and Spin-offs, with an average project value of MKD 2.2 million (≈ EUR 36 000), of which MKD 1.7 million (≈ EUR 28 000) were co-funded by the FITD – raised questions about whether resources were sufficient to drive transformative SME investments. With the FITD discontinued and its competences transferred to INOVA, the former financial instruments have been carried over with improvements, as reflected in new Rulebooks currently under development. A new Rulebook facilitating access of enterprises, higher education and scientific institutions to European Institute of Innovation and Technology (EIT) and European Innovation Council (EIC) funds was adopted by end of 2025, and additional financial instruments and measures are foreseen under the new Law. Moreover, although North Macedonia has placed a greater emphasis on digital innovation within its broader SME development agenda, uptake remains uneven across the SME sector, with adoption particularly concentrated among ICT-intensive firms and start-ups (OECD, forthcoming[14]).
At the same time, North Macedonia’s participation in the Digital Europe Programme is broadening SMEs’ access to EU networks and expertise. The establishment of INNOFEIT, the European Digital Innovation Hub (EDIH) in Skopje and Bitola, provides SMEs with test-before-invest facilities, digital maturity assessments, training and brokerage services (European Commission, 2025[49]). By embedding firms into regional and EU value chains, the hub offers opportunities to overcome domestic market constraints; however, uptake will depend on SMEs’ awareness and capacity to engage with such services. Complementary infrastructure, including the Skopje Technology Park, SEEUTechPark in Tetovo (Box 4.4) and university-based incubators, further extend the ecosystem by offering prototyping facilities, mentoring and advisory programmes. These efforts are particularly visible in AgriTech, MedTech and CleanTech, where public‑private partnerships are piloting digital solutions tailored to sector-specific needs. While the growing number of actors creates co-ordination challenges, these are expected to be addressed through the implementation of the Smart/MK 2030 Strategy, notably through a measure which foresees specific actions to strengthen capacity to use the Digital Europe Programme and improve the coherence and scalability of support initiatives.
SEEUTechPark, established in 2013 within the South East European University (SEEU) in Tetovo, is one of the first technology parks in North Macedonia dedicated to fostering innovation, entrepreneurship, and small and medium-sized enterprise (SME) development. Designed as a university-linked innovation hub, it provides an enabling environment where start-ups and SMEs can access mentoring, training and incubation services alongside co-working spaces and modern laboratory facilities.
SEEUTechPark serves as a bridge between academia and business, helping firms translate research and innovative ideas into market-ready solutions. Its incubation programme supports early-stage enterprises with tailored advisory services, including business planning, intellectual property guidance and access to investor networks. By connecting SMEs with domestic and international partners, SEEUTechPark also plays a role in facilitating cross-border collaboration and integration into global value chains.
In December 2024, SEEUTechPark expanded its activities with the launch of the “700 Accelerator” hub. Two acceleration programmes have been implemented, attracting 55 start-ups with innovative ideas, 12 of which were selected and successfully completed the programme. Over the past decade, SEEUTechPark has hosted more than 70 start-ups and SME projects, many of which operate in ICT, renewable energy and creative industries. Its position in Tetovo ensures greater geographic inclusion, offering innovation support outside the capital and fostering entrepreneurial talent in North Macedonia’s northwestern region. The park is increasingly recognised as a best practice model for linking higher education, innovation policy and SME competitiveness.
Source: SEEUTechPark (2025[50]).
At the firm level, these developments appear to be accompanied by relatively strong awareness of the importance of digital innovation among SMEs. OECD survey findings show that 53% of surveyed SMEs already use digital innovation at least moderately to enhance products, services or processes while 35% indicate plans to do so in the near future (Figure 4.6) (OECD, forthcoming[14]). This suggests that awareness of the potential benefits of innovation is no longer confined to early adopters but is beginning to diffuse across the broader SME sector. At the same time, only 6% of SMEs report not engaging in digital innovation at all, pointing to a comparatively small share of laggards.
Yet the intensity and depth of adoption remain more limited. Moderate use may often reflect incremental improvements such as upgrading websites, applying standard digital tools or experimenting with digital marketing rather than more transformative changes involving automation, data analytics or AI. The high proportion of SMEs that plan to adopt digital innovation also indicates that many firms are still in the exploratory stage, facing constraints which can range from limited finance and skills shortages to uncertainties about returns on investment.
Source: OECD (forthcoming[14]).
Despite growing awareness of the importance of innovation, collaboration among innovative SMEs in North Macedonia has weakened over time, declining from 61.4% of the EU average in 2018 to 44.5% in 2025 (European Commission, 2025[51]). This trend points to persistent structural barriers to co-operation, even as innovation policy frameworks increasingly emphasise networking and joint projects. The Smart Specialisation Strategy 2023-2027 seeks to reverse this pattern by promoting stronger scientific and business collaboration in priority areas such as smart agriculture, ICT and renewable energy. However, tangible improvements have so far remained limited. Looking ahead, the Smart/MK 2030 Strategy is expected to reinforce collaborative dynamics by prioritising targeted measures, including support for digital and innovative solutions in agricultural production and focused interventions for high-potential start-ups. Together these initiatives aim to reinforce innovation linkages and foster more systematic co-operation among SMEs and research actors.
Financing SME innovation is also seen as a major constraint. Investment in R&D in North Macedonia stood at 0.37% of gross domestic product (GDP) in 2023, significantly lower than the EU average of 2.26% (Figure 4.7) (Eurostat, 2023[52]; OECD, 2025[53]). SMEs in North Macedonia, therefore, relied heavily on the former FITD, now INOVA, for co-financing schemes and donor-funded programmes. However, these instruments have tended to prioritise early-stage firms, leaving scale-ups with limited financing pathways for higher risk and longer term innovation projects. This imbalance weakens the development of a dynamic SME innovation pipeline and constrains North Macedonia’s ability to translate entrepreneurial activity into sustained technological upgrading. OECD evidence suggests that R&D tax incentives can be an effective complement to grant-based schemes, particularly for small firms, which are typically more responsive to tax-based R&D support due to their lower initial R&D intensity and greater financing constraints (OECD, 2025[54]; 2023[55]). In the absence of such instruments, opportunities to broaden and deepen private sector R&D investment remain limited.
Notes: R&D expenditure as a percentage of GDP encompasses spending by governments, higher education institutions, business enterprises and private non-profit organisations. The 2014-2016 and 2020-2023 figures represent three-year unweighted averages of R&D expenditure as a percentage of GDP.
Source: Eurostat (2024[56]).
The way forward
Expand and refocus grant-based financial instruments to support SME digital innovation and scale-up. Rather than concentrating public funding predominantly on early-stage start-ups, North Macedonia could expand and refocus grant-based financial instruments to support established SMEs and scale-ups undertaking larger, higher risk digital investments. Building on the mandate of the newly established INOVA, existing grant schemes could be scaled up and complemented by dedicated funding windows for projects involving process automation, data analytics or the integration of AI solutions. To maximise uptake and impact, these instruments could feature simplified application procedures and performance-based disbursement mechanisms, reducing administrative burdens while incentivising results. Broadening grant availability beyond early-stage support would help SMEs move towards more comprehensive and productivity-enhancing digital transformation without duplicating existing start-up support schemes. North Macedonia can help SMEs progress from experimentation to full digital transformation.
Strengthen SME readiness for e-commerce and digital trade through structured advisory and training programmes embedded in existing business support ecosystems. In partnership with the EDIH and business associations, support should prioritise hands-on assistance in areas critical to market access, including online store development, cross-border logistics management, digital payment solutions and compliance with EU consumer protection standards (Box 4.5). To ensure broad reach and avoid excessive concentration in Skopje, delivery could be anchored in chambers of commerce, technology parks and regional business centres, to include SMEs from less developed regions. This place-based and practice-oriented approach would help SMEs translate digital capabilities into sustained participation in regional and EU digital markets.
France provides a useful example of how governments can strengthen small and medium-sized enterprise (SME) e-commerce capacities through centralised, practical advisory and training support embedded within existing business-support structures. As part of its broader digital transformation agenda, the French Ministry of Economy launched a comprehensive online support offer to help SMEs adopt digital tools and e-commerce solutions, hosted on the platform France Num.
The initiative combined two complementary elements:
First, the government issued a call to private digital service providers, including e-commerce platforms, payment service providers, logistics companies and communication tools, to offer free or preferential-rate services to small businesses. These offers were consolidated into a publicly accessible inventory, allowing SMEs to easily identify trusted solutions for building online shops, accessing marketplaces, managing digital payments, and organising delivery and logistics.
Second, the government complemented this inventory with a step-by-step e-commerce guide tailored to SMEs. The guide provides practical instructions on setting up or improving an online presence, using social media and marketplaces effectively, managing customer communication, and maintaining digital sales channels. It also includes links to specialised guides on topics such as online payments, cybersecurity and logistics, as well as concrete case studies showing how small firms have successfully adopted digital commerce tools.
By combining advisory content, private sector solutions and real-world examples in a single, easily accessible platform, France reduced entry barriers for SMEs and supported more structured and confident engagement with e-commerce. The approach demonstrates how governments can scale SME digital trade support without creating new institutions by leveraging partnerships with business associations, technology providers and chambers of commerce.
Sources: OECD (2021[1]); France Num (2025[57]).
As enterprises increasingly adopt cloud-based solutions, electronic payments and online sales channels, the benefits of digitalisation are accompanied by growing exposure to data protection and cybersecurity risks. SMEs are particularly vulnerable in this environment as they tend to have fewer financial and human resources, less structured approaches to managing data, and limited capacity to continuously monitor and mitigate digital threats (OECD, 2021[1]; 2025[2]). In parallel, progressive alignment with the EU acquis is raising compliance expectations in areas such as personal data protection and cyber resilience, making digital trust a more salient issue for SMEs engaged in online and cross-border activities (European Commission, 2024[58]).
In North Macedonia, the expansion of the use of digital tools has increased SMEs’ exposure to data protection and cybersecurity risks, while firm-level preparedness and risk management practices remain uneven. While recent legislative and strategic reforms have strengthened the regulatory framework for digital trust, this progress has yet to translate into widespread adoption of robust data protection and cybersecurity practices among SMEs, which continue to rely largely on basic measures, with awareness gaps particularly pronounced among smaller firms. This section examines how regulatory frameworks, institutional arrangements and firm-level practices shape SME data protection and cybersecurity readiness in North Macedonia.
4.3.1. Adapting data protection to evolving digital threats
Robust data protection regimes are essential for building trust in digital services and can enhance business competitiveness by clearly defining rights and responsibilities in data-driven markets (EDPB, 2025[59]). For economies like North Macedonia, alignment with the EU General Data Protection Regulation represents a central component of the broader EU accession process and digital integration agenda. Therefore, examining how SMEs in North Macedonia handle personal data and apply data governance practices is relevant for assessing the security, credibility and sustainability of their digital operations.
At the enterprise level, there are some positive trends in SMEs’ adoption of data protection practices in North Macedonia, with findings fairly similar to other WBT economies. About 65% of surveyed SMEs have a data privacy policy in place (OECD, forthcoming[14]), but the findings vary by firm size. Surveyed medium-sized firms are more likely to have a policy than micro and small micro enterprises, with all medium-sized respondents having a data privacy policy in place, compared to 67% of small firms and only 56% of microenterprises. This pattern is not surprising given their typically higher administrative capacity, better access to legal expertise and greater exposure to regulatory compliance requirements. On the other hand, 53% of surveyed SMEs find data protection and security challenging for their business, indicating that compliance often remains formalistic and not fully embedded in operational practices (OECD, forthcoming[14]). Data protection appears to be even more difficult as firms grow, with all surveyed medium-sized firms finding it challenging compared to only 44% of microenterprises. Data privacy presents a particular challenge for SMEs, given their reduced internal capacity to manage complex and evolving regulatory environments.
In terms of data storage, cloud services are increasingly popular among firms in North Macedonia, and while around 12% of respondents cite storing data on both the cloud and on-site, 35% report using only an on-site data centre and hardware. Uneven knowledge persists regarding the security implications of different storage models, and on-site storage remains the preferred method among SMEs (OECD, forthcoming[14]). Furthermore, more than 35% of enterprises cannot specify whether their business data are stored on local servers, hybrid solutions or cloud platforms, reflecting low digital literacy and limited access to expert advice (Figure 4.8) (OECD, forthcoming[14]). This lack of clarity increases vulnerability to breaches and weakens firms’ ability to respond effectively to incidents.
Source: OECD (forthcoming[14]).
In response to growing data protection and cybersecurity risks, North Macedonia enacted its Law on Personal Data Protection in 2020, largely modelled on the EU General Data Protection Regulation. The law establishes core principles such as consent, transparency, accountability and sanctions and requires certain controllers and processors to designate data protection officers (Vlajkovic and Vidikov, 2023[60]). Responsibility for enforcement lies with the Personal Data Protection Agency, which has sought to strengthen implementation through the adoption of the Strategy for the Implementation of the Right to Personal Data Protection 2025-2030 and the Rulebook on Security of Personal Data Processing in July 2025 (Vanevski Law Office, 2025[61]). While the Law on Personal Data Protection is broadly aligned with the General Data Protection Regulation, including sanctions of up to EUR 20 million or 4% of annual turnover (Vlajkovic and Lazarevska, 2020[62]), its practical enforcement remains relatively limited. To date, the Personal Data Protection Agency has prioritised awareness-raising and corrective actions over the systematic use of sanctions, which reduces the law’s deterrent effect and may weaken incentives for SMEs to invest in robust compliance systems. This assessment is echoed by the European Commission, which notes that despite a largely aligned legal framework, implementation gaps persist and the institutional capacity of the Data Protection Agency needs further strengthening (European Commission, 2025[63]).
In parallel, in 2025 parliament adopted a new Law on Electronic Communications, which further strengthens the protection of personal data in the digital communications sector. The law enhances users’ rights, guarantees a higher level of personal data protection in electronic communications, and introduces a clearer and more transparent regulatory framework for service providers. It also defines the competences of the Electronic Communications Agency, with a stronger focus on accountability and effective oversight, contributing to greater regulatory certainty for businesses operating in digital markets.
Taken together, these measures establish the core legal framework for personal data protection in North Macedonia. However, the effectiveness of the framework will depend on stronger institutional capacity, more consistent enforcement and the development of practical compliance support tools tailored to SMEs so that formal alignment with EU standards translates into concrete improvements in enterprise-level data management practices.
4.3.2. Strengthening SME cybersecurity resilience
Cyber incidents tend to affect smaller firms more severely than they do larger ones (OECD, 2021[1]), and inadequate cybersecurity can itself become a competitive disadvantage. SMEs that lack sufficient protection measures may be excluded from procurement processes, cross-border value chains and partnerships with larger firms that apply higher digital security standards (OECD, 2023[13]). Improving cybersecurity among SMEs is, therefore, not only a matter of reducing operational risk, but also of preserving their ability to participate in increasingly regulated and interconnected digital markets.
Cybersecurity has become a pressing concern for the government and businesses in North Macedonia, reflecting the economy’s growing reliance on digital public services, e-commerce platforms and cloud‑based solutions, which increase vulnerabilities if not adequately safeguarded (Global Initiative Against Transnational Organised Crime, 2020[64]). North Macedonia records several hundred cyber incidents annually, with the Computer Security Incident Response Team reporting a growing number of phishing and ransomware attacks affecting public and private entities (Dimeska, 2025[65]). In 2024, North Macedonia experienced two notable cyber incidents: a March attack on the electricity operator MEPSO disrupted internal systems without affecting power supply (Dimoski, 2024[66]), while a September ransomware attack on the Ministry of Economy and Labour disabled email and Internet services. High-profile cyberattacks against government institutions in 2022 and 2023 further highlighted these weaknesses and raised concerns about spillover risks for private enterprises operating with limited cybersecurity safeguards (Marusic, 2022[67]).
At the enterprise level, SMEs in North Macedonia face considerable barriers, including low awareness, limited infrastructure and scarce tailored support mechanisms (OECD, forthcoming[14]). Some forms of cybersecurity measures are being adopted; however, 47% of surveyed SMEs are not using any form of cybersecurity measures (Figure 4.9), a share significantly higher than the 9% among the OECD sample (OECD, 2025[2]). At 35%, the use of strong and secure passwords is the most common measure implemented, followed by around 18% of respondents using two-factor authentication. Use of regularly updated anti‑virus and anti-malware software, as well as the use of VPN systems remain slightly below 12% (OECD, forthcoming[14]). Cybersecurity adoption is, therefore, largely centred around basic measures and the use of more advanced areas such as firewall systems, cybersecurity training and regular security assessments remains minimal, potentially leaving SMEs vulnerable to cyberattacks. SMEs’ adoption of cybersecurity measures in North Macedonia is lower than in the sample of OECD Member countries across all measures (OECD, 2024[68]), suggesting that there is still a clear lag in digital practices.
Note: VPN: virtual private network.
Source: OECD (forthcoming[14]).
Additionally, survey findings point to cyber threat concerns among SMEs: while 53% of surveyed SMEs state they have never experienced a cyberattack, 29% are certain they have experienced a breach, much higher than the 16% among the OECD countries (OECD, 2024[68]). There are also prominent knowledge gaps and shortcomings of monitoring, with 18% of surveyed SMEs reporting being unsure whether they were ever subject to a breach (OECD, forthcoming[14]). Additionally, cost is a key obstacle; surveyed SMEs consider cybersecurity tools, professional services and specialised training to be too costly (OECD, forthcoming[14]). Furthermore, 76% surveyed SMEs do not employ dedicated IT staff and instead rely on informal or reactive support from external providers, often engaging only after incidents occur. This ad hoc approach reflects SMEs’ tendency to prioritise immediate operational needs over long-term digital security investments.
At the policy level, the adoption of the Cybersecurity Strategy 2025-2028 and its accompanying Action Plan have strengthened North Macedonia’s cybersecurity policy landscape. Together they constitute the central framework guiding efforts to build digital resilience. The strategy recognises the private sector, including MSMEs, as a key stakeholder across multiple objectives. In addition to a specific objective on partnership and co-operation between public and private sector capacities, the business dimension is also embedded in a specific objective on establishing a clear and robust cybersecurity governance structure, which provides measures to strengthen public-private partnerships; co-operation with chambers of commerce; and knowledge sharing between public authorities, the private sector, and academic and research communities. More broadly, MSMEs are expected to benefit from measures implemented under all five strategic objectives, including those related to governance, prevention, response capacity, skills development and international co-operation. The strategy further confirms a rising volume and sophistication of cyberattacks targeting critical sectors such as the public administration, energy, finance and private service providers, pointing to systemic vulnerabilities in the current cyber resilience system. While the Action Plan 2025-2027 defines concrete measures to strengthen cyber resilience, it does not yet provide disaggregated evidence on impacts specifically affecting SMEs, and dedicated SME-focused capacity building and compliance support are still only partially developed.
Complementary digital policy frameworks also contribute to cybersecurity objectives, although they do so indirectly. The Smart/MK 2030 Strategy embeds cybersecurity within its broader agenda by positioning digital trust and resilience as core elements of North Macedonia’s digital transformation. Yet given the early stage of implementation, the practical implications of this framework for SME cybersecurity remain uncertain, and its effects on firms’ digital resilience have not yet been documented.
Recent legislative developments reinforce these strategic commitments. The transposition of the European Union’s updated Network and Information Security Directive informed the adoption of the Law on Security of Network and Information Systems, which establishes a comprehensive governance structure for network and information systems security (Kocovska, 2025[69]). While the law primarily targets operators of essential services and critical infrastructure, it also affects SMEs indirectly by creating economy-wide obligations for digital service providers and by reinforcing the overall environment of digital trust (AMCHAM, 2025[70]). These reforms represent an important step toward a more secure digital economy, but SMEs may face new capacity and compliance challenges as they adapt to the evolving regulatory landscape.
By contrast, operational incentives and programmes aimed specifically at strengthening SME cyber resilience remain limited. North Macedonia currently only participates in a few initiatives, such as the EU‑supported regional CyberSEE project, aimed at strengthening the rule of law, security and co-operation in the Western Balkans (Council of Europe, 2025[71]). Some complementary training and capacity-building efforts are in place, but they are mostly led by the Metamorphosis Foundation; the CYBER-IS association and several universities provide valuable awareness-raising and technical support (Metamorphosis Foundation, 2025[72]; CYBER-IS, 2025[73]). These initiatives’ primary shortcoming is that they are mostly dependent on project-based funding and are not tailored to SME needs.
The way forward
Strengthen SME compliance with data protection and digital user rights obligations through the implementation of the new Law on Electronic Communications. To ensure that digital transformation is accompanied by a high level of trust and legal certainty, North Macedonia could reinforce the protection of personal data and users’ rights in the SME context through the effective implementation of the new Law on Electronic Communications. This could include targeted guidance for SMEs on their obligations related to electronic communications, data processing and digital service provision, as well as practical tools such as simplified compliance checklists and sector-specific templates. Close co-operation between the Personal Data Protection Agency, the Agency for Electronic Communications and business associations would help SMEs better understand and apply these rules in their digital operations, strengthening consumer trust and supporting the sustainable development of digital markets.
Build SME cybersecurity capacities through a structured programme combining practical training and affordable protection tools. Given the predominance of basic and reactive cybersecurity measures among SMEs, North Macedonia should establish a dedicated SME Cybersecurity Readiness Programme focused on raising baseline cyber hygiene. Rather than relying on project-based initiatives, the programme should be delivered through a co‑ordinated public-private partnership involving the Ministry of Digital Transformation, the national computer emergency response team, the EDIH, chambers of commerce, and experienced non‑governmental actors such as the Metamorphosis Foundation and CYBER-IS, building on initiatives such as the CyberSEE project. The programme could include modular, hands-on training for SME owners and managers on risk prevention, password and access management, data protection, and incident response; and small-scale grant or voucher schemes to co-finance essential cybersecurity software and basic advisory services (Box 4.6). Practical onboarding support could ensure that participating SMEs implement minimum safeguards during programme participation, helping firms move from reactive to preventive security management and supporting alignment with the evolving EU cybersecurity framework.
The United States provides a relevant example of how governments can strengthen SME cybersecurity through targeted financial support combined with hands-on training and counselling. In 2022, the United States Small Business Administration launched the Cybersecurity for Small Business Pilot Program to help small firms improve their cyber resilience in response to rising digital threats.
The programme provides direct financial assistance to eligible small businesses to cover the costs of cybersecurity training, risk assessments and professional advisory services. Funding can be used for practical activities such as identifying vulnerabilities, improving password and access management practices, implementing basic cybersecurity tools, and developing incident-response plans.
A core feature of the initiative is its emphasis on hands-on counselling and guidance, delivered through certified service providers and local support networks. Small and medium-sized enterprises receive tailored advice based on their size, sector and digital maturity, helping them move from reactive responses to cyber incidents toward more preventive and structured security management. The pilot also seeks to lower cost barriers by co-financing services that would otherwise be unaffordable for many small firms.
The US approach illustrates how voucher-based or small-grant schemes, combined with practical training and trusted advisory support, can significantly enhance SME cybersecurity readiness without imposing excessive compliance burdens.
Sources: OECD (2025[30]); US Small Business Administration (2022[74]).
Moving beyond basic digital adoption, a central question is whether SMEs are ready to deploy advanced technologies in ways that are efficient and environmentally responsible while supporting competitiveness without deepening structural inequalities. Technologies such as AI, data analytics and automation are reshaping how enterprises innovate, organise production and improve productivity. Yet in OECD countries, SMEs are far less likely to use AI than large firms, with adoption rates around 12% among SMEs compared to over 40% among large companies (OECD, 2025[75]). SMEs also face constraints, including limited financial resources, skills shortages and weaker organisational capacities, which hinder their ability to integrate advanced technologies into core business processes (OECD, 2025[35]). As a result, diffusion of these technologies is uneven across firm sizes, making targeted and coherent policy support essential for achieving inclusive and broad-based productivity gains.
This challenge is particularly relevant in North Macedonia, as in other WBT economies, given that limited adoption of advanced technologies risks widening performance gaps between digitally capable firms and those operating with basic tools, potentially constraining competitiveness and opportunities for diversification. This section examines how SMEs in North Macedonia are adopting AI and emerging technologies, and the extent to which policy instruments support sustainable and energy-efficient uptake, identifying both progress made and remaining bottlenecks.
4.4.1. Encouraging SME adoption of artificial intelligence and emerging technologies
AI and other data-driven technologies are increasingly transforming how firms produce goods, deliver services and take strategic decisions, opening new avenues for efficiency gains and innovation (OECD, 2022[76]). However, SMEs tend to benefit much less from these technologies than large enterprises, as they often lack the data infrastructure, managerial expertise and long-term planning capacity needed to embed AI into core business processes (OECD, 2021[1]). As a result, uptake among SMEs is frequently confined to basic, off-the-shelf tools rather than more advanced, customised solutions that would require organisational change and sustained investment.
North Macedonia recognises the role of emerging technologies in some of its strategy and policy frameworks (Table 4.3), with the Smart/MK 2030 Strategy representing the most comprehensive and forward-looking framework in this area. One objective under the priority area Business, Innovation, New Technologies and Artificial Intelligence explicitly focuses on supporting the development and application of AI as a key tool for innovation in the start-up and technology sector. The strategy recognises AI as a transformative technology with the potential to optimise processes, automate tasks and generate new business solutions. It also acknowledges the need for appropriate infrastructure, governance and safeguards. Nevertheless, the strategy also notes that a comprehensive AI strategy will eventually be required to address the full range of opportunities and risks for SMEs.
Complementary frameworks integrate emerging technologies but more indirectly. The Smart Specialisation Strategy 2024-2027 and its Action Plan highlight opportunities for advanced technologies in priority domains such as agriculture, energy and urban development, marking progress in embedding AI-enabled innovation in strategic sectors. Yet the strategy contains no explicit SME targets and only limited references to start-ups, suggesting that the broader business base is not yet systematically engaged in these initiatives. Similarly, the SME Strategy 2025-2030 acknowledges advanced digitalisation as a driver of competitiveness under its green and digital transition objective but offers few concrete measures to support SME adoption of AI, the Internet of Things or big data solutions. Broader policy documents, such as the ICT Strategy 2023-2027, reference smart technologies only at a general level. Overall, this policy gap highlights a common challenge: while strategic documents increasingly reference emerging and advanced technologies, they stop short of providing SMEs with tailored instruments such as targeted financing, sector-specific use cases or applied research partnerships, that could translate high-level ambitions into concrete business-level digital transformation.
Source: Information provided by the government of North Macedonia during the assessment period.
The adoption of public financial support for emerging technology adoption in North Macedonia has so far been primarily channelled toward start-ups and innovation-oriented firms. Some former FITD schemes enabled companies to experiment with advanced digital solutions, including pilot projects in AI, automation and data-driven platforms (FITD, 2021[48]), but these programmes are yet to be established through INOVA. Donor-backed initiatives such as the Western Balkans Digital Innovation Hub Network and the EDIH INNOFEIT have further expanded access to expertise and test-before-invest environments (European Commission, 2025[77]; INNOFEIT EDIH, 2025[78]).
Moreover, several initiatives are broadening SMEs’ access to emerging digital technologies in North Macedonia. The INNOFEIT Hub provides SMEs with free services, including pilot testing of AI, the Internet of Things and cybersecurity tools, as well as advisory and matchmaking support (Box 4.7), (INNOFEIT EDIH, 2025[78]). In parallel, accelerators and incubators such as the Seavus Accelerator, YES Incubator, CEED Hub Skopje, Business Accelerator UKIM and X Factor Accelerator offer mentorship, prototyping support and investor connections (WB Info Hub, 2023[79]; 2023[80]; CEED Hub, 2015[81]; UKIM, 2023[82]; X-Factor, 2018[83]), while academic-linked platforms such as SEEUTechPark Tetovo bridge research and practice (SEEUTechPark, 2013[84]). In 2025, the government also announced the establishment of a National Centre for Artificial Intelligence (“Vezilka”), aimed at strengthening capacities in AI development, research and application (Ministry of Digital Transformation of North Macedonia, 2025[85]). The centre is expected to support ecosystem development and provide an additional institutional anchor for emerging-technology initiatives. Together, these initiatives represent a promising foundation for SME-targeted support. North Macedonia thus has a solid and expanding support for SME uptake of emerging technologies, although the long-term impact will depend on effective co-ordination, sustained funding and accessibility for SMEs.
The government of North Macedonia, in partnership with the European Commission, launched INNOFEIT EDIH as the economy’s first European Digital Innovation Hub (EDIH) to accelerate digital transformation and innovation through the uptake of artificial intelligence (AI) and other advanced technologies. Jointly financed by the Digital Europe Programme (2021-2027) and co-funding, the hub serves as a one-stop platform supporting small and medium-sized enterprises (SMEs) and public sector organisations in adopting AI-based, data-driven and smart digital solutions. Over its initial four-year mandate, INNOFEIT EDIH will provide more than 300 free services, valued at approximately EUR 2 million, focused on strengthening digitalisation and technological innovation.
The hub offers an integrated suite of services built around four key pillars:
1. test-before-invest allows firms to pilot and assess digital technologies before full deployment, reducing investment risk
2. digital skills and training offers free courses, from basic IT to advanced fields such as AI and cybersecurity
3. support-to-find investment links enterprises with investors and European Union funding to scale AI-driven and digital innovation
4. innovation ecosystem and networking strengthens collaboration among academia, industry and government through specialised labs in cybersecurity and advanced manufacturing.
This type of integrated, EU-supported digital innovation model offers valuable lessons to strengthen SME competitiveness and accelerate digital transition. Establishing similar co-ordinated hub networks could accelerate regional AI adoption; support SME digital transformation; and deepen collaboration between research, business and the public sector.
Source: INNOFEIT EDIH (2025[78]).
Looking at the demand side, survey evidence suggests that the uptake of emerging technologies among SMEs in North Macedonia is uneven and often shallow. Around 41% of surveyed SMEs in North Macedonia use some form of AI for their business operations, broadly in line with the WBT average of 39%. Over 35% report using generative AI services such as ChatGPT, Open AI, Bard and others. Around 12% use digital tools with AI functions such as machine learning and under 6% use AI systems developed by experts either within or outside their business (Figure 4.10) (OECD, forthcoming[14]). AI use appears to be concentrated among more digitally mature firms and ICT service providers, whereas most SMEs struggle to identify relevant AI applications and to integrate them effectively into their day-to-day business processes. This pattern is mirrored in the adoption of other advanced digital technologies: 94% of surveyed SMEs report not using any form of advanced digital technologies, and only 6% report using the Internet of Things (OECD, forthcoming[14]).
Note: AI: artificial intelligence.
Source: OECD (forthcoming[14]).
At the level of perceptions, SMEs in North Macedonia show strong optimism toward generative AI. Survey results show that 83% of respondents agree that generative AI has the potential to boost day-to-day efficiency, while 77% believe it can support innovation. This optimism is accompanied by a high level of trust: 77% of surveyed SMEs report no concern about the technology producing inaccurate content, and 88% disagree that generative AI generates harmful outputs. However, this confidence drops when considering broader strategic implications. Views are more mixed regarding AI’s potential to unlock new revenue streams or enable firms to operate with fewer staff, and many SMEs appear uncertain about key challenges around data privacy and legal copyright (OECD, forthcoming[14]).
As digital technologies such as AI, cloud computing and advanced analytics become more prevalent, understanding their environmental footprint is increasingly relevant for SMEs in North Macedonia. North Macedonia’s electricity generation continues to be dominated by fossil fuels, with around 40% of power produced from coal versus 24% rooted in hydropower (IEA, 2025[86]), indicating a relatively carbon-intensive energy mix despite the decline of coal use throughout the years. Lignite-fired plants such as REK Bitola have historically accounted for a large portion of the economy’s electricity supply, reinforcing this dependence on carbon-intensive power (Bytyci and Teofilovski, 2023[87]). In this context, the increased use of energy-intensive digital services, including AI-enabled computing and cloud infrastructure, could translate into higher operational costs and carbon emissions for SMEs unless accompanied by measures that support energy efficiency, low-carbon energy sourcing and green ICT practices.
4.4.2. Promoting a sustainable digital transformation
Digitalisation is closely linked with environmental performance: digital tools can support SMEs in their energy efficiency, monitoring and reporting, but they can also raise operating costs and emissions if deployed without attention to sustainability objectives (OECD, 2024[4]; 2023[13]). For SMEs in North Macedonia operating in a context of continued reliance on carbon-intensive electricity and facing rising EU climate and environmental, social and governance requirements, the ability to combine digital and green upgrading is becoming a critical determinant of competitiveness. This makes the design of coherent, SME-oriented green-digital support particularly relevant as digital adoption accelerates.
While digital transformation is visibly integrated across North Macedonia’s strategic frameworks, the sustainability dimension often appears as a parallel policy objective rather than being embedded into digital support measures. The Smart/MK 2030 Strategy and the ICT Strategy 2023-2027 set high-level digitalisation and innovation goals, but do not provide detailed pathways for SMEs to integrate digital tools into green or sustainability-related investments. In contrast, the SME Strategy 2025-2030 identifies the green and digital transition as a core priority under the strategic objective on Improving Competitiveness and Greening (Environmental Sustainability) of the Business Sector. This objective aims to enhance productivity and efficiency through green and digital transformation, supported by financial instruments such as loans, guarantees and grants for green and digital investments, alongside vouchers for certification, advisory services and market expansion. Additionally, the National Energy and Climate Plan 2021-2030 also briefly highlights the role of technology in decarbonisation, including the development of negative-emission technologies and the integration of energy transition technologies into research and innovation priorities. Together these frameworks signal growing recognition of the role of digital tools in advancing green objectives, yet they still fall short of offering SMEs concrete, operational guidance to translate high-level ambitions into practical outcomes.
Financial support for SME uptake of digital technologies for environmental management, energy efficiency or circular business models is still underdeveloped. North Macedonia has not yet introduced a dedicated, comprehensive financial instrument enabling SMEs to invest in digital tools for sustainability-related purposes, and existing incentives remain modest in scale and fragmented across programmes, limiting their capacity to drive more transformative investments in digital-green solutions.
Looking at practical support for the sustainable use of emerging technologies by SMEs, a positive recent development is the launch of the first Decarbonisation Guide for Small Businesses, produced by the Economic Chamber of North Macedonia with the support of EIB Global (EIB, 2025[88]). The guide provides practical tools and sector-specific recommendations to help SMEs assess their carbon footprint and identify decarbonisation measures, marking an important step towards operationalising the green transition for smaller firms. This effort is complemented by broader government plans linked to the establishment of the National Centre for Artificial Intelligence “Vezilka”, which is expected to provide institutions, companies and start-ups with access to European supercomputing capacity and advanced data spaces (Ministry of Digital Transformation of North Macedonia, 2025[85]). Aside from focusing on trusted AI applications in priority areas, it will aim to explicitly link emerging technologies to sustainability and public interest objectives.
Moreover, some SME-tailored initiatives and advisory programmes have also emerged. The APPRM’s 2025 Programme includes awareness-raising activities through six workshops designed to familiarise SMEs with the importance of digitalisation and the green economy (APERM, 2025[26]). With a budget of MKD 450 000 (≈ EUR 7 300), the workshops are expected to reach around 90 participants and focus on productivity, competitiveness and the alignment of SME perspectives with policies shaping the economic environment. The APPRM has also introduced measures to build advisory capacity through three training sessions for local consultants on digitalisation, the green economy and AI (APPRM, 2025[89]). With a budget of MKD 250 000 (≈ EUR 4 000), this intervention contributes to strengthening support services, though its limited budget constrains its wider impact.
In parallel, donor initiatives play an important role in North Macedonia’s SME digitalisation and green transition ecosystem. The Go Digital Programme, implemented by the European Bank for Reconstruction and Development and the European Union, provides an integrated package of loans, grants and technical assistance to support SME investments in digitalisation, automation and green technologies, with banks in North Macedonia such as Sparkasse and NLB Skopje now offering dedicated credit lines under this scheme (WBIF, 2025[5]). Complementing this, the Green Economy Finance Facility, led by the United Nations Development Programme and co-financed by the European Bank for Reconstruction and Development and the government of North Macedonia, offers SMEs performance-based green financing for renewable energy and energy efficiency projects, including cash-back incentives and technical assistance (Vlajcic, 2025[6]).
Despite these efforts, SME engagement with sustainable digital practices in North Macedonia is at the early stage. Around 24% of surveyed SMEs report having a strategy or action plan in place to reduce their environmental footprint using digital tools, a share comparable to the EU average (European Commission, 2022[90]). At the same time, approximately 71% of surveyed SMEs report having intentions to create a structured sustainability plan but do not currently have one, while less than 6% report already being carbon‑neutral (Figure 4.11). This pattern suggests that awareness and intent are relatively widespread, but that many SMEs have yet to translate these intentions into concrete strategies and operational use of digital tools.
Source: OECD (forthcoming[14]).
Survey evidence further supports this interpretation: 59% of surveyed SMEs consider sustainability factors when procuring digital technologies or services, while 41% do not yet account for environmental aspects, often citing that it is either due to high costs or lack of information (OECD, forthcoming[14]). Furthermore, ICT disposal practices also highlight fragmentation. About 12% of surveyed SMEs retain old ICT equipment due to data security concerns, 35% use certified recycling providers and 41% are unaware of disposal processes. This suggests that there is a high need for awareness-raising and the development of structured e-waste management schemes for SMEs.
Tracking of environmental metrics is also developing, but slowly. Just over half (53%) of SMEs track energy efficiency and 41% monitor energy consumption, but only 12% monitor their carbon footprint. Less than 6% monitor its water usage. Almost a quarter (24%) of SMEs do not monitor any sustainability indicators at all and 18% are unsure if this is done within their enterprise (Figure 4.12). This lack of measurement capacity makes it challenging for SMEs to demonstrate environmental performance or prepare for forthcoming EU sustainability reporting requirements, potentially affecting future market access and financing.
Note: Tracking energy efficiency: e.g. reductions in energy waste, impact of energy-saving upgrades like LED lighting or efficient machinery; Tracking energy consumption: electricity and gas consumption by department or production line, peak vs. off-peak usage patterns, etc.
Source: OECD (forthcoming[14]).
The way forward
Develop an integrated AI Roadmap with a clear SME adoption pillar. North Macedonia should prepare an AI and Digital Transformation Roadmap that complements existing strategic frameworks, such as the Smart/MK 2030 Strategy, the ICT Strategy 2023-2027 and the SME Strategy 2025-2030, ensuring that AI, broader digital transformation and sustainability objectives are addressed within a single, coherent framework. The roadmap could include a dedicated SME pillar that identifies priority sectors; sets out responsible AI guidelines; and provides practical tools such as vendor-selection checklists, template data-governance procedures and sector-specific implementation pathways (Box 4.8). It could also define a co-ordinated capacity-building agenda delivered jointly by institutions such as INOVA, INNOFEIT EDIH, universities, innovation hubs and chambers of commerce, covering AI literacy, data readiness and hands-on support for SMEs. By aligning AI with broader digital and green priorities, the roadmap would give SMEs clearer guidance, reduce policy fragmentation and anchor North Macedonia’s emerging technology agenda within a practical, EU-aligned implementation framework.
Germany’s artificial intelligence (AI) strategy combines a strong emphasis on trustworthy, human-centred AI with a clear focus on small and medium-sized enterprises (SMEs). Since the launch of its AI Strategy in 2018, public funding had increased from EUR 3 billion to EUR 5 billion by 2025, with implementation co-ordinated across ministries to translate research excellence into practical SME adoption.
Germany’s approach centres on lowering technical and skills barriers for SMEs through shared infrastructure and applied support:
AI factories and compute access: As a host of the EuroHPC AI Factories, Germany provides SMEs with access to advanced computing and expertise. The Jupiter AI Factory, linked to Europe’s first exascale supercomputer, and HammerHAI at the University of Stuttgart’s High Performance Computing Center offer cloud-based access to AI tools, curated datasets, pre‑trained models and hybrid AI simulation workloads, enabling SMEs to experiment without heavy upfront investment.
AI service centres (since 2022): Four centres provide SMEs with advisory support and computing resources for applied AI use cases, particularly for firms lacking in-house AI capacity.
Targeted funding programmes: The KI4KMU programme supported SME-led AI innovation with grants covering up to 50% of project costs, while the “Generative AI for SMEs” programme (EUR 30 million, launched in 2025) targets concrete applications such as predictive maintenance, automated design and natural language interfaces.
Hands-on skills and adoption support: AI studios, funded by the Ministry of Labour, provide low-threshold, practical learning environments for employees, using fixed and mobile units to reach SMEs nationwide, with a target of 2 600 firms by 2026. These efforts are reinforced by Mittelstand-Digital Innovation Hubs and the Cybersecurity for SMEs initiative.
Germany’s model focuses on access rather than ownership: shared computing, applied testbeds, co‑funded projects and worker-centred learning environments enable SMEs to adopt AI incrementally, manage risk and build internal capabilities without large upfront investments. For North Macedonia, Germany illustrates how shared computing infrastructure, applied testbeds and workforce-oriented learning can complement AI strategies. Adapting lighter versions, via European Digital Innovation Hubs, innovation centres and mobile demonstrators, could help SMEs in North Macedonia test AI in real business settings, build skills on the job and progress from experimentation to deployment.
Source: OECD (2025[75]).
Introduce an SME “Green Digital Toolkit” and voucher scheme to support energy-efficient digital adoption. North Macedonia could develop a practical Green Digital Toolkit that is fully integrated into the broader SME digital support system, rather than implemented as a stand-alone environmental measure. The toolkit could provide step-by-step guidance on adopting digital solutions that reduce resource use, such as Internet of Things-based energy monitoring, cloud‑based resource tracking, automation for energy-efficient production, digital waste management tools and paperless workflows alongside simple templates for tracking energy, water and material use as well as guidance on responsible ICT procurement and e-waste disposal (Box 4.9). Small green-digital vouchers, managed by INOVA in co-operation with regional chambers of commerce, could help SMEs finance initial adoption and pilot projects. Embedding this environmental component within a unified digital innovation support pathway would strengthen coherence with North Macedonia’s green transition objectives and EU sustainability requirements while avoiding fragmented or parallel support schemes.
Austria’s KMU.DIGITAL programme, led by the Federal Ministry for Labour and Economy and the Austrian Federal Economic Chamber, provides small and medium-sized enterprises (SMEs) with targeted support to advance their digital transformation and environmental sustainability goals. The programme offers co-financing for digital consulting and implementation projects, with a dedicated focus on tools that reduce energy consumption, optimise resource efficiency and support low-carbon business models through digital solutions.
SMEs receive funding in two stages: first for structured digital diagnostics and strategy development, then for implementation measures such as introducing energy-monitoring software, upgrading to cloud‑based infrastructure or digitalising production processes to reduce waste. The programme covers up to 30-50% of project costs, with simplified access procedures tailored for smaller firms. As of 2023, more than 10 000 SMEs had participated, with strong uptake in sectors such as manufacturing, logistics and construction.
A key strength of the KMU.DIGITAL programme is its emphasis on personalised, hands-on support, delivered through a network of certified consultants who are trained to identify digital and environmental optimisation potential within SMEs. This ensures that solutions are practical, sector‑specific and scalable, rather than generic. The programme also maintains a strong monitoring framework, collecting data on energy savings, efficiency improvements and CO₂ reduction outcomes linked to digital adoption. This evidence-based approach helps justify continued public investment and demonstrates tangible returns. North Macedonia could benefit from adopting a similar dual-track approach linking green goals with digital incentives while building a pool of certified advisors and ensuring equitable access to support across urban and rural regions.
Source: KMU.DIGITAL (2023[91]).
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← 1. Process‑oriented digital tools encompass technologies such as enterprise resource planning systems, customer relationship management software, workflow automation platforms or integrated supply chains. These are tools that systematically connect, automate, monitor and optimise key business operations. They go beyond surface-level digitisation (e.g. websites or email) to embed digital capabilities deeply in business processes, transforming data into actionable insights and enabling firms to move from fragmented tasks toward coherent process management and strategic decision making.