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In the autumn of each year, the European Commission adopts its “Enlargement package” – providing a detailed assessment of the state of play and the progress made by the enlargement countries on their respective paths towards the European Union, with a particular focus on implementing fundamental reforms, as well as clear guidance on the reform priorities ahead.
Separate chapters are developed for the knowledge economy, i.e. the areas that the Western Balkans Info Hub focuses: “Science and Research” (chapter 25) and “Education and Culture” (chapter 26 which includes also a focus on higher education) as well as the chapter “Enterprise and Industrial Policy” (chapter 20 which includes a focus on innovation in the business sector) are referenced below. Further chapters address topics including fundamentals such as the functioning of democratic institutions, rule of law, economic criteria, etc., intellectual property law, digital transformation, enterprise and industrial policy, green agenda and sustainable connectivity, agriculture, external relations and many more.
For the full report on North Macedonia see the Report and Country factsheet.
Chapter 25: Science and research
The country has a good level of preparation in the area of science and research. Some progress was made, notably by adopting the smart specialisation strategy for 2024-2027, setting up the European Institute of Innovation and Technology regional innovation scheme (EIT RIS), and continuing to participate in Horizon Europe.
The Commission’s recommendations from last year were only partially implemented and therefore remain valid. In the coming year, North Macedonia should in particular:
→ increase the efficiency of State resources for science and research in line with the new European Research Area priorities;
→ promote and increase participation in Horizon Europe;
→ step up the design and implementation of measures included in the smart specialisation strategy.
The EU provides significant support to research and innovation. All Member States can participate in the EU’s research and innovation programmes and benefit from them, especially where there is scientific excellence and a solid investment in research and innovation.
Some progress was made to align with European standards on research and innovation. In 2023, the State Industrial Property Office registered 581 patents while the Ministry of Education and Science announced calls for six new European Research Area actions. The Smart Specialisation Strategy, the main policy document for innovation and research with clear sector-specific priorities, and a biannual action plan for 2024-2025 were adopted in December 2023. Implementation started slowly as no significant State budget was allocated for 2024. The overall investments in research and innovation remained low (only 0.38% of GDP 2022, while the participation of the private sector in research remains as in past years (0.1% of GDP). The national technology transfer roadmap has not yet been developed. Authorities need to strengthen their participation in the new European Research Area and in the new European Innovation Agenda.
The country’s participation in Horizon Europe, the EU’s framework programme for research and innovation continued, while in 2023 17 projects received EUR 3.4 million funding (30% less funding than 2022). The national technology transfer roadmap has not yet been developed. Authorities need to strengthen their participation in the new European Research Area and in the new European Innovation Agenda.
On innovation, the European Innovation Scoreboard 2024 classifies the country as an ‘emerging innovator’ with a score of 45.1% of the EU average, marking a decrease of 4.5% compared to 2023. The Fund for Innovation and Technological Development started restructuring in order to adhere to the findings of the State Audit Office. The academia-business cooperation has been boosted by a special grant programme launched in the beginning of 2024.
The EIT RIS hub was set up and started to promote the EIT support in the area of education-science-innovations.
Chapter 26: Education and culture
North Macedonia is moderately prepared in the area of education and culture. Limited progress was made. Work on the 2018-2025 education strategy and on developing a proper monitoring system continued to be slow. The adoption of key legislation such as the Law on secondary education, the Law on adult education and the Law on vocational education and training (VET) was delayed.
The Commission’s recommendations from last year were only partially implemented and therefore remain largely valid. In the coming year, North Macedonia should in particular:
→ adopt the Laws on secondary education, on adult education and on VET, as well as the related implementing legislation, and continue to set up and operationalise the regional VET centres;
→ improve access to quality education for all, in particular for children with disabilities and children from Roma communities; further develop teachers’ skills and invest in their continuous professional development;
→ optimise the school network; adopt and apply the new formulas for financing primary education; complete and apply similar formulas for secondary, VET and higher education.
The EU supports cooperation in education and culture through funding programmes and the coordination of Member State policy through the ‘open method of coordination’. The EU and the Member States must also prevent discrimination and ensure quality education for children of migrant workers, including those from disadvantaged backgrounds.
The 2018-2025 strategy for education is the main document governing the education sector, but its monitoring mechanisms remain not well defined. Targets and indicators need to be improved to allow a proper evaluation of the implementation of the reforms. Authorities need to strengthen coordination among institutions in developing legislation.
Authorities need to improve the capacities in the school system allowing for the optimisation and restructuring of the school network thus increasing the efficiency of the education system. A new funding model for primary education aiming to redistribute funds more effectively across municipalities, developed by the Ministry of Education and Science (MoES) is yet to be approved. Public spending on education and training decreased slightly to 3.17% of GDP in 2024 (3.58% in 2022), which is still far below the EU average of 4.7%. The education budget decreased as a share of the overall State budget in 2024 (9.15%) comparing to 2023 (11.7%).
During the reporting period, the capacity of public and private institutions providing early childhood and care (ECEC) increased by 1 072 places. While enrolment of children 3-6 years old into ECEC increased over the last year by 4%, the current rate of 46% still falls considerably short compared to the EU target on ECEC attendance set at 96%.
The number of pupils in primary schools dropped by 0.83% at the beginning of the school year 2022/2023, while the number of pupils in secondary schools dropped by 2.52% compared to the previous school year. In 2022/2023 there were 185 099 pupils (out of which 89 676 females) in primary schools in 2022/2023, and 69 227 (out of which 33 825 females) in secondary schools.
In line with the Law on primary education, the Concept for primary education as well as national learning outcomes and assessment standards, curricula for grade 6 were introduced in school year 2023/2024, thus covering the first 6 out of 8 years of primary education.
The results, published in November 2023, from the Programme for International Student Assessment (PISA) of 2022 highlighted concerning setbacks in pupils’ learning outcomes in reading, mathematics and science in the country as well as a decrease compared to 2018. In all three tests, students in North Macedonia scored less than the OECD average. The results show a high proportion of students of 15-year-olds failing to demonstrate basic proficiency (level 2) in reading (73.6%), in maths (66.2%) and in science (65.3%). North Macedonia is taking part to the ongoing Trends in International Mathematics and Science Study (TIMSS 2023) and Teaching and Learning International Survey (TALIS 2024) aiming at providing evidence-based data on the working conditions of teachers and school leaders and learning environments in their schools. According to the Concept of Primary education, in the new curricula for the subjects for the first, second, third, fourth, fifth and sixth grades of primary education, as well as in those for the seventh and eighth grades (prepared in the period October 2023 – March 2024), green skills are integrated in the contents of different teaching subjects, especially within the Science subject. The results of these tests are however not yet available.
North Macedonia has taken steps towards the effective, coherent and inclusive digital transformation of its education system, by launching a new Education Management a new Education Management Information System (EMIS), equipping schools, and putting in use digital textbooks in Information System (EMIS), equipping schools, and putting in use digital textbooks in primary education.primary education. The authorities need to further enable developing digital skills throughout primary and secondary as well as increasing the capacities of the educational institutions and teachers’ competencies to develop these skills in line with the EU Digital Education Action Plan 2021- 2027. The development of the curriculum for secondary education including green skills was further delayed, as the Law on secondary education is not yet adopted.
The new Law on vocational education and training (VET) has yet to be adopted. A cooperation scheme is in place between business companies, vocational high schools, the Chambers of Commerce and the Ministry of Education to support students’ internships in private companies. In school year 2023/24, in total 568 dual classes were operating with 8 242 students enrolled.
In higher education, the overall enrolment remains low. In the 2022/2023 school year 69 227 students were enrolled (out of which 33 825 female). The main challenge remains the improvement of quality of higher education through the development of accreditation and quality assurance processes. A new model for financing of higher education needs to be adopted.
In the last quarter of 2023, MoES finalised a project on further supporting the implementation of the National Qualifications Framework, resulting to the development of ‘training the trainers,’ guidebook to develop qualification standards, the holding of capacity building trainings and the development of guidelines on managing and quality-assuring the digital input in the NQF register.
North Macedonia remains a member of the European Higher Education Area (Bologna process).
North Macedonia continued participating in the Erasmus+. In 2023, organisations from North Macedonia participated as applicant or partner in 828 Erasmus+ (and also European Solidarity Corps) projects for a total contracted grant of EUR 7.05 million. The country continued to participate in the European Education Area working groups 2021-2025.
The Law for adult education is not yet adopted. North Macedonia made some progress in inclusive education, namely in primary education. As of school year 2023/2024, pupils with special educational needs are enrolled to mainstream primary schools, increasing their number by app. 10%. The total number of educational assistants in primary education amounted to 820. Over the reporting period authorities issued a call to engage 40 Roma educational mediators from 28 municipalities to support Roma students in primary education. In the school year 2023/2024, the total number of Roma pupils in primary education is 9 657 while in secondary it is 1 970, with about two-thirds being recipients of a scholarship. In higher education, authorities granted 135 scholarships to Roma students whereas the total number of active Roma students in the education system is 250.
In the reporting period the authorities adopted the national youth strategy for 2023-2027 along with the action plan for 2023-2025. On sports, North Macedonia continued to participate in the European Week of Sport.
On culture and the protection of cultural heritage, the adoption of amendments to the culture national legislation, the new national strategy for 2023-2027 on the development of culture and protection of cultural heritage was further delayed. The Ministry of Culture should strengthen the capacities for the protection and promotion of country’s diversity of cultural expressions, including heritage. The State Audit Office report revealed the need to reinforce the legal and operational system of country’s Film Agency. The country’s cultural heritage needs to be better safeguarded. Further efforts to reinforce institutional response and interinstitutional cooperation on the protection of cultural heritage sites, such as the Skopje Old Bazaar should be considered. North Macedonia continued to participate in fully in the Creative Europe programme.
Chapter 20: Enterprise and industrial policy
The country has between a moderate and a good level of preparation in the area of enterprise and industrial policy. Some progress was made. The plan to consolidate the institutional structures and mandates of public bodies and the export promotion strategy were adopted, and a set of measures to implement the strategy on the formalisation of the informal economy were introduced.
The Commission’s recommendations from last year were implemented to some extent. In the coming year, North Macedonia should in particular:
→ implement the plan for the consolidation of the institutional structure and the mandates of public bodies;
→ adopt the strategy for the development of small and medium-sized companies (SMEs), and boost export readiness and the integration of companies in supply chains by stepping up efforts to implement the export promotion strategy;
→ improve the process of consulting enterprises during the preparation of measures and of informing them with sufficient lead time about implementation conditions.
EU industrial policy strengthens competitiveness, facilitates structural change and encourages a business-friendly environment that stimulates small and medium-sized enterprises (SMEs).
Enterprise and industrial policy principles remain scattered within a number of strategic documents under the competence of different national authorities and the plan to consolidate part of the administrative structures, by merging some institutions and integrating others into the Ministry of Economy was adopted but is not yet implemented (see also the section on public administration reform).
An export promotion strategy 2024-2027 was adopted in January 2024 and will have to be swiftly implemented. The SME Observatory 2022 Report which provides statistical data and analyses of the actual situation of SMEs was published. The Ministry of Economy started working on a new strategy for the development of SMEs for which EU technical assistance was provided. The strategy is scheduled to be adopted in December 2024, it will cover the period 2025-2030 and will be based on the EU strategy for green and digital SMEs and the small business act.
The dialogue with the chambers of commerce took place through a dedicated platform managed by the Deputy Prime Minister for Economic Affairs. However, the dialogue still needs to be more transparent, systematic, and considerably more responsive to the business needs. National authorities continue to adopt measures, laws and implementing legalisation without previous notification and adjustment period for companies. Authorities conduct regular monitoring of policy implementation based on input indicators, but no evaluation of the impact and effectiveness is conducted. Out of 15 shortcomings identified last year by the State Audit Office, the Fund for Innovations and Technological Development (FITD) addressed three and partially addressed six of them.
Overall, the enterprise and industrial policy would benefit from improved coherence and institutional coordination while the impact of the policies for private sector development remain unclear.
There has been some progress in implementing the 2022-2026 Growth acceleration plan. A legal framework for a new Guarantee facility, a Development Fund, an Energy Efficiency Fund, and a Hybrid Strategic Green Fund is in place. The Fund for Innovation and Technological Development remains the key institution in support of innovation in private companies. Under the entrepreneurship education programme, the Agency for entrepreneurship provided trainings aiming at developing the entrepreneurial spirit and culture. The Directorate for Technological Industrial Development Zones initiated a programme for the development of suppliers aiming to support local companies to integrate into the global value chains. Streamlining of parafiscal charges did not progress. FITD started working on measures for financial aid for ‘greening’ of businesses with the objective to financially support companies’ activities in line with the Green Agenda for the Western Balkans. Despite the recent increase of average wages, companies face difficulties to employ qualified workforce due to significant emigration and persisting mismatch between skills demand and offer.
There are numerous policy measures for financial and non-financial aid to companies. None of the measures have been subject to in-depth evaluation for the purpose of assessing their relevance, potential to distort market competition or the effectiveness and impact on the overall economy growth.
On policy instruments, North Macedonia participates in the SME Pillar of the Single Market Programme.
Some progress is noted in harmonisation with the Late Payment Directive while full transposition is planned for end of 2025.
In terms of sectoral policies, the adopted smart specialisation strategy covers industries under this chapter, notably electro-mechanical industry, food processing, construction and tourism (more details, see chapter 25 – Science and research). A measure targeting industry-academia cooperation in S3-areas was piloted under the Programme for support of competitiveness of the manufacturing industry and social responsibility. A new strategy for tourism is under development. The country launched its circular economy roadmaps in March 2024, targeting circular business models across five key sectors: SMEs, construction, biomass and food, textiles, and mining and metallurgy.
For more information on other chapters see the Report and Country factsheet.