For the first time in history, the government of North Macedonia is working hand in hand with the local startup community to improve legislation and create more favorable conditions for startup development in the country. The collaboration was formalized at the end of 2020, when the first National Startup Council was created.
North Macedonia has a lot to offer startups, with its main advantages being profitability, a well-connected and collaborative community, and a large pool of tech talent. However, its ecosystem is currently built from the bottom up, mainly by startup enthusiasts and Startup Macedonia association.
The newly established Council brings together experts from various fields of activity united by their goal of making North Macedonia a regional startup hub. With members working intensively for almost six months, the public is eager to see the first results – and expectations are high.
Meeting the needs of local startups
The Startup Council was launched by the Government of North Macedonia Fund for innovation and technological development (FITD), after identifying the need for formal representation of the startup community in the process of creating and adopting national policies for the growth and development of the startup ecosystem.
“This Council is the first national government body that specifically addresses startup growth strategies. Not small or medium-sized businesses, but startups – a category that was not even recognized as such before,” Kosta Petrov, director of FITD, told Trending Topics SEE.
It is chaired by the Deputy Prime Minister in charge of Economic Affairs, Coordination of Economic Departments and Investments, Fatmir Bitiqi. Current members include Kosta Petrov from FITD, Anita Nikova from the North Macedonian Chamber of ICT (MASIT), Dejan Aleksov from Startup Macedonia, Gjorgji Rafajlovski from SEEU Tech Park, Stefan Mitevski, founder of the startup, and Bistra Kumbarovska, leader of social entrepreneurship. The structure remains open to anyone who wishes to get involved with their ideas and make their contribution.
“The National Startup Council is unique. What makes it unique is the country’s willingness to open up and have a structured conversation directly with the local startup community,” says Jakob Modéer, head of the Swiss Regional Entrepreneurship Program (Swiss PE) for the Western Balkans.
Keeping in mind the expertise and experience of all members, the Council is expected to provide robust solutions, including “updating” laws and regulations according to the needs of startups. The consultancy should also help connect startups with networks, partners and investors. It aims to internationalize the startup community, but also to position North Macedonia regionally and internationally.
Policy change document expected in May
The Startup Council is responsible for creating and monitoring the implementation of short- and long-term national strategies, using partner expertise with the aim of rapidly growing the country’s startup ecosystem. Members are finalizing a policy change document – redefining the term startup itself and identifying key issues and proposed solutions, such as changes in legislative regulation that will create more favorable conditions for startups. The paper, together with the results of research carried out by Startup Macedonia, will also be presented as part of the first National Startup Summit to be held in North Macedonia at the end of May.
The Council will continuously work to identify challenges and propose solutions to help entrepreneurs and startups. As part of his responsibilities, he will actively participate in the development of future policies regarding startups, proposing measures to improve the organization of public sector operations and institutions that will result in better public services. In addition, it will provide recommendations to reduce startup costs, facilitate access to capital and its mobilization. The ultimate goal of these activities is to increase the number of startups and position the country as a startup and regional hub.
Attracting digital nomads
Two other important efforts undertaken by the Council are the development of a social entrepreneurship strategy, as well as the creation of better conditions for digital nomads. FITD is part of a working group created to make changes to laws on innovation and social entrepreneurship. They are also working with the Home Office on the Aliens Act as a prerequisite for the successful implementation of its Digital Nomad program.
“We will be one of the few countries to offer foreign entrepreneurs the opportunity to set up shop and work from here. These people will bring a positive effect to the local economy and open opportunities for cooperation and networking with Macedonian startups,” Kosta Petrov told Topics SEE.
Startup Macedonia, on the other hand, offers Soft-Landing as a service, hoping that very soon a digital nomad/startup visa will be introduced, following the legislative changes mentioned above. In the meantime, they are working to attract more international experts into the ecosystem, especially those with experience in go-to-market, sales and business development.
THE Swiss EP Entrepreneurs-In-Residence Programfor example, provides a great opportunity to gain first-hand experience of the ecosystem of North Macedonia.
The young ecosystem of North Macedonia
“Five years ago, there was no ecosystem. There was a community, but no ecosystem. The dialogue wasn’t there; the actors saw each other as competitors. Swiss EP and Startup Macedonia work like glue for the ecosystem. We now have communication, collaboration and cooperation,” says Nina Nikolikj, head of the Swiss Entrepreneurship Program (Swiss PE) and co-founder of Startup Macedonia.
Over the past three years, North Macedonia has improved significantly, moving from 84th place (2018) to 57th (2020) on the Global Innovation Index. The country’s performance is better than expected given its level of development, market sophistication and sustainability. The creative sector is a particular strong point. Skopje, the capital, is ranked as the most profitable tech hub of the future in the FDI global rankings (by the Financial Times), as the country sees growing interest from international founders and startup teams in the facility from their head office.
“Now I see more real startups, real companies, whereas before it was mostly teams moving from one startup competition to another. There is also extensive offering on the programming side – both in capacity building and financial support,” Nina Nikolikj told Trending Topics SEE.
Indeed, startups in North Macedonia enjoy strong support from the government and donor agencies, but private companies need to become more involved in order to ensure balance and sustainability. Furthermore, even though Skopje has come a long way, equal access to services must also be ensured for other cities.
Comparison with other Western Balkan ecosystems
Western Balkans Program Manager
Swiss Entrepreneurship Program; image: ©EP Switzerland
“This is a unique time in North Macedonia,” Jakob Modéer told Trending Topics SEE. “The biggest star for me is the startup Macedonia. They have worked together for over five years, demonstrating consistency and a data-driven approach. Their example has created a mindset shift within the startup community, showing the true value of cooperation, bringing stakeholders closer together and inspiring them to work together,” he adds. The Startup Council and Startup Macedonia are unique structures compared to other Balkan countries, as they both focus exclusively on the startup community and ecosystem.
Serbia is still number one in terms of depth and breadth of the ecosystem – there are more startups and more organizations there; they’ve been in the game longer. As head of the European Parliament’s Swiss program for Albania, Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia, Jakob Modéer explains that all the countries come from similar environments, but they find themselves at different stages of development. Other things matter too, like culture, tradition, outside interests, and there is also a difference in what nations are naturally good at. For example, Albania is strong in the fields of hospitality and tourism, while the countries of the former Yugoslavia have an affinity for mathematics, engineering and technology.
Overcoming “subsidy syndrome”
There seems to be a “subsidy syndrome” in the Balkans: the obsession with “free money,” which experts say is not the most pressing problem for startups. “You have to have a good product, be a good manager, know what your customers want, know how to sell. Money is not the most important thing. If “free” money is not supplemented by private money (angel investors, venture capitalists), it can create a culture of dependency and have a negative impact,” says Modéer.
Companies need to invest in developing soft business communication and sales skills and maintain a “global first” mentality, which is most important. Startups have the opportunity to target not only domestic, but also regional and international markets – they only need the skills and the right attitude to seize them.