NMAC: Modernisation project
The most persistent bottleneck in North Macedonia’s economic development is the low productivity of businesses resulting in their limited capacity to offer decent jobs. Switzerland, through its Modernisation Project (MP) will tackle this by supporting the development of an ecosystem for businesses to modernize. Using business diagnostics to identify productivity bottlenecks will enable businesses to invest strategically in modernisation, leading to increased productivity, improved environmental efficiency and decent jobs.
| Country/region | Topic | Period | Budget |
|---|---|---|---|
|
North Macedonia |
Employment & economic development
SME development
Business support & economic inclusion |
01.04.2022
- 31.10.2028 |
CHF 3’593’195
|
- Consultancies have the capacities and tools to diagnose businesses and offer tailored and comprehensive services and solutions.
- Businesses have access to resources for business modernisation.
- Business associations proactively support consultancies and businesses to enhance the uptake of consultancy services.
- Businesses associations proactively engage with consultancies and businesses to enhance the uptake of financial products for modernization.
- Other international or foreign NGO North
- Swisscontact
-
Sector according to the OECD Developement Assistance Commitiee categorisation INDUSTRY
BUSINESS & OTHER SERVICES
Sub-Sector according to the OECD Developement Assistance Commitiee categorisation Small and medium-sized enterprises (SME) development
Business support services and institutions
Aid Type Mandate with fiduciary funds
Project number 7F10245
| Background | North Macedonia currently stands at 42% of EU27 GDP per capita (EUR 6`620) and with the current growth pace it will need decades to reach European standard. The key structural barrier for growth of the economy is low productivity of the businesses, which in return are unable to offer decent jobs leaving 1/3 of the population at risk of poverty. Both the lack of know-how and expertise of SMEs, coupled with lack of experts offering proper business diagnostics to effectively identify the bottlenecks prevent an increasing productivity. The increased outmigration due to lack of decent jobs puts an additional pressure to businesses that struggle for workforce. With such stalemate situation, the full potential of the private sector to boost growth and create decent jobs remains locked in. |
| Objectives | Modernised businesses, by enhancing productivity and supporting green transformation, contribute to more sustainable economic growth and creation of decent jobs. |
| Target groups | MP will work through businesses, consultancies, anchor companies and business associations. The primary target group that will benefit from the interventions of the project are the small and medium sized businesses with potential for growth. The end beneficiaries of the MP, who will ultimately benefit from generating decent employment opportunities, are the employees with focus on women and youth, especially outside of the capital. |
| Medium-term outcomes |
Outcome 1: Businesses strategically invest to increase their productivity and improve environmental efficiency. Outcome 2: Strong and responsive business associations engage with consultancies and businesses to enhance modernization. |
| Results |
Expected results: Results from previous phases: Decent employment remains a significant challenge and low productivity is one of the key factors limiting the creation of decent jobs. Low productivity of businesses is primarily a result of obsolete technology and weak management practices, further hampered by shrinking workforce. Businesses lack capabilities to properly identify and prioritize their bottlenecks (business diagnostics), which often results with ineffective investments. Ultimately the findings of the pilot intervention on business diagnostics show that MP should focus on educating the market, building local consultancies’ capacity, ensuring competitive pricing, and establishing robust follow-up mechanisms. With these elements in place, business diagnostics could become a powerful tool for driving sustainable growth and transformation of the businesses in North Macedonia. |
| Directorate/federal office responsible |
SDC |
| Project partners |
Contract partner International or foreign NGO Swiss Non-profit Organisation Implementing partner
SwissContact
|
| Coordination with other projects and actors |
SDC: Increasing Market Employability, Education for Employment, Groundwater Management Use and Protection Programme, Parliament Support Programme. SECO: SIPPO, SwissEP, Light Manufacturing Other: USAID, EU Delegation, SIDA, EBRD, The World Bank Group, Fund for Innovation and Technological Development, Development Bank of North Macedonia; |
| Budget | Current phase Swiss budget CHF 3’593’195 Swiss disbursement to date CHF 905’917 Total project since first phase Swiss budget CHF 704’658 Budget inclusive project partner CHF 12’193’195 |
