Digital transformation, driving efficiency and productivity through the adoption of digital technologies and data utilisation, holds promise for fostering economic activity and competitiveness. This chapter, across four sub-dimensions, assesses the scope and quality of the policy framework and strategies and the implementation and adoption by North Macedonia. The first sub-dimension, access, explores government policies and initiatives to enable network infrastructure investment and broadband services to take up and increase data accessibility. The second, use, delves into the government’s plan to implement programmes to develop a user-centric digital government and help businesses achieve a digital transformation. The third, society, assesses whether governments have planned and implemented programmes to reduce the digital divide and create an inclusive society through green digital technologies. The fourth, trust, examines the economies’ frameworks and how they are being implemented to protect data and privacy, build trust in e-commerce and ensure cybersecurity through effective digital risk management systems.
Western Balkans Competitiveness Outlook 2024: North Macedonia
Abstract
North Macedonia’s overall performance has decreased since the 2021 CO. The economy enhanced its performance in digital government and business development, cybersecurity, and consumer protection in e-commerce. Additionally, it maintained good performance in broadband development and the communications regulatory framework. On the other hand, scores indicate stagnation in terms of digital inclusion, privacy and personal data protection. Moreover, the assessment reveals that the economy slowed down regarding data accessibility. North Macedonia’s overall performance lies below the average Western Balkan regional performance (Table 11.1).
The key findings are:
North Macedonia has yet to address disparities in broadband development between urban and rural areas. After the cancellation of the Western Balkans Investment Framework (WBIF) North Macedonia Digital Economy (NODE) project, a new project was launched in 2023 to conduct a feasibility study for the construction and development of the National Transport Optical Network, which has been pending since 2019.
Digital government development remains below expectations despite progress in establishing a government interoperability system connecting the e-government portal and the electronic population register. As of early 2024, 246 e-services are available on the national e-service portal, with only a fraction of these being fully transactional services,
North Macedonia currently lacks a digital business policy framework and corresponding initiatives that effectively support private sector companies adopting information and communications technologies ICTs. Business digitalisation progresses gradually, driven by the government's efforts to digitalise services and initiatives supporting innovation and start-up development, such as the Fund for Innovation and Technology Development.
The digital divide in North Macedonia is expanding due to the lack of a comprehensive approach to digital inclusion, including essential components such as digital training for disadvantaged groups, affordable high-speed Internet access for all citizens, diverse channels for accessing online services, and integration of e-accessibility tools on public sector websites.
The new Consumer Protection Law has enhanced protection for online consumers by introducing out-of-court dispute resolution and strictly defining the role of competent authorities. Implementing the law remains in the early stages, as complementary legislation is pending.
Unsatisfactory implementation of cybersecurity policy and inadequate allocation of human and financial resources have been limiting North Macedonia’s capacity to address emerging challenges. However, the new cybersecurity strategy under preparation and the new Law on Information Security, pending adoption in 2024, are expected to strengthen North Macedonia’s cybersecurity capacity and improve alignment with the EU acquis.
North Macedonia’s ICT infrastructure is predominantly centred in the capital, Skopje, hampering the inclusion of rural populations. While ICT equipment is readily available, companies across the board need enhanced educational efforts to harness the benefits of digital technologies fully (ITU, 2023[1]). Despite the challenges, the ICT industry exhibits robust growth, emerging as one of the economy’s fastest-growing sectors even without significant institutional support. Notably, the information technology (IT) software and services segment spearheads this expansion, emerging as the largest employer in the ICT industry. The IT industry itself witnessed a remarkable 37% increase in total revenue from 2021 to 2022, accompanied by a notable 42% surge in net exports during the same period (MASIT, 2023[2]). Official data from the State Statistical Office reveal promising trends, indicating a 13% rise in the average monthly gross salary per employee in the IT sector (specifically in computer programming). Furthermore, the total number of employees in the ICT sector increased to almost 20 000 in 2022, 13% higher than in 2021 (MASIT, 2023[2]). However, the growing demand for skilled IT professionals has led to a persistent shortage, primarily due to insufficient ICT graduates. Both public and private stakeholders encounter challenges in talent acquisition and retention, exacerbated by escalating salary expectations influenced by globalisation and the remote working trend. Complicating matters further, frequent changes in the Ministry of Information Society and Public Administration, coupled with unresolved issues regarding the planning and management of ICT programmes, have delayed the adoption of the ICT Strategy since its development in 2018 with EU support.
North Macedonia’s broadband infrastructure has advanced significantly over the past three years, with a notable focus on fixed and 5G network expansion in urban areas. Implementing the National Operational Broadband Plan 2019–29 remains a cornerstone of the economy’s integration into the EU, marked by consistent co-operation between state and private actors, overseen by the National Broadband Competence Office (NBCO). The Plan sets ambitious targets for achieving a Gigabit Society by 2029, aiming for 100% symmetrical Internet access with speeds of at least 1 Gbps for all public institutions, including schools, research and academic institutions, healthcare facilities, courts, public sector bodies and local authorities. As of September 2023, 88.8% of households in North Macedonia have access to high-speed broadband networks exceeding 30 Mbps, while 73.7% have access to ultra‑fast broadband with speeds exceeding 100 Mbps, which is still trailing behind the EU average of 86.6% in 2022 (NBCO, 2023[3]; Eurostat, 2022[4]). Moreover, household fixed broadband adoption rates (i.e. subscriptions) stand at 76.93% as of end-2022, with only 5.8% of connections exceeding 100 Mbps, significantly lower than the EU average of 55.08% (DESI, 2023[5]). Additionally, North Macedonia prioritised 5G network development, granting two mobile operators 5G licences in the 700 MHz and 3.6 GHz bands in July 2022. Thus, 5G commercial services are available in the main urban centres. By Q2 2023, 5G coverage extended to 31.5% of settlements or 62.15% of the population. Overall mobile broadband take-up was 79.4% as of the end of 2022 (NBCO, 2023[3]), while the EU average was already 86.5% in 2021.
However, despite overall progress in fixed and mobile broadband penetration, rural areas face challenges due to uneven development. In April 2023, only 15.3% of households in underserved rural areas had high-speed broadband access compared to 69.8% in well-served areas (NBCO, 2023[3]). Similarly, while household coverage in fixed Very High-Capacity Networks (VHCN) reached 68.67%, rural settlements lag significantly behind with 10.96% (NBCO, 2023[3]). This rural-urban disparity is substantial compared to EU Member States, where the average VHCN coverage in rural settlements is 45.1% (Figure 11.1). Delays in rural broadband development were primarily attributed to the cancellation of the North Macedonia Digital Economy (NODE) project, supported by the WBIF instrument, which paused the Feasibility Study project to develop the National Transport Optical Network. Nevertheless, an EU Integration Facility-supported project was launched in June 2023 to resume the planned feasibility study, anticipated in mid-2024. This study aims to determine the optimal financing model, including state aid and commercial investment stimulation, and define the characteristics of the national backhaul fibre network, which will connect all settlements in the economy with gigabit speeds.
North Macedonia has made strides in enhancing its communications regulatory framework in the past three years, although full alignment with the EU framework is yet to be achieved. The Ministry of Information Society and Administration (MISA) has prepared a new Law on Electronic Communications following the European Electronic Communications Code.1 Currently, this draft law is undergoing review. The anticipated adoption of the new Law is expected to boost the independence of the Agency for Electronic Communications (AEC), particularly in light of concerns raised regarding the 5G spectrum auctions. The need to reinforce AEC’s independence has been highlighted by the European Commission since 2022 and reiterated in its latest monitoring report for North Macedonia (European Commission, 2023[7]).
In September 2023, the AEC adopted a regulation aligning with the EU Broadband Cost Reduction Directive2 (BCRD), while also incorporating elements of the 2023 EU proposal for the new Gigabit Infrastructure Act,3 which is poised to replace the BCRD. This rulebook delineates the methodology and conditions for constructing and accessing public electronic communication networks, marking a significant advance in simplifying broadband infrastructure development and stimulating additional private sector investments in network construction. However, complete alignment is still pending, particularly in harmonising legacy legislation concerning administrative procedures and construction permits at the local self-government level. Moreover, AEC has enhanced predictability for mobile operators by adopting the Rulebook on quality parameters for 5G technology and obligating them to submit 5G coverage data quarterly. Despite granting 5G licences to Makedonski Telekom and A1 Makedonija in 2022, the AEC has yet to adopt a permit-exempt deployment regime for small-area wireless access points in alignment with the relevant EC regulation.4 Such a regime would facilitate the timely deployment of 5G networks, delivering high capacity, increased coverage and advanced connection speeds.
The framework for data accessibility and data reuse is not sufficiently developed in North Macedonia. The economy has yet to articulate a vision for data openness and data-driven innovation, prioritising establishing an enabling environment and institutional support for creating new services. The government has also not prepared a dedicated policy framework since the Open Data Strategy was completed in 2020, although it adopted the Transparency Strategy with Action Plan 2023-26 in December 2023. Transparency initiatives are also supported by the ongoing implementation of the Open Government Partnership (OGP) Action Plans. However, despite five OGP action plans implemented so far, boasting relevant legal enhancements regarding access to public sector information, progress in legal reforms that facilitate data sharing and data reuse is marginal. The new Law on the Use of Public Sector Data, improving North Macedonia’s alignment with the Open Data Directive,5 has been under preparation since 2021. Its adoption is still pending in early 2024. Thus, North Macedonia is not yet compliant with the typical rules for establishing government-held data marketplaces adopted by EU Member States and some Western Balkan economies.
The national open data portal in North Macedonia remains significantly underdeveloped, hosting some 625 datasets from 74 public institutions as of February 2024 (North Macedonia Ministry of Information Society and Administration, n.d.[8]). Most published datasets fail to comply with international open data-sharing principles and lack machine-readable formats, consistency, completeness, and timeliness. Consequently, this is limiting their reuse potential in the creation of data‑driven innovative services. Progress among local self-government authorities, including municipalities, in publishing and making data available in open formats varies widely (Metamorphosis, 2022[9]). Moreover, due to the absence of updated legislation on public sector data reuse, the government has yet to identify high-value datasets that could foster public-private partnerships to deliver data-driven applications for societal benefit. Furthermore, the public sector's capacity to manage the open data process remains inadequately addressed. Insufficient training opportunities within the public sector on data sharing, pooling, and innovation practices, coupled with a lack of understanding of the benefits of data partnerships with the private sector, exacerbate the situation (Metamorphosis, 2023[10]). Additionally, there is a notable absence of institutional support for establishing data innovation hubs, which could be crucial in strengthening the emerging domestic data innovation ecosystem. Without such support, the full potential of data-driven innovation in North Macedonia may remain untapped.
North Macedonia has continued implementing digital government initiatives focused on modernising the legal framework and enhancing the ICT infrastructure within public administration. However, the absence of a clear vision for e-government development and the lack of a results-oriented implementation plan undermines the quality and effectiveness of government digitalisation initiatives. Additionally, inefficient activity monitoring and the absence of impact assessments impede overall progress in digitalisation. The Strategy for Public Administration Reform, initially adopted in 2018 and updated in 2023 to extend until 2030, governs digitalisation efforts. North Macedonia has established an enabling legal framework comprising three interconnected laws: the Law on electronic documents, electronic identification and trusted services, in line with the EU eIDAS6 Regulation; the Law on electronic management and electronic services; and the Law on the central population register. While these laws align with the EU framework, challenges persist, including the absence of a user-friendly public eID system and the harmonisation of existing legislation, which hinder the effective enforcement of e-government laws and seamless digitalisation of services. An estimated 100 laws require amendment and supplementation to align with the general laws on digitalisation, posing legal challenges that impede referral to and use of data from the Central Population Register (CPR) (Metamorphosis, 2022[11]). Furthermore, accepting electronic documents issued through electronic services when printed and submitted to certain public sector institutions remains a challenge (Metamorphosis, 2022[11]).
As of 2022, only 95 e-services on the national e-government portal (Government of North Macedonia, 2024[12]) were fully transactional, out of a total of approximately 392 e-services available, many of which are rarely used (European Commission, 2023[7]). Despite the government’s efforts to improve interoperability, only 50 institutions are connected to the Macedonian Information Highway interoperability platform. Poor utilisation of the platform, attributed to uncoordinated digitalisation efforts without attention to compatibility issues and the lack of ICT equipment and communications software, hampers the development of higher-quality e-services (SPAR, 2023[13]). Additionally, numerous e-services from various public institutions are still offered through individual websites and portals instead of the national e-government portal.
On a positive note, North Macedonia has prepared significant legislative reforms, pending adoption as of early 2024. The draft Law on the Security of Network and Information Systems and Digital Transformation aims to transition from a distributed digital infrastructure to centralised access to the government cloud within two years of adoption. The new Law will establish the Agency for Security of Network Systems and Information Systems and Digital Transformation for managing and co-ordinating the digital transformation process of public administration. Other legislative reforms seek to address capacity issues and enhance the effectiveness of public administration while implementing an omnichannel approach for the provision of public services, in line with relevant OECD recommendations (OECD, 2020[14]). The government plans to enable the use of the wide network of facilities of the Post of North Macedonia for increasing the availability of “Single Points of Service” locations (MISA, 2023[15]). However, the effectiveness of these reforms hinges on their adoption within 2024.
Digital business development in North Macedonia is predominantly driven by private sector investments and government support for technological innovation. Unfortunately, the overarching ICT Strategy 2023‑27, which aims to provide a comprehensive digital agenda for the whole spectrum of public and private sector digitalisation activities, is yet to be adopted. Without a clear strategy and focus on business digitalisation and ICT sector development, the government has not prioritised financial support programmes targeting SMEs for ICT adoption through subsidies, tax incentives or e‑business and e-commerce development. Additionally, insufficient awareness of available digital technologies and their capacity to propel a company’s productivity and profitability poses challenges, hindering digital business uptake. Moreover, addressing the need to develop workforce digital capacities is only partially met by the government and the private sector. While the Employment Agency trained around 400 unemployed individuals annually in digital skills in 2021 and 2022, the private sector remains the primary source for employee ICT training. Data from the State Statistical Office in 2023, reveal that only 52.5% of businesses in North Macedonia had a website, trailing behind regional economies like Montenegro (85.4%), Serbia (85.1%) and Bosnia and Herzegovina (64.4%), as well as the EU average of 78.1% (MAKSTAT, 2023[16]; Eurostat, 2023[17]). Additionally, only 14.3% of businesses in North Macedonia received orders on line in 2023, which is lower than in other WB economies (e.g. 28.7% in Serbia and 22% in Montenegro) and the EU average of 19.7% (MAKSTAT, 2023[16]; Eurostat, 2023[18]).
On a different note, the ICT industry emerged as a key beneficiary of the government’s business innovation policies in North Macedonia. The Fund for Innovation and Technology Development (FITD) has played a pivotal role in transforming the IT industry. In the period 2016-21, the Fund had co-financed 699 projects with a joint investment of EUR 88.3 million (55% FITD, 45% private companies), of which 326 corresponded to start-ups (FITD, 2021[19]). The Fund also supported the development of three accelerators (X Factor, Seavus Accelerator and Business-Technology Accelerator UKIM) with nearly EUR 1.5 million (FITD, 2024[20]). Additionally, in 2021, the government established the National Startup Council to foster a conducive environment for start-up development. Despite these positive initiatives, the government has yet to adequately address the technical talent shortage, with the ICT sector grappling with rapidly rising salaries and challenges in retaining skilled ICT professionals. Addressing these issues is critical to sustaining and furthering digital business development in North Macedonia.
North Macedonia has yet to establish a dedicated policy for developing and utilising emerging digital technologies, such as artificial intelligence (AI), the Internet of Things (IoT) and blockchain. Nevertheless, both the Public Administration Reform Strategy 2030 and the Law on the Central Population Register are laying the groundwork for incorporating innovative solutions, like AI, to deliver higher-quality services to citizens and businesses. Moreover, the draft ICT Strategy 2023-27 acknowledges the importance of using advanced technologies, such as AI, Big Data, IoT and Cloud Services, to achieve strategic goals in the economy’s digital transformation process. The Ministry of Information Society and Administration intends to form a working group to develop a national artificial intelligence strategy to explore opportunities and challenges in applying AI solutions within the public sector. Initial efforts in this direction began in September 2021, with the formation of a working group to develop the economy's first National Strategy for Artificial Intelligence at the initiative of the Fund for Innovation and Technological Development. Furthermore, in December 2023, the NGO Metamorphosis Foundation announced the launch of a process to establish a Coalition for Responsible Artificial Intelligence in North Macedonia. The Coalition, comprising non-governmental organisations, business experts and academia members, aims to facilitate discussions on rules for AI's responsible and equitable use. It also seeks to review guidelines for regulated and transparent procurement of AI solutions while addressing concerns like technophobia and personal data protection within the evolving AI landscape.
North Macedonia has yet to prioritise the establishment of a policy framework ensuring digital inclusion, especially since the adoption of the draft ICT Strategy is still pending. The Strategy for Public Administration Reform includes measures to reduce the digital skills gap and enhance the accessibility of e-services through the advanced availability of “Single-Point of Service centres” (SPoSC), first established in 2018. However, in 2023, such centres will exist in only five cities in North Macedonia. Furthermore, although efforts were made to enhance the legal and regulatory framework in 2020 to promote inclusiveness with service optimisation guidelines and standards for service delivery, little progress has been achieved in adopting and implementing standards for e-accessibility for public sector websites and mobile applications. The e‑government portal has yet to integrate accessibility tools to ensure the e-inclusion of persons with disabilities. Similarly, adopting accessibility standards for the public procurement of ICT products and services remains a low priority for the government. Positively, an intersectoral working group was formed in 2023 to align legislation with the relevant EU directive,7 and a project is under way to implement unified public sector websites, incorporating the Web Content Accessibility Guidelines (WCAG) 2.0 standard. However, the Strategy for People with Disabilities 2023-30 is still in preparation and the National Coordination Body for implementation of the Convention on the Rights of Persons with Disabilities has undertaken a limited number of activities, such as developing a Macedonian and Albanian language reader for blind individuals and creating electronic versions of some textbooks for primary education. Despite these efforts, such initiatives hardly constitute a comprehensive response to mitigate the risk of digital exclusion for persons with disabilities.
Digital literacy remains a significant barrier to e-inclusiveness and increased usage of digital services in North Macedonia. Particularly for the elderly and other marginalised groups, digital skills training is not yet effectively implemented (FRA, 2023[21]). According to the State Statistical Office, in 2023, 11.5% of individuals aged 15-74 have never used the Internet (10.9% men and 12.5% women). The percentage of individuals never using the Internet is mainly concentrated in the 55-74 age group, amounting to 22% of all individuals in this group. These statistics are considerably higher than in some of the regional economies (7.71% in Montenegro and 8.98% in Serbia) and the EU average of 5.97% (Eurostat, 2023[22]). Alarmingly, the percentage of households with no Internet access in 2023 is 10.5% (12.5% in rural and 9.4% in urban settlements) (MAKSTAT, 2023[23]). In effectively addressing the digital divide, North Macedonia could learn from other countries’ implementations of digital upskilling programmes for seniors (Box 11.1).
Despite North Macdonia’s undeniable progress in digital service delivery, the digital divide widens, leaving room for enhancing Digital Citizen Engagement (WBG, 2022[24]). Several EU Member States implement measures and initiatives that strengthen older persons’ digital literacy skills, such as the following.
In Estonia, the Central Library of Tallinn offers classes to all readers who wish to develop their digital literacy skills. Older persons can learn to use computers, the Internet, and digital public services. The course is free of charge and can be held both virtually through Skype and on-site.
The Digital Champions Programme 2022-26 in the United Kingdom combines four key services to address the common barriers to digital inclusion for older people. The Programme aims to tackle digital exclusion by recruiting and training Digital Champion volunteers to support older people in improving their digital skills and provide loan technology to those older people without access. The Programme aims to engage with 120 000 older people between 2022 and 2026.
In Austria, the Austrian Institute for Applied Telecommunications runs the nationwide service centre “Digital Seniors” (Digitale SeniorInnen), which aims to promote improved access to the benefits of digitalisation to all Austrian citizens, especially older people. The centre offers consulting services to educational institutions and trainers on planning and implementing educational offers on digitalisation for older persons. The initiative provides free training materials, free workshops and counselling sessions to educators, a quality seal on digital education measures for older persons, and a training course on teaching digital literacy.
Sources: FRA (2023[21]); Tallin Central Library (2023[25]); e-Estonia (2023[26]); AgeUK (2022[27]); Austrian Institute for Applied Telecommunications (2024[28]); European Union (2023[29]).
North Macedonia has yet to adopt specific policy measures to ensure the development of green digital technologies. The draft ICT Strategy is the first policy document affirming that specifications for broadband infrastructure and the government data centre should incorporate technically balanced and economically justifiable state-of-the-art green digital technologies, aligning with the principles of the European Green Deal8 policy. Nonetheless, without formal adoption of the strategy, these positive objectives may remain unrealised due to the absence of budgeted programmes and initiatives in this domain. An interesting project, the "Computing power goes green" project,9 is being implemented by the Bureau for Regional Development, a body of the Ministry of Local Self-Government, in collaboration with regional entities and EU co-financing. This project aims to assess the current status and obstacles to green digitalisation in North Macedonia while raising awareness about creating ecologically sustainable digital infrastructure. Additionally, the Energy Development Strategy 2040 promotes energy savings through the utilisation of digital technologies for enhancing energy efficiency in various sectors, including construction, industry, transport, heating and cooling, and energy distribution. Similarly, the National Strategy for Agriculture and Rural Development 2021-27 envisions introducing precise agricultural production and processing of agricultural products through data-driven, smart decision-making, robotics and IoT solutions focused on efficient resource utilisation. Furthermore, e‐waste management is addressed in the Law on the management of electrical and electronic equipment and waste electrical and electronic equipment, adopted in 2021. The Law accompanies this law on Extended Producer Responsibility (EPR) for managing special waste streams, enacted in the same year to establish a professional, accountable and efficient EPR system. This system ensures that manufacturers consider the complete life cycle of their products, from the design phase to the end of the product's life, promoting sustainability and environmental responsibility.
North Macedonia has not made sufficient progress in strengthening its policy and legal framework on privacy and data protection since 2021. In 2022, the Personal Data Protection (PDP) Agency received 19 notifications of data breaches, with 14 originating from private and five from public sector controllers. This indicates that personal data protection is still in the early stages of development in North Macedonia. The Agency has prepared a strategy for 2024-30, which is expected to be adopted in 2024. However, the existing legal framework for personal data protection is not yet fully aligned with the EU’s General Data Protection Regulation (GDPR)10 or the EU Police Directive.11 Efforts are under way to amend the PDP law to improve alignment with EU standards, particularly regarding strengthening the Agency’s institutional and financial independence and facilitating data transfers to third countries and international organisations. However, while the Agency continues consistently implementing the framework, it faces significant challenges, notably due to a shortage of human and financial resources. Currently staffed with 20 employees, only 40% of the optimal 50 staff members, the Agency lacks financial resources to motivate, retain and facilitate further professional development of its skilled personnel. Dependency on donor funding for training, awareness-raising events, and staff capacity building exacerbates these challenges. Moreover, public authorities hinder law enforcement efforts, with registered cases indicating disrespect for the Agency’s work, disregard of issued decisions and opinions, and noncompliance with the obligation to submit legislative proposals with implications for personal data protection for review and recommendations by the Agency. Despite these adversities, the Agency performs its supervisory, awareness-raising and capacity-building activities. It conducted 13 personal data protection training sessions in 2022, attended by 317 participants representing 176 controllers or processors from the public and private sectors (AZLP, 2023[30]).
Consumer protection in e-commerce has advanced in North Macedonia over the past three years. The government has consistently implemented a comprehensive Consumer Protection (CP) Programme with annual plans from 2021 to 2023. The Ministry of Economy is preparing a new programme for 2024, emphasising consumer protection in electronic commerce. Activities integrated into the implemented CP programmes have focused on increasing transparency regarding information provided to consumers, educating and supporting consumer NGOs, strengthening co-operation among competent public institutions, harmonising consumer protection legislation, and ensuring the availability of alternative dispute resolution mechanisms. However, transparent monitoring and evaluation of implemented activities are not yet prioritised. Notably, the new Law on Consumer Protection, adopted in 2022, aligns with EU Directives on Consumer Rights,12 contracts for the supply of digital content and services13 and the sale of goods.14 The new Law introduces out-of-court settlements, delineates the role of competent authorities in consumer protection, including consumer associations, and outlines traders’ obligations. Moreover, it regulates the initiation of procedures for protecting consumer rights in case of transboundary violations and ensures enhanced consumer education on protecting their rights, including in online purchases. The Law’s implementation, however, is subject to the adoption of corresponding secondary legislation, which is an ongoing process.
North Macedonia has enhanced consumer awareness-raising activities and made efforts to conduct inspections in e-commerce businesses, but the relevant initiatives are not yet sufficiently prioritised. The State Market Inspectorate has jurisdiction to perform inspections for consumer protection purposes in the area of the Law on Electronic Commerce. However, activities in this domain remain limited. In the first half of 2023, only three regular inspections on e-commerce were carried out, in a total of 16 427 inspections (regular, extraordinary and control) conducted in the same period) (DPI, 2023[31]). The Ministry of Economy annually grants funds to consumer protection associations to raise consumer awareness about their rights and operate free counselling centres for consumers. In 2023, the Ministry of Economy granted consumer associations across North Macedonia a total of EUR 32 500. In addition to these funds, consumer associations receive grants for awareness-raising activities from local authorities and other public institutions involved in implementing the Consumer Protection Program. However, only a fraction of funded awareness-raising activities refer to online consumer protection. This is hardly sufficient for widespread campaigns, particularly considering the rapid growth of e-commerce take-up in North Macedonia. In 2023, 53.5% of individuals using the Internet ordered products or services on line in the past 12 months, up from 49.5% since 2022 (MAKSTAT, 2023[16]). While this percentage lags behind the EU average of 75.14%, it is second only to Serbia’s 64.18% in the WB region.
North Macedonia has yet to strengthen its cybersecurity capacities despite experiencing a series of cyberattacks in 2022 that caused significant disruptions in public administration and industry functions. Implementing the Cybersecurity Strategy 2018-22 remained incomplete, with key measures, such as fortifying the national computer emergency response team CERT – the Computer Incident Response Team of North Macedonia (MKD-CIRT) – left unaddressed. MKD-CIRT operates as an organisational unit of the Agency for Electronic Communications with inadequate human resources, consisting of only three staff members, and insufficient financial and technical means. Moreover, resources allocated to cybersecurity are lacking across the public and private sectors. Participation in MKD-CIRT’s National Information Sharing Network (NISN) remains voluntary, which limits experience and data sharing among its 160 members. While MKD-CIRT provides some cybersecurity training for private sector employees and public officials, public awareness-raising and educational activities fall short of expectations. Cybersecurity incident reporting is also regular, but policy implementation monitoring, indicator data collection, evaluation, and impact assessment processes are not systematic or transparent.
North Macedonia’s existing cybersecurity framework is not aligned with the EU acquis (European Commission, 2023[7]). The government is preparing a comprehensive legal and policy framework for cybersecurity, including protecting Critical Information Infrastructure, to achieve a higher level of cyber resilience and an enhanced response to cybercrime. A draft strategy for the next period, 2024-27, has been under preparation since 2022 and is undergoing further review to align with recent updates in the EU cybersecurity framework. The government has revised two draft laws to comply with the EU NIS2 Directive15 enforced in 2023: the draft Law on Critical Infrastructure to align with the “sectors of high criticality” of the Directive and the draft Law on Security of Networks and Information Systems and Digital Transformation. As of February 2024, these draft Laws are in the pipeline for adoption. The law on network security will reinforce cybersecurity capacities in North Macedonia, aiming at the same standards as EU Member States and ensuring heightened cybersecurity training for public sector employees and upskilling for citizens. However, its delayed adoption inevitably postpones establishing and operationalising the Agency for Security of Network Systems and Information Systems and Digital Transformation. Moreover, the government signed an MoU with the US Government in October 2023 on 5G security, which is expected to lead to an amendment of the Electronic Communications Law imposing stricter rules for 5G equipment procurements. North Macedonia has established a methodology to assess the risk profile of suppliers and network equipment manufacturers and a list of critical components and sensitive parts of electronic communication networks. However, the methodology has not fully aligned with the shared principles outlined in the EU’s 5G Cybersecurity Toolbox. It has yet to adopt cybersecurity certification processes for ICT products, services, and processes, as per the EU Cybersecurity Act.16
North Macedonia’s progress in implementing CO 2021 recommendations has been mixed. The economy has made substantial advances in consumer protection, while progress has also been made in strengthening public administration digitalisation infrastructure. Conversely, progress has stagnated in digital inclusion, open data reuse and innovation, and comprehensively reinforcing cybersecurity capacities. Below, Table 11.2 shows the economy’s progress in implementing past recommendations for developing a digital society.
Considering the level of the previous recommendations’ implementation, there are still areas in which North Macedonia could enhance the digital society policy framework and further improve aspects of access to electronic communications and public data, digitalisation of government and businesses, inclusiveness of the digital society, and trust in digital technologies. As such, policy makers may wish to:
Expedite the development of the National Transport Optical Network and simplify investments in and construction of ultra-high-speed infrastructure. The government needs to accelerate the implementation of the optical backhaul network in North Macedonia, taking advantage of insights from the forthcoming feasibility study in 2024. It is critical to prioritise harmonisation of procedures and co-ordination of civil works for network construction, particularly at the local self-government level. It is also important to align state aid rules with the revised EU Broadband Guidelines (2023).17 Additionally, North Macedonia should adopt a permit-exempt deployment regime for small-area wireless access points to facilitate 5G network deployments.
Modernise the open data framework and promote data innovation partnerships to create new services. The government should update legislation in alignment with the Open Data Directive and the EU Data Governance Act,18 expanding the legal obligations of public institutions and enabling greater reuse of public sector data. Identifying and introducing high-value datasets (e.g. geospatial, meteorological, statistics, mobility, etc.) is critical after thoroughly assessing potential demand. It is imperative to combine legislative implementation with capacity-building efforts for public officials in data management and distribution and foster partnerships with the private sector and civil society on data-driven e-services development.
Prioritise developing high-quality, fully digitalised e-services explicitly tailored for businesses. North Macedonia should prioritise the development of fully transactional digital services tailored to meet the specific needs of private sector companies. These services should encompass critical functions such as online business registration, tax filing, permit applications, funding and support programme applications, complaint submissions, and other essential administrative tasks. To ensure accessibility and efficiency, these services should be centralised within a dedicated business services platform or integrated into a single‑point-of-access digital government portal. User-friendly interfaces, seamless integration with eID and e-payment systems, and connectivity to digital government databases are essential features to eliminate the necessity for physical visits to public administration offices, streamlining processes for businesses and promoting digital adoption.
Increase resources for cybersecurity and enhance institutional capacities for cyber resilience. The government should prioritise adopting the Cybersecurity Strategy and strengthen institutional capacities and horizontal co-ordination for its implementation. It needs to enhance the protection of Critical Information Infrastructure and raise awareness while increasing capacity-building efforts for public and private sector employees. It is critical to expedite the establishment of the Agency for Security of Networks and Information Systems and Digital Transformation, incorporating the MKD-CIRT and ensuring efficient staffing and full operational capacity by the end of 2024. It is imperative that both the public and private sectors boost collaboration and increase preparedness for a higher level of cyber resilience (Box 11.2).
Cyberattacks surged by 38% globally in 2022, driven by geopolitical instability, underscoring the critical importance of cybersecurity on the agendas of nations worldwide. Denmark, a digital-first nation, swiftly recognised the imperative of readiness to share, prepare, and simplify as fundamental to building robust cyber resilience. Denmark's approach to cyber resilience embodies a proactive governance model, fostering public-private collaboration, promoting cybersecurity awareness, investing in research and innovation, implementing regulatory measures, and engaging internationally. These concerted efforts aim at fortifying Denmark's cyber defences, mitigating risks, and ensuring the resilience of its digital infrastructure and society. Consequently, Denmark was ranked the world’s most cyber-secure economy in 2023 among 75 countries, as assessed by the security research firm Comparitech.
At the heart of Denmark's cyber resilience strategy lies the National Centre for Cyber Security (CFCS), entrusted with monitoring and analysing cyber threats, providing guidance and support to organisations, and coordinating responses to cyber incidents. As a focal point for cybersecurity collaboration and expertise, the CFCS facilitates collaboration among government agencies, law enforcement bodies, private sector entities, academic institutions, and international partners. These stakeholders work together to enhance Denmark's cyber resilience and effectively address cyber threats by sharing information, expertise and resources. Furthermore, the CFCS conducts cybersecurity awareness campaigns and initiatives targeting citizens, businesses, and government personnel to educate them about cyber risks and best practices for online safety. These efforts are geared toward enhancing cybersecurity hygiene, reducing vulnerabilities, and empowering individuals to proactively recognise and mitigate cyber threats.
Sources: Centre for Cyber Security (2024[32]); Denmark Ministry of Foreign Affairs (2024[33]); Comparitech (2024[34]).
References
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← 1. Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code (Recast) (Text with EEA relevance), http://data.europa.eu/eli/dir/2018/1972/oj.
← 2. Directive 2014/61/EU of the European Parliament and of the Council of 15 May 2014 on measures to reduce the cost of deploying high-speed electronic communications networks (Text with EEA relevance), https://eur-lex.europa.eu/eli/dir/2014/61.
← 3. Proposal For a Regulation of the European Parliament and of the Council on measures to reduce the cost of deploying gigabit electronic communications networks and repealing Directive 2014/61/EU (Gigabit Infrastructure Act), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52023PC0094.
← 4. Commission Implementing Regulation (EU) 2020/1070 of 20 July 2020 on specifying the characteristics of small-area wireless access points pursuant to Article 57 paragraph 2 of Directive (EU) 2018/1972 of the European Parliament and the Council establishing the European Electronic Communications Code (Text with EEA relevance), http://data.europa.eu/eli/reg_impl/2020/1070/oj.
← 5. Open Data Directive: Directive (EU) 2019/1024 of the European Parliament and of the Council of 20 June 2019 on open data and the reuse of public sector information (recast), http://data.europa.eu/eli/dir/2019/1024/oj.
← 6. Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC, http://data.europa.eu/eli/reg/2014/910/oj.
← 7. Directive (EU) 2016/2102 of the European Parliament and of the Council of 26 October 2016 on the accessibility of the websites and mobile applications of public sector bodies (Text with EEA relevance), http://data.europa.eu/eli/dir/2016/2102/oj.
← 8. The European Green Deal - Striving to be the first climate-neutral continent, https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en.
← 9. Computing Power Goes Green – GO_GREEN project, co-funded by the Interreg V-B Balkan – Mediterranean Cooperation Programme 2014-2020, https://brr.gov.mk/en/computing-power-goes-green-go_green/.
← 10. Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation), http://data.europa.eu/eli/reg/2016/679/oj.
← 11. Directive (EU) 2016/680 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data by competent authorities for the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and on the free movement of such data, and repealing Council Framework Decision 2008/977/JHA, http://data.europa.eu/eli/dir/2016/680/oj.
← 12. Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019 amending Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council as regards the better enforcement and modernisation of Union consumer protection rules (Text with EEA relevance), http://data.europa.eu/eli/dir/2019/2161/oj.
← 13. Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the supply of digital content and digital services (Text with EEA relevance), http://data.europa.eu/eli/dir/2019/770/oj.
← 14. Directive (EU) 2019/771 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC (Text with EEA relevance), http://data.europa.eu/eli/dir/2019/771/oj.
← 15. Directive (EU) 2022/2555 of the European Parliament and of the Council of 14 December 2022 on measures for a high common level of cybersecurity across the Union, amending Regulation (EU) No. 910/2014 and Directive (EU) 2018/1972, and repealing Directive (EU) 2016/1148 (NIS 2 Directive) (Text with EEA relevance), http://data.europa.eu/eli/dir/2022/2555/oj.
← 16. Regulation (EU) 2019/881 of the European Parliament and of the Council of 17 April 2019 on ENISA (the European Union Agency for Cybersecurity) and on information and communications technology cybersecurity certification, and repealing Regulation (EU) No. 526/2013 (Cybersecurity Act) (Text with EEA relevance), http://data.europa.eu/eli/reg/2019/881/oj.
← 17. Communication from the Commission Guidelines on State aid for broadband networks 2023/C 36/01, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52023XC0131%2801%29.
← 18. Regulation (EU) 2022/868 of the European Parliament and of the Council of 30 May 2022 on European data governance and amending Regulation (EU) 2018/1724 (Data Governance Act) (Text with EEA relevance), http://data.europa.eu/eli/reg/2022/868/oj.