ICT Sector study North Macedonia Albania Kosovo
Presentation by PwC North Macedonia April 2020 Introduction I N. Macedonia II Albania III Kosovo Contact
PwC North Macedonia supported by PwC Albania and PricewaterhouseCoopers (PwC) was PwC Kosovo, performed a detailed market research engaged by the Embassy of the Kingdom on the ICT sector in the MAK region (North of Netherlands to perform a study on the Macedonia, Albania and Kosovo) comprising the ICT ICT sector in North Macedonia, Albania ecosystem, status of the available workforce, ICT education, government support for the ICT sector, and Kosovo. national strategic documents and government policies and regulations. The Multi-Annual Action Plan adopted at the Western Balkan Summit in Trieste in 2017 highlights the significance of the digital agenda As part of the Project, ICT companies, for the Western Balkan. As a result, a sector government institutions, faculties were study is considered as a primary step to position considered as a primary source of potential stakeholders and to facilitate their plans information on the sector. to expand/develop in the region.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 2 Introduction I N. Macedonia II Albania III Kosovo Contact
ICT Ecosystem I North Macedonia Available workforce Review of the existing market II Albania ICT sector support Government policies and regulation III Kosovo National strategic documents ICT Infrastructure
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 3 Introduction I N. Macedonia II Albania III Kosovo Contact Business opportunities for Dutch companies North Macedonia • The ICT sector in North Macedonia is the fastest growing industry • Excellent supply of young well-educated IT experts at among the lowest labor costs in the region (average age structure in our survey shows that 63% of the employees are 25-29 years old) • The survey shows that 19% of the participants in the survey had above 1 million EUR average revenue for 2019, their most common business activity is custom software development with 38% and selling software solution with 25%. Export is of crucial importance due to the small national market. • There is continuous growth in the ICT market supported by decrease in the price of IT equipment, and a decrease in VAT for the equipment.. Albania • Young and educated population with foreign language knowledge (average age structure in our survey shows that 69% of the employees are 25-29 years old). • The survey shows that 23% of the participants had above 1 million EUR average revenue for 2019, Major export market is Italy with 24% of IT services export. • Albania has the lowest corporate income tax rate for all companies whose activity is software production and development. • The country has high entrepreneurial potential and growing soft infrastructure. The government strategies continue to strengthen Kosovo • The ICT sector is among the few sectors within the Kosovo economy that is characterized by a positive trade balance, whereby around 78% of already existing companies export their services. • The Government of Kosovo is working to position the country as a regional hub for information technology (IT)-related products and services, building on the strong IT and English-language skills within the workforce. • As per the survey, about 27% of the companies export to Switzerland and 23% to Germany.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 4 Introduction I N. Macedonia II Albania III Kosovo Contact
N. Macedonia
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 5 Introduction I N. Macedonia II Albania III Kosovo Contact Key Facts – Republic of North Macedonia
NORTHEASTERN Kumanovo KEY FACTS 2019 Tetovo Skopje Name Republic of North Macedonia 2 SKOPJE EASTERN Kochani Area 25,713 km Gostivar Shtip Population 2.075 million POLOG Veles Berovo Radovish National currency Macedonian denar (MKD) NORTH MACEDONIA Kichevo VARDAR Strumica GDP in current SOUTHWESTERN EUR 10.07 bn Prilep prices SOUTHEASTERN
GDP per capita EUR 4,853 Struga PELAGONIJA
Inflation rate 1.5% Lake Bitola Ohrid Corporate tax 10% Lake Unemployment Prespa 17.1% rate
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 6 I ICT Ecosystem
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 7 Introduction I N. Macedonia II Albania III Kosovo Contact The ICT ecosystem in North Macedonia
Academics
Creative IT Tech professionals Companies
Ministries ICT and public Investors agencies ecosystem
ICT Chamber Entrepreneurs of Commerce
Accelerators
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 8 Introduction I N. Macedonia II Albania III Kosovo Contact Doing business and improvement of government policies
Labour force Digital transformation
Highly skilled, competitive and cost One of the smallest gaps in in the region effective labour force regarding digital transformation in comparison to the EU Young and well educated population with foreign language knowledge 2nd in Network readiness index in the region after Slovenia (Rank 46th). Some of Macro factors the measured parameters are Political and Regulatory environment, Business and innovation Environment, Infrastructure, Affordability, Skills, Government usage
Free economic zones Improvements of government policies Skopje region is the most developed • Develop to the fullest e-government and Optimal geographical location government services to citizens and businesses
Ease of Doing Business ranking (17h • Speed up procedures in the administration and among 190 countries) with best indicators relating to: reduce costs th - Getting Credit ( Rank 25 ) • Further improvement of legislation related to - Paying Taxes ( Rank 37th) property rights and urban planning - Trading across borders ( Rank 32nd ) • Reduce the informal economy, including undeclared work ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 9 Introduction I N. Macedonia II Albania III Kosovo Contact Background of the survey
PwC North Macedonia ran a survey among local ICT players with the aim of assessing the current situation. The survey focuses on exploring the following issues related to the ICT sector:
• Policy and regulatory environment • Education level and existing skills • Digital infrastructure • Human resources • Financial performance • Barriers for development
The overall sample consisted of 90 companies from North Macedonia, out of which 34 companies responded. The questionnaire was prepared in Google Forms and it was delivered through e-mail in the period March 9th - April 24th . The survey was conducted in English Language. The survey consists of open ended, multiple choice and licker-scale questions.
The results on some of the key questions covered by the survey are presented in the next slides.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 10 Introduction I N. Macedonia II Albania III Kosovo Contact Survey results (1/3)
Which of the following best describes your business? List the industries you have worked for so far:
Education 9% Software consulting and other 6% Energy 5% related services Transport 9% Telecommunications 6% Outsourcing IT services 31% Retail 8% Public administration 8% Selling your own software 25% solutions Game of chance 4% Healthcare 8%
Custom software development 38% E-commerce & web 15% Business conuslting 10% Banking and financial services 18%
What is the average age structure in the company? How many vacancies are currently available in your company?
1-5 75% 35-44 19%
6-10 6% 30-34 19%
11-20 13% 25-29 63%
21 and more 6%
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 11 Introduction I N. Macedonia II Albania III Kosovo Contact Survey results (2/3)
For which technologies / programming languages do you Please provide info on average revenue in 2019 (in EUR) have deficit of human resources?
CSS 9% PL/ SQL 6% Swift 9% 0 to 500,000 25% Ruby 6% 500,001 to 1milion 13% JavaScript 15% PHP 6% Above 1 milion EUR 19% Python 12% no answer 44% C# 15% C++ 9% Java 12%
In which countries do you currently provide export How much export contribute to total revenue? services?
Serbia 6% Netherlands 6% no answer 25% UK 11% Germany 6% 90-100 % 63% Israel 6% Croatia 6% 50-80 % 6% Switzerland 11% North America 6% Norway 6% Up to 50% 6% Sweden 11% Denmark 17% USA 17%
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 12 Introduction I N. Macedonia II Albania III Kosovo Contact Survey results (3/3)
Do you face any difficulties in recruiting skilled labour to How adequate is the current local policy and regulatory your company / start-up a challenge? environment for your business?
5 0% 5
4 20% 4 13%
3 27% 3 40%
2 47% 2 40% 1 7% 1 0%
5 - Satisfactory 5 - Satisfactory 1 - Unsatisfactory 1 - Unsatisfactory
Rate the quality of schools and training for people working Evaluate what factors limit your company's growth in the digital tech sector in your local area?
5 0% Non-harmonized education programs 15% 15% 4 13% Lack of skilled workforce Tax policy is discouraging 14% 3 33% Insufficent cooperation with government inst. 14% 2 47% Employee turnover rate 12% 11% 1 7% Insufficent no. of knowledge sharing events Not sufficently connected with the ecosystem 10% 5 - Satisfactory Do not have access to young talent 9% 1 - Unsatisfactory
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 13 II Available workforce
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 14 Introduction I N. Macedonia II Albania III Kosovo Contact Potential workforce
Students enrolled in ICT % of students enrolled in ICT Name of the institution Programmes Programmes
University "Ss. Cyril and Methodius" - Skopje 5,886 23.3 University "St. Kliment Ohridski" - Bitola 1,204 29.1 University "Goce Delchev" - Shtip 1,375 16.7
Public University for Information Science and Technology "St. Paul the Apostle" - Ohrid 375 100 State University - Tetovo 710 10.0 University of Mother Teresa 398 43.4 European University - Skopje 30 6 SEE University - Tetovo 397 21.5 FON University - Skopje 87 10.1 American College - Skopje 99 17.6 Private International Slavic Institute - Sveti Nikole 37 12.6 International University Vision 47 5.5 International Balkan University, Skopje 313 29.1 Source: State Statistics Office
The data refers to the year 2018/2019
• The vast majority of students opt for public universities when it comes to ICT programmes
• The only university dedicated exclusively to ICT programmes is a public university
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 15 Introduction I N. Macedonia II Albania III Kosovo Contact Employees in the ICT sector
ICT sector employees
14.060
12.995 12.657
12.101 Number of employees
2016 2017 2018 2019 Year
Year 2016 2017 2018 2019 ICT 13,600 13,587 12,995 12,657 ICT sector (% of total employment) 1.9 1.8 1.7 1.6 Total 723,550 740,648 759,054 799,546 Source: State Statistics Office
• The data represented in the table relates only to employees in information and communication, not taking into consideration the other service activities • Out of the total number of employees, in 2019 only 1.6 % were employed in the IT or IT-related sectors
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 16 Introduction I N. Macedonia II Albania III Kosovo Contact Average salary by sector, in Euro
2016 2017 2018 2019 NATIONAL AVERAGE SALARY 363 387 394 394
INFORMATION AND COMMUNICATION 593 683 769 761
Motion picture, video and television programme production, sound recording and music publishing activities 512 429 502 502
Programming and broadcasting activities 381 383 396 439 Telecommunications 666 652 724 671 Computer programming, consultancy and related activities 805 1,044 1,059 1,029 Information service activities 504 624 542 569 OTHER SERVICE ACTIVITIES 425 473 471 488
Activities of membership organizations 551 583 608 599 Repair of computers and personal and household goods 301 335 385 432
Other personal service activities 286 366 365 414 Source: State Statistics Office Note: All figures are in net amount in euros and are translated with the exchange rate available at the end of the year
• The average salary in the ICT sector is 52% higher than the national average • On average, computer programmers receive the highest salaries in the ICT sector
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 17 Introduction I N. Macedonia II Albania III Kosovo Contact Average monthly salary
Average monthly gross salary per employee for 2019 (EUR) 1,800 National Minimum 1,600 Wage (NMW) is 1,400 1,200 1,000 236 EUR 800 600 400 200 0
Information and communication Computer programming, consultancy and related activities
Source: State Statistics Office
• The average monthly salary in December is higher by about 10% compared to the rest of the year. • The average salary of the ICT sector is lower by 35% compared to the sub-sector Computer programming, consultancy and related activities
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 18 III Review of the existing market
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 19 Introduction I N. Macedonia II Albania III Kosovo Contact ICT Industry’s % contribution to the GDP
In EUR 000’ 2015 2016 2017 2018 2019 In 2019 the GDP 9,108,095 9,877,268 10,077,853 10,736,715 11,342,195 contribution of the ICT 302,439 314,455 323,349 314,569 387,121 ICT Industry to the ICT Industry % GDP was 3.4 %, contribution to the GDP 3.3 3.2 3.2 2.9 3.4 which is the highest in the last 12,000,000 3.5% five years 3.4% 10,000,000 3.3% 8,000,000 3.2% Total turnover of 3.1% the ICT sector for 6,000,000 3.0% the year 2018 4,000,000 2.9% amounts EUR 668 2.8% 2,000,000 2.7% million * - 2.6% 2015 2016 2017 2018 2019 The value added at GDP ICT ICT Industry % contribution to the GDP factor cost for 2019 is EUR 336 million* Source: State Statistics Office * The last available data of the total turnover and value added of the ICT industry is for year 2018
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 20 Introduction I Macedonia II Albania III Kosovo Contact Established entities in the area of ICT in 2018
11 215 11
25 8 16 15
15
Source: Central Register of the Republic of North Macedonia
• The region of Skopje is leading in attracting new ICT companies with 68%. • The total number of ICT companies for Macedonia in 2018 is 1,919, compared to 2017 when there were 1,689 companies.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 21 Introduction I N. Macedonia II Albania III Kosovo Contact ICT service exchange between North Macedonia and rest of the world
2015 2016 2017 2018
ICT service exports (BoP, current ‘000 €) 312,042 378,688 159,196 /
ICT service exports (% of service exports, BoP) 22.30 24.94 10.71 /
Computer, communications and other services (% of commercial service exports) 58.78 59.41 55.12 54.02
Communications, computer, etc. (% of service imports, BoP) 55.62 54.68 50.47 26.36
Computer, communications and other services (% of commercial service imports) 54.81 53.80 49.32 50.98 Source: Trading Economics
• Since 2015, computer, communications and other services make up a majority of commercial service exports • Imports and exports of IT services are deeply intertwined
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 22 Introduction I N. Macedonia II Albania III Kosovo Contact E-commerce in the enterprises, according to the number of employees, 2019
E-commerce Total (10+) (10-49) (50-249) (250+) Е-sales: have received orders via computer networks 3.6 2.9 6.3 11.4 The proportion of enterprises that use Web sales: received orders for products or services via a website 3.4 2.7 6.0 9.6 e-commerce increases with Percentage of the total turnover company size. resulting from orders received via a website = /> 1% 2.0 1.6 4.0 6.1 < 1% 1.3 1.2 2.0 3.5
Sales via a website by type of customer
B2C (Sales to private consumers) 2.9 2.4 5.2 6.6
B2B (Sales to other enterprises) and B2G (Sales to public authorities) 1.5 1.2 2.6 6.2
EDI-type sales: received orders via EDI- type messages in an agreed format, e.g. EDIFACT, UBL, XML 0.8 0.5 2.2 4.8
Source: State Statistics Office
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 23 Introduction I N. Macedonia II Albania III Kosovo Contact Social Media Usage
Companies that use social media (categories by number of employees)
250+ 68.10%
50-249 56.90%
10-49 54.50%
Number of employees Total (10+) 55.20%
% of social media use in 2019
Source: State Statistics Office
• The majority of Macedonian companies with more than 10 employees use social media. • The proportion of companies that use social media increases with company size.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 24 IV ICT sector support
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 25 Introduction I N. Macedonia II Albania III Kosovo Contact Sources of funding
Fund for Innovation and Technological Development
Employment Service Agency of the Republic of North Macedonia Public “Support to the employment of young people” – internship programme up to the age 29
Agency for Promotion of Entrepreneurship of Republic of North Macedonia
Western Balkans Guarantee Facility
EU funding COSME
Horizon 2020
SEEUT TechPark, Seavus Accelerator, South Central Ventures, Business Angels Club Private (CEED BA Club), CEED Hub Skopje, X Factor Accelerator, Small Enterprise Assistance Funds (SEAF) funding and other Hub Skopje Business Accelerator, PSM business incubator, New Man’s Accelerator, SuperFounders Accelerator
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 26 Introduction I N. Macedonia II Albania III Kosovo Contact Fund for innovation and technological development (state owned)
Financial support instruments under pillar Co-financed 3 of the Economic grants for Co-financed Growth Plan newly grants for established Technology start-up and • Co-financed Grants for Transfer spin-off Fast-growing Small and companies Medium Enterprises (Gazelle) Co-financed Technical grants and Assistance • Co-financed grants for conditioned through micro enterprises loans for Business- • Co-financed grants to innovation Technology enhance innovation commerciali- Accelerators zation • Co-financed in-service training and grants for newly employed youth
Source: Fund for Innovation and Technology development
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 27 Introduction I N. Macedonia II Albania III Kosovo Contact Co-working spaces
Coffice Funky Co-working Coffice is a shared office space for A community of startups and freelancers who entrepreneurs, located in Skopje’s city center. organize meetups to network and celebrate http://www.coffice.com.mk/ co-working lifestyle.
#MKstartups SPACE Public Room The 1st entrepreneurial community center in Public room is a restaurant and a co-working Skopje. The meeting space for start-ups, space for entrepreneurs, designers, innovation leaders and the community. freelancers and startups. http://www.publicroom.org/
• Co-working spaces in North Macedonia are available in limited number and capacity mostly in Skopje.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 28 Introduction I N. Macedonia II Albania III Kosovo Contact Incubators and Accelerators
YES Business Incubator Seavus Incubator Youth Entrepreneurial Service (YES) Foundation Seavus Incubator is a multi-functional working with its main component, business incubator for space intended for tech start-ups and supporting micro, small and medium enterprises entrepreneurs, digital artists and online media. in the ICT field. http://www.yes.org.mk/YES/Testimonials.aspx?r= http://seavusincubator.com/ 6&l=63&c=22
CEED Hub New Man’s Business Accelerator CEED Hub Skopje acts as a central root of a fast- Over the last 5 years NewMan’s BA has hosted moving community and actively boosting and over 160 startup events, and have worked with inspiring idea generation, creation, innovation over 1200 individual entrepreneurs and 430 and cooperation for startups and business. startup teams. https://ceedhub.mk/ https://newmansba.com/
INNOFEIT SEUUTechPark INNOFEIT is a place where the faculty staff, SEUUTechPark Incubator offers professional students and company representatives can training and counseling provided by interact, network and transfer technologies and professionals. innovations. https://techpark.seeu.edu.mk/en/incubator http://inno.feit.ukim.edu.mk/
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 29 Introduction I N. Macedonia II Albania III Kosovo Contact Private non-formal education
Data Masters Brainster Data Masters is unformal education specialized in Brainster is a digital education platform specialized in Business Intelligence, Machine Learning and IT and digital, combining the most relevant Advanced Analytics. technologies with the market demand. https://www.datamasters.co/ https://brainster.co/
Seavus Education Centre Seavus Education Centre is specialized training center for education of staff in the fields of programming, design, computer networks and software testing. https://www.sedc.mk/
Semos Education Creative Hub The main task of Semos Education is developing a Creative Hub is a business center in Skopje that wide range of courses designed for various end users offers computer courses, graphic design courses, with a different level of computer technology digital marketing courses and more. knowledge. https://www.creativehub.mk/ http://www.semosedu.com.mk/
• The non-formal education has come a long way in its recognition, validation, verification and acceptance in North Macedonia.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 30 V Government policies and regulation
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 31 Introduction I N. Macedonia II Albania III Kosovo Contact
General laws Industry-specific laws • Law on Labor Relations • The Law on Waste, the Law on Waste from Electrical • Law for Protection Against Harassment At Work and Electronic Equipment and other laws in the field • Law on Health and Safety at Work of waste management • Law on Financial Discipline • Law on Copyrights • Law on Payment Operations • Methodology for Assessing the Value of Information Technology • Law on Archiving • Agreement between North Macedonia and EU for • Companies Law the “Horizon 2020” programme • Law on Protection of the Use of Macedonian Language • Law on Whistle-blowers • Law on Foreign Exchange Operations * Annex 1 • Inventory Obligations • Transportation Regulations • Law on Protection And Rescue • Law on Personal Data Protection • Law on Personal Income Tax • Data Protection Law Aligned with the EU General Data Protection Regulation (GDPR)
*General laws are not industry specific and are valid for every incorporated company.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 32 VI National strategic documents
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 33 Introduction I N. Macedonia II Albania III Kosovo Contact
National Cyber Security Strategy and Action Plan 2018 – 2022 The National Cyber Security Strategy of Republic of North Macedonia is a strategic document that fosters the development of safe, secure, reliable and resilient digital environment, supported by high-quality capacities based on cooperation and trust in the field of cyber security. Open Data Strategy and Action Plan 2018-2020 The Government of Macedonia recognizes that open data can be a powerful incitement for social and economic development and that it can also be used to improve public governance by enhancing transparency, openness, integrity and public participation at the central and local levels of government.
Public Administration Reform Strategy 2018 – 2022 Public Administration Reform (PAR) is a continuous process of reorganization of the institutions in the public sector and improving their administrative capacity, time and one of the key priorities in the accession partnership and an important prerequisite in the European integration of the Republic of Macedonia.
National Operational Broadband Plan 2019 – 2022 The Government adopted the National Operational Broadband Plan - NOBP (2019 - 2022). The underlying aim is to reach speed and utilization of broadband that are in place in EU member- states.
Source: Ministry of Information Society and Administration - www.mioa.gov.mk
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 34 VII ICT infrastructure
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 35 Introduction I N. Macedonia II Albania III Kosovo Contact Use of ICT by households for 2019 Percentage (%) Households with PC (desktop or laptop) / Households with Internet access Internet Access 79.3 81.8 75.3 73.6 Households with Internet access 81.8 65.1 68.3 69.4 Households without Internet access 18.2 Households that are unaware whether they have access to the Internet 0.2
Broadband vs. mobile data Households with broadband Internet connectivity (fixed or mobile) 70.0 2013 2014 2015 2016 2017 2018 2019 Internet connectivity via mobile broadband connection, 3G or better (e.g. UMTS) 57.6 Households with Internet access
Total population aged 15-74 Linear (Households with Internet access ) Internet users (ever to have used Internet) 83.4 Used Internet in the last 3 months1 81.4 • The number of households with Used Internet between 3 months and a year ago 1.0 Internet access is increasing every year Used Internet more than a year ago 1.0 Never used Internet 16.6 Used every day or almost every day 72.9 At least once a week (not every day) 7.7
Source: State Statistics Office
• 81.8% of Macedonian households have access to Internet
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 36 Introduction I N. Macedonia II Albania III Kosovo Contact Use of Internet for private purposes for 2019
Percentage (%) Leisure Reading or downloading online newspapers, magazines 54.1 Uploading personal content on webpages 70.4 14.8% of respondents use Communication online-banking, Social networks 68.4 whereas more than Telephony via the Internet/video-calls (webcam) 64.9 68.4% use social Sending/receiving mail 47.2 networks Posting opinions on civic or political issues via websites 7.2 Taking part in online consultations or voting to define civic 3.8 or political issues 53.6%
Research Search information Finding information about health-related issues 45.1 about Finding information about products/services 53.6 products/services online Services Looking for a job or sending job application 8.6 Online-banking 14.8 Participating in professional networks 5.2 Sale of products/services (e.g. eBay) 4.7
Source: State Statistics Office
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 37 Introduction I N. Macedonia II Albania III Kosovo Contact Key indicators for the development of ICT for 2019
389.108
1.944.870
435.060
1.302.461
412.728
Source: Agency for electronic communications
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 38 Introduction I N. Macedonia II Albania III Kosovo Contact Findings from EU progress reports
“The potential and capabilities of modern ICT systems are still growing exponentially fuelled by the progress in electronics, microsystems, networking, the ability to master increasingly complex cyber-physical systems and robots, and progress in data processing and human machine interfaces..”
“EU investments in ICTs are due to increase by about 25% under Horizon 2020 compared to FP7”
“Information and Communication Technologies underpin innovation and competitiveness across private and public sectors and enable scientific progress in all disciplines.”
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 39 Introduction I N. Macedonia II Albania III Kosovo Contact
Albania
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 40 Introduction I N. Macedonia II Albania III Kosovo Contact Key facts – Republic of Albania
KEY FACTS 2019
Name: Republic of Albania
Area: 28,748 km2
Population: 2,846 million
National currency: Albanian lek (ALL) Tirane
GDP in current EUR 14.3 billion prices: GDP per capita: EUR 4,846
Inflation rate: 1.3% ALBANIA
Corporate tax: 15%
Unemployment rate: 11.50 %
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 41 Introduction I N. Macedonia II Albania III Kosovo Contact Macroeconomic situation
Macroeconomic indicators
Indicators FY14 FY15 FY16 FY17 FY18 FY19
Population (in mln) 2.89 2.88 2.88 2.88 2.89 2.88 Real GDP growth (in %) 1.8 2.2 3.4 3.9 3.9 4.2 GDP per capita (euro) 3,450 3,546 3,727 4,026 4,846 4,970 Inflation (in %) 1.6 1.9 1.3 1.99 2.02 1.4 Employment (in %) 44.3 46.2 48.7 50.3 59.7 61.5 Average salary (euro) 337 347 340 399 408 424 Corporate Income Tax rate (In %) 15 15 15 15 15 15
Source: Trading Economics 1 Eur/122 ALL
• After expanding by 4.1% in 2018, annual growth for 2019 is projected to slow to 2.9 %, as a drastic decline in rainfall cut hydroelectric power production. An expansion in domestic demand led growth in 2019. Net exports reduced growth, as stagnant growth among trade partners limited traditional exports.
• Employment continued to grow. Unemployment reached a record low of 11.5% in the second quarter of 2019. Poverty remains high, however; it is estimated that roughly 34.6% of Albanians are living on less than US $5.5 per day.
• Inflation declined compared to end-2018, reversing the trend of the recent past. The Bank of Albania has maintained its policy rate at a record-low 1% since June 2018. The monetary easing and improvements in the loan portfolio has facilitated private sector credit growth.
• Although Albania’s fiscal position improved in 2019, risks from contingent liabilities and state-owned enterprises (SOEs) remain high. In 2019, fiscal revenue growth was limited by lower GDP growth and especially by the increased repayment of value added tax refund arrears. The budget deficit is projected to widen to 2.2% of GDP in 2019, while the public debt, including guarantees and arrears, is expected to decline to 68.4% of GDP.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 42 Introduction I N. Macedonia II Albania III Kosovo Contact Doing business and recommendations for improvement of government policies
Recommendations for improvement
The Global Competitiveness Index (2019) has assessed Albania Why doing with 57.6 points business in 01 02 Albania? Continue fiscal Bolster financial stability consolidation to meet further by continuing to Improvement in Doing the medium-term target promote the resolution of Business ranking (53th for public debt NPLs and the use of the among 190 countries) reduction. domestic currency.
Optimal Competitive geographical labour cost location Reduce the informal Further improvement economy, including of legislation related undeclared work. to property rights.
Young and well Free economic educated zones population with 04 03 foreign language knowledges
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 43 Introduction I N. Macedonia II Albania III Kosovo Contact Business opportunities in the ICT sector
1. Development of e-services
• Despite the small share in the software development there is room for potential growth. One of the main government priorities is the development of public service delivery focusing especially on e-services and related platforms in place. Main areas for further development especially relying on international expertise are: infrastructure management services software related services Further R&D software IT consulting services
2. BPO sector – an employment generator
• The BPO sector in Albania is one of the most developed in the last 5 years resulting to be a real employment generator, especially for youth generation. Referring Albanian Outsourcing Association (AOA) members there are around 300 call-centres in Albania with over 20.000 employees. Most of the players in the market are Italian companies but there is room for growth for other European countries and companies.
3. Introduction of technology in many priority sectors like health and agriculture
. Further improvement and modernization of health sector based on supply of up to date medical equipment/medical labs and reliance on technology (best practices) from European countries. . Automation and further improvement of technology in place related to existing landfills and improvement of waste management processes . Process automation and further technology or systems improvement in agriculture sector related to specific processes like; packaging, storage and distribution or supply chains.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 44 Introduction I N. Macedonia II Albania III Kosovo Contact Background of the survey
PwC North Macedonia ran a survey among local ICT players with the aim of assessing the current situation. The survey focuses on exploring the following issues related to the ICT sector:
• Policy and regulatory environment • Education level and existing skills • Digital infrastructure • Human resources • Financial performance • Barriers for development
The overall sample consisted of 60 companies from Albania, out of which 30 companies responded. The questionnaire was prepared in Google Forms and it was delivered through e-mail in the period March 9th -April 24th . The survey was conducted in English Language. The survey consisted of open ended, multiple choice and licker-scale questions.
The results on some of the key questions covered by the survey are presented in the next slides.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 45 Introduction I N. Macedonia II Albania III Kosovo Contact Survey results (1/3)
Which of the following best describes your business? List the industries you have worked for so far
Software consulting and other Education 9% 17% related services Energy 9% Transport 8% Outsourcing IT services 17% Telecommunications 8% Retail 12% Selling your own software Public administration 9% 25% solutions Healthcare 11% E-commerce & web 11% Custom software development 25% Business conuslting 14% Banking and financial services 9%
What is the average age structure in the company? How many vacancies are currently available in your company?
35-44 0%
30-34 23% 1-5 77%
25-29 69% 6-10 8%
18-24 8% We don't have 15%
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 46 Introduction I N. Macedonia II Albania III Kosovo Contact Survey results (2/3)
For which technologies / programming languages do you Please provide info on average revenue in 2019 (in EUR) have deficit of human resources?
JavaScript 27% 0 to 500,000 38%
Python 7% 500,001 to 1milion 23% C# 20% above 1milion 23% C++ 13%
Java 33% no answer 15%
In which countries do you currently provide export How much export contribute to total revenue? services?
6% USA 12% no answer 15% 6% United Kingdom 6% 6% 90-100 % 15% Bosna & Herzegovina 6% 12% 50-80 % 31% Macedonia 6% 6% Up to 50% 38% Greece 6% 6% Italy 24%
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 47 Introduction I N. Macedonia II Albania III Kosovo Contact Survey results (3/3)
Do you face any difficulties in recruiting skilled labour to How adequate is the current local policy and regulatory your company / start-up a challenge? environment for your business?
5 8% 5 8%
4 8% 4 8%
3 38% 3 69%
2 38% 2 15%
1 8% 1 0%
5 - Satisfactory 5 - Satisfactory 1 - Unsatisfactory 1 - Unsatisfactory
Rate the quality of schools and training for people working Evaluate what factors limit your company's growth in the digital tech sector in your local area?
Non-harmonized education programs 12% 5 0% Lack of skilled workforce 11% 4 0% Tax policy is discouraging 12% 3 38% Insufficent cooperation with government inst. 10% 2 23% Employee turnover rate 12% 1 38% Insufficent no. of knowledge sharing events 15% Not sufficently connected with the ecosystem 15% 5 - Satisfactory Do not have access to young talent 12% 1 - Unsatisfactory
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 48 I ICT Ecosystem
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 49 Introduction I N. Macedonia II Albania III Kosovo Contact Accelerators and incubators
Yunus Social Business helps create social Garazh (The Garage) is a project brought up by the businesses around the world through setting up startup and innovation enthusiasts who are already incubator funds and helping people in developing contributing into building the startup ecosystem in and emerging countries to become successful Tirana. With the main objective to contribute, entrepreneurs through financial support but most promote and shape the innovation in Albania, the importantly through training, coaching and mentoring organization aims to become the one-stop for as well as access to local and global networks. professionals, entrepreneurs, and startups by offering access to resources and knowledge.
Oficina covers and provides support to a number of Protik Innovation Center is one of the two active start-up teams. Interested parties have the chance to seed accelerators in Albania. It mainly focuses on test and certify their ideas and to connect with ICT education and covers laboratory provision and potential investors. Although the accelerator has a other required support to startups. There is a future very good output and feedback it still struggles to find plan for an accelerator programme as well which is sufficient funding to sustain its operations. highly depended on financing sources
While there is a lack of incubators there are two seed accelerators identified in Albania like Protik and Oficina both located in Tirana.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 50 Introduction I N. Macedonia II Albania III Kosovo Contact Co working spaces
Co-working spaces in Albania are available in limited Innovation Hub Tirana number and capacity only in Tirana. All of them Innovation Hub currently putted on hold is an 800 sq. provide not only physical workspace but also aim at space in Tirana that provides workspaces and community connecting their community of founders and to provide building activities. It can host up to 10 start-up teams coaching and support programmes. mainly focusing on coaching, mentoring and acceleration activities. The project was launched from the Ministry of State for Innovation and Public Administration and financed by the Italian-Albanian Debt for Development Swap Program IADSA. https://www.facebook.com/innovationhubtirana/
MyOffice.al Tirana Business Park, Tirana MyOffice.al is a co-working space situated near a very Tirana Business Park is a project aiming to establish a favorite area of the city of Tirana. MyOffice premises, located business park and an economic center of European in an area where the greatest number of startups are standards, and to give the Albanian area a real potential situated, offers modern workplaces, no contract obligation, of economic and social development. office for single person or team , meeting/teleconference The business park is open to all businesses and offers room use for free a bar and entertainment room. co-working spaces. Price for private office per month: 140 EUR. https://www.tiranabusinesspark.com/en/ http://myoffice.al/
Creative Hub Tirana Talent Garden, Tirana Is an international network with a focus on digital Creative Hub is the first center for informal and creative education in Albania offering courses in marketing, public offering a space for technology/digital/creative relations, business communication, human resources and entrepreneurs, freelancers and startups. design. Located in Tirana is one of the first campus in Albania https://creativehub.al/ that can host up to 48 members. It is part of the Italian Talent Garden Network and seeks to combine digital, tech and creative talent. Talent Garden thus far remains a provider of work spaces rather than an entrepreneurial community center. https://talentgarden.org/coworking/albania/tirana/
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 51 II Available workforce
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 52 Introduction I N. Macedonia II Albania III Kosovo Contact Available workforce statistics (1/2)
Labour force participation rate Age 2016 2017 2018 2019 Skilled youth labour 15-29 Total 45.6 45.5 52.5 52.5 force with improved Male 51.6 52.8 59.3 59.1 technical skills and Female 38.7 37.2 45.1 46.0 knowledge of foreign 30-64 Total 76.1 77.0 77.6 79.0 language; mainly in Male 85.8 87.8 87.0 87.6 English and Italian Female 66.8 66.7 68.9 70.5
Employment rate Official employment for Age 2016 2017 2018 2019 the workforce within age 15-29 Total 32.4 33.8 40.8 41.3 range 30-64 is 72% and Male 36.3 38.5 46.0 46.9 followed by a positive Female 28.0 28.3 35.1 35.7 trend in the last 4 years 30-64 Total 67.2 68.7 70.5 72.3 Male 75.4 77.9 78.8 79.9 Female 59.3 60.0 62.4 64.8
Source: Institute of statistics
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 53 Introduction I N. Macedonia II Albania III Kosovo Contact Available workforce statistics (2/2)
Gross average salaries as per activity 2018 (Euro)
Sector Total Male Female Agriculture, forestry and fishing 303 308 291 622 EUR Mining and quarrying; manufacturing; electricity, gas, steam Average salary in ICT and air conditioning supply; water supply; sewerage, waste management and remediation activities 346 423 274 sector for 2018; male 670 EUR, female 559 Construction 358 365 326 EUR Wholesale and retail trade 302 314 282 Information and communication 622 670 559 Financial and insurance activities 873 995 796 National Minimum Real estate activities; Professional, scientific and technical activities; administrative and support service activities 485 497 466 Wage is Public administration and defence; compulsory social security; education; human health and social work activities 501 543 469 213 EUR Arts, entertainment and recreation 422 407 445
Average gross salary per employee for 2019
750 704 700 643 650 611 615 in EUR 600 550 Q1 Q2 Q3 Q4 Quarter Source: Institute of statistics
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 54 Introduction I N. Macedonia II Albania III Kosovo Contact Potential workforce for the ICT sector
Students enrolled by Faculty and Programmes, academic year 2018-2019, in Public Education
Total Man Women Almost 15% of total Total bachelor students in Albania 75,604 32,828 46,915 students in the public Tirana University 19,582 4,448 15,134 universities are Faculty of Natural Sciences 5,352 1,903 3,449 students enrolled on University of Polytechnic 10,057 6,974 3,083 ICT programs. Faculty of Information Technology 1,451 885 566 University "Aleksandër Xhuvani"Elbasan 8,701 3,238 5,463 Faculty of Natural Sciences 960 631 329 University "Luigj Gurakuqi" of Shkodra 7,058 2,651 4,407 54% of students Faculty of Natural Sciences 2,100 939 1,161 enrolled on the University "Eqrem Çabej" Gjirokastra 841 359 482 faculties related to Faculty of Natural Sciences 382 186 196 ICT programs and University "Aleksandër Moisiu" of Durrës 12,887 5,161 7,726 majors are women Faculty of Information Technology 2,436 1,653 783
Number of graduated students on the public universities No official data is available on Academic years 2013-14 2014-15 2015-16 2016-17 2017-18 Bachelor only 17,469 19,152 18,652 20,423 20,108 graduated students from ICT studies, however as per unofficial Source: Institute of statistics data, the trend is similar as for the overall education and is around 20% graduated students from the total enrolled per year.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 55 III Review of the existing market
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 56 Introduction I N. Macedonia II Albania III Kosovo Contact ICT Industry’s % contribution to the GDP
In EUR 000’ 2014 2015 2016 2017 2018
GDP 11,194,420 11,507,330 11,813,581 12,440,701 13,123,210 In 2018 the ICT ICT Industry % Industry's % contribution to the GDP 2.8 3.0 3.1 3.1 2.9 contribution to the GDP was 2.9 %. . ICT Industry % contribution to the GDP Total turnover of 13,500,000 3.2% 3.1% the Transport, 13,000,000 3.1% Information and 12,500,000 3.0% 12,000,000 3.0% Communications 2.9% 11,500,000 2.9% sector for the year 11,000,000 2.8% 2018 amounts EUR 2.8% 10,500,000 2.7% 1,255 million* 10,000,000 2.7% 2014 2015 2016 2017 2018 The value added GDP ICT Industry % contribution to the GDP for 2018 is EUR 512 million*
Source: Database Government Albania * The data includes the Transport, Information and Communication Sectors; There is no available data only for the ICT sector
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 57 Introduction I N. Macedonia II Albania III Kosovo Contact ICT usage
ICT usage 2018 (in %)
Companies using Employees using Companies with Companies that did Sector computers computers at work internet access e-commerce sales Manufacturing 95 7.2 97 1.7 Utilities (energy, water) 100 21.6 100 0.0 Construction 98.7 15.0 100 2.9 Wholesale & retail 97.3 26.7 95.9 3.8 Transportation and logistics 100 25.5 100 8.4 Accommodation and food service activities 97.7 30.8 96.7 9.0 Information and communication 100 73.9 99 23.6 Real estate activities 100 34.6 100 1.2 Professional, scientific and technical activities 94.6 68.6 100 12.1 Administrative and support service 97.8 61.4 100 13.0 Repair of comp.&communication equipment 100 65.2 100 20.0 Total 97.3 26 97.5 5.3
Source: Institute of statistics
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 58 IV ICT sector support
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 59 Introduction I N. Macedonia II Albania III Kosovo Contact Mapping of government involvement
Policy maker level
• Ministry of Infrastructure and Energy • AKKSHI – National Agency for Scientific responsible for ICT infrastructure research and innovation • Ministry of Finance and Economy • AKEP – Electronic and Postal responsible for business environment Communications Authority • Ministry of Education, sports and youth • AKSHI – National Agency for Information responsible for science, academia and Society youth • AIDA – Albanian Investment & • National Council for Investment Development Agency • National Council of High education and • Chamber of Commerce and Industry science • Consulting council for businesses • Council of strategic planning
Executive level
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 60 Introduction I N. Macedonia II Albania III Kosovo Contact Sources of funding
• In terms of financing main sources remain the donor ones with USAID and Italian donors being very active in promoting the competitiveness of the SME sector and the ICT industry, Germany’s GIZ and UNDP in supporting vocational training and Swiss-contact promoting new ventures in the social business space. • On the government side main actors remain the Agency for Investment and Development in Albania (AIDA), National Agency for scientific research and Donor Public innovation (NASRI)and Municipality of Tirana as well. funds funds NASRI allocates research grants on a competitive basis and it seeks to foster bilateral projects between science and industry. • The Albanian Investment and Development Agency Private (AIDA) has established a number of new funding instruments, like the Innovation Fund assists SMEs sector and start-ups seeking scientific collaboration by providing matching funds up to EUR 10kr. Innovation voucher schemes also are under consideration. • Even the private sector has became an active actor in the last years trying to support development of SMEs and startups based on small sized grants (average of EUR 5k) covering the initial launching if ideas, products and services.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 61 Introduction I N. Macedonia II Albania III Kosovo Contact Grants & Subsidies
. Yunus Social Business helps create social businesses around the world through setting up incubator funds and helping people in developing and emerging countries to become successful Yunus Social entrepreneurs through financial support but most importantly through training, coaching and Business mentoring as well as access to local and global networks. Until now, YSB Albania funded and supported the launch of several social businesses with more than $850,000 in financing, with a further $500,000 in in-kind investments.
Vodafone . Vodafone Foundation aims to allocate grants to local organizations, including non-profit organizations and other civil society institutions in order to respond to community needs. Foundation
Vodafone Albania Foundation also delivers donations in kind that are generated by the benefits Support and development of mobile communication technology.
. USAID offers some supporting grants and subventions to different categories of businesses. USAID’s programs in Albania strengthen democratic institutions, promote civil society, reduce USAID corruption, promote gender equality and, at the same time, create a more favourable environment for inclusive economic growth – all necessary to move Albania forward more quickly towards greater democracy while meeting criteria that are essential to achieving its European aspirations.
. Embassies like the Embassy of the Netherlands in Albania, Embassy of the United States, the Embassy financial Embassy of Israel or the Embassy of Switzerland through different projects offer grants and support financial support for startups and local project in specific area of interest.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 62 V Government policies and regulation
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 63 Introduction I N. Macedonia II Albania III Kosovo Contact
General laws Industry specific laws
• Albanian Labor Code and Law • Law on Science and Technology • Law on Trading Companies Development • Law on Personal Data Protection • Law on Higher Education and Scientific • Law on Strategic Investment Research in Higher Education Institutions of the Republic of Albania • Law on Health and Safety at Work • Law on the Academy of Science in Albania • Law on Labor Inspection and State Labor Inspectorate • Memorandum of Understanding between Albania and EU in the light of 7th framework • Law on the Status of Civil Employees agreement for RDI • Law on Public procurement • Agreement between Albania and EU for the • Law on Whistle-blowers “Horizon 2020” programme
*General laws are not industry specific and are valid *Annex 2 for every incorporated company.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 64 VI National strategic documents
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 65 Introduction I North Macedonia II Albania III Kosovo Contact National strategic documents
• Development of legal and institutional framework • Development of ICT infrastructure and the facilitation of cheap and fast Digital Agenda 2015- internet 2020 • Development of e-governance; • Education related to ICT knowledge • Promotion of e-business
• Improvement of legal, institutional, financial serving to science, innovation and National strategy for technology Science searches, • Support to scientific researches as an incentive of innovation and technology Technology and development in the business community Innovation (NSSTI) • Raise awareness among key players like business community, media, and 2017-2022 public
National Strategy for • Modernization of ICT in public institutions Development and • Develop e-governance and offer interactive public services via internet for the Integration 2014- citizens and the businesses 2020 • Complete switchover from analogue to digital broadcasting
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 66 VII ICT infrastructure
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 67 Introduction I N. Macedonia II Albania III Kosovo Contact ICT Infrastructure
The digital transformation gaps between Albania and Network readiness index in 2019 the EU, which compare the values of digital EU AL transformation indicators to respective EU averages, suggest the level of digital transformation falls short relative to more propulsive regional peers in Central Europe and the Baltics (CEB). These gaps are marked by significant deviation from EU averages Political and regulatory both in infrastructure and individual use indicators. environment 6 Business and inovation Social Impacts 5 environment 4 3 Insfrastructure and digital Econimic impacts 2 content In terms of the proportion of households with 1 computer, internet access at home and households 0 with a personal computer, Albania has the weakest performance in these indicators, lagging behind EU Government usage Affordability average by more than 60 percent.
Business usage Skills
Individual usage
Source: World Economic Forum
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 68 Introduction I N. Macedonia II Albania III Kosovo Contact Findings from EU progress reports
‘’In the coming year, Albania should in particular: adopt the necessary amendments to the Law on Electronic Communication, in alignment with the new European Electronic Communications Code, and prepare an action plan for the digital agenda.‘’
‘’Albania has made some progress in terms of energy, transport and digital infrastructure development, but lack of productive know-how, low education levels and technology transfers hinder Albania’s competitiveness and integration into international value chains.’’
‘’ In order to monitor progress made by Albania towards the compliance with the European Union rules for electronic communications and information society services and convergence with the internal market, as well as the alignment with the Digital Agenda for the Western Balkans, the country needs to improve the collection of statistical data on digital performance and digital competitiveness.‘’
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 69 Introduction I N. Macedonia II Albania III Kosovo Contact
Kosovo
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 70 Introduction I N. Macedonia II Albania III Kosovo Contact Key Facts- Kosovo
KEY FACTS 2018/2019 Leposavić
Name: Republic of Kosovo KOSOVSKA MITROVICA Podujevo Area: 10,908 km2
Population: 1.9 million Peć Priština Klina National currency: Euro (EUR) Glogovac KOSOVO PEĆ KOSOVO POMORAVLJE GDP in current prices: EUR 7.9 billion Gnjilane PRIZREN GDP per capita: EUR 3,812 Uroševac Prizren Inflation rate: 1.2%
Corporate tax: 10%
Unemployment rate: 24.5%
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 71 Introduction I N. Macedonia II Albania III Kosovo Contact Advantages of doing business
Business-friendly Young population Set up a business in 2 42% of the population business days under the age of 25 Reduced administrative Majority of talent pool with burdens (one-stop-shop) university-level education Online application Business Young friendly population Strategic location Low labour costs Located in the heart of the Average private sector Balkans salary approx. EUR 400 Strategic Low labour Modern road infrastructure Why Kosovo? Wide and low-cost pool of to capital cities in location costs young, English-speaking neighbouring countries workforce. Driving distance from Macedonia and Albania Fast-growing Low taxes Fast-growing economy Low taxes economy 10% corporate tax rate EUR is the official 0-10% personal tax rates currency Low social security Strong macroeconomic contributions (5% stability contribution by employee GDP growth rate and employer) expanded 4.4% in 2019 Low inflation rate
Source: Kosovo World Bank; Kosovo Statistical Agency; CIA Factbook Investment and Enterprise Support Agency; ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 72 Introduction I N. Macedonia II Albania III Kosovo Contact Areas for improvement
Increase awareness of the importance of Improve formal and vocational IT education digital skills in the economy . The curriculum of the education system . There is a lack of knowledge and resources (tertiary education) does not a meet the among stakeholders which is necessary for needs and requirements of IT companies, the promotion of IT sector. which negatively affects the competitiveness of local IT companies. . More efforts needed to establish an institutional framework for the promotion of . Specialized formal and training-focused the IT sector. education programs are necessary to increase the skill set of local IT graduates Promote and enhance skills specialization and professionals. . IT companies are not highly specialized or differentiated in terms of technologies, target industries (vertical specialization) and specific functional areas (horizontal specialization). . The domestic market in Kosovo is comparatively small and underdeveloped, hence creating difficulties in generating growth impulse in the IT sector or promoting local innovation. . There is a lack of information on IT market and technology trends, especially with regards to potential export markets
Source: Emerging Europe; Digital 2019, Datareportal; ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 73 Introduction I N. Macedonia II Albania III Kosovo Contact Background of the survey
PwC North Macedonia ran a survey among local ICT players with the aim of assessing the current situation. The survey focuses on exploring the following issues related to the ICT sector:
• Policy and regulatory environment • Education level and existing skills • Digital infrastructure • Human resources • Financial performance • Barriers for development
The overall sample consisted of 60 companies from Kosovo, out of which 20 companies responded. The questionnaire was prepared in Google Forms and it was delivered through e-mail in the period March 9th -April 24th . The survey was conducted in English Language. The survey consisted of open ended, multiple choice and licker-scale questions.
The results on some of the key questions covered by the survey are presented in the next slides.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 74 Introduction I N. Macedonia II Albania III Kosovo Contact Survey results (1/3)
Which of the following best describes your business? List the industries you have worked for so far:
Education 10% Software consulting and other Energy 5% 10% related services Transport 8% Telecommunications 15% Outsourcing IT services 30% Retail 5% Public administration 8% Selling your own software 30% Healthcare 10% solutions E-commerce & web 15% Business conuslting 13% Custom software development 30% Banking and financial services 10%
How many vacancies are currently available in your What is the average age structure in the company? company?
35-44 10% 1-5 60% 30-34 10% 6-10 20% 25-29 60% We don't have 20% 18-24 20%
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 75 Introduction I N. Macedonia II Albania III Kosovo Contact Survey results (2/3)
For which technologies / programming languages do you have deficit of human resources? Please provide info on average revenue in 2019 (in EUR)
CSS 5% PL/ SQL 5% 0 to 500,000 30% Swift 5% Ruby 10% 500,001 to 1milion 40% JavaScript 5% PHP 5% above 1milion 10% Python 10% C# 15% no answer 20% C++ 20% Java 20%
In which countries do you currently provide export services? How much export contribute to total revenue?
Norway 4% Austria 8% Canada 4% no answer 20% UK 8% USA 12% 90-100 % 10% Finland 4% Netherlands 8% 50-80 % 10% Switzerland 27% Belgium 4% Up to 50% 60% Germany 23%
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 76 Introduction I N. Macedonia II Albania III Kosovo Contact Survey results (3/3)
Do you face any difficulties in recruiting skilled labour to How adequate is the current local policy and regulatory your company / start-up a challenge? environment for your business?
5 0% 5 10%
4 10% 4 30%
3 60% 3 30%
2 20% 2 30%
1 10% 1 0%
5 - Satisfactory 5 - Satisfactory 1 - Unsatisfactory 1 - Unsatisfactory
Rate the quality of schools and training for people working Evaluate what factors limit your company's growth in the digital tech sector in your local area?
5 20% Non-harmonized education programs 10% Lack of skilled workforce 13% 4 10% Tax policy is discouraging 11% 3 50% Insufficent cooperation with government inst. 12% 2 10% Employee turnover rate 11%
1 10% Insufficent no. of knowledge sharing events 15% Not sufficently connected with the ecosystem 15% 5 - Satisfactory Do not have access to young talent 13% 1 - Unsatisfactory
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 77 I ICT infrastructure
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 78 Introduction I N. Macedonia II Albania III Kosovo Contact Mobile, Internet and Social Media use (1/2)
Total Mobile Population Subscriptions . Annual change in mobile subscription: + 0.5 % 1.91 1.86 . The mobile connections as Million Million a percentage of total population is 97% . Total number of mobile connection is 1.86 million users.
. Annual change in population size: + 0.7% 100% . Female population: 48.5 % . Male population 51.5 % 80% 94% . GDP per capita: $ 10,754 60% 63% . Overall literacy (adults aged 15+): 92% 40% . Female literacy (adults aged 15+): 88% 20% 6% . Male literacy (adults aged 15+): 97% 0% Pre-paid mobile Post-paid mobile Broadband mobile connections connections connection (3G & 4G) Source: Datareportal- Digital 2019:Kosovo
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 79 Introduction I N. Macedonia II Albania III Kosovo Contact Mobile, Internet and Social Media use (2/2)
Internet Active Social users Media users . Facebook 780,000 . Instagram 580,000 . Twitter 65,500 1.68 870 . LinkedIn 48,000 Milion Thousand
. Internet users as a . Annual change in population 100% percentage of total size: - 21% 80% population: 88% . Active social media users as a 62% 59% 65% . Total number of active percentage of total population: 60% 77% mobile internet users: 1.49 45% 40% Male Million . Total number of active social users accessing vie mobile 20% 38% 41% 35% . Mobile Internet users as a 23% Female percentage of total devices: 770,000 0% population: 78% . Active mobile social users as a percentage of the total population: 40%
Source: Datareportal- Digital 2019:Kosovo
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 80 Introduction I N. Macedonia II Albania III Kosovo Contact E-commerce indicators
52% 10% 6.7% 14% 12% 18% 15% Has an Has a credit Percentage Percentage of Percentage Percentage Makes online account with card of women men with a of women of men purchase a financial with a credit credit card making making and/or pays institution card online online bills online transactions transactions
. While e-commerce is seen as an important driver in developing the ICT sector, it is still not all that popular in Kosovo, more than 54 per cent of individuals prefer to see and buy products in shops.
Source: Datareportal- Digital 2019:Kosovo
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 81 II ICT Ecosystem
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 82 Introduction I Macedonia II Albania III Kosovo Contact Existing ICT ecosystem
Non-Government Organizations (1/2)
1. Kosovo ICT Association (STIKK)
The Kosovo ICT Association (STIKK) was established in 2008 and aims to help create a better ICT business environment by improving standards and educational opportunities, and advocating with the government on behalf of its members to ensure that the sector will attract new business and investment. . IT Barometer study STIKK is a key contributor to the Kosovo’s IT strategy, a member of the Steering Committee for the implementation of the Kosovo IT Strategy and it also conducts the annual IT Barometer study providing an insight of the IT industry of Kosovo and market trends. STIKK currently accounts for 125 +members, which represents 90% of the ICT market of Kosovo.
. Tech Park in Pristina STIKK together with relevant ministries and government agencies established the first Tech Park in Pristina, where the sector of Information and Communication Technology would be the leading sector. Tech Park Prishtina is planned to become an internationally acknowledged and supportive environment for new businesses, by enabling entrepreneurship through technology, competitiveness and global business promotion.
. Innovation Centre Kosovo (ICK) The Innovation Centre Kosovo is founded by STIKK to support entrepreneurship, innovation and commercially based business development with focus on information and communication technology. ICK is the leading integrator for start-ups.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 83 Introduction I Macedonia II Albania III Kosovo Contact Existing ICT ecosystem
Non-Government Organizations (2/2)
2. CEED Kosovo . CEED Kosovo is an organizing providing entrepreneurs training, connections to finance and access to new markets. They offer peer-to-peer learning programs, relationship building through mentoring and connecting and helping businesses with accessing capital and financing. It also implements several donor projects on entrepreneurship, business consultancy and executive development.
3. UNICEF Innovations Lab . UNICEF Innovations Lab is a unit of UNICEF Kosovo that aims to help young people with innovative ideas get start-up funding (up to EUR 3k) and coaching/mentorship throughout implementation of their project. They support young people between the ages 14 – 25 with sustainable business plans with a social impact/change component.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 84 Introduction I Macedonia II Albania III Kosovo Contact Existing ICT ecosystem
Incubators / Accelerators & Co-working spaces
1. Innovation Centre Kosovo (ICK)- https://ickosovo.com/
. Innovation Centre Kosovo (ICK) was established and funded by the Swedish and Norwegian Embassy in Kosovo. It runnetworkss a structured incubation program with access to mentors and international funding. 123 startups have participated so far, in 15 calls for applications. ICK Incubator provides pre-incubation, incubation, training and courses, and co-working spaces. Together with STIKK, ICK is one of the key players in the Kosovo ICT ecosystem.
2. Gjirafa Lab - https://gjirafalab.com/
. Gjirafa Lab is a startup factory made for Internet entrepreneurs and provides space, mentoring, networking, technology, and funding to develop their business in Kosovo and the region. It was founded by Mergim Cahani of Gjirafa, Inc., a Kosovo startup success story, in funding partnership with USAID. 3. Innovation Centre Jakova- http://www.jic-ks.com/
. ICG is an innovation centre based in Jakova, a city in Kosovo. It was established by the Ministry of Education, Science and Technology, along with the local municipality and with the support of the British Embassy. It provides co- working space, incubation support services and trainings for participants. 4. Prishtina Hackerspace . Prishtina Hackerspace is a member-based co-working and open experimentation space established exclusively for technological, educational, cultural and scientific purposes. The aim of the space is to provide workspace, equipment and other resources for communal use by all members; encourage continued and after-school learning and create a safe and open environment for experimentation in technology and art.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 85 Introduction I Macedonia II Albania III Kosovo Contact Government Institutions
1. Ministry of Education, Science and Technology
. The Ministry of Education, Science and Technology is responsible for both the development of the scientific research and the higher education system, and for the promotion of innovation and technological development. . Additionally, the ministry is in charge of the formulation of an overall strategy for the development of education, science and technology in Kosovo and the promotion of a single, unified, non-discriminatory and inclusive education system. . The Department for Science and Technology takes care of the creation of a good infrastructure, institutional and financial basis for science and research as well as of the promotion of technological developments in the economy.
2. Ministry of Economy and Environment (previously Ministry of Economic Development) . The Ministry of Economy and Environment is the key institution in charge of drafting of policies and strategies on the overall economic development of Kosovo, including the provision of support to information technology and innovation. . The Ministry also participated in the preparation and implementation of international agreements in the sectors of energy, mining, postal services, telecommunications and information technology and environment.
3. Kosovo Investment and Enterprise Support Agency (KIESA) . KIESA, the Kosovo Investment and Enterprise Support Agency, operates under the Ministry of Trade and Industry and it is responsible for the protection and promotion of investments and develops SME-related policies. . KIESA runs an SME Grant Scheme that includes Consulting Vouchers for small and medium enterprises to assist them with their business needs as well as export-promoting. It also works closely with foreign donors to run financing schemes for MSMEs . KIESA is promoting support to young entrepreneurs and women.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 86 III Review of the existing market & available workforce
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 87 Introduction I N. Macedonia II Albania III Kosovo Contact ICT Industry’s % contribution to the GDP
In EUR 000’ 2014 2015 2016 2017 2018 In 2018 the GDP 5,567,494 5,807,009 6,070,113 6,413,861 6,725,913 contribution of the ICT 109,251 108,965 111,556 115,841 125,063 ICT Industry to the ICT Industry % GDP was 1.9%. contribution to the GDP 2.0 1.9 1.8 1.8 1.9 The turnover of ICT Industry % contribution to the GDP the ICT sector for 8,000,000 2.0% the year 2017 7,000,000 2.0% represents 3.8% 6,000,000 5,000,000 1.9% of the total 4,000,000 1.9% turnover 3,000,000 1.8% 2,000,000 1,000,000 1.8% 0 1.7% 2014 2015 2016 2017 2018
GDP ICT ICT Industry % contribution to the GDP
Source: Kosovo Agency of statistics * There is no data available regarding the value added of the industry
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 88 Introduction I Macedonia II Albania III Kosovo Contact Overview of the existing ICT market (1/2)
. The total number of companies registered in the ICT sector in Kosovo EUR 717 is 982. In 2019 alone, 621 new companies were registered. * . The average gross salary for the employees in the ICT sector in average salary in ICT Kosovo for 2018 was EUR 717, compared to the national average sector for 2018 gross salary in 2018 which was EUR 558. The national minimum wage (NMW) is 170 EUR.
61% of the IT . Companies have found different ways to do business with international companies, by far the most popular way is direct exports companies work in from your country to the client abroad 68%. Others are doing international market, business by a subsidiary / branch office in the target market 26%, as compared to the 39% a distribution partner / Local Partner (sales agent) 26%, with a in local market. representative office 18%, and as a joint venture 8%. . Central Europe, USA and UK have the highest potential to export to, The revenues from namely Switzerland and Germany, followed by North America (USA and Canada), and United Kingdom. East Asia, and Middle East and exporting in the EU Africa are seen with little or no potential to export. market are almost three times higher . The revenues from exporting in the EU market are almost three times higher compared to exports in non-EU countries (51% in EU compared to exports countries and 14% in non-EU countries for the year 2019). in non-EU countries.
* There is no data available regarding the number of companies pers sub-sector in ICT or per type of ICT Sector study N. Macedonia, Albania and Kosovo 2020 organization April 2020 PwC 89 Introduction I Macedonia II Albania III Kosovo Contact Overview of the existing market (2/2)
Workforce
83% . The latest available data for the number of employees in the ICT sector is from 2017 and it is 9,597 employees, compared to 2016 of companies face a and 2015 when there were 8,714 and 8,019 employees respectively. deficit of skilled/qualified workers. . Most of the companies provide Software/IT services i.e. 87% of the IT companies. A third of the IT companies namely 26% of them provide hardware products and 11% of the companies provide other Top 10 programming services and products like: Cyber security, customer care, BPO, E- procurement, Digital Marketing (specifically SEO and SEA), languages: Document Management Services, ICT Consulting & Audit, Information Security and, Business Solutions, Education and 1. JAVASCRIPT Training, etc. 2. HTML, XML 3. PHP . In general there is a lack of skilled/qualified workers. In 2019 STIKK 4. JAVA survey, a majority of 83% of companies declared that they face a 5. C++ deficit of skilled/qualified workers. Whereas in terms of ways how 6. C these companies cope with the deficit of the workers is by investing 7. SCRIPT LANGUAGES in training and certifications. The most popular investment is in- 8. PYTHON house training followed by other specific training. 9. PL/SQL 10. SWIFT . Almost all employees of the companies speak English, followed by German (74%), Turkish (24%), Serbian/Croatian (24%), French (13%), Italian and Spanish (5%).
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 90 Introduction I Macedonia II Albania III Kosovo Contact ICT education system
. There are 6 universities in Kosovo teaching computer science & IT-related subjects, producing ca. 350 IT graduates per year.
1 University of Pristina (UP) National public university
2 University of Business & Technology (UBT) Private university
3 American University of Kosovo (AUK) Private university
4 Iliria University Private university
5 University of AAB Private university
6 University of Prizren Local public university
. In addition to universities, there is a private VET institution established by a prominent local IT company (Cacttus), Cacttus Education, which offers diplomas in network and system administration, and web and mobile application development. In addition to academic programs, it also offers trainings and a children’s learning program. . Other educational initiatives include Jcoders Academy and The Digital School which provide learning programs for young people, as well as Open Data Kosovo, an NGO that provides trainings and mentoring in ICT-related topics. . Creative Hub is non-formal education and co-work centre for everyone that wants to change career, develop new skills and work as freelancers or learn new things. They offer variety of courses which last 2-3 months, skill-up courses which are one day workshops or the 6 to 9 months Academies which offer both practical and functional education. . The current state of ICT education in Kosovo reveals deficiencies both in quality and quantity. . There is a high dropout rate from university due to employment before graduation. Universities are also severely underfunded and require substantial investments in infrastructure and staffing. . The education strategy 2017- 2021 focuses on the implementation of new curricula, textbooks and ICT implementation in education.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 91 IV ICT sector support
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 92 Introduction I Macedonia II Albania III Kosovo Contact Funding Sources (1/2)
1. Loan facilities
. To alleviate credit requirements from commercial banks, the Kosovo Credit Guarantee Fund was established by USAID and Ministry of Trade and Industry, which cover up to 50% of the risk for loans to micro, small, and medium enterprises.
. SMEs are also eligible for loans with reduced collateral requirements through EBRD-EU programme, where €25 million has been allocated to two partner commercial banks ProCredit Bank Kosovo and Bank per Biznes, which will be coupled with a dedicated package of technical assistance and incentive grants in excess of €5 million from the EU national Instrument for pre-Accession funding (IPA).
. In 2019, the World Bank’s Board of Executive Directors has approved the Kosovo Financial Sector Strengthening Project, to improve access to finance for Micro, Small and Medium Enterprises (MSMEs), including startups, young entrepreneurs and women-owned businesses, by strengthening the financial and technical capacity of the Kosovo Credit Guarantee Fund (KCGF). The financial support for the project is €22.3 million ($25 million equivalent).
2. VCs / Angel Investors
. Kosovo does not have any VC firms and angel investors were previously organized under KOSBAN (Kosovo Business Angels Network), though this organization is now defunct. Nevertheless, local angel investors are recognized in the ICT community and regularly appear in ICT events and take part in initiatives to meet startups.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 93 Introduction I Macedonia II Albania III Kosovo Contact Funding Sources (2/2)
3. Funds
. Through WB ENIF (Western Balkans Enterprise Innovation Fund), Kosovo SMEs are eligible to obtain equity and quasi-equity financing to stimulate and support commercially viable companies in the region. The fund is managed by South Central Ventures and ENIF investors are EC, EIF, EBRD, KfW together with institutional and private investors from the Western Balkans. ENIF also includes investments from the beneficiary economies of the Western Balkans.
4. COSME
. COSME, the first EU programme that Kosovo has joined, will bring new possibilities to Kosovo entrepreneurs for increasing the competitiveness of SMEs. It will support projects on a wide range of topics that include clusters, SME internationalization, building entrepreneurship skills, tourism, reducing the administrative burden for companies and protection of intellectual property rights. It will also help SMEs identify funding sources.
5. Horizon 2020
. Kosovo is eligible to participate in the EU Research and Innovation Program “Horizon 2020”, allowing participation of private sector companies, academic institutions, associations and researchers. Currently uptake in Kosovo is minimal and awareness of Horizon 2020 funding is needed. . There is very limited, almost inexistent government support for ICT. Special industry zones or incentive schemes (e.g. like in Macedonia) do not exist. . The only financial support provided was Micro, Small and Medium Enterprise Grants project supported by the EU Office in Kosovo, co-financed by Ministry of Trade and Industry. The project provided 36 grants to MSMEs with the potential to export and import substitution. Grants were provided across different sectors such as metal processing, wood processing, textile, food processing, ICT, glass processing and automotive industry etc.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 94 V & VI National strategic documents & government policies
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 95 Introduction I Macedonia II Albania III Kosovo Contact National strategic documents on ICT and Government policies and regulations
1. Kosovo’s Economic Reform Programme (ERP) recognizes the need for further extension of the ICT network infrastructure and its link to socio-economic development, and lists the establishment of the digital technology park as one of the key measures to be taken. 2. Kosovo National Development Strategy 2016-2021, through its measure “Deployment of information and communication technology infrastructure” identifies needs which lay out specific points to be addressed in order to enhance the competitiveness of Kosovo’s digital businesses. 3. Kosovo National IT Strategy – sets the sector’s overall goal, to become the main driver for economic growth, employment and innovation by 2020 through increasing the international competitiveness of the Kosovo IT industry based on digital excellence. The main beneficiary and target group of the strategy is the Kosovo IT industry. 4. Digital Agenda for Kosovo 2013-2020 - is in compliance with the objectives set out in the Communication from the European Commission of 19 May 2010 to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions "A Digital Agenda for Europe" (COM (2010) 245 final) and aligned with the Communication from the European Commission of 3 March 2010 “A strategy for smart, sustainable and inclusive growth" (COM (2010) 2020 final). . Kosovo’s legislation covering the field of ICT is generally harmonized with the relevant acquis of the EU. Relevant laws include: . Law no. 04/L-109 on electronic communications . Law no. 04/L-094 on the information society services, which includes eCommerce law, eSignatures law, ePayments law, electronic contracts, etc. . Law on copyright and related rights, Law on amending and supplementing the Law no.04/L-065 on Copyright and Related Rights . Law on the Protection of Personal Data (to be harmonized with GDPR) . Law on Prevention and Fight of the Cyber Crime
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 96 Introduction I Macedonia II Albania III Kosovo Contact Findings from EU progress reports
‘’On electronic communications and information and communication technologies (ICT), there has been no improvement in the financial and organisational independence of the Regulatory Authority of Electronic and Postal Communications.‘’
‘’The mid-term targets of the 2013-2020 Digital Agenda for Kosovo have been fully achieved and the strategy is being implemented.’’
‘’The computer security incident response team, set up in 2014, is still understaffed. Modernisation of the public administration is a key element for successful digitalisation. Kosovo should put more effort in implementation of e-government frameworks and services.‘’
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 97 Annexes Introduction I N. Macedonia II Albania III Kosovo Contact Annex 1 North Macedonia
Laws & Programs Link Description
Law on Personal Income http://www.ujp.gov.mk/files/attachment/000 Although this is general law, the ICT sector is strongly affected due to the level Tax 0/1132/ZAKON_ZA_DANOKOT_NA_LICE of salary. According to the latest amendments of the law, a personal income tax N_DOHOD____Sl_vesnik_na_RM_br_241 rate of 18% will apply to incomes exceeding MKD 90,000 per month ($1,660). _od_26_12__2018__i___275_od_27_12_2 Incomes up to that amount will continue to be taxed at 10%. Effectively, the tax 019.pdf reform introduces an additional tax bracket.
Law on Waste, the Law https://www.pravdiko.mk/wp- This law regulates the requirements for environmental protection that should be on Waste from Electrical content/uploads/2013/12/Zakon-za- met by legal entities and individuals that produce and market on the market in and Electronic upravuvan-e-so-elektrichna-i-elektronska- North Macedonia electrical and electronic equipment and that deal with Equipment oprema-11-01-2012.pdf electrical waste and electronic equipment.
Law on copyrights https://www.wipo.int/edocs/lexdocs/laws/mk This law regulates the copyrights of the products in the Information /mk/mk038mk.pdf Communication and Technology sector.
Methodology for http://www.mioa.gov.mk/sites/default/files/p This methodology determines the way of assessing the value of information assessing the value of bl_files/documents/legislation/Metodologija technology. Information Technology _za_procena_na_IT_sredstva.pdf
Agreement between https://ec.europa.eu/research/participants/d Horizon 2020 is the European Union’s Framework Programme for Research North Macedonia and EU ata/ref/h2020/grants_manual/hi/3cpart/h202 and Innovation. Running from 2014 until 2020 with a budget of nearly €80 for the “Horizon 2020” 0-hi-list-ac_en.pdf billion, Horizon 2020 is the biggest multinational research programme in the programme world. It funds research in all areas of science and innovation.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 99 Introduction I N. Macedonia II Albania III Kosovo Contact Annex 2 Albania
Laws & Programs Link Description
Law on Science and http://www.herdata.org/public/ALEN-LAW- Sets out the objectives of S&T policy, including incentives for global integration Technology ON-SCIENCE-AND-TECHNOLOGY- of national R&D and measures to encourage privatization. Defines the main Development DEVELOPMENT.pdf functions of the Committee for Science and Technology, currently performed by the Ministry of Education and Science.
Law on Higher Education https://www.ascal.al/media/documents/legji Regulates the activities of universities and faculties, the establishment and and Scientific Research slacioni/Ligji%20Nr.%2080,%202015.pdf work of managing bodies, appointments and promotions of teaching staff, etc. in Higher Education The role of university, its scope of work and basic work conditions and Institutions of the objectives are regulated by laws, while the overall organization and activities are more closely elaborated by their statute. Republic of Albania
Law on the Academy of http://www.herdata.org/public/ALEN-LAW- Regulates the activity of Academy of Sciences of Albania and its scientific Science in Albania ON-THE-ACADEMY-OF-SCIENCES.pdf institutes and research centers.
Memorandum of https://ec.europa.eu/citizenship/pdf/doc760 The Framework Agreement of 22 November 2004 between the European Understanding between _en.pdf Community and the Republic of Albania establishes the general principles for Albania and EU in the the participation of Albania in Community programmes, leaving the light of 7th framework Commission and the competent authorities of Albania to determine the specific terms and conditions, including financial contribution, with regard to such agreement for RDI participation in each particular programme.
Agreement between https://ec.europa.eu/research/participants/d Horizon 2020 is the European Union’s Framework Programme for Research Albania and EU for the ata/ref/h2020/grants_manual/hi/3cpart/h202 and Innovation. Running from 2014 until 2020 with a budget of nearly €80 “Horizon 2020” 0-hi-list-ac_en.pdf billion, Horizon 2020 is the biggest multinational research programme in the programme world. It funds research in all areas of science and innovation.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 100 Introduction I Macedonia II Albania III Kosovo Contact Annex 3 Kosovo
Laws & Programs Link Description
Law no. 04/L-109 on https://gzk.rks- The purpose of this law is to regulate electronic communications activities electronic gov.net/ActDetail.aspx?ActID=2851 based on the principle of technological neutrality and the EU regulatory communications framework for electronic communications, promoting competition and efficient infrastructure in electronic communications, as well as guaranteeing appropriate and appropriate services in the territory of the Republic of Kosovo.
Law no. 04/L-094 on the http://www.mzhe- This Law shall make electronic documentation legally equivalent to its information society ks.net/repository/docs/LIgji_i_SH_SH_I_(A traditional counterpart in paper format, in order to facilitate electronic services services. nglisht).pdf including, but not limited to, consumer shopping and sales over the internet (eCommerce), electronic banking and financial services (ePayments), government provision of services (eGovernment) and electronic purchasing by enterprises (eProcurement) and applies where electronic signatures are used.
Law on copyright and http://presscouncil-ks.org/wp- The aim of this Law is to amend and supplement Law No. 04/L-065 for related rights content/uploads/2015/04/Law-on- Copyright and Related Rights, with the aim of harmonizing the law with the amending-and-supplementing-the-Law-on- European Union directives in the field of copyright and related rights. copyright-and-related-rights.pdf
Law on the Protection of https://www.afapdp.org/wp- This Law determines the rights, responsibilities, principles and measures with Personal Data (to be content/uploads/2012/01/Law-on-Personal- respect to the protection of personal data and sets up an institution responsible harmonized with GDPR) Data-Protection-Kosovo.pdf for monitoring the legitimacy of data processing.
Law on Prevention and https://mzhe- This Law aims to prevent and combat the cyber crime with concrete measures, Fight of the Cyber Crime ks.net/repository/docs/LIGJIPERPARANDA prevent, discover and sanction violations through computer systems, by LIMINDHE_LUFTIMINE_KRIMITKIBERNE providing observance of the human rights and safeguard of the personal TIKE2010166-alb2010-166-eng.pdf information.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 101 Introduction I N. Macedonia II Albania III Kosovo Contact
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ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 102 Introduction I N. Macedonia II Albania III Kosovo Contact Contact
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ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 103 Disclaimer: This report has been prepared by PwC solely for the purpose of developing a comprehensive study with relevant information on the ICT sector in N.Macedonia, Kosovo and Albania in accordance with our contract signed with The Embassy of the Netherlands ("the Client"). Any liability of PwC to the Client is subject to the terms set out in the contract. PwC accepts no liability (including for negligence) to anyone else or for any other purpose in connection with this report. Nothing in this report constitutes investment, legal or tax advice, nor shall be relied upon as such advice. Specific professional advice should always be sought separately before taking any action based on this report. The contents of this report are based on current market conditions and current information available and consequently any market changes may have an impact on these contents. This report contains information obtained or derived from a variety of external sources (described within the report in more detail). PwC has not sought to establish the completeness or verify in any way the information so provided. While the information in this Report has been prepared with reasonable care, neither PwC nor any of its affiliates nor any of its respective directors, officers, employees or agents make any representation or warranty, explicitly or implied, as to the fairness, correctness, accuracy or completeness of the information contained herein.
ICT Sector study N. Macedonia, Albania and Kosovo 2020 April 2020 PwC 104