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July 2018

Inellipse Software Solutions – Bitola is the First Applicant of the Bitove Family Entrepreneurship Program in partnership with CESO

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With more than 20 years of international high-tech experience in business & marketing strategy, product and solution development, ecosystem creation, sales for startups and established software and networking companies, William (Bill) Murphy is the first CESO Volunteer Advisor in Macedonia, conducting his assignment at Inellipse Software Solutions – Bitola, the first company applicant to the Bitove Family Entrepreneurship Program in partnership with CESO (Canadian Executive Service Organization).

Ilija Jolevski – Co-Founder at Inellipse and Full Professor at University St Kliment Ohridski in Bitola says that what they planned on doing is additionally market, sell and support internally conceived and developed products, apart from successfully providing offshore, onshore and near-shore software development services for clients.

“One of the things we knew from the start is that we needed to apply. We must apply, we must be first. The visit is great. Work with Bill is excellent. We need help in product development, in better research and classification of products. What Bill brought us here was the overall process of how we structure an idea, how we see strengths and weaknesses, how we find all the other stuff that we need to do, how to develop a product and how to create a go-to-market strategy.” – elaborated Jolevski.

Together with Inellipse team, Bill Murphy has already been enthusiastically working on more than 23 projects in just 4 days, transferring knowledge, mentoring and providing support in crucial aspects from the working of the company.

“Macedonia has tremendously good software people. That is a huge resource, ranking high in comparison to other countries, which is a great advantage. The mission of Inellipse is to grow the professional services business, then to build a product-based business and grow that as well. So, present business gets bigger and a new business grows as well. Building products and services, not just services. The idea is to have at least 20% revenue from products in the future. ” – emphasized Murphy.

What they both planned on doing is sharing the received knowledge and expertise to other IT companies in Bitola through workshops, tutorials, online courses, significantly helping students, startups and other relevant stakeholders, thus achieving even more success stories in the future.

After the successful completion of the product development process, Inellipse will also have the opportunity to export its products, conduct bilateral meetings with diaspora business professionals and promote itself through the wide membership network of Macedonia2025.

The Bitove Family Entrepreneurship Program seeks to support the development of Macedonian micro, small and medium enterprises (SMEs), recruiting companies who have specific needs and then matching the abilities of the Canadian senior experts who would like to spend from two to four weeks in Macedonia to advise the companies.

Macedonian micro, small and medium companies, working in the field of finance, tourism and hospitality, information technology, agri-business and natural resource management are welcomed to apply.

Meet the MK2025 Summit ’18 Speaker: Ilija Gospodinov – Group Quality Manager at Endava and Company Administrative Director at Endava Skopje

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Mr. Ilija Gospodinov has been a constant presence in the growth of Macedonia’s tech business for the past 20 years. While creating value in the internet, telco and IT services industries, and with successes across a varied portfolio including corporate compliance, enterprise risk management, information security and quality, he has used his personal approach with lasting results.

Since 2016, he is the Administrative Director at Endava in Skopje, and Endava’s Group Quality Manager since 2017. A dedicated leader above all, he creates an environment where people establish trust and achieve their full potential.

Stay tuned as we announce all the speakers in the period to come, and don’t forget to secure your seat, get your tickets at https://mk2025summit.com/​

MACEDONIA2025 COMMENTS ON PRESPA AGREEMENT

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Press Release 

23.07.2018

 

Macedonia2025 is a non-government, non-profit, think-and-do-tank organization.  Our goal is to continue to drive, promote and increase the economic prosperity for all our people residing in the Republic of Macedonia, as well as building a stronger nation. In our capacity as a non-political and independent organization, many constituents have asked us to opine on the Prespa Agreement, signed on June 12 between the Prime Ministers of Macedonia and Greece. Therefore, here we would like to provide transparently our views on the matter.

Without question, we are in favor of an agreement that will further normalize political and economic relations between the two countries. We are especially pleased to note that this agreement might stimulate cooperation in the areas of the economy, investments and developing strategic cooperation. It may also accelerate Macedonia’s prospects of joining international alliances, which is important for protecting the country’s borders.

While this agreement is a demonstration of both countries showing cooperation and progress, we would like to highlight a few important items in the current agreement for which we would encourage both parties to discuss and address now, in future discussions and through further addendums.

 

1. Economic implications

Macedonia is an open economy already integrated into the global trading system. The EU is the main trading partner of the country, accounting for 80% of the total exports and 61% of the imports in 2017* (Source: National Bank of Republic of Macedonia). While the EU integration will bring additional economic benefits for the country, the country is already benefiting from the close markets of the EU, FDIs and the preferential trade relations set out in the Stabilization and Association Agreement between Macedonia and EU.

At present, Macedonia is required to pass all its changes, only then will Greece decide whether to ratify the agreement or not. We believe this can create unfortunate consequences.  Macedonians need to have a clear understanding on what will happen in case the agreement is not approved by Greece and what is the alternative, particularly if there is no movement on full integration as an EU nation.  So far, the EU has deferred a decision until 2019, well past the intended referendum date.  On the other hand, and as a positive development, NATO has recently extended an invitation to join its membership, however the ultimate membership is clearly conditional on Macedonia fulfilling all the terms of the agreement first.

 

2. Human rights and heritage

Every citizen has the right to self-determination of their identity which is based on their personal feelings and/or historic or national attachment and no one can take that right away. Macedonians who exist in the Republic of Macedonia, Greece, Bulgaria and Albania are of one origin to the region.

With that in mind and considering these most recent positive developments between Macedonia and Greece, now it is also the time to turn the page and move on from the past.  In doing so, there should be recognition of the Macedonian minority in Greece historically as well as currently. A formal apology for the treatment of this minority in the past, without any expected financial implications is required. In addition, Greece should be asked to permit a return of the “Deca Begalci”, children who were exiled from the region over 50 years ago. Many ethnic Macedonians have property or assets in Aegean Macedonia and a pledge to allow these assets to be owned and freely accessed is important and would be following international law on protection of rights, land and businesses. The permission of Macedonian schools and churches in Greece should be included as well. All these actions should help with healing the differences of the past and the overall reconciliation between the countries.

 

3. Mutual Understanding

We believe that trademarks, brand names etc. should be at discretion of the people who own them, they should not be required to change with this agreement. In principal we do not see the need for the existence of a joint commission that will be reviewing the history, archaeology, and education, including school textbooks, maps, focused unilaterally on Macedonia. This is redundant and unnecessary interference in cultural and educational aspects of a foreign entity into domestic matters of a neighboring country and we believe it creates a very negative historic global precedent.

We should ensure that the modern Macedonian culture and traditions can thrive and flourish while promoting the similar background, culture, tradition, heritage and economic trade between people of the two countries. Greece should acknowledge our history in the region and we should be free to use any geographic references that we currently use (e.g.: Greece continues to call Bitola-Monestiri and Istanbul-Constantinople) like other neighboring nations.

 

In Summary

Our mission as an organization is to promote democracy, rule of law and transparency in support of the economic prosperity of Macedonia. The people need to have a comprehensive knowledge of the agreement to be able to make an educated decision. We expect such a referendum to be open and transparent so that whatever the outcome is we stand behind the decision of the people.  We also call on the media to be neutral, objective, respect the freedom of speech from all sides and the press to be free from governmental pressure or influence.   Our hope is that this referendum will lead to national unity with the resulting participation of as many Macedonian citizen’s as possible participating in the vote.

While we support the country’s integration into the EU and NATO, at the same time, we see opportunities for Macedonia to be successful with and without it. Joining the EU could be beneficial, but we also must plan as if it might not happen.  As such we must focus on what drives economic prosperity. The country needs to keep driving for a long-term growth strategy. Macedonia has continually been one of the top reformers according to the World Bank, so whatever the outcome, we continue to encourage Macedonia, its government (current and future) as well its civil society to continue to be engaged in swift reforms that strengthen the democratic institutions and rule of law in the country.  This is what ultimately will create economic value and make Macedonia more transparent, and economically developed for future generations. As an economic organization, we want to emphasize there is no such thing as a single accomplishment or a resolution of one issue that will facilitate economic prosperity for our people. It is the hard work, determination, increased trade and investment, eradication of corruption, honorable and independent judicial system and most of all unity that we believe will drive economic growth.

 

In closing, given the importance of any proposed agreement, we feel that the serious implications of this agreement require national consensus and unity between the parties, the President and the people who live in Macedonia and call themselves Macedonian. All sides need to be aligned going forward, that is the way together, we will lead to our prosperity as a nation and people.  Macedonia2025 is always ready and willing to help in any way possible make our nation stronger.

Economic and Business News

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A recap of the key economic headlines and research for Macedonia in the last quarter. What do I need to know?

· 22 March 2018 – Kicevo to Ohrid highway completion deadline extended to June 2021 – link.

· 16 April 2018 – AccelorMittal looking to divest itself of its steel mill in Skopje and Bucharest as it seeks EU regulatory approval for its acquisition of Italian steel maker Ilva.

· 17 April 2018 – European Commission releases 2018 report on Macedonia recommending that the EU begin ascension talks with Macedonia.

· 19 April 2019 – Skopje hosts the first ever Western Balkans Digital Summit.

· 24 April 2018 – Macedonia issued 30 year bonds for the first time, €19.5m was raised at a coupon rate of 4.85 per cent. The only other country to issue 30 year bonds in the region is Slovenia.

· 3 May 2018 – Macedonia signs cooperation agreement with Democratic Control of Armed Forces (Swiss NGO) to improve the governance of security and intelligence services.

· 14 May 2018. Finance minister announces that the EBRD (European Bank for Reconstruction and Development) and EIB (European Investment Bank) will help fund a wind park in Miravci and a solar park in Oslomej – link.

· 14 May 2018 – Kosovo announces plan to build 55km highway to the border with Macedonia – link.

· 15-16 May 2018 – Western Balkans Summit in Sofia: French president said he wants to see the Western Balkans “anchored in the EU”. Angela Merkel said “I do not think 2025 is a realistic date for the EU enlargement. More important is the progress that has been achieved by the candidates” – link

· 21 May 2018 – law passed to enable liberalization of Macedonian electricity market by 2019 – link

· 22 May 2018 – New governor assumes role at National Bank: Anita Angelovska Bezhoska – link

· 1 June 2018 – Census announced for 2020 – link

· 13 June 2018 – World Bank lowers Macedonia’s 2018 GDP growth forecast from 3.2 per to 2.3 – link (p124)

· 17 June 2018 – Prespa Lake Accord signed – Greek and Macedonian governments agree on a name change for Macedonia – link

· 26 June 2018 – Reports says that EU ascension negotiations to start in June 2019; France, Holland, and Denmark want to see improvements in the fight against corruption in Macedonia and Albania – link

· 12 July 2018 – Macedonia officially invited to NATO – link

 

Article by Brendan Filipovski, Research Manager

Highlights of MK2025 Business Forum in Belgrade in Partnership with CANSEE

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On 22 June, Macedonia2025 and CANSEE held a business forum in Belgrade. The forum brought together the diaspora in Serbia, and investors interested in Macedonia. The discussion focussed on how Macedonia, Serbia, and the Western Balkans can move forward together.

We have an opportunity to work together and win together

We are in South-Eastern Europe together and we need to take this opportunity to build something together. If we don’t work together then we all lose.
John Bitove, MK20205 Board Member, and Svetozar Janevski, a leading regional businessman.

Serbia, Macedonia, and the Western Balkans are small. It is difficult for our individual countries to scale, find investment, and to find talent. However, when we look beyond borders and work together we are capable of growing our capacity, attracting investment, and becoming international brands.

We must sell the region to investors. “When they invest in Macedonia and Serbia they are not just investing in those individual countries but in the whole region with its talent and potential”. Jelena Bulatovic, Serbian Association of Managers

An important part of working together is increasing trade with one another. When the region functions better as a seamless regional market then we will be more attractive to investors and will be better placed to export to the rest of Europe.
Wolfgang Maringer, Foreign Investment Council Vice President, Macedonia.

We must be brave and ambitious to grow

To grow, our companies and countries need to be ambitious. We need to be brave enough to take the risks that enable growth.

“We are brave enough to think we can succeed in Europe and this bravery drives our strategy and vision”. Rados Vukicevic, CEO at Tikves Winery.

“There are problems but with a single vision and persistence there are no barriers”. Mihail Mateski, CEO and Partner at Greentech.

The government has an important role but private business is the driver

Business drives growth but the government has a role to facilitate business, particularly with infrastructure, green technology, and education.

“To achieve innovation we cannot do the same thing with the same people. We need to change education at the youngest level”.
Svetozar Janevski

We need more graduates with IT skills and practical business skills.
Anthony Naumoff and Rados Vukicevic.

The government can also ensure cross-border logistics work smoothly. Goods should not be spoiling on the border.
Mitko Andonov, Business Development at Kolid International.

Better legal protection is also needed. A Macedonian company doing business in Serbia and vice versa need to feel as secure as a local company.

Immigration

Western European countries are showing us the way. Immigration provides skilled workers but also workers at the low-wage end where there is often a supply shortfall. Lastly immigration also helps with the viability of country’s pension schemes.

Corporate Social Responsibility

For foreign direct investment companies, investment in a company is an extension of their home country’s international relations. The company is not just representing itself.
Todd Romaine, Vice President of CSR at Nevsun Resources.

Good corporate social responsibility is not just about the company and its products. Companies have opportunities to change their societies for the better by increasing social responsibility awareness in the community. It is about both companies and individuals looking around to see where they can make a difference.
Tanja Dusanic , Legal and CA Director Serbia and Montenegro, Apatinska Brewery

Inspirational insights of successful Macedonians in Serbia

What is success? It is an overused pose in the Facebook age. The secret is not in social networks but in self-evaluation.
Filip Luneski, Sr Category and Customer Marketing Manager for Europe at Molson Coors; President of Macedonian Business Association in Serbia

We are so close to Macedonia but we don’t feel like the diaspora. Sometimes we are more connected to the diaspora in places like Australia and Canada than the diaspora closer to home. Ana Koeshall, Executive Director at Ana and Vlade Divac Foundation; and Biljana Markovic Stamenova, Macedonia2025 Executive Director.

We have lost the power of citizens in the region. It is not just for companies and governments to make a difference.
Ana Koeshall, Executive Director at Ana and Vlade Divac Foundation

 

To view the photo album of the forum please click HERE

 

Article by Brendan Filipovski, Research Manager

Interview with Scott Resnick, an “Entrepreneur Evangelist”

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Scott Resnick is the Founder and first Executive Director of StartingBlock Madison, a 50,000 sq. foot entrepreneurial hub in Wisconsin, USA. He has also helped raise millions for the start-up scene around Wisconsin University. Ahead of his appearance at our 2018 Summit, Scott shares some lessons for the Macedonian start-up scene.

 

1. You have an impressive list of achievements behind you. Currently, you are the Founder and first Executive Director of StartingBlock Madison – 50,000 sq. foot entrepreneurial hub, which was opened in 2018. Could you give us a short overview of your professional background, and how you reached the point of founding StartingBlock?

Back in 2006, a few friends and I had an idea for a technology company to answer the following question: “what if folks could watch television online?” The concept was excellent. However, we were unable to commercialize the idea. Our team learned much from our failure and several of us continued on to build a second company together. Years later, Hardin Design & Development creates enterprise web applications for companies such as FedEx, Toyota, and American Family Insurance. I am still the company’s Chief Operating Officer.

While the company was going well, several entrepreneurs were looking to make a larger impact in our community. We wanted to be able to “pay it forward” and help other startups succeed in starting new companies. StartingBlock is an incubator that will provide young companies with the education, tools, resources, and capital to thrive in the 21st century.

 

2. You led efforts to raise millions of dollars to build the “beacon for Midwest startups” particularly around technologies spurred by the University of Wisconsin. What is the main purpose of this organization and how it is structured?

Madison has a population of less than 250,000 yet is in the top 15 in the world for venture capital investments per capita. What Madison lacks in population, we make up for in startup density. One goal of StartingBlock is to amplify the message that anyone can create a startup, and that Madison is one of the best place in the country for entrepreneurs. To accomplish our goals, we’ve partnered with our local and federal government partners, and the local university and colleges to highlight the strengths and competitive advantages of our region. We structured our organization as a not-for-profit and shared the vision with community institutions who were supportive of the project.

 

3. You are a former two-term member of the Madison Common Council and you created the first 1.5-million-dollar seed fund to spur women and minority entrepreneurship. How important do you find social responsibility and advocacy for societal issues that really matter?

Social responsibility should be at the heart of all professional decisions. As a young business leader who entered politics, I felt I had a duty to ensure all members of our greater community were treated with respect and equal opportunity while holding myself to the highest moral standards. The 1.5M fund came out of an opportunity analysis. Women and underrepresented groups receive a fraction of the venture capital funding as white males. Given that underrepresented founders often have higher returns, I spearheaded this founding as an opportunity to grow the venture community and grow our startup community.

 

4. At the upcoming Macedonia2025 Summit, you will share your experience and know-how on how to build an entrepreneurial district. As the Macedonian startup ecosystem is still fairly young, what would your suggestions be for the Macedonian entrepreneurs?

Be a cheerleader for your local ecosystem and startups. Too many people focus on the negatives of why an idea can’t work or why a startup can’t thrive in a particular region. Embrace your local strengths and become a champion for your community. You can do this by supporting fellow startup companies and offering assistance whenever possible. When one company succeeded in the region, the entire community succeeds.

 

5. Is there anything else you would like to share so our Summit registrants can learn more about Scott Resnick?

I ask every startup who I work with the single question: “How can I help?” I love working with young companies to help them discover their business model, find a new consumer, or locate financing. I am thrilled to have the opportunity to speak at Macedonia2025, and share my insights.

 

Interview by Dimitar Chatleski, Diaspora Relations/Business Development Officer 

Armenia and Macedonia: Business Opportunities

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At last year’s summit Ruben Vardanyan, impact investor, inspired us with his example of social entrepreneurship in Armenia, Russia, and the world. In many ways, Armenia provides a template for what can be done in Macedonia. This article compares Macedonia and Armenia, and points out possible business opportunities for Macedonian companies in Armenia.

Why Armenia?

Macedonia and Armenia share many similarities (see table 2 below). Both countries are similar sized, both are land-locked, both are at similar stages of development, and both share similar cultural influences. Both countries also have long and proud histories, however, both only became modern independent states in 1991. Armenia declared independence with the dissolution of the Soviet Union while Macedonia declared independence with the collapse of Yugoslavia. Both countries have also both experienced some political instability in recent years. All these similarities mean that the two countries should be able to relate to each other well, which should help facilitate business and investment. Armenia is our cousin in the Caucasus.

Business opportunities

Armenia provides Macedonian companies with some strong export opportunities. While the two countries have many similarities, Macedonia only ranks 91st in terms of imports for Armenia. However, Macedonia has the potential to dramatically increase its exports to Armenia through the following three strategies:

1. Target three of Armenia’s top five imports which are also among Macedonia’s leading global exports: Medicaments; Petroleum oil and bituminous materials (excl. crude); and Telecommunications equipment and parts (table 2). These are goods where there is strong demand by Armenia and in which Macedonia has a strong supply.

 

Table 2: Top 5 Imports in Armenia by value and Macedonian exports of the same good, 2017

2. Build upon existing Macedonian exports to Armenia: Medicaments, Clothing, and Footwear (table 3).

 

Table 3: Top 5 Armenian imports from Macedonia and total Armenian imports of the same good, 2017

3. Lastly, focus on Macedonia’s leading exports which also have a market in Armenia: miscellaneous chemicals, pumps, equipment for distributing electricity, furniture, and clothing (table 3). These are goods that Macedonia has strong exports in and that Armenia imports but the current level of trade in these goods between the two countries is small.

 

Table 4: Top 5 Macedonian exports and Armenian imports of the same good, 2017

Of all these highlighted goods the one that stands out is Medicaments. It is Armenia’s third largest import overall, it is already Armenia’s largest import from Macedonia (so there is a good beachhead), and Macedonia has a lot more medicaments it could export to Armenia: 90m USD exports worldwide with only 282,000 USD being imported by Armenia.

This analysis is just the beginning for increasing trade between the two countries. More detailed market analysis and cost-benefit analysis is required. However more importantly, awareness and relationships need to be built. Let us reach out to our cousin in the Caucasus and grow together.

Emigration from Macedonia: 1990 to 2017

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534,720 people from Macedonia are living overseas according to the latest UN report on migrant stock. Emigration has a long history in Macedonia and continues to be important. However, the pattern of emigration has changed significantly since independence, and this provides policy lessons and opportunities for Macedonia and its diaspora.

In 1990 the top five destinations for emigrants from Macedonia were: France, Italy, Hungary, Australia, and Turkey. However, since independence the number of emigrants to Turkey has skyrocketed overtaking all other destinations in terms of total stock (graph 1). Conversely, the emigrants in France and Hungary either returned or went elsewhere since independence.

The reason for the rise in the importance of Turkey as a destination is unclear, however, the diaspora policies of Turkey during the 1990s and 2000s may have played a part. In the 1990s Turkeys began an active policy of working with their diaspora around the world, building official links with diaspora communities. In 2012 Turkey established the Office for Turks Abroad and Related Communities (YTB). During this period, Turkey also implemented the ‘Blue Card’, which gives citizenship-style rights for immigrants of Turkish origin[1]. The Blue Card makes it easier for the Turkish diaspora to return and invest in Turkey.

Turkey’s strong economic growth and EU related reforms likely also played a big part in attracting immigrants. From 2002 to 2007, Turkish GDP growth averaged 7.1 per cent per year[2].

Turkey’s diaspora policies provide an example for Macedonia and its own diaspora. Macedonia could strengthen contact with the diaspora through new institutions that played a more active role in diaspora life. Macedonia could also implement its own version of the ‘Blue Card’ making it easier for the diaspora to invest and work in Macedonia. Similar ‘cards’ are used by several countries including Poland[3], India[4], and Ethiopia[5].

Macedonia should also embrace reforms connected to EU ascension and use this as a selling point for the diaspora and FDI. However, above all, Macedonia should remember that there is no substitute for economic growth. Sustained economic growth and increasing living standards would likely have the strongest impact in attracting diaspora migration and investment. The new government needs to ensure a strong rebound after recent flat results.

The rise in emigrants to Turkey also provides an opportunity for companies in Macedonia. These emigrants could help foster exports and investment between the two countries. Graph 2 below shows that exports from Macedonia to Turkey have risen noticeably since 2002 (below). In March, Prime Minister Zaev talked to the Macedonian-Turkish Chamber of Commerce encouraging them to help increase Turkish investment in Macedonia[6].

Article by Brendan Filipovski, Research Manager


[1] De Bel-Air, F, (2016), ‘Migration Profile: Turkey’, Policy Brief, December 2016, Migration Policy Center at the European University

[2] UN World Development Indicators, World’s biggest diasporas.

Cecilia Hjertzell – Swedish Entrepreneur and Co-founder of CMO goes Tech and her Stand on the Strategies for Brain Gain

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Cecilia Hjertzell is a Swedish entrepreneur and co-founder of CMO goes Tech, an international network for the CMOs of the future. With almost 20 years of extensive experience within digitalization, Cecilia serves as board member and senior business advisor to a number of large companies in their digital transformation. Cecilia is a frequent key note speaker on marketing innovation and consumer trends in international leading forum, and co-author to a book about the Gig Economy. Cecilia’s past experiences include working in leading marketing positions, as well as co-founding a successful MarTech Management Agency.

Regular registration is ongoing. Don’t forget to secure your spot at the Summit and buy your tickets at: https://mk2025summit.com/