#1>> OECD BETTER POLICIES FOR BETTER LIVES Western Balkans Competitiveness Outlook 2024 Fact-finding Meeting Skopje, North Macedonia 10 October 2023 OECD South East Europe Regional Programme " Co-funded by the European Union#2The OECD SEE Competitiveness Outlook: A tool for building competitive economies ABOUT The Competitiveness Outlook (CO) assesses reform progress across multiple policy areas crucial to competitiveness in the six Western Balkan economies: Albania, Bosnia and Herzegovina, Kosovo*, Montenegro, North Macedonia, and Serbia. Competitiveness Outlook 2024 is the 4th edition of this assessment, following the publication of the Competitiveness Outlook 2021. Competitiveness and Private Se Development Competitiveness in South East Europ A POLICY OUTLOOK 2016 Competitiveness and Private Sect Development Competitiveness in South East Europe A POLICY OUTLOOK 2018 Competitiveness and Private Sector Development Competitiveness in South East Europe 2021 A POLICY OUTLOOK APPLICATION Guiding policy reform and acting as a change management tool through government self-evaluation. methodology ➤ Benchmarking performance between peer economies using internationally comparable databases ➤ Providing a source of information on international standards, databases and other tools across several policy areas ➤ Enabling gradual adherence to the OECD standards. ➤ Supporting monitoring of Sustainable Development Goals' implementation. OECD OECD OECD FE Western Balkans Summit Berlin 202 OCDE OECD OCC The Competitiveness Outlook supports the Western Balkan governments' EU integration efforts by providing analytical contributions supporting the Economic Reform Programmes and the EU progress reports and recommendations. Gacze S 30 Groce HOTE GMC * This designation is without prejudice to positions on status, and is in line with United Nations Security Council Resolution 1244/99 and the Advisory Opinion of the International Court of Justice on Kosovo's declaration of independence 2#3INVESTMENT POLICY & PROMOTION TRADE POLICY Assessment Approach and Methodology The CO 2024 methodology is designed to provide an evidence-based assessment of progress in the design, implementation and monitoring across 15 policy dimensions key to economic competitiveness Each of the 15 policy dimensions is split up into several sub-dimensions, reflecting the key areas of that policy dimension Sub-dimensions are composed of both qualitative and quantitative indicators ENVIRONMENTAL POLICY ENERGY POLICY BANK ACCESS TO FINANCE TAX POLICY 100 Policy Dimensions 13 Qualitative indicators Sub-dimension 1 Quantitative indicators Qualitative indicators 15 Sub-dimension 2 Quantitative indicators 01110 01100101 01100011 01101000 01101110 101111 Sub-dimension ... TRANSPORT POLICY & PERFORMANCE AGRICULTURE STATE-OWNED EDUCATION SCIENCE, ANTI-CORRUPTION ENTERPRISES & COMPETENCIES EMPLOYMENT POLICY TECHNOLOGY & INNOVATION DIGITAL SOCIETY POLICY TOURISM#4Scoring methodology - Qualitative indicators According to the level of policy development and implementation, the qualitative indicators are assigned a numerical score between "0" and "5" to permit comparison of performance across WB6 economies. An independent impact evaluation of policy measures is executed. Results of monitoring and impact evaluation inform policy framework design and implementation updates towards OECD and international good practices. 5 4 The policy framework is monitored and, if necessary, adjusted accordingly. The policy framework includes more advanced features to increase its impact. 3 The adopted policy framework is effectively being implemented. The policy framework includes key features which make it impactful. 2 A policy framework specifically addressing the policy area concerned has been officially adopted by the government or parliament (where applicable). 1 A draft / pilot policy framework with government activity exists addressing the policy area concerned. C No framework (e. g. law, institution, project, initiative) exists addressing the policy area concerned. 4#5Regional assessment Five distinct clusters The CO 2024 will introduce an enhanced regional profile methodology, built around five distinct clusters, to effectively encompass and show the policy landscape of the Western Balkans. Business Environment Connectivity & infrastructure Skills Greening Digitalisation INVESTMENT POLICY & PROMOTION TRADE POLICY TRANSPORT POLICY & PERFORMANCE EDUCATION ENERGY POLICY EMPLOYMENT POLICY & COMPETENCIES ENVIRONMENTAL POLICY ENERGY POLICY DIGITAL SOCIETY m 01110 01100101 01100011 01101000 01101110 0101111 0111 01100101 01100011 01101000 1101110 101111 0111 01100101 01100011 01101000 1101110 101111 SCIENCE, TECHNOLOGY & INNOVATION TRADE POLICY SCIENCE, SCIENCE, AGRICULTURE TRANSPORT POLICY & PERFORMANCE ACCESS TO FINANCE TAX POLICY ACCESS TO FINANCE DIGITAL SOCIETY TECHNOLOGY & INNOVATION TECHNOLOGY & INNOVATION JA STATE-OWNED ENTERPRISES ANTI-CORRUPTION POLICY#6Datahub Competitiveness Outlook 2024 Useful components Complement the publication with the underlying wealth of qualitative and quantitative data in a visual and easily accessible way Economy-specific profiles Co-funded by the European Union OECD Competitiveness Outlook Datahub ◆ Montenegro WB6 AVR Albania ●Bosnia and Herzegovina ⚫Kosovo ◆ North Macedonia ⚫ Serbia 8. Science, Technology and Innovation 7. Employment Policy 9. Digital Society 6. Education Policy 10. Transport Policy 5. State-owned Enterprises 4. Tax Policy 3. Access to Finance 2. Trade Policy 1. Investment Policy and Promotion Score 5 4.5 4.2 4.0 3.8 3.6 11. Energy Policy 12. Environment Policy 13. Agriculture Policy 14. Tourism Policy 15. Anti-corruption Policy *The image shown is for illustration purposes only and will not be the exact representation of the final product. Access an economy-specific set of policy recommendations and source of information on international standards, databases and other tools across several policy areas 6#7Datahub Competitiveness Outlook 2024 Useful components Complement the publication with the underlying wealth of qualitative and quantitative data in a visual and easily accessible way Economy-specific profiles Go-funced by the European Union OECD Competitiveness Outlook Datahub ⚫Montenegro WB6 AVR Albania Bosnia and Herzegovina ⚫Kosovo North Macedonia ⚫Serbia 8. Science, Technology and Innovation 7. Employment Policy 9. Digital Society 6. Education Policy 10. Transport Policy 5. State-owned Enterprises 11. Energy Policy 4. Tax Policy 3. Access to Finance 2. Trade Policy 1. Investment Policy and Promotion Score 5 3.9 2.5 2.3 2.6 1.7 12. Environment Policy 13. Agriculture Policy 14. Tourism Policy 1.9 2.5 15. Anti-corruption Policy. *The image shown is for illustration purposes only and will not be the exact representation of the final product. Access an economy-specific set of policy recommendations and source of information on international standards, databases and other tools across several policy areas 7#8Q1 Revision of Design Assessment Frameworks and phase Questionnaires Assessment phase Consolidation phase Review & Publication Competitiveness Outlook 2024 Timeline 2023 2024 Q2 Q3 Q4 Q1 Q2 Q3 Kick-off meeting 15 Regional Co- ordination meetings Government Self- assessment Independent Assessment by OECD 10 October 2023 Fact-finding meetings 13 Dec 2023 Input analysis Preliminary results Meeting Publication & Data hub preparation Review phase & integration of updated data July 2024 (TBC) Publication & Datahub launch --------- Only OECD 요 04 Government involved Economy-specific launch meetings/Road show#9ווי Competitiveness Outlook 2024 Next Steps 14 July 2023 Second round of input collection 10 October 2023 Fact-finding meeting 13 December 2023 Presentation of preliminary findings February 2024 Draft publication shared Respond to OECD comments and update the demanded information Send the final qualitative and quantitative questionnaire ☐ Contribute to closing information gaps in policy dimensions related to the skills system by sharing additional information Identify achievements, challenges, and policy priorities ☐ Contribute to discussion and validation of the preliminary results Provide updated data if available ☐ Comment on initial OECD policy recommendations ☐ Provide updated data if available Provide final comments on the draft outputs Publication & Datahub release in July 2024 (TBC) & Economy-specific launch meetings in Q3 2024 6#10>> OECD BETTER POLICIES FOR BETTER LIVES Western Balkans Competitiveness Outlook 2024 SKILLS POLICY IN NORTH MACEDONIA DATA GAPS Skopje, North Macedonia 10 October 2023 " OECD South East Europe Regional Programme Co-funded by the European Union#11Data gaps across 15 assessed policy dimensions as of 7 October 2023 Dimension Investment Policy and Promotion Trade Policy Access to Finance Tax Policy Environment Policy Agriculture Policy Tourism Policy State-owned Enterprises Education Policy Employment Policy Science, Technology and Innovation Digital Society Transport Policy Energy Policy Anti-Corruption Questionnaire Major gaps Partial gaps (only 1st round received) Minor gaps Minor gaps Major gaps (only 1st round received) Minor gaps Major gaps (only 1st round received) Partial gaps (only 1st round received) Not received Minor gaps Minor gaps Not received Major gaps (only 1st round received) Partial gaps (only 1st round received) Minor gaps Statistical sheet Partial gaps Major gaps (only 1st round received) Major gaps N/A Minor gaps Minor gaps Major gaps (only 1st round received) Not received Minor gaps Minor gaps Minor gaps Major gaps (only 1st round received) Minor gaps Partial gaps (only 1st round received) Minor gaps Remarks Major qualitative data gaps (sub- dimension 1 largely missing) Some qualitative data gaps (e.g., QL. 9 missing) and large quantitative data gaps Large quantitative data gaps (e.g., sub- dimension 1 largely missing) Major qualitative data gaps (sub- dimension 3 largely missing) Large qualitative (sub dimension 2 & 3) and quantitative data gaps Pending review of qualitative questionnaire; no statistical sheet received No qualitative questionnaire received Major data gaps in statistical sheet (mostly pre-filled in); no qualitative questionnaire Additional qualitative input pending Missing qualitative indicators (sub- dimension 3); some quantitative data gaps 11#12Skills cluster - Data gaps (qualitative) Education Policy Sub-dimension 1: Equitable education for an inclusive society Sub-dimension 2: Teachers Sub-dimension 3: School-to-work transition Sub-dimension 4: Skills for the green-digital transition Employment Policy Sub-dimension 1: Inclusive labour market governance Sub-dimension 2: Social protection and activation policies Sub-dimension 3: Skills for adaptable labour markets Sub-dimension 4: Expanding the skills pool Science, Technology and Innovation Sub-dimension 1: STI system Sub-dimension 2: Public research system Sub-dimension 3: Knowledge exchange and co-creation Minor information gaps Partial information gaps Largely incomplete Not received Not received Not received Not received Largely incomplete 12#13Education Policy Missing questionnaire Skills cluster – Data gaps • • • . Employment Policy Progress on digitalisation of Public Employment Services (PES) Active Labour Market Policies (ALMPS) – budget and - stakeholders Details on "Learn smart, work professionally" campaign Information on activities to prepare for greening of economy • • • Science, Technology and Innovation Details on time/budget for Smart Specialisation Strategy Future operations of Fund for Innovation and Technology Development (FITD) Details on activities of National Council for Higher Education, Scientific Information on progress of research infrastructure roadmap 13#14>> OECD BETTER POLICIES FOR BETTER LIVES Western Balkans Competitiveness Outlook 2024 SKILLS POLICY IN NORTH MACEDONIA KEY CHALLENGES & POLICY SOLUTIONS Skopje, North Macedonia 10 October 2023 " OECD South East Europe Regional Programme Co-funded by the European Union#15Economic convergence of North Macedonia over five CO policy clusters 184.13 5184.13 711.25 1561.21 417.52 1711.25 1417.52 3215.24 3215.25 1552.52 1711.25 1561.21 1711.25 1561.21 1527 52 3215.24 1417.52 2427.52 215.05 • 6542.52 1552.52 155, 52 155252 518413 5184.13 2124.13 5184.18 8794 21 5124.67 5124.67 512467 5124.67 114.87 6124.87 6124187 6824.87 2114.87 6124.87 • 3121446 9721.88 $52146 124.76 3124.76 312461 3 14.61 512461 7605050 14.61 3/24.61 Economic Convergence 9918.87 Scoreboard for the Western Balkans 2023 (Draft Regional Version) 505.67 7605.05 75145 13155 213455 15654 5630 INS570 New OECD scoreboard to assess economic convergence of North Macedonia with EU and OECD standards To be presented at the Berlin Process Western Balkan Summit 2023 in Tirana Scoreboard highlights North Macedonia's convergence relative to EU policy outcomes and OECD good practices across five clusters: >>>OECD BETTER POLICIES FOR BETTER LIVES 1 Business environment 2 Skills 3 Connectivity & infrastructure 4 Greening 5 Digitalisation 15#160 1/3 2/3 1 Economic convergence of North Macedonia in the skills cluster ".." denotes complete data unavailability Performance relative to Change the EU Policy outcomes OECD good policy practices, standards, and tools Performance relative to the OECD Change 2008- 2012 2017 2013- 2018- 2022 2008-12 to 2018-22 2016- 2018- 2020- 2017 2019 2022 2016-17 to 2020-22 Skills Employment rate (% of the 15-64 0.71 0.78 0.82 +0.11 population) NEET rate (% of the 15-24 0.44 0.47 0.51 +0.07 population) CO Employment Policy 0.50 0.46 0.66 +0.16 Output per hour worked (2017 0.45 0.43 0.40 -0.05 PPP $ GDP) PISA average score 0.76 0.83 +0.07 CO Education Policy Lifelong learning (% pop. 25-64) 0.11 0.09 -0.02 Tertiary education achievement 0.40 0.65 +0.25 (% pop. 25-34) CO Science, Technology, and Innovation Policy 0.38 0.42 0.48 +0.10 R&D expenditure (%GDP) 0.12 0.21 0.16 +0.04 0.54 0.56 0.58 +0.04 Convergence with OECD good practice: Overall, North Macedonia's policies increasingly align with OECD good practices in all policy dimensions of the skills cluster However, while advancements are promising, they remain modest; as of 2021, none of the three examined policy areas had achieved more than 66% convergence with OECD standards Within skills cluster, North Macedonia's progress towards OECD standards has been strongest in employment policy Convergence of policy outcomes: Number of people attaining tertiary education demonstrates highest degree of convergence, rising from 40% to 65% of EU average (2013-2022); however, participation rates in lifelong learning activities still significantly lower than EU levels. North Macedonia's low spending on research and development remains persistent challenge to foster skills for innovation → in 2020, R&D expenditure was only 0.37% of national GDP which is markedly below EU average (2.32%) 16#17North Macedonia's Competitiveness Outlook performance since 2018 North Macedonia has improved its performance in all policy dimensions related to skills policy In 2021, North Macedonia achieved its highest average scores - next to trade, investment, tax and energy policy in the employment policy dimension, where it outperforms the WB6 average ― In education policy, North Macedonia scored slightly below the WB6 average EDUCATION & COMPETENCIES EMPLOYMENT POLICY SCIENCE, TECHNOLOGY & INNOVATION Education Policy Employment Policy 2018 2018 2021 WB6 2021 average WB6 2021 average 2018 2021 Science, Technology and Innovation +X WB6 2021 average 5 2021 5 5 17#18• • Skills cluster - Key progress and remaining challenges since CO2021 Progress Education Policy Challenges Improvements in higher educational attainment Better student performance in PISA (from 2015-2018) Strengthened focus on secondary education (concept for secondary education of adults; new draft law on secondary education) Efforts to improve the VET system (planned new law on VET; regional VET centres) • Decreasing public spending on education and training . Lack of regular national • . assessments at key levels of education Limited progress on adjusting VET legal framework to labour market needs Low participation rates in adult learning (2.6% in 2020) 18#19Skills cluster - Key progress and remaining challenges since CO2021 Progress • Efforts to formalise the informal Employment Policy Challenges economy . Reinforcement of Youth Guarantee • Improved collaboration for continuous training ("Learn smart, work professionally" campaign) Measures towards reducing . gender inequalities Increased focus on digital skills • . No clear progress in improving effectiveness of labour inspectorates Limited counselling activities of public employment services Issues of data availability for employment indicators No specific framework to identify skills mismatch 19#20Skills cluster - Key progress and remaining challenges since CO2021 • . Progress Progress in development of Smart Specialisation Strategy (S3) Establishment of National Council for Higher Education and Scientific Research Activities (in 2021) Adoption of National Roadmap for Research Infrastructure (in 2022) National Open Science Cloud Initiative (in 2021) STI Policy • • Challenges Public research system remains underfunded, GERD at around 0.4% of GDP Weak business-academia links; no collaborative grant schemes in place Limited progress on establishment of Science and Technology Parks (STPs) 20#21Competitiveness Outlook 2024 Skills cluster The skills cluster looks at the various policies and factors that determine the availability of a qualified and skilled workforce and the effective use of peoples' skills in the labour market. Building strong foundational skills Developing skills for the twin transition {o} Developing relevant skills Expanding the skills pool Putting skills to effective use Easing the school-to- work transition Matching skills with labour market needs Activating unused skills Leveraging skills for innovation 21#22Building strong foundational skills What are the main obstacles that prevent the education system from further improving student learning outcomes? What are the key obstacles to introducing regular standardised testing on a national scale? Developing relevant skills Developing skills for the twin transition How can students' digital skills development be further accelerated? Are there specific policies promoting the development of green skills* in schools? Is it considered a priority? Expanding the skills pool Have plans to attract skilled migrants to the labour market produced results? How successful is the government's engagement with diaspora communities to tap their skills and knowledge? Select priorities How can policies better prepare the workforce to participate in the twin transition? * Green skills refer to the knowledge, abilities, values and attitudes needed to live in, develop and support a sustainable and resource-efficient society (e.g., specific skills to modify products, services or 22 operations due to climate change adjustments, requirements or regulations)#23Putting skills to effective use Easing the school-to- work transition How can mechanisms be improved to ease the transition from education to work? Matching skills with labour market needs How can adult learning and work- based learning programmes be improved, and participation increased? What are the main obstacles for the VET and Higher Education sectors to better align curricula with labour market needs? What are the main deficiencies of current forecasting tools to analyse and anticipate skills mismatches and shortages? Select priorities 23#24Select priorities ⇒ Putting skills to effective use Activating unused skills How effective are government policies/services in helping people find suitable employment? How can women's participation in the labour force be further increased? Have policies supporting vulnerable groups succeeded in helping them overcome employment obstacles? Leveraging skills for innovation How can policies improve the attractiveness of the research sector to draw and retain highly-skilled individuals? What are the main obstacles in the development and expansion of the research and innovation infrastructure? What are the key challenges in implementing policy initiatives related to promoting business- academia collaboration? 24 24#25>>OECD BETTER POLICIES FOR BETTER LIVES Thank you for your attention! For further information please contact: Mr. Umur GOKCE Economic Advisor at the OECD South East Europe Division e-mail: [email protected] Co-funded by the European Union Mr. Martin KOHTZE Project Manager of the SEE Competitiveness Outlook OECD South East Europe Division e-mail: [email protected] Mr. Ali-Fuad TURGUT Project Manager of the SEE Competitiveness Outlook OECD South East Europe Division e-mail: [email protected] Ms. Alexandra PROKSCHY Policy Analyst at the OECD South East Europe Division OECD South East Europe Division e-mail: [email protected] OECD South East Europe Regional Programme