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Investing in Information Communication Technology

Bill Pavleski, Minister for Foreign Investments London, 19th October 2011

Investment opportunities in ICT Competitive advantages of Macedonian ICT sector

Reliable, modern ICT infrastructure and intellectual property rights in compliance with EU laws. Qualified workforce, near-shoring and off-shoring opportunities. Large range of Language capabilities. High local IT demand from multinational companies high potential for local and regional IT services. Substantial cost savings without compromising quality, increased efficiency with easy access to specialized services.

I. ICT Infrastructure
Best telecommunication networks in the region the system is 100% digital; 4 Mobile phone operators T-mobile, VIP, One and WTI, two fixed phone operators and several VoIP; Complete coverage with WLAN connection and 8 internet providers; Leading multinational hardware and software suppliers (Microsoft, HP, IBM) with local sales and support services; Introduced a notification system: 4-hour company registration; Electronic fee payments for government services; Computer for every child; Scholarships for ICT students; Macedonia was ranked 53 out of 152 countries in 2010 (based on an ICT Development Index figure of 4.98).

I. Intellectual property rights

Macedonia is trustworthy business partner for offshoring and near-shoring:


Macedonias legislation with respect to the intellectual property (IP) rights is fully harmonized with EU laws; Macedonia has ratified and adopted all laws and regulations concerning the protection of intellectual property rights.

II. Qualified workforce

II. Qualified workforce - near-shoring and off-shoring opportunities


The internationally competitive wage of 550 (monthly salary), particularly in comparison to wages of IT professionals in Western Europe; The average rate for software services is 50-150 per man-day for software services; High level of technical skills due to the countrys traditionally strong education system, particularly in the areas of engineering and natural sciences; The country is located closely to Western Europe and has European culture which gives the possibility for near-shoring. Average rates per man-day in EUR (software services) 200-220 150-170 240-260

Countries

Bulgaria, Romania and Serbia Russia, Belarus and Ukraine Czech Republic, Slovakia, Poland and Hungary Republic of Macedonia

50-150*

Export Promotion Strategy for Macedonian Software and IT Services Industry, GTZ, 2010 (Data from Survey 2008-2009) * Based on local consultants fees (EU projects)

II. Qualified workforce - near-shoring and off-shoring opportunities

Structure of ICT Workforce


Programming/Software engineers 30%

Technical support, includes call center ICT representatives


Database design, development and administration IT sales/marketing System analysis and integration

17%
12% 12% 11%

Network design and administration


Digital media specialists Technical writing/training Call center representatives (not IT related) Data encoders/transcribers Other

9%
2% 2% 2% 1% 2%

Source: IT Workforce demand survey 2006, MASIT

III. Language capabilities

Foreign Languages Studied

Students in Primary Schools, % of Total

Students in Secondary Schools, % of Total

English French German

91% 22% 13%

94% 32% 21%

Italian
Russian Turkish

1% -

2%
2% 1%

Source: State Statistical Office of the Republic of Macedonia (Education 2008/2009)

IV. High local IT demand from the multinational companies

Intermediated mode of internationalization is evident in the country


Multinationals are part of Macedonian companies supply chain and export opportunities emerge from this kind of collaboration.

Substantial investments by international corporations such as Johnson Controls, Johnson Matthey have opened the window of opportunities for expansion in Macedonian IT industry.

Top ICT companies in Macedonia


Makedonski Telekom AD: As a member of the Magyar Telekom Group, is a part of the international Deutsche Telekom Group, thus bringing best international practice in the Macedonian telecommunication market Asseco SEE The largest operator in South-Eastern Europe in banking software, mobile banking & authentication, card business, general business & telco and system integration Seavus International software consulting and development company Neocom leading domestic ICT company providing software solutions and maintenance and support of hardware equipment NextSense - specializes in building complete e-business solutions to improve business performance for wide range of companies, from start-up businesses to strategic initiatives for established companies. FX3X - Full sequence work service facility, from roto/paint to matchmove and comp and CG integration, as well as dynamics simulations and creature work.

Opportunities: IT Partnership among UK, Republic of Macedonia and India

UK/EU/USA
Market growth
Higher competitiveness Risk diversification

INDIA

MACEDONIA

Opportunities: IT Partnership among UK, Republic of Macedonia and India

Call Centers Data Entry Services Medical Billing Services Financial back-office processing services BPO Film/Photo Editing Services Research and Analysis Services Software Development IT Services to large local multinational corporations, e.g. Johnson Matthey