Skills Policies for Economic Diversification in the Former Yugoslav Republic of Macedonia- Enhancing local skills policies for the food and tourism sectors

This report presents an application of the ILO’s Skills for Trade and Economic Diversification (STED) methodology to two sectors – tourism and food industries – of the economy of the former Yugoslav Republic of Macedonia. The STED methodology provides strategic guidance for the integration of skills development in sectoral policies. It is designed to support growth and decent employment creation in sectors that have the potential to increase exports and to contribute to economic diversification. It has been developed in recognition of the fact that having the right skills among workers is crucial for firms or industries to succeed in trade, and because understanding trade is important to providing workers with the right skills. Availability of skilled workers contributes to higher and more diversified exports, more FDI, higher absorption of technology, and more sustainable growth and productive employment creation. At the same time, skills are the key determinant for a worker’s success in finding a good job and making a living. Employment promotion and defining the priority sectors for future economic development in terms of skills is still a challenging task for many of the institutions and stakeholders in the former Yugoslav Republic of Macedonia. In this context, investment in human resources is central and formulating up-to-date policy advice on how to increase economic diversification through strengthening the business enabling environment with a focus on skill endowments and export orientation is key to fostering employment generation. While analysis at the national level can give useful directions for sustainable growth and employment creation, an in-depth analysis of individual sectors is useful – and indeed necessary – in order to design concrete policy proposals. It is for these reasons that two sectors - Tourism and Food Industries - were analysed in some detail. The analysis describes the obstacles to enhanced economic diversification and sustainable growth in terms of the business environment, the availability of skills, and the situation of global markets for Macedonian exports. A particular emphasis was put on identification of skill needs at regional and local level through the creation of two working groups representing trend-setting companies from each selected sector, employers’ organizations, workers’ organizations, practitioners and teachers. The results of the analysis have been incorporated in local action plans for employment, using the LED approach, for the regions of Krushevo, Prilep and Resen.