Investing in ICT. in Macedonia
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- Dwain Ford
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1 Investing in ICT in Macedonia CeBIT 2008, Hannover, nover, Germany
2 Agency for Foreign Investments of the Republic of Macedonia Invest Macedonia is the primary government institution supporting foreign investment in the Republic of Macedonia. Our mission is to win new investment projects into Macedonia and support the expansion of the existing base of overseas companies in the country. Published: February 2008
3 Becoming the first all broadband wireless country its size or larger in the world, Macedonia has come a long way in the ICT sector. Ivo Ivanovski, Macedonian Minister for Information Society
4 Macedonia is now one of the best investment locations in Europe in the ICT sector: Duty-free access to market of over 650 million people Skilled and cost effective workforce Strong work ethic Excellent telecommunications infrastructure Excellent language skills, especially in English Good track record in IT products and services Low corporate taxes Government highly supportive of foreign direct investment (FDI) - 2 -
5 EXCELLENT KNOWLEDGE OF THE SOUTH EASTERN EUROPEAN MARKET South Eastern European countries represent an emerging ICT market, worth 4.5 billion, growing at 10 to 15% per annum compared to around 4% per annum in the more developed markets in the EU. These markets are next door to Macedonia and represent an excellent opportunity for investors in the sector to exploit. WORKFORCE AND EDUCATION With ICT skills shortage in Western economies and growing demand for outsourcing services Macedonia can be your solution! Structure of ICT workforce Programming / Software engineer 30% Technical support includes call centers ICT representatives 17% Database design development and administration 12% IT sales / marketing 12% System analysis and integration 11% Network design and administration 9% Digital media specialist 2% Technical writing / training 2% Call centers representative (not ICT related) 2% Data encoders / transcribers 1% Other 2% Source: IT Workforce demand survey 2006, Macedonian Association for Information Technology Salaries New Graduates 350 Project Menagers Average for ICT sector Gross monthly salary in ICT sector, 2007 Source: Invest Macedonia, State Statistical Office of the Republic of Macedonia - 3 -
6 Sustainable workforce supply With 45% of the population under the age of 30, Macedonia has a plentiful supply of young and educated people. The number of ICT graduates has doubled over the last four years. 1,600 1,400 1,200 1, Graduated Students in Technical Fields е Index of graduated ICT students; 2000= е year year Source: Invest Macedonia, State Statistical Office of the Republic of Macedonia Excellent language skills Every child in Macedonia begins to learn English in the first grade of primary school. Two foreign languages are mandatory in high school as well: English, and either German, French, or Russian. English is also thought for two years at University level. Regional languages (Serbian, Bulgarian, Albanian and Greek) are widely spoken. Universities, research centers and associations University Ss.Cyril and Methodius, Skopje Faculty of Electrical Engineering and Information Technologies Institute of Informatics Faculty of Natural Science and Mathematics Faculty of Mechanical Engineering University St. Clement of Ohrid, Bitola Technical Faculty South East Europe University Faculty of Communication Science and Technologies MASA Macedonian Academy of Sciences and Arts MASIT Macedonian Association of Information Technology MADE Macedonian Association of Digital Entertainment - 4 -
7 COMPETITIVE OPERATING COSTS Office rent Electricity price per sqm/month 0.04 per kwh Labour costs Internet price 550 avg. per month 22.5 per month for a speed of 2048 kbps and unlimited downloads Source: Invest Macedonia, Energy Regulatory Commission of the Republic of Macedonia, State Statistical Office of the Republic of Macedonia EXCELLENT ICT BASE 100% digital network 3 Mobile phone operators 3G operator, operational from Internet Operators Country wide WiFi - coverage 2 WiMAX operators, operational from fixed phone operators Struga Debar 7 km 13 km 12 f.o 27 km 24 f.o 38 km 57 km 26 km 12 f.o 2.4 km 31 km f.o Resen 47.8 km 40.8 km STM km M.Brod 50 km 55 km 24 f.o 17 km STM 16 Sv. Nikole 44.5 km 15 km 48.2 km 25 km Kavadarci 52 km 61.1 km 16.5 km 4.2 km Kratovo 13.8 km Probistip 12.5 km 19 km STM km 34.7 km 44 km Negotino 68 km 16 km 43 km Radovis 33 km Delcevo 33 km Valandovo 29 km 7.5 km 12 f.o 11 km 8 f.o 32 km km 24 f.o International and transit exchange Main exchange Optical cable Radio system Cross-border links - 5 -
8 MACEDONIAN ICT INDUSTRY Companies (%) Employees (%) Other Telecom 6.6 Telecom (Carrier) Services 16.8 IT Hardware 4.7 Software 4.7 Other Telecom 64.9 IT Hardware 3.3 Software 8.3 IT Services 14.5 IT Channels 32.5 IT Services 34.7 Telecom (Carrier) Services 57.8 ICT TECHNOLOGY PENETRATION IT Channels 9 Source: IDC 2006 Main telephone lines 33 Cell phone subscripton 75 Usage Per 100 Inhabitants Computer 91 Internet 73 Usage in Enterprises (%) Source: Eurostat latest available data, State Statistical Office of the Republic of Macedonia A GOOD TRACK RECORD IN ICT PRODUCTS AND SERVICES A number of existing ICT companies have been successfully growing and developing in recent years. AIRBUS has recently started to use a highly sophisticated software package fully developed by the Faculty of Mechanical Engineering, University Ss. Cyril and Methodius, Skopje. SEAVUS delivers own software packages and customised products to an extensive list of international customers including Cisco Systems, Bayer, Ford Motor Company, Fuji Electric PowerService Co.Ltd, etc. PEXIM, a regional leader in financial software development, implemented their solutions in more than 60 banks in the region, like SEE branches of Banca Intesa, Hypo Alpe-Adria-Bank, etc EIN-SOF specializes in software development for the automotive industry, working with companies as SPX and Johnson Controls Automotive Electronics.
9 LEGISLATION FULLY HARMONISED WITH EU Law on Copyright and Related Rights Law on Industrial Property Law on Electronic Communications Law on e-trade Law on Conditional Access to Protected Electronic Services GOVERNMENT SUPPORT OF E-SOCIETY With the help of the Government and a new Minister for Information Society, Macedonia is leapfrogging in the areas of E-Infrastructure, E- business, E-government, E-education, E-health, E-citizens. Successful projects help build a sustainable IT culture: A computer for every child Scholarships for IT students Digital certificates for employers Free Internet sessions Free computer application training ICT University planned for 2009 IT IS TIME TO INVEST IN MACEDONIA Companies investing in Macedonia now will have first-mover advantage New Business Heaven in Europe Lowest flat tax on profit 10% Lowest flat tax on income 10% Tax on reinvested profit 0% VAT on computers 5% Fast company registration 4 hours; Macroeconomic stability 3.2% inflation EU & NATO candidate country MACEDONIA 4 th IN THE WORLD BEST REFORMER World Bank s Doing Business 2008 Report - 7 -
10 AT YOUR SERVICE Invest Macedonia, the official governement agency for foreign investments, is looking forward to servicing your needs throughout your investments decisionmaking process: from answering initial questions and arranging an appropriate itinerary to visit Macedonia, to objectivly evaluating the business climate and the prospect for the success of your project. Should you decide to locate in Macedonia we will work on your behalf with national and local governmental authorities and help you find suitable local partners with whom you can open an exploratory dialogue. As your operation grows in Macedonia, we will continue to work closely with you to understand your requirements to grow faster and to ensure that Macedonia can fulfil your business needs to facilitate that growth.
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