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IT Outsourcing and Remote Workforce Solutions

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IT Outsourcing and Remote Workforce Solutions

Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Technology and Communications
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Technology
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
10% - 15% (in ROI)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
< USD 500,000
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Decent Work and Economic Growth (SDG 8) Industry, Innovation and Infrastructure (SDG 9)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Gender Equality (SDG 5) Quality Education (SDG 4) Climate Action (SDG 13)

Business Model Description

Establish and operate an IT outsourcing firm specializing in software development, cybersecurity, and cloud infrastructure for European clients. Provide services through remote teams, leveraging North Macedonia’s skilled workforce and competitive pricing. Implement AI-driven project management and cybersecurity solutions while expanding via strategic partnerships and white-label services.

Expected Impact

The IT outsourcing sector in North Macedonia creates high-value jobs, drives digital inclusion, and fosters gender equality

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

Disclaimer

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The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Region
  • Republic of North Macedonia: Skopje
  • Republic of North Macedonia: Pelagonia
  • Republic of North Macedonia: Polog
  • Republic of North Macedonia: Eastern
  • Republic of North Macedonia: Southwestern
Learn more

Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Technology and Communications

Development need
The ICT sector in the Republic of North Macedonia requires enhanced digital infrastructure, increased R&D investment, and a larger skilled workforce to sustain its rapid growth. Strengthening digital skills training, cybersecurity resilience, and cloud computing adoption will enable businesses to scale and improve competitiveness in regional and global markets. (2)

Policy priority
ICT is a cross-sectional strategic priority under NDS 2024-2044 and Smart Specialization Strategy, aligning with EU digitalization and innovation goals. Policies focus on digital transformation, technology exports, AI development, and bridging the skills gap through targeted incentives and workforce training programs. (1, 2)

Gender inequalities and marginalization issues
Despite ICT’s growth, women and marginalized groups remain underrepresented, particularly in high-value technical roles and leadership positions. Addressing this gap requires STEM education initiatives, mentorship programs, and gender-inclusive hiring policies to foster greater diversity and participation. (19)

Investment opportunities introduction
The ICT sector offers high-growth opportunities in broad IT services including outsourcing, AI, and cloud services, supported by government incentives, tax benefits for IT exports, and EU funding programs. The growing demand for digital solutions across industries presents further investment potential in smart infrastructure, automation, and IoT. (20)

Key bottlenecks introduction
Challenges include a shortage of skilled professionals, limited access to capital for startups, slow digital adoption in traditional industries, and gaps in regulatory alignment with EU digital standards. Improving educational alignment with industry needs, expanding digital infrastructure, and reducing bureaucratic barriers will be critical (20, 21)

Sub Sector

Technology

Development need
The Software & IT Services subsector requires scalable digital infrastructure, advanced AI & cloud solutions, and a highly skilled workforce to sustain rapid expansion. Strengthening R&D capabilities, startup ecosystems, and university-industry collaboration will enhance North Macedonia’s position as a competitive regional tech hub. (2)

Policy priority
Fully aligned with the Smart Specialization Strategy and NDS, the Government prioritizes digital transformation, IT outsourcing, cybersecurity, and AI-driven innovation. Policies focus on tax incentives, workforce upskilling, and EU market integration to strengthen global competitiveness. (1, 2)

Gender inequalities and marginalization issues
Women and marginalized groups remain underrepresented in technical roles, leadership, and entrepreneurship within ICT. Expanding STEM education programs, mentorship initiatives, and diversity-focused hiring policies is crucial for fostering inclusive growth and reducing gender disparities in the digital economy. (7)

Investment opportunities introduction
High-growth opportunities are emerging in advanced sub-sectors such as cybersecurity, fintech, and frontier technologies including AI, blockchain, and IoT. These areas are drawing attention from investors due to rising global demand and the country’s growing tech talent. (2)

Key bottlenecks introduction
Challenges include a shortage of experienced professionals, slow access to venture capital, regulatory gaps in data protection, and digital adoption barriers in traditional industries. Addressing talent retention, expanding digital infrastructure, and streamlining investment procedures will be key to long-term subsector growth. (22)

Industry

Software and IT Services

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

IT Outsourcing and Remote Workforce Solutions

Business Model

Establish and operate an IT outsourcing firm specializing in software development, cybersecurity, and cloud infrastructure for European clients. Provide services through remote teams, leveraging North Macedonia’s skilled workforce and competitive pricing. Implement AI-driven project management and cybersecurity solutions while expanding via strategic partnerships and white-label services.

Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

> USD 1 billion

CAGR
Describes the historical or expected annual growth of revenues in the IOA market.

5% - 10%

In 2023, North Macedonia's ICT service exports were reported at $601 million, highlighting the sector's significant contribution to the national economy. (3)

The ICT market in North Macedonia surpassed USD 1 billion in 2020, making the IT industry one of the most profitable and prosperous industries. (11)

The European IT outsourcing market is projected to experience a CAGR of 7.93% between 2025 and 2029. (12)

Indicative Return

ROI
Describes an expected return from the IOA investment over its lifetime.

10% - 15%

Profit margins of 12-16% in the sector indicate solid ROI, particularly in software and cloud services. (6)

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Medium Term (5–10 years)

A small IT outsourcing firm can break even in 4-7 years, depending on size and profitability. (6)

Firms with high-value services (AI, cybersecurity, fintech) may achieve even faster payback (4-5 years), based on key stakeholder interviews. (6)

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

< USD 500,000

Market Risks & Scale Obstacles

Capital - Limited Investor Interest

The ICT sector in North Macedonia struggles with limited access to venture capital and private investment, making it difficult for startups and SMEs to scale. (4, 6)

Market - High Level of Competition

The IT outsourcing sector faces strong regional competition, especially from Bulgaria, Romania, and Serbia, which offer larger talent pools and better-funded ecosystems. (31, 32, 33)

Business - Supply Chain Constraints

While IT outsourcing does not rely on physical supply chains, talent availability is a major constraint. A workforce shortage of 500+ skilled professionals per year slows industry growth​. (3,4)

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

The IT outsourcing sector retains skilled professionals in North Macedonia by offering competitive salaries and remote work opportunities, reducing emigration and unemployment among young graduates. (4)

Expanding IT infrastructure and digital skills training can boost innovation, economic diversification, and SME competitiveness, supporting country’s digital transformation goals. (4)

IT services reduce paper usage, energy-intensive business travel, and inefficient processes by promoting cloud computing, AI-driven automation, and remote work, lowering the overall carbon footprint. (20)

Gender & Marginalisation

Women remain underrepresented in North Macedonia’s IT sector. Targeted STEM education, mentorship programs, and inclusive hiring policies help increase female participation in tech careers. (3)

Expanding digital skills training and remote work opportunities enables rural populations, persons with disabilities, and economically disadvantaged groups to access high-paying tech jobs. (20)

Expected Development Outcome

By integrating energy-efficient technologies and renewable energy, the energy efficiency retrofitting reduces industrial and commercial energy demand, cutting greenhouse gas emissions and supporting North Macedonia’s climate targets.

The IT outsourcing sector creates high-paying jobs, reduces youth unemployment, and retains skilled workers in North Macedonia, fostering a knowledge-based economy and increasing GDP contribution.

By expanding digital literacy programs, STEM education, and remote work opportunities, the sector enhances accessibility for marginalized groups and improves workforce readiness for global markets.

Gender & Marginalisation

The business model supports STEM education, mentorship, and gender-inclusive hiring policies, increasing female representation in IT roles and leadership positions in North Macedonia’s tech industry.

Promotion of remote work and digital skills training enables rural populations, persons with disabilities, and underprivileged youth to access stable, high-paying tech jobs.

Primary SDGs addressed

Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth

8.1.1 Annual growth rate of real GDP per capita

Current Value

Annual growth rate of 3%. (12)

Target Value

Annual growth rate of 4.7% in line with the NDS 2024-2044. (1)

Industry, Innovation and Infrastructure (SDG 9)
9 - Industry, Innovation and Infrastructure

9.5.1 Research and development expenditure as a proportion of GDP

Current Value

0.4% of GDP. (1)

Secondary SDGs addressed

Gender Equality (SDG 5)
5 - Gender Equality
Quality Education (SDG 4)
4 - Quality Education
Climate Action (SDG 13)
13 - Climate Action

Directly impacted stakeholders

People

Young professionals (aged 20-35), particularly those in STEM fields, benefit from high-paying IT jobs, digital skills training, and remote work opportunities, reducing youth unemployment and brain drain in North Macedonia (3, 4)

Gender inequality and/or marginalization

Women in ICT (aged 18-45) gain greater access to STEM education, mentorship programs, and leadership roles. Rural and disadvantaged groups benefit from digital inclusion initiatives and remote job access in IT outsourcing.

Planet

The sector reduces carbon emissions by promoting remote work, cloud computing, and digital solutions, cutting energy use and business travel. AI-driven efficiency helps industries optimize resource use and lower their environmental footprint.

Corporates

Local and international tech firms benefit from cost-effective IT outsourcing, skilled workforce availability, and tax incentives, driving growth in software development, cybersecurity, and cloud computing services.

Public sector

The government benefits from increased ICT exports, foreign direct investment, and higher tax revenue. Digital transformation in public services (e-governance, cybersecurity) enhances efficiency and transparency.

Indirectly impacted stakeholders

People

University students (aged 18-25) benefit from expanded internship opportunities, industry partnerships, and improved digital education, increasing their employability in the IT sector. Families of IT professionals gain financial stability and improved living standards.

Gender inequality and/or marginalization

Women-owned businesses and entrepreneurs gain better access to digital tools, online platforms, and IT services, enabling business growth. Young girls in STEM education benefit from role models and increased career opportunities in tech.

Planet

Traditional industries (manufacturing, agriculture, transport) benefit from IT-driven efficiency through AI, automation, and digital monitoring, reducing waste and energy consumption. Increased remote work adoption decreases urban congestion and emissions.

Corporates

Non-ICT sectors, such as finance, healthcare, and retail, benefit from improved digital solutions, cybersecurity measures, and cloud services, enhancing productivity and innovation. Small businesses gain affordable IT support for scaling operations.

Public sector

Municipalities and government agencies benefit from enhanced digital public services, cybersecurity, and AI-driven administrative efficiency, improving service delivery for citizens while reducing operational costs.

Outcome Risks

Rapid IT sector growth may outpace local workforce supply, leading to talent shortages, wage inflation, and reliance on foreign workers, making it harder for SMEs to compete for professionals.

Heavy dependence on foreign clients and outsourcing contracts exposes the sector to economic downturns and demand fluctuations, increasing financial instability for local IT firms.

While IT reduces travel emissions, higher energy consumption from data centers, AI processing, and cloud computing may increase carbon footprints unless powered by renewable energy sources.

Impact Risks

If university curricula do not align with industry demands, graduates may lack necessary skills, limiting the impact of IT sector growth on youth employment and economic development.

Without sufficient investment in broadband, cloud services, and cybersecurity, businesses and public institutions may struggle to fully adopt digital transformation, reducing expected benefits.

Heavy reliance on foreign IT outsourcing contracts exposes the sector to economic slowdowns, policy changes, or client withdrawals, reducing job security and business stability.

If data protection laws and IT regulations lag behind EU standards, North Macedonia may face obstacles in accessing international markets and attracting foreign investments.

Women and marginalized groups may struggle to access leadership positions, without STEM education programs, mentorship and workplace diversity policies

Impact Classification

C—Contribute to Solutions

What

IT outsourcing sector creates high-paying jobs, reduces youth unemployment, and strengthens digital infrastructure. It contributes positively to economic growth

Who

Young professionals, university graduates, and marginalized groups (women, rural populations) benefit from new opportunities in IT. Gender disparities in leadership and technical roles persist.

Risk

Lack of aligned curricula, insufficient investment uncoordinated regulations with EU and poor data protection laws.

Contribution

Without targeted government incentives, workforce development programs, and digitalization initiatives, sector growth would slow

How Much

With over 21,000 IT jobs and 37% export growth in 2023, the sector significantly impacts GDP, employment, and digital adoption

Impact Thesis

The IT outsourcing sector in North Macedonia creates high-value jobs, drives digital inclusion, and fosters gender equality

Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

NDS 2024-2044 prioritizes digital transformation as a key pillar for sustainable development, aiming to strengthen ICT infrastructure, foster digital skills, and align regulatory frameworks with EU standards to boost innovation, competitiveness, and inclusive economic growth. (1)

Smart Specialization Strategy identifies priority domains—such as Information and Communication Technologies (ICT)—to drive research, innovation, and economic growth. It also supports the NDS's overarching goal of sustainable development through digital transformation. ​(2)

Digital Agenda for Western Balkans supports the growth of country's ICT sector by promoting digital infrastructure, skills development, e-governance, and alignment with EU digital regulations, fostering regional integration and competitiveness. (15)

Financial Environment

Financial incentives: North Macedonia benefits from ICT-focused EU funds, which provide strong financial assistance for digital transition and digitalization in Western Balkans. (29, 34, 35)

Fiscal incentives: 0% corporate income tax for ICT companies operating in Technological Industrial Development Zones (TIDZs) for up to 10 years; 0% personal income tax on salaries under certain conditions); reduced VAT rates and customs exemptions for importing ICT equipment (30)

Regulatory Environment

Law on Companies provides a flexible and investor-friendly legal framework that supports the establishment and operation of ICT businesses, including startups and foreign-owned firms. (24)

Law on Electronic Communications underpins the ICT sector by regulating digital infrastructure, ensuring fair competition, and promoting access to high-speed networks and secure electronic services in line with EU standards. (25)

Law on Personal Data Protection, which aligns with the EU General Data Protection Regulation (GDPR), regulates data handling practices, crucial for cybersecurity, cloud services, and fintech operations. (26)

Law on Innovation Activity supports R&D and tech innovation through fiscal incentives and access to national innovation funds (e.g., FITD), and encourages development in frontier technologies like AI and blockchain. (27)

Law on Electronic Documents, Electronic Identification and Trust Services regulates the legal validity to e-documents and e-signatures, as well as facilitates digital transactions and remote business operations in ICT. (28)

Marketplace Participants

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Private Sector

Seavus, Endava, Scalefocus, Nextsense– Leading IT outsourcing firms providing software development, AI, and cloud services for global clients.

Government

Ministry of Digital Transformation; Agency for Electronic Communications, Agency for Employment of North Macedonia.

Multilaterals

European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), World Bank, UNDP, KfW.

Non-Profit

MASIT (ICT Chamber) ;Startup Macedonia; Women in Tech® Macedonia (16)

Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map
urban

Republic of North Macedonia: Skopje

Skopje is the largest IT hub in North Macedonia, hosting most ICT companies, universities, and innovation centers. It has well-developed digital infrastructure and serves as the main outsourcing and startup ecosystem. (4, 21)
urban

Republic of North Macedonia: Pelagonia

Growing IT sector with a strong university presence (St. Kliment Ohridski University), fostering tech talent development. (4, 21)
urban

Republic of North Macedonia: Polog

Home to South East European University (SEEU), offering STEM programs that align with ICT workforce needs. (4)
urban

Republic of North Macedonia: Eastern

The Eastern planning region has a strong university base (Goce Delčev University) producing tech talent, with potential for Business Process Outsourcing and IT outsourcing expansion. (4)
urban

Republic of North Macedonia: Southwestern

The Southwestern region has an emerging IT and startup ecosystem, with increasing focus on remote work and software development. (4, 21)

References

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    • (1) National Development Strategy of the Republic of North Macedonia 2024-2044
    • (2) Smart Specialization Strategy of the Republic of North Macedonia
    • (3) New Growth of the ICT Industry, MASIT, Skopje, https://masit.org.mk/publications_post/novite-indikatori-pokazhuvaat-nov-porast-na-ikt-industri-ata-za-2023-godina/
    • (4) ICT Industry in North Macedonia, General Mapping Report, Skopje, North Macedonia, June 2020, Insider ID and Target Group, MASIT.
    • (5) Export Promotion Strategy of North Macedonia
    • (6) Interview with Vladimir Popovic, Managing Director of Boson Solutions, Ltd., March 17th, 2025.
    • (7) Gender analysis of the management bodies of joint stock companies listed on the Macedonian Stock Exchange for 2024, https://www.mse.mk/mk/news/13/3/2025/gender-analysis-of-the-management-bodies-of-joint-stock-companies-listed-on-the-macedonian-stock-exchange-for-2024