that domestic companies are not competitive
enough. The EU integration process will enable
higher competitiveness of the economy, mainly
utilizing the benefits of knowledge transfer,
technology transfer, fostering innovation, as
well as research and development activities.
The integration process itself enables access to
funds that support these activities.
Access to the open market also increases
opportunities for domestic companies. From this
process, the most compelling, innovative, and
fast-growing companies will reap the greatest
benefits, making them competitive with their
peers from EU countries. Hungary’s experience
has shown a rapid increase in trade in services
and agricultural products after EU membership,
while neighboring countries are mentioned as
key partners.
Benefits to the Public Sector
In addition to the benefits for the private sector,
the benefits of joining the EU are perceived in
improving public services. Standardization of
public services, higher quality, and efficiency
are the expected results from the process of
structural reforms of public services. Additionally,
by joining the EU, the country is eligible for the
use of infrastructure funds, which is an important
aspect for fostering economic development.
The focus and significance of EU transport
infrastructure can be seen from the long-term
investment plans. As part of the next long-term
EU budget 2021-2027, the European Commission
proposes a budget of 42.3 billion euros to support
investments in European infrastructure projects
through the reconstruction of the Connecting
Europe Facility. This represents an increase of
47% compared to 2014-2020.
Challenges on the Road to EU
However, besides the benefits, EU membership
has its own challenges. The two key deficiencies
that the country faces at the moment are: low
productivity, and lack of skills and labor shortages.
These disadvantages are a key threat on the path
to EU membership.
In the latest World Bank report, it was noted
that the country has a low level of productivity
and no progress in this field. The top 10% of
the most productive companies are more than
seven times more productive than the lowest
10% of companies. For comparison, in America,
the difference is two times. On the road to EU,
companies will face greater competitiveness and
need for productivity, and some of the companies
will not “survive” this process. Joining the EU
is a threat to the least-productive companies.
Whether this threat can be overcome depends
on domestic companies and on how much they
can adapt, restructure, and take advantage of
technological development opportunities.
In addition to the productivity of companies,
the availability of skilled labor, human capital,
and employee productivity is a second threat
to the country. The average employee in the
production and service sector in Europe is
four times more productive than the average
employee in Macedonia (World Bank, 2019). The
business sector has been warning about the lack
of skilled workforce for a long time. One of the
obstacles to further attracting foreign investment
and expanding the country’s existing foreign
investment is precisely the lack of workforce,
low skills, and a long process of training at the
workplace (Trajkovska and Petreski, 2018).
Currently, the lack of skilled labor is evident in
both quantity and quality. With EU membership,
labor market mobility is much greater and an
outflow of skilled labor should be expected.
Hence, urgent reforms in this field are needed in
order to minimize the negative consequences.
EMERGING MACEDONIA
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