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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 Republicof Macedonia. The STED methodology provides strategic guidance for the integration of skills developmentin sectoral policies. It is designed to support growth and decent employment creation in sectors that havethe potential to increase exports and to contribute to economic diversification. It has been developed inrecognition of the fact that having the right skills among workers is crucial for firms or industries to succeedin trade, and because understanding trade is important to providing workers with the right skills. Availabilityof skilled workers contributes to higher and more diversified exports, more FDI, higher absorption oftechnology, and more sustainable growth and productive employment creation. At the same time, skills arethe 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 ofskills is still a challenging task for many of the institutions and stakeholders in the former Yugoslav Republicof Macedonia. In this context, investment in human resources is central and formulating up-to-date policyadvice on how to increase economic diversification through strengthening the business enabling environmentwith a focus on skill endowments and export orientation is key to fostering employment generation. Whileanalysis at the national level can give useful directions for sustainable growth and employment creation, anin-depth analysis of individual sectors is useful – and indeed necessary – in order to design concrete policyproposals. It is for these reasons that two sectors - Tourism and Food Industries - were analysed in somedetail. The analysis describes the obstacles to enhanced economic diversification and sustainable growthin terms of the business environment, the availability of skills, and the situation of global markets forMacedonian exports. A particular emphasis was put on identification of skill needs at regional and local levelthrough 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 havebeen incorporated in local action plans for employment, using the LED approach, for the regions of Krushevo,Prilep and Resen.

ssrn electronic journal

Skills Policies for Economic Diversification in the Former Yugoslav Republic of Macedonia - Enhancing Local Skills Policies for the Food and Tourism Sectors