Authors summarises the research conducted for the needs of a EU‐funded project to assist the Ministry of Economy of the Republic of Macedonia to develop a strategy and programme to stimulate the development of SMEs during the period 2007‐2010. The research reviewed the current status of the National Innovation System (NIS), its key elements and inter‐relationships. It assessed the government strategies and policies that are targeting the above‐mentioned NIS elements. This paper culminates in a series of recommendations for policy intervention that can be considered for the SME development programme.

The youth unemployment is one of the most pressing problems for every economy. For addressing this issue in the Republic of North Macedonia, numerous project initiatives and activities are in the phase of planning and implementation. Part of these is the implemented project: 'Building capacities for better employability'. Through the project activities, it was proposed to be institutionalized the stakeholder cooperation for matching education curricula according to labour market needs. In order to increase the employability of students and graduates, the main aim which is also the goal of this study, was developing a methodology for closing the gap between the skills of students and graduates and the Labour market needs, by enhancing the entrepreneurial education dominance in high education curricula. Through advanced understanding of the entrepreneurial mind-set, new opportunities in teaching and learning can enhance the University provision. For that purpose, case studies for the best UK practices in employability were developed and a survey for investigating the needs and requirements of the Macedonian high-educational sector was conducted. The research findings comprised rich informative set of recommendations that was a base for developing the methodology for closing the skills gap. The methodology was organised in four main levels with a number of institutions (actors) and activities (measures) related to them. The application of this methodology resulted with an outline of a stakeholder plan that offers insights into other areas of study and research possibilities. The contribution of this study is twofold. It adds on the literature for high-sector education and employability, but also it has practical implications for all stakeholders responsible in coping with the unemployment issue. The proposed methodology assists in monitoring the labour market changes and addressing them with improvements in the university curricula accordingly. It could be a powerful tool in the hands of the stakeholders for better employability of the students/graduates and can facilitate whole process. Overall, it will support the Republic of North Macedonia's future strategies at Government, University and Faculty level in their strides toward creating more skilful and employable youth.

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The importance of innovations for development of knowledge-based economies is widely acknowledged. However, certain challenges for researching the innovativeness in post-socialist economies still exist. We analyse the most influential drivers for innovativeness in Macedonian enterprises. Based on the extended literature review and the firm-level dataset collected by the CIS 2012 (Community Innovation Survey 2012), the conceptual model for identifying the factors that drive innovation was developed and tested with standard multiple regression. The findings confirm that firm innovativeness could be improved by extending the number of collaborators and sources for information and knowledge. Also, further investments in research and development for innovation positively impact the variety of innovation activities in companies. In addition to the theoretical and practical implications, this study is significant because the proposed method could be adjusted and applied in many countries where CIS research is conducted.

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