P ROCESS OF D IGITALIZATION AS O UTSOURCING : C HALLENGE FOR THE I NTERNATIONAL C OMPANIES IN THE R EPUBLIC OF N ORTH M ACEDONIA

Outsourcing, as a type of international trade is a relatively new phenomena in the world trade. The digitalization process has enabled companies to geographically dislocate their services and/or production processes to other locations in the world, with the best cost advantages. Although outsourcing is not sufficiently well understood in the Republic of North Macedonia, digital economy plays a vital role in the growth of this sector. The research made shown that the Republic of North Macedonia is one of the most desired destination in the South East Europe for the foreign companies, where outsourcing has sustained a higher employment growth rates and has established into a highly promising industry in the structure of the economy in the country. Through the deduction method, the research paper has a role to investigate the global trends in the outsourcing from one side and the implemented outsourcing trends and factors in the Republic of North Macedonia. The paper will identify the legal regulation of digitalization in the Republic of North Macedonia, will present the data and evidences from the relevant state institutions, as well as will analyze the economic and social benefits of the users, or so-called investors, in terms of their business efficiency.


Introduction
Digitalization in the Republic of North Macedonia, has been an ongoing process aimed at lev enraging technology and digital advancements to improve various sectors of the country's economy and society.The Macedonian government has been working on developing and implementing various e-government initiatives.
The goal is to streamline government services, improve efficiency, and enhance citizen engagement.There is also an Digital Infrastructure which means that Macedonia has been investing in improving its digital infrastructure to support widespread internet access and connectivity.After all promotion of the government for the digitalization we can see that the digitalization of education has been a priority in Macedonia.The government also has been fostering a favorable environment for the growth of the digital economy and supporting the development of startups.
Initiatives such as the establishment of technology parks, innovation centers, and incubators aim to nurture entrepreneurship and innovation in the tech sector.
Efforts have also been made to attract foreign investment in the digital industry.However, the government has been actively promoting digital transformation as a means to drive economic growth, improve public services, and enhance the overall quality of life for its citizens.Digitalization also plays a big role in Business sector, especially for the foreign companies.Outsourcing has become an increasingly popular practice in Macedonia.The country has positioned itself as an attractive outsourcing destination due to several factors, including its skilled workforce, competitive labor costs, favorable business environment, and strategic geographic location.In this paper it can be seen that Digitalization brings numerous challenging benefits to outsourcing in Macedonia.It enables faster and more streamlined processes, reducing manual intervention and minimizing errors.This efficiency translates into improved productivity and faster turnaround times for outsourced tasks.By leveraging digital technologies, outsourcing companies in Macedonia can reduce operational costs.Digitalization automates repetitive tasks, eliminating the need for extensive manual labor.This, in turn, lowers expenses related to labor, infrastructure, and maintenance.It allows outsourcing companies in Macedonia to tap into a global talent pool.They can collaborate with experts and professionals from around the world, leveraging their skills and knowledge to deliver high-quality services.Digital tools and platforms facilitate seamless collaboration between outsourcing companies and their clients, regardless of geographical boundaries.Real -time communication, file sharing, and project management software enable efficient collaboration, ensuring smooth project execution.It can be seen that that it provides flexibility and scalability to outsourcing operations.As businesses grow, digital systems can easily accommodate increased workloads and expanding requirements.Scaling up or down becomes more manageable with digital infrastructure in place.Digitalization enables better data security measures.From the research it can be seen that Outsourcing companies can implement robust cybersecurity protocols to protect sensitive client information, reducing the risk of data breaches and ensuring compliance with data protection regulations.This kind of a tools enable detailed reporting and analytics capabilities.These analytics help identify areas for improvement and support data-driven decision-making.Adopting digitalization in outsourcing gives companies in Macedonia a competitive edge.They can provide enhanced services, faster delivery, and better customer experiences, distinguishing themselves in the market and attracting more clients.This Digital Era enables better business continuity planning.Cloud-based storage, backup systems, and remote access to data and applications ensure uninterrupted service delivery, even during unforeseen events or disruptions.It fosters innovation and enables outsourcing companies in Macedonia to adapt to evolving market demands.They can leverage emerging technologies, such as artificial intelligence, machine learning, and automation, to offer innovative solutions and stay ahead in a dynamic business landscape.In sum, digitalization brings numerous challenging benefits to outsourcing in Macedonia, ranging from improved efficiency and cost savings to increased competitiveness and access to global talent.It enables outsourcing companies to deliver high-quality services while remaining adaptable and resilient in an increasingly digital world.

Subject and Purpose of Research
The purpose of this research is to examine the impact of digitalization on the outsourcing industry in Macedonia.The study aims to explore the opportunities and challenges faced by outsourcing companies in the country in adopting digital technologies, understand the current state of digitalization in the outsourcing sector, and assess the future prospects for digitalization and outsourcing in Macedonia.The research aims to contribute to a deeper understanding of the digitalization landscape in the outsourcing industry in Macedonia.It seeks to provide insights that can inform strategic decision -making, policy formulation, and best practices for outsourcing companies, industry associations, and government entities in harnessing the benefits of digitalization and fostering sustainable growth in the sector.
The research will focus on the following objectives: 1.

Methodology of the study
The methodology for this research is conduct a thorough review of existing academic literature, industry reports, case studies, and relevant publications to gain insights into the digitalization trends and outsourcing landscape in Macedonia.The methodology of the study relies on a review of scholarly contributions and literature; it also uses official information sources and data from the National Statistics Institute as well as relevant country development indexes.In order to fulfil the objectives and the purpose of this research it is been rely on the secondary data acquired from different sources.Through the deduction method, the research paper has a role to investigate the global trends in the outsourcing from one side and implemented outsourcing trends and factors in the Republic of North Macedonia, from another side.The paper will identify the legal regulation of digitalization in the Republic of North Macedonia, will present the data and evidences from the relevant state institutions, as well as will analyze the economic and social benefits of the users, or so called investors, in terms of their business efficiency.
To address the challenges associated with business process outsourcing (BPO), this research methodology integrates insights from existing academic literature and industry reports.Mehta et al. (2006) underscore the significance of operational ownership in BPO arrangements, where external service providers assume operational control over specific business functions.Moreover, Barthélemy and Quélin (2006) emphasize the prevalent strategy among companies to outsource production systems to minimize operational costs and leverage the expertise of external service providers.In evaluating outsourcing decisions, Jiang and Qureshi (2006) highlight the critical role of cost assessment.They assert that firms must weigh the potential reduction in operating costs against the maintenance of competitive advantage.Conversely, Kremic et al. (2006) argue that some firms prioritize core competencies over cost reduction, opting to outsource despite potential risks such as security concerns and cultural barriers.Incorporating these insights into the methodology, the research will conduct a thorough analysis of the cost-effectiveness of outsourcing decisions within the context of the Macedonian business landscape.By examining factors such as cultural compatibility, service quality, and customer satisfaction, the study aims to provide a comprehensive understanding of the challenges and opportunities associated with BPO in Macedonia.
This methodology aligns with the research objectives of identifying key issues in BPO and evaluating the strategic implications for companies operating in Macedonia.By integrating insights from diverse academic sources, the study endeavors to offer actionable recommendations for organizations navigating the complexities of outsourcing in the digital era.

Literature review
Numerous researches show that digitalization brings transformations in a One of them (Macias, 2018) points out that there are several ways to transform the economic processes through the digital technology.They are related to flexibility of production (due to the processing power), availability of information (digital technologies make data more available), network effects (creating demand-side economies of scale, through social networks, software systems and digital industrial applications), and zero marginal costs (because the digital goods are non-rival and infinitely expandable).At the same time digitalization implies great transformations of the working conditions, due to the mass use of networks, internet and the available online platforms.Many studies confirm that this new way of work provides flexibility of the lifestyle, freedom of action, but also brings disadvantages associated with the sacrifice of financial security, the unpredictability of incomes, the need to learn new skills, the increase of the risk of unemployment for workers with specific qualifications.Digitalization also brings changes in labor legislation, because employment changes considerably, through the use of online platforms, through remote work etc. (Vasilescuet al., 2020).The new technological advances imply the re-skilling of the labor force and changing the world of work, including job substitution, transformation, creation, and lose.The innovation cycle is faster than the changes in the labor market and people's skills.Thus, the current economic environment requires digital knowledge for a large share of the jobs, because digitalization uses information technology infrastructure and the Internet, as technological support.As a result, the imbalances on the labor market growth are reflected in increasing the duration of unemployment, in long-term unemployment and higher structural unemployment (Cedefop, 2018).All this implies great challenges on the labor market.Digitalization is bringing change to the boardroom, imposing a need for a new type of manager.This is the eleventh hypothesis that is focusing on the role of the managers who at the same must realize efficiencies in existing business and driving the transformation toward new business models.These managers should steer the organization, change the working processes and set an example to the staff, not just by living out a value-based management style.Digitalization also requires employers to create new forms of management, which means that it has to evolve, for instance, by providing guidelines to employees rather than trying to control all the risks.New technologies can, in fact, facilitate both the monitoring of employees and the recording of work activities, making it easier for employees to prove that certain tasks have been carried out, in both cases monitoring the outcome rather than the process (European Economic and Social Committee, 2017).Business Process Outsourcing according to Mehta et al. (2006) is that an external service provider can be given operational ownership of the company's business for one or more than one activity.Barthélemy and Quélin (2006) noted that the companies often discontinue in-house production system to minimize the operational cost including goods and services and benefit from an outside service provider which is known as outsourcing.The firms seeking a BPO strategy can also outsource back office functionalities to an outsider at relatively lower cost.Although there are number of benefits associated with offshore outsourcing have been studied by different academia and research institutes but there are also key issues of BPO , for example cultural and linguistic issue, quality of service and customer satisfactions, which will be discussed later in this section.According to Jiang and Qureshi (2006) companies going for an outsourcing decision also evaluate the cost factor and i f the reduction of the present operating cost is achievable through outsourcing then the available resources can be reinvested to gain and maintain competitive advantage.However, Kremic et al. (2006) say that many of the firms today are deciding to outsource setting aside the cost factor to focus on core competencies.Despite the potential risks of outsourcing for example, security issues, cultural problems firms hope to benefit from the lower cost.The overall corporate strategy is to minimize operating costs but it is not necessarily a mean of gaining completive advantage because marginal cost might be higher than it used to be.
Expanding on the literature review, recent studies highlight the unique challenges faced by Macedonia in the context of digitalization and business process outsourcing (BPO), shedding light on the specific hurdles encountered within the Macedonian economic landscape.
Digitalization brings about transformative changes in economic processes, presenting both opportunities and challenges for countries like Macedonia.While digital technologies enhance production flexibility, information availability, and create network effects, they also necessitate adaptations in working conditions and labor legislation (Vasilescu et al., 2020).The mass adoption of digital platforms and online work introduces flexibility but also entails risks such as financial insecurity and skill obsolescence, particularly for workers with specific qualifications.
Moreover, the rapid pace of technological innovation outstrips the ability of the labor market to adapt, leading to imbalances such as prolonged unemployment and higher structural unemployment (Cedefop, 2018).This exacerbates existing challenges in Macedonia's labor market, requiring targeted interventions to equip the workforce with digital skills and foster inclusive growth.
In addition to labor market challenges, digitalization also impacts management practices and corporate strategies.The emergence of digital technologies necessitates a new breed of managers who can navigate digital transformations while driving organizational change (European Economic and Social Committee, 2017).Furthermore, the rise of digital platforms facilitates outsourcing decisions, with firms seeking cost efficiencies and core competency focus (Jiang & Qureshi, 2006;Kremic et al., 2006).However, outsourcing entails risks such as security concerns and cultural barriers, which are particularly pertinent for countries like Macedonia.
These challenges underscore the need for targeted policies and strategic initiatives to harness the opportunities presented by digitalization while mitigating its adverse effects on Macedonia's economy and labor market.

Outsourcing challenges in Macedonia
While every outsourcing destination has its unique strengths, Macedonia stands out in terms of its skilled workforce, competitive costs, favorable business environment, language proficiency, strategic location, and cultural compatibility.These factors combine to position Macedonia as a strong contender and a preferred choice for outsourcing companies seeking high-quality services at a competitive price point.
There are also some challenges that companies may encounter.
According to the already done researches and information of the outsourcing report 2019 ( MASIT , 2019 ) there are in sum a few common challenges associated with outsourcing in Macedonia: − Limited Market Size: Macedonia has a relatively small market size compared to other outsourcing destinations.This can limit the availability of specialized skills or resources for certain niche industries or projects.
Companies seeking highly specialized or industry-specific services may face challenges in finding suitable outsourcing partners.− Infrastructure and Connectivity: While Macedonia has made significant progress in improving its digital infrastructure, there may still be occasional challenges with internet connectivity, especially in remote or rural areas.This can impact the efficiency and reliability of outsourced services, particularly those that rely heavily on stable internet connections.− Cultural and Language Differences: Despite the proficiency in English and language skills in Macedonia, cultural and linguistic differences can still present challenges.Communication and understanding may require extra effort, particularly when it comes to nuanced business requirements, cultural context, or specific terminology.Companies need to establish clear communication channels and ensure effective cross-cultural collaboration.− Intellectual Property Protection: Intellectual property rights and protection can sometimes be a concern when outsourcing to any location, including Macedonia.It is crucial for companies to have appropriate legal agreements and safeguards in place to protect their proprietary information and ensure data security.− Time Zone Differences: While the time zone advantage is often cited as a benefit, it can also pose challenges in terms of real-time collaboration and communication.Companies outsourcing to Macedonia may need to establish effectivcommunication practices and schedules to bridge the time zone gap and maintain seamless coordination.− Talent Retention and Attrition: The demand for skilled IT professionals in Macedonia is high, leading to potential talent retention challenges.
Experienced and talented individuals may be sought after by local and international companies, which can result in talent attrition.This can impact project continuity and require ongoing efforts to attract and retain skilled resources.− Regulatory Environment: Like any country, Macedonia has its own regulatory environment that companies must navigate when outsourcing.
Companies need to ensure compliance with local laws and regulations, including tax and labor laws, which may differ from their home country.
Understanding and addressing these legal requirements is essential for a smooth outsourcing operation.
Despite these challenges, many companies have successfully outsourced to Macedonia and achieved their business objectives.Careful planning, clear communication, and a thorough understanding of the local business environment can help mitigate these challenges and ensure a successful outsourcing engagement.

Economic and social benefits of outsourcing companies in Macedonia
It should be taken in consideration that the extent of economic and social benefits may vary depending on the specific outsourcing arrangements, the sectors involved, and the overall economic conditions.However, outsourcing has played a significant role in Macedonia's economic growth, job creation, and social development, positioning the country as an attractive destination for outsourcing services.According to the research done by the American Chamber of Commerce in North Macedonia.(2015) Outsourcing companies in Macedonia bring several economic and social benefits to the country.They create employment opportunities for the local workforce.As companies outsource their business processes or services to Macedonian firms, they require a skilled workforce to handle the outsourced tasks.This leads to the creation of jobs, reducing unemployment rates and improving living standards.This companies contribute to the overall economic growth of Macedonia.Their presence attracts foreign investment, which leads to the expansion of business activities, infrastructure development, and increased productivity.This infusion of capital and resources boosts the country's economy and stimulates various sectors, such as real estate, hospitality, and retail.Outsourcing companies often provide specialized training and skill development programs to their employees.This helps in upskilling the local workforce, enhancing their capabilities, and improving the overall talent pool in the country.Additionally, working with international clients and exposure to new technologies and practices allows knowledge transfer, which can benefit local businesses and professionals.
Outsourcing companies in Macedonia primarily serve clients from abroad, allowing for the export of services.This contributes to the growth of the country's export sector and helps diversify the economy.Increased exports also lead to a positive Communications and the Law on Electronic Signature provide the legal framework for cybersecurity in North Macedonia.These laws address issues such as network and information security, electronic identification, electronic signatures, and the protection of electronic communications.They outline measures to ensure the integrity, confidentiality, and ava ilability of electronic communications and protect against cyber threats.The Law on Electronic Commerce regulates electronic transactions, electronic contracts, electronic signatures, and the legal validity and enforceability of electronic documents.It provides a legal framework for conducting business online, including electronic payments, online consumer protection, and the resolution of disputes arising from e-commerce transactions.The Law on Electronic Communications and the Law on Electronic Government promote the digitalization of government services and the use of electronic means for interaction between citizens and the government.These laws establish the legal basis for the provision of e-government services, electronic documents, and electronic signatures in administrative processes.The Law on Electronic Communications regulates the telecommunications sector, including the provision of telecommunications services, licensing, competition, and consumer protection.It aims to promote competition, ensure efficient use of resources, and protect the rights and interests of consumers in the telecommunications market.

Digital governmental services for businesses in Macedonia
Republic of North Macedonia has made significant progress in developing digital government services for businesses.The government has been actively promoting digitalization and e-government initiatives to enhance the efficiency, transparency, and accessibility of public services.According to the North Macedonia Digital Agenda Observatory Country Report and Roadmap for Digital Agenda (Metamorphosis Foundation 2021) there are some key digital government services available for businesses in Macedonia: − Business Registration and Licensing: Businesses can register their company and obtain necessary licenses and permits through online platforms.The Central Register of the Republic of North Macedonia provides a digital portal where businesses can submit applications, track the status of their registration, and receive digital certificates.− Electronic Tax Filing and Payment: The Public Revenue Office of North Macedonia offers an electronic tax filing system where businesses can submit their tax returns online.The system allows for secure electronic communication, facilitates faster processing of tax documents, and enables online payment of taxes.− Electronic Procurement: The Public Procurement Bureau of North Macedonia has implemented an electronic procurement platform called e-Auction.It enables businesses to participate in government procurement processes electronically, submit bids online, and track the progress of procurement activities.− Digital Customs Services: The Customs Administration of North Macedonia provides electronic customs services for businesses involved in import and export activities.This includes online customs declarations, electronic payment of customs duties and fees, and electronic submission of supporting documents.− Online Business Reporting: Businesses can file various business reports and financial statements electronically through the Central Register of the Republic of North Macedonia.This streamlines the reporting process and improves data accuracy and efficiency.− Access to Public Information: The Macedonian government has implemented online platforms that provide access to public information and official documents.This enables businesses to access relevant information and documents related to public tenders, regulations, legal requirements, and other government procedures.− Digital Signature and Authentication: The use of digital signatures and authentication mechanisms is encouraged in Macedonia.Digital signatures provide secure and legally recognized authentication for online transactions, contracts, and official documents.
It is important to note that the availability and specific details of digital government services may vary, and businesses should refer to the official government websites and portals for up-to-date information and access to these services.The development and expansion of digital government services in Macedonia aim to simplify administrative processes, reduce bureaucracy, and improve the overall ease of doing business in the country.These services contribute to a more efficient and business-friendly environment, supporting the growth and competitiveness of businesses in Macedonia.

Conclusion
In conclusion, outsourcing in Macedonia has brought significant economic and social benefits to the country.The presence of outsourcing companies has created job opportunities, reduced unemployment rates, and improved living standards for the local workforce.It has stimulated economic growth, attracted foreign investment, and contributed to the expansion of various sectors.Outsourcing has also led to skill development and knowledge transfer, enhancing the capabilities of the local workforce and promoting technological advancements.The collaboration and networking opportunities created by outsourcing companies have fostered innovation, entrepreneurship, and the growth of startups in Macedonia.Moreover, the export of services by outsourcing companies has bolstered the country's export sector, generating foreign currency inflow and strengthening the national economy.
The economic benefits have had a positive impact on social development, including poverty reduction, improved healthcare and education, and enhanced infrastructure.
While challenges exist, such as limited market size, infrastructure considerations, and regulatory compliance, Macedonia has made significant strides in creating a supportive environment for outsourcing.The government's efforts to promote digitalization, develop a skilled workforce, and provide a favorable business environment have contributed to the success of outsourcing in the country.Overall, outsourcing in Macedonia has been instrumental in driving economic growth, creating employment opportunities, and improving the overall quality of life for its citizens.With continued focus on developing the digital infrastructure, fostering innovation, and addressing challenges, Macedonia has the potential to further strengthen its position as an attractive outsourcing destination.On the other side, the Republic of North Macedonia has made significant strides in the development and implementation of digital government services for businesses.These services aim to enhance efficiency, transparency, and accessibility in various aspects of business operations.By leveraging technology and digitizing administrative processes, the government has created a more business-friendly environment that supports the growth and competitiveness of businesses in the country.From online business registration and licensing to electronic tax filing and payment, businesses in Macedonia can benefit from streamlined processes and reduced administrative burdens.The availability of electronic procurement platforms enables businesses to participate in government procurement activities more efficiently.Digital customs services facilitate smoother import and export processes, reducing delays and improving overall efficiency.Furthermore, businesses can access public information, regulations, and official documents through online platforms, enabling them to stay informed and comply with legal requirements.The use of digital signatures and authentication mechanisms adds an extra layer of security and credibility to online transactions and contracts.The digital government services provided by the Republic of North Macedonia contribute to a more efficient and business-friendly environment.By embracing digitalization, the government has taken significant steps towards simplify ing administrative processes, reducing bureaucracy, and enhancing the ease of doing business.These efforts ultimately support the growth and competitiveness of businesses in Macedonia, fostering an environment that encourages innovation, investment, and economic development.

Research results
As an Results for this research there are given an explanation to all objectives which are mentioned before in the objective and research filed.The research findings shed light on the current status of digitalization, highlight specific areas for digital transformation, address obstacles hindering the adoption of digital technologies, evaluate the effectiveness of government support, and provide a forward-looking perspective on future prospects.The results of this research contribute to the knowledge base of digitalization in the outsourcing industry and offer practical guidance for outsourcing companies, policymakers, and stakeholders to navigate the digital landscape effectively.
Objective 1. Digitalization Landscape in Macedonia -The current state of digitalization in Macedonia's outsourcing industry is moderately advanced.The industry has witnessed a gradual adoption of digital technologies, with a focus on areas such as cloud computing, data analytics, and automation.However, there is room for improvement in terms of the extent of digital transformation.While some companies have embraced digitalization, many others are still in the early stages of their digital journey.technologies.The effectiveness of existing policies and initiatives varies.Some have been successful in attracting investments and fostering innovation, while others may require fine-tuning or additional support to achieve the desired outcomes.
Collaborative efforts between the government, industry associations, and educational institutions are crucial for creating an ecosystem that nurtures digital talent, promotes research and development, and supports the digitalization agenda.
Objective 5. Future Prospects and Recommendations-The future prospects for digitalization and outsourcing in Macedonia are promising.The global demand for digital services is expected to continue growing, presenting opportunities for Macedonian outsourcing companies to expand their market reach.Emerging technologies such as 5G, Internet of Things (IoT), and edge computing will shape the industry, enabling new service offerings and innovative business models.
Companies should stay updated with these trends and invest in building relevant capabilities to capitalize on the opportunities presented by digitalization, outsourcing companies should prioritize investments in digital skills development, foster a culture of innovation, and embrace collaboration with technology partners and startups.Policymakers should continue to support the digitalization agenda by providing a conducive regulatory environment, investing in digital infrastructure, and facilitating public-private partnerships.Stakeholders should work together to address data security concerns, promote knowledge sharing and best practices, and actively participate in industry forums and events to stay abreast of the latest trends and developments in the digital outsourcing landscape.

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Digitalization Landscape in Macedonia: Assessing the current state of digitalization in Macedonia's outsourcing industry, including the level of adoption of digital technologies, the extent of digital transformation, and the maturity of digital infrastructure and capabilities.2. Opportunities for Digitalization in Outsourcing: Identifying the specific areas within the outsourcing sector in Macedonia that can benefit from digitalization, such as software development, customer support, back-office operations, and other related services.Exploring the potential advantages, such as increased efficiency, cost savings, and access to global markets, that can be derived from digitalization.3. Challenges and Barriers to Digitalization: Investigating the challenges and barriers faced by outsourcing companies in Macedonia in adopting and implementing digital technologies.Examining factors such as lack of digital skills, inadequate digital infrastructure, data security concerns, and resistance to change that may hinder the digitalization process.
Challenge for the International Companies in the Republic of North Macedonia 649.balance of trade, generating foreign currency inflow and strengthening the national economy.They often bring advanced technologies and infrastructure to Macedonia.This helps in the transfer of technology know -how and best practices, promoting technological advancements within the country.Access to modern technologies improves productivity and efficiency across industries, supporting overall economic development.The presence of outsourcing companies in Macedonia fosters collaboration and networking opportunities.It encourages interaction between local businesses and international companies, creating a platform for knowledge sharing, partnerships, and innovation.This can lead to the development of local entrepreneurial ecosystems and the growth of startups in the country.The economic benefits generated by outsourcing companies contribute to social development in Macedonia.The increased employment opportunities and improved living standards lead to poverty reduction, higher disposable income, and enhanced social wellbeing.This, in turn, positively impacts healthcare, education, and infrastructure development, benefiting the overall quality of life for citizens.(AmericanChamber of Commerce in North Macedonia.(2015).Outsourcing Trends : Globbaly and in Macedonia)It's important to note that the legal framework for digitalization in North Macedonia is subject to ongoing development and updates to keep pace with technological advancements and international standards.Businesses and individuals operating in the digital sphere should stay informed about any new laws or regulations that may impact their activities.Consulting legal professionals familiar with Macedonian laws is recommended to ensure compliance and mitigate any potential legal risks.The legal regulation of digitalization in the Republic of North Macedonia is aimed at creating a supportive environment for digital technologies and ensuring the protection of rights and privacy in the digital realm.According to the Digital Development Country Profile North Macedonia (2021) as a key aspects of the legal framework governing digitalization in North Macedonia we can say that it includes several aspects.Data protection is governed by the Law on Personal Data Protection.This law regulates the processing of personal data, including its collection, storage, use, and transfer.It establishes the rights of individuals regarding their personal data and outlines obligations for data controllers and processors.The law aligns with the principles and requirements of the General Data Protection Regulation (GDPR) of the European Union.The Law on Electronic C. TelakDurmishi, A. Bojadzievska Danevska, S. Bilic: Process of Digitalization as  Outsourcing: C. TelakDurmishi, A. Bojadzievska Danevska, S. Bilic: Process of Digitalization as Outsourcing: Challenge for the International Companies in the Republic of North Macedonia 653.
The digital infrastructure and capabilities in Macedonia are developing steadily but are not yet at the level of more mature outsourcing destinations.There is a need for further investment in digital infrastructure and the development of skilled digital workforce.Objective 2. Opportunities for Digitalization in Outsourcing -Software development is a prime area that can greatly benefit from digitalization in Macedonia's outsourcing sector.Adopting agile development methodologies, DevOps practices, and leveraging emerging technologies like artificial intelligence and blockchain can enhance the efficiency and quality of software development processes.Customer support services can also be transformed through digitalization.Implementing chatbots, virtual assistants, and omnichannel communication platforms can improve response times, personalize customer experiences, and reduce costs.Back-office operations, such as finance and accounting, human resources, and data entry, can be streamlined through automation, digitization of documents, and integration with enterprise resource planning (ERP) systems.Other related services, such as digital marketing, cybersecurity, and data analytics, present opportunities for outsourcing companies to provide specialized digital services to global clients.Objective 3. Challenges and Barriers to Digitalization-One of the primary challenges is the lack of digital skills among the workforce.There is a need for upskilling and reskilling programs to b ridge the digital skills gap and equip employees with the necessary competencies to leverage digital technologies effectively.Inadequate digital infrastructure, including access to high-speed internet, can hinder the widespread adoption of digital technologies.Investment in improving the digital infrastructure is essential to support digitalization efforts.Data security concerns pose a significant barrier to digitalization.Companies need to address issues related to data privacy, cybersecurity, and compliance with relevant regulations to build trust and confidence in digital solutions.Resistance to change and a conservative business culture can slow down the digitalization process.Companies need to prioritize change management, create awareness, and foster a culture of innovation to overcome resistance and drive digital transformation.Objective 4. Government Support and Policies -The Macedonian government has recognized the importance of digitalization in the outsourcing industry and has taken initiatives to support its development.Policies and incentives are in place to attract foreign investments, encourage entrepreneurship, and promote the growth of digital C. Telak Durmishi, A. Bojadzievska Danevska, S. Bilic: Process of Digitalization as Outsourcing: Challenge for the International Companies in the Republic of North Macedonia 655.