PUBLIC FINANCE AND THE INTERNATIONAL ECONOMY IN SUPPORT OF THE SMART SPECIALISATION STRATEGY: FOCUS ON THE GREEN AND DIGITAL TRANSITION

Abstract

This paper analyses the role of public finances and the international economy in supporting the implementation of the Smart Specialization Strategy of the Republic of North Macedonia for the period 2024–2027, with a particular focus on the green and digital transition. The main objective of the study is to examine how fiscal policy instruments, public investment, and international economic integration contribute to innovation-led and sustainable economic development. The methodology is based on qualitative policy analysis and comparative assessment, using official data from the Ministry of Education and Science, the Innovation Agency, and relevant European Union documents, complemented by academic literature in the fields of public finance and international economics. The results indicate that public finances play a key role in operationalizing the Smart Specialization Strategy through targeted budget allocations, innovation grants, and support for green and digital projects, while international economic integration enhances access to external funding, markets, and knowledge transfer. The findings further show that alignment with European Union policies significantly strengthens the effectiveness of national strategic interventions. The paper concludes that coherent coordination between fiscal policy, innovation support mechanisms, and international economic frameworks is essential for the successful implementation of the Smart Specialization Strategy. It is recommended that public financing for innovation be made more stable and predictable, that absorption of European Union funds be increased, and that international best practices be systematically integrated in order to accelerate the green and digital transition. Additional data used in the analysis include official budgetary information, innovation grant programs, and comparative indicators related to research, innovation, and sustainability in North Macedonia and the European Union.