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COMPUTERWORLD | Articles | Government Policies
13 Oct

Good Investment Climate and the EU Membership Make Bulgaria Attractive for Foreign ICT Companies

The growth of the Bulgarian ICT sector is over 12% per year over the last few years, which is twice over the real growth of the Gross Domestic Product (GDP), says Nelly Stoyanova, Director of Information Society and Information Technologies Directorate at the State Agency for Information Technologies and Communications (SAITC), Republic of Bulgaria


Nelly Stoyanova, Director of Information Society and Information Technologies  Directorate at the State Agency for Information Technologies and Communications (SAITC), Republic of Bulgaria

What has been done by now by SAITC for the development of the ICT sector in Bulgaria?

During the implementation of the national policy for the achievement of the European objectives of the Lisbon strategy and the i2010 Initiative, it was important to draw the Information society and the role of information technologies as a first-place priority at the government policy. Consequently in 2005 the State Agency for Information Technologies and Communications (SAITC) was established with the aim to create and carry out the entire state policy at the fields of information society (IS), information technology and communications. With its start, SAITC developed a group of measures for the inclusion of ICT in each national strategic document for the period 2007-2013.

At the beginning of 2006, SAITC worked out a project for State policy for accelerated development of the information society in Bulgaria, which was approved by the Coordination Council for Information Society at the Council of Ministers. This document draws out the objectives and priorities of the country for the development of the IS by 2010. These objectives and priorities will have to bind concrete projects, which are described at the National Programme For Accelerated Development Of Information Society for the period 2007-2010. Our vision includes the National Programme to unite and to focus the efforts of all the concerned parties to a more dynamic development of the IS in the country. A Bulgarian State Framework for interoperability was accepted too, which defines the way of state interaction of the different information systems in the country.

What does the state strategy for the development of ICT sector envisage?

The ICT sector has a first-place priority for the economic growth and for the competitiveness. The growth of the Bulgarian ICT sector is over 12% per year over the last few years, which is twice over the real growth of Gross Domestic Product (GDP). It is obvious, that the more investments enter this fastest developing sector, the more dynamically the Bulgarian economy will develop.

An important question, which should be solved as a priority, is the unequal access to ICT, which is one of the problems of the modern society. Putting one or another social group at the position of isolated user, without options for access to electronic services, is a serious holdback to the economic and social development in Bulgaria. From this point of view, the national policy is meant to ensure a broad access to electronic services and to carry out structural reforms at key fields of the economics, with emphasized attention to the use and spreading of ICT.

Where is Bulgaria positioned as an ICT level of development among the others European countries?

Unfortunately, Bulgaria is falling behind the other European countries in terms of development of ICT. Bulgaria is at the 44th place at the e-readiness ranking for implementation of the 2006 indicator according to the Economist Intelligent Unit, as the only country in EU behind Bulgaria at the ranking is Romania. This information is approved also by the yearly report e-Bulgaria, where the aggregate index for the electronic readiness of Bulgaria (e-Bulgaria) in 2006 slightly retards its growth in comparison with 2004 and 2005, but it keeps high level of 13%. Main contribution to the increase of the complex index in 2006 has the e-business index (26%), and in 2005 – the e-education index (25%). Weakest is the development last year in the fields of e-government and the supply of e-services from the government.

Which directions will be developed as priority and are there any concrete plans with fixed terms for the whole ICT sector?

The building of a knowledge – based economy, is grounded on contemporary ICT, open national innovation system, well trained workforce, and competitive market economy.

The development of the information society (IS) is a horizontal priority and every attempt for dividing this priority to vertical priorities would bring to missing out of a key field of impact. The State Policy is based on a system approach, as we focused on five fields, which we think, have to be set as priority for the fast overcoming of the falling behind of the country. These fields are: ICT infrastructure, economy and employment, education and training, society and culture, safety and trust. A key challenge is the right definition of the links between them, with the aim to achieve synergic effect.

What initiatives are included in the State Strategy And Programme For Development Of ICT?

We envisage measures for improvement of the technical infrastructure at the universities and the scientific organizations and for ensuring of high-qualified workforce, which will help the technology transfer and development of innovations in ICT sector.

Our efforts in the field of ICT infrastructure are headed to the final construction of high-speed optical network, which should connect all the district centers in the country by the end of the year. For the overcoming of the digital divide, we continue the development of the network of telecenters, which by now binds 120 municipalities in Bulgaria. Our target is to spread the scope of the project so that the telecenters will go beyond their main role to supply cheap access to Internet, and become educational centers for all the citizens, and ensure specialized education in IT, business and foreign languages. Bulgaria keeps the place before the last in Europe for all-life education. Only 1,6% from all the citizens above student age (from 24 to 64 years old) continue their education and study. In the EU this percentage is 10,1%, and by the year 2010 this share is envisaged to reach 12,5%.

The government will continue the policy of partnering with the ICT industry, the branch associations and the academic society, and it will initiate concrete actions at some directions where the market is unable to create the necessary conditions for growth and accessibility. Speaking of ICT industry, we put on the first place the creation of a predictable environment, where the business will be able to predict its activities at least for the next few years.

Are there enough investments in ICT development from the government and from the business?

The government should not be the main investor at the market. The efforts of the government should be aimed at drawing out the market rules and control. The authorities would not stop just that far. The modern state direction in the ICT sector includes also a strong commitment of the government to the education and training in this field, to the support and modernization of public ICT infrastructure, to the ensuring of broad and equal access to modern e-services for the cictizens. At these fields the government will keep its leading role, and we hope that it will enter partnerships with the private sector. A special attention should be paid to the investments in scientific and research and development activities. The improved interaction between business, universities and scientific institutes for the implementation of scientific and research and development activities in ICT will create the necessary conditions for stable growth and higher competitiveness.

In the USA 2/3 of the finance for development in ICT are provided by private companies and in Europe the business provides about 50% from the necessary funding. Speaking of business investments in Bulgaria, we have to divide the companies into three groups. In the first group are the foreign companies. They usually have a well organized corporate structure and they know how to manage their business according to the market. The second group belongs to the Bulgarian companies with strong market positions. They have the necessary know-now, knowledge, experience and resources to deal with the challenges of the market competition. The third group - the emerging ICT companies have to attract the attention of the government. They still don`t have the necessary critical mass of knowledge and capital and are most vulnerable to the market changes. Different stimulation could be offered for the implementation of ICT activities and for spreading new know-how and technologies. The government doesn` t  manufacture much, but it has a substantial impact on the production via the regulations, taxes, state aids, and the different funding, which could change companies` behavior.

Could you give examples for successful PPP at the fields of ICT in Bulgaria?

We understand that for the improvement of the investment climate and business environment in ICT sector, as a measure for the positioning of Bulgarian ICT market in the European space, general efforts are needed part of the government and the business. In 2006, according to a project, led by SAITC, a Center for ICT Implementation In Small And Medium Enterprises (SME) was established. The center is built by the Industrial Capital Association in Bulgaria, the Federation of Science-Technical Alliances and CAD R&D Center “Progress” with the cooperation of Kontrax and TechnoLogica.

The main aim of the Information center is to accelerate the implementation of ICT in SMEs in Bulgaria, which has to lead to higher efficiency of their activities and improvement of their competitiveness in front of the challenges of the common European market. At the beginning of February a National Innovation Center was founded for facilitation of the technology transfer from the scientific units to the SMEs. It was the result of cooperation between SAITC and Microsoft Bulgaria.

What is the future of the ICT sector in Bulgaria?

Bulgaria has traditions in ICT sector, a liberalized telecommunications market and a competitive ICT industry. It is a fact, that although the difficulties of the years of the transition from one to another political government, the ICT sector stayed one of the leading sectors at the national economy, which is mainly due to the entrepreneurship and innovation mind of Bulgarian ICT companies. Our expectations are that the good investment climate, combined with the EU membership, will encourage more leading ICT companies to expand their business in Bulgaria. This process will go simultaneously with the market consolidation. Bulgaria is small market, where the successful future of the market depends on the ability of the public and the private sector to be partners.

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