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COMPUTERWORLD | Articles | Market Analysis
05 Mar

Bulgarian software branch is well positioned on global markets


At the press-conference about BASSCOM`s anniversary last year you said that in the recent years the Bulgarian software industry had been positioning itself as a successful sector which provides high added value and contributes to the meaningful development of the specialists working in it. You added that many of the domestic software companies are globally competitive and work on projects for some of the largest organizations in the USA, Western Europe and Asia. How do you see the future of the members of BASSCOM?

The internal surveys conducted by GOPA Consultants, Germany, for BASSCOM during the last 4 years have clearly shown the immense capacity built in Bulgaria in the past 10 years. We are speaking about new levels of financial stability, and more important – about a radically changed role and maturity. In other words, we have seen the end of the period of low payment and responsibility levels at the expense of capital, knowledge, skills and self-confidence. Most of the companies have a significant list of recommendations from partners all over the world at the moment, and thus they change their business model from subordinate software code writing to active information systems development in partnership conditions.

Which are the biggest challenges in front of the software sector in Bulgaria locally and globally in 2012 and how will you cope with it?

The Bulgarian software branch is very well positioned on global markets and many of the enterprises are recognized as reliable partners by some of the biggest organizations in the world.

These days the biggest challenge for us is the insufficiency of qualified workforce. According to a recent survey by the education work group in BASSCOM, up to three years from now the companies from the sector will be able to hire three times more specialists than the number of employees in the industry at the moment. There are specialists on the market but there are not enough educated professionals who can deal with most of the typical tasks in the software sector. This problem will worsen in the following years and that is why we are trying to work together with the education system to prepare more IT specialists. There is no point for hundreds of students graduating every year to meet difficulties with their professional realization and for local software companies to have problems finding the right employees meanwhile.

The next problem is the lack of financing and an innovation ecosystem, which could support the birth of Bulgarian Skype or Facebook. And this is a natural step for the level of technology and organization development which the leading companies in the IT sector now have.

What was the share of the overall ICT revenue in Bulgaria's GDP in 2011? What is the contribution of the software industry to this share?

The total share of information and communication technologies in the gross domestic product of Bulgaria for 2011 was about 10%, and the share of the software industry itself was 1.5%. Yet, the software industry has the highest levels of added value and export potential.

Which are the main markets for Bulgarian software exporters?

50% from our activities have been export-oriented during the past few years, and nearly 60% of the total export has been directed to Europe. North America gets the second place with a 35% share of the export.

It is good that lately the share of the export of high value-added products has been rising at the expense of the export of services. This distinguishes Bulgaria's software sector from the IT industries in countries of similar scale to Bulgaria.

What specific stimuli does the local administration offer Bulgarian exporters?

The country does not offer domestic exporters almost any preferences. To be concrete, the Bulgarian software sector has never relied to specific state support and its successful development during the last years has only been a merit to the young entrepreneurs in the sector.

The positive side is the fact that Bulgarian software companies are extremely resilient and stable, especially if we compare them to companies from countries with huge state support.

The negative side of this situation is that Bulgarian companies are not competitive when they participate in serious international projects, where a state warranty or a capability to accumulate funds is needed.

How did the 2008-2013 national export strategy created by the Ministry of Economy, Energy and Tourism support local exporters?

Unfortunately, excluding 1-2 small project which were executed by the BulgariaInvest Agency and The Bulgarian Small and Medium Enterprises Promotion Agency, I have not seen a real implementation of the strategy. But our hopes will remain for 2012.

How would you describe the business climate in Bulgaria?

The business climate in Bulgaria is rather good. Our country has preserved its macro-economic stability during the years of crisis and now it is among the most stable economies in Central and Eastern Europe. The high rate of export in the national gross domestic product last year showed that many Bulgarian sectors can be competitive on the global market.

The Ministry of Economy, Energy and Tourism initiated revolutionary amendments in the Investment Promotion Act. Do you think they are enough to stimulate local companies' investments in R&D activities and innovations?

Although the legislation in this field is developing, the main problems, which existed 10 years ago, are actual nowadays too. It will not be surprising if I point out the huge bureaucracy, the legislative uncertainty and the outdated infrastructure among all. It will be hard to change these circumstances with a single act of the Parliament – more significant measures at a national level must be put in action to overcome these hurdles.

Meanwhile, our country has its own advantages, among which are the qualitative broadband infrastructure, the low tax levels and the relatively low standard of living, which reduces production costs.

The interview was lead by Konstantsa Grigorova

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