Many R&D centers, especially in the IT sector, already operate in Sofia employing thousands. The city continues to expand its portfolio of innovative businesses thanks to its young and educated population and the favorable business climate. Sofia has identified several key industries, new and innovative as well as traditional industries with proven potential. See what they are and why we chose them, and explore how you can grow your business in Sofia.
Striving to become the regional ICT center, Sofia is home to over 50 000 IT professionals. The wider sector of Creation and Distribution of Information & Creative Products and Telecommunications employs 85 000 people. Every year, the ICT sector grows 10-20%.
The city has attracted global IT R&D leaders like SAP Labs, HP, VMware, IBM, CISCO. They already operate large R&D centers in Sofia. They employ, educate and develop thousands of highly qualified professionals.
The city has been gaining popularity as a start-up destination with a developing start-up ecosystem. Over 43.000 university students in Sofia study a STEM programme. More than 16 private academies offer IT programmes, 6 to 36 months long. The courses are taught by practitioners and the curriculum is set by companies from the sector.
Sofia is a preferred destination for IT and business process outsourcing, with professionals working in more than 25 different languages. The city offers all the advantages for that type of business. There are multiple A class office buildings, well-developed IT infrastructure, political stability.
The city’s new focus, however, is to shift to smart-sourcing, building on its highly skilled and competitively priced talent pool – over 50% of the city’ population holds a university degree – that can offer attention on innovation and excellence.
The total output volume of the manufacturing industry was slightly above EUR 4.35 billion or 10.4% of Sofia’s economy for 2017. A total of 70 000 people, or 13% of all employed in the city work in the sector. Sofia has great manufacturing traditions and the main focus of the capital is the establishment of high-value added productions. Further objectives include the introduction of cyber-physical systems, automation and data exchange in manufacturing technologies.
Sofia has competitive real estate, energy and labor costs. In addition, business-friendly tax frame and large labor pool make greenfield development an attractive option.
Many Bulgarian producers are looking for partnerships with foreign companies and offering the advantages of market knowledge and established logistics networks.
With high-level of digital penetration, Sofia is a great place for R&D in the area of smart city solutions. Those are solutions that improve the quality of life of the citizens by enabling the city to use technology, information and big data to improve planning, infrastructure and services in all areas.
Approx. 90% of the busiest road sections and 60% of Sofia’s intersections are smart. They are equipped with AI traffic lights, sensors, cameras and controllers. Over 80 intersections give priority to Emergency Rescue cars.
The areas of development are e-governance and citizen services, urban mobility, energy, waste & water management. Recently, Sofia became an active member in the EU’s Digital Cities Challenge initiative.
Sofia is the centre of cultural and creative industries in Bulgaria. According to NSI 2/3 of the Bulgarian creative sector and 3/4 of the employed are concentrated in Sofia. There are 7 500 creative companies or just over 6% of all enterprises in the city. Most of their products and services are export-oriented.
Nearly 7% of the employed in Sofia work in the creative industries sector and these numbers are growing. The sector includes advertising, architecture, crafts, design, cinema, interactive recreation, video games etc.
Sofia is one of the greenest capitals in Europe – the ratio of trees to people is one of the highest on the continent.
The city has an extensive public transit system and is surprisingly compact for its population of 1.3 million people.
Currently 40 km of metro have been constructed and further 21 km are due in early 2020, expected to serve over 500 000 passengers daily. The focus has now shifted to implementing comprehensive urban environment solutions. The aim is to answer specific urban issues like air pollution, energy efficiency and water & waste management.
With 406 660 m² of shopping centers, Sofia is a mature retail market that is expected to grow steadily over the next several years. In 2017 investments in the sector set a record, reaching 680 million EUR. Two trends to keep in mind are the increasing share of non-grocery retailing and the growth of e-commerce. Currently, e-commerce deals in Bulgaria amount to approx. 350 million EUR annually.
In 2017, 25% of the population of Southwestern Bulgaria (a region that includes Sofia) made an online purchase. This amounts to nearly half a million people. Close to 90% of the purchases were made from Bulgaria-based online sellers. Оver 70% of the orders were in the Fashion segment.
With 70% of Bulgarians expected to have internet access by 2019, the e-commerce market is projected to grow to 3.4 million users by 2021.
The absence of major e-commerce players like Amazon from the market combined with high digital penetration and well-formed e-commerce habits, together with the expectation of same or next day delivery, makes Sofia a good test market for new business models. Market research by Mastercard in 2016 showed that 67& of Bulgarian users prefer paying by an online payment service.
Sofia is 2nd in Europe in growth of international visitors for 2017 – 15.2%, right after Istanbul (16.8%) and followed by Lisbon (14.6%), Paris (13.1%), Munich (12.9%) and Warsaw (12.3%). Sofia is also among the TOP 5 cities in Europe with the highest overall growth of international visitors for 2009 – 2017, with an average increase of 9% per year.
The many new cultural attractions, vibrant street life in the summer and rich festival and event calendar year long make Sofia an increasingly recognizable tourist destination. In 2017, Sofia was visited by 1 346 993 tourists, 65% of which foreigners.
NDK, the biggest convention center in the city has undergone a major renovation in preparation for the Bulgaria’s EU Presidency in 2018. The number of 5-star rooms in the city is expected to double by 2020.
Companies engaged in R&D in the medical and pharmaceutical areas are one the fastest growing in Bulgaria.
The pharmaceutical industry in the country has long and well-established traditions in the production of generics and GMP certified production. In recent years, production capacity has increased and innovative production technologies have been introduced. Activities related to clinical research currently represent a significant share of the industry. Their annual turnover has grown to over 400 million leva. After 2015, there has also been a significant increase in consultancy activities related to pharmacoeconomics and health technology assessment (HTA).
The factors contributing to the growth in the clinical research are:
– relatively low operating costs
– competent and experienced medical staff
– ease of access to patient selection
– mechanisms for technology and know-how transfer
A high level of digital skills and an evolving start-up eco system make Sofia an exciting place for start-ups with medtech focus and biopharmaceutical R&D activities.
Europe is currently facing considerable demographic and economic challenges. In the years to come there will be increased attention to innovations in the biotech and pharmaceutical sector.