The team of Sofia Investment Agency published its new report titled ‘Sofia: Economic and Investment Profile 2019’. The fourth edition of the annual report contains data and analysis of the leading industries, the target sectors for investments, the importance of infrastructure, local taxes and business conditions, information about Sofia’s performance in comparison to other popular business destinations in the region, as well as a forecast on how the economy of Sofia and the investments will develop in the future.
Key report highlights:
The contribution of Sofia Municipality to the national economy has been growing at a moderate but stable rate in recent years and Sofia remains the biggest regional economy in the country with about 40% of Bulgaria’s GDP.
The change in the value added by the different sectors in Sofia in the last 10 years is in line with the transformation of the Bulgarian economy and its orientation towards higher value-added sectors. While the share of construction sharply shrinks (compared to 2008), Manufacturing, Information Technology and Outsourcing are increasing their share and setting the pace of Sofia’s development.
The manufacturing industry has increased its weight in the local economy after a series of investments in the areas of Pharmaceuticals, Automotive, Cosmetics, Optics, among others. By 2018, the Manufacturing industry had a share of 9.9%, showing an increase of almost 2% compared to its share before the crisis.
The same increase can be observed in the gross added value of the Administrative and Supporting Activities sector, which includes part of the outsourcing industry (the so-called service call centres).
The other part of the outsourcing industry is included in the Professional Activities and Research sector. These two broad sectors of outsourcing, along with the IT industry (part of the Creation and Distribution of Information and Communication sector), found favourable growth conditions in Sofia in the last few years due to the combination of educated workforce, knowledge of foreign languages and low labour costs.
Sofia’s economy is also characterized by significantly higher investment activity than the national average. Latest data shows that about 40% of the cost of tangible fixed assets and half of foreign direct investments were concentrated in the Sofia region. By the end of 2018, the Capital had attracted €13 billion of foreign investments or about € 9 800 per capita, which is nearly three times the average for the country
Most investments in Sofia are directed
Successful cities from now on will be those that work for their image and for the trust (not blind, but healthy one) between institutions and different urban communities. Only this way, Sofia will be able to stand strong in the competition for people, business and investment against other attractive destinations in Europe and the world.
We follow this conviction in our daily work and we have been given a valuable opportunity to share it exactly with The Creators – the Digital Optimists of Bulgaria.
Nadia Soultanova and Ana Georgieva from Sofia Investment Agency talked with Hellyana Velinova about the potential of the creative sector in Bulgaria, the Digital Transformation Strategy for Sofia, the startup environment and its development, what Sofia is and what we want it to become, our work with local and international companies and other cities, and how we help businesses in the capital.
Listen to the interview (in Bulgarian). For English translation, read below.
Hellyana Velinova: Would you introduce yourself first?
Nadia Soultanova: I have been working at the agency for three years. I had the tremendous privilege to start working at the Agency only three months after it was created and to set up the team of Invest Sofia – the investment unit of the Sofia Investment Agency. I work with some exceptional young people – who have returned from abroad, intelligent, smart and passionate about the cause of Sofia, including a digital Sofia. I really enjoy my work every day. As for the rest – I lived in the USA for a while, then returned to Bulgaria and worked here for six years for a Fortune 500 company, then at a startup, and then happened to start at the Agency by chance.
Ana Georgieva: I have been working at the Agency for a year and eight months now, with lots of enthusiasm, eagerness and joy.
Hellyana Velinova: That’s true! I, as a bystander, can confirm. That’s true! (she laughs)
Ana Georgieva: I also happened to work in the Agency by chance and I’m very happy about that. I’m one of those young people who have decided to return from abroad. In 2010, I left to study – four years in Istanbul, then two years in Germany, one of which I spent in academia as a research assistant. But at some point I realized that I wanted to come back here and put
Dear Partners and Friends,
With 2020 around the corner, it’s important for us to spotlight some of this year’s achievements and to set some of our future goals. It was a year full of challenges, success stories, community building events and initiatives that aimed to put Sofia on the international map and to build a stronger, more recognizable brand for the city.
Here are some of the 2019 highlights.
Sofia’s business environment had another year of growth. The city remains the biggest regional economy in the country with about 40% of Bulgaria’s GDP. Sofia had attracted €13 billion of foreign investments or about € 9 800 per capita or nearly three times the average for the country.
Overall, the prospects for the development of Sofia are positive. The city will most likely continue to concentrate an increasing share of the economic activity in the country due to its positive demographics and its leadership in the development of the fastest growing sectors such as the IT industry, outsourcing of business services and some manufacturing activities with relatively high added value.
Sofia is well-positioned to develop some new forms of economic relations such as digital and shared economy services due to both the appropriate IT infrastructure and the abundance of IT companies and specialists. The so-called Creative Industries have also been experiencing a rapid growth and development in recent years, and the creative companies and talent in the sector are mainly concentrated in Sofia. Trade, Transport, Storage and Tourism also have good development potential.
More detailed data, charts, analyses and trends can be found in our latest report ‘Sofia: Economic and Investment Profile 2019’.
Again, we did our best to make the information about Sofia as a business destination and a wonderful place to live available in one place, to make it easily accessible and pleasing to the eye. We published our second edition of the Sofia Business Guide, new reports with current data on the development of the Start-up and Innovation Ecosystem in Sofia, the Manufacturing Industry, the Tourism and Air Transport Market, the Labor Market, the latest Sofia Economic and Investment Profile, and the first version of our first sub-sector matrix, dedicated to Sofia’s Gaming Studios.More reports and guides will be released next year to help entrepreneurs
Three years ago, when Sofia Investment Agency started work, we identified 9 priority sectors for the city. The Creative Industries was one of them.
In the process of research, we learned that the creative ecosystem in Sofia is very fragmented and there are over 10 very diverse sub-sectors out there. So our first step was to get to know each of the sectors and start focusing on specific ones.
To help the Gaming sector take shape, bring attention to the players and outline the resources available to help them, we just published the first version of our first sub-sector matrix – Sofia Gaming Studios.
The matrix contains a list of 35+ gaming companies and 100+ resources that are a part of the ecosystem.
We spent weeks of research on this, kindly supported by Game Dev Summit, but the project is still a work in progress. Enjoy the Matrix, and if you have any comments, please feel free to contribute, and we will include all input into our next update.
The Creative Industry in Sofia
The Creative Industries are among the fastest growing sectors with the highest added value. While in Europe this industry accounts for about 4-5% in cities, the share in Sofia is around 8%.
Indisputably, the Creative sector is something that Sofia can boast of and develop further. At the moment, our focus is on gaming, creative visualization, video and movie production.
The Gaming Sector in Sofia
Over ⅔ of the Gaming sector in Bulgaria is concentrated in Sofia. It has the highest growth among all creative industries and shows a 127% growth of value added at factor cost (2008-2015).