Mayor Yordanka Fandakova has appointed Sofia’s first ever Deputy Mayor for Digitalization, Innovation and Economic Development. The position is taken up by the current Chief Executive Officer of Sofia Investment Agency, Mr. Vladimir Danailov. He will lead the Digitalization, Innovation and Economic Development Unit. With the opening of such a unit, Sofia joins the ranks of cities such as London, Barcelona, Vienna and Stockholm.

“More e-services, digitalization of the processes of managing and serving citizens and businesses, the use of innovative urban solutions, and working together with the IT sector – these are key priorities for me in the coming years,” said Yordanka Fandakova, commenting on the decision to create the new unit. “I am convinced that the digitalization of the urban environment, innovation and economic development are interlinked areas that give the city and our lives more order, more publicity, attract foreign investment and create quality jobs and a better quality of life,” the Mayor of Sofia added.

Deputy Mayor Vladimir Danailov commented on the new unit: 

“The digitalization of Sofia is a broad process that covers not only the metropolitan municipality and its services, but also the entire urban environment. Sofia can be a platform for innovation and a market for digital products and services created by the strong IT companies in Sofia and the startup environment. Finally yet importantly, digitalization activities are a tool for a strong international image of the capital. Digitalization is the basis of smart cities. By 2050, nearly 70% of the world’s population will live in large cities and the increased pressure on cities must be alleviated by new innovative solutions.” 

The new unit for digitalization, innovation and economic development start its work with several tasks:

✔️ to ensure a holistic approach rather than a piece-by-piece work and inconsistent standalone decisions

✔️ to turn the city into a platform for innovation

✔️ to reduce the administrative burden

✔️ to turn Sofia into a market for digital products and services created by Sofia-based companies

✔️ to avoid dependency on a particular provider

The Deputy Mayor has already submitted for discussion and adoption by the Sofia City Council the Digital Transformation Strategy for Sofia – a strategic document on which Vladimir Danailov and the team of the Sofia Investment Agency, on behalf of the metropolitan municipality, worked for 18 months and developed it within the framework of the Digital Cities Challenge project of the European

Sofia Municipality will be among the participants of the European Commission’s “870675 PolicyCLOUD – Policy management through technologies across the complete data lifecycle on cloud environments” project with the topic: “Pilot on using the European cloud infrastructure for public administrations” under the Horizon 2020 Programme.

The project implementation term is 36 months, during which Sofia will work in a network with 15 other partners from nine European countries. PolicyCLOUD is already underway and an inaugural meeting with all participants in the programme took place in Madrid on January 21.

The municipality of #Sofia will work with #Okys on the #PolicyCloud use case focusing on urban #environment improvement and monitoring through #crowdsourcing data analysis.
Discover the project https://t.co/KFlNIIylwa pic.twitter.com/RPbNAPGjrW

— PolicyCloudEU (@PolicyCloudEU) January 22, 2020

The main objective of the PolicyCloud project is to create a cloud-based tool for effective modelling, testing and management of policies through data analysis and visualization. Various pilot projects have been included in the program activities, including in Sofia.

The implementation of the project activities will be supported by free access to the existing European cloud-based IT infrastructure for collection, comprehensive processing and analysis of data. Latest ICT tools will be used for big data, data mining and predictive analytics in urban management topics, such as: waste management and garbage collection; hygiene; road infrastructure; street lighting; traffic signalisation; parking; ecology, green systems; children’s playgrounds; disruption of public order and others.

By participating in the project, Sofia Municipality will be able to simulate, test and analyse potential policies using different categories and types of data. This will help the municipal administration to improve the management, implementation and transparency of local policies by using the latest technologies.

In addition to Sofia, the project consortium numbers 15 more partners, including Atos (Spain) – coordinator, IBM Research (Israel), London Borough of Camden (United Kingdom), Socieadad Aragonesa de Gestion Agroambiental (Spain), Instituto Technologico de Aragon (Spain), EGI (Netherlands), Singular Logic (Cyprus), Greek Research and Technology Network (Greece), Maggioli (Italy), LeanXcale (Spain), Ubitech (Cyprus) and others.

Interviews with the participants on how PolicyCloud ⁦adds value to local and European policymaking.

Latest news on data-based public policies, as well as up-to-date information on the implementation of the programme and the activities of the associated participants will be published on the project’s website: https://policycloud.eu

Bloomberg Philanthropies invited Sofia to participate in an international training project on digital transformation management in European cities. The initiative is aimed at leaders in urban governance and policies for digitalization of the urban environment and innovation. Our capital is already part of the program and is represented by Vladimir Danailov, Deputy Mayor for Digitalization, Innovation, Economic Development and Investment, and Elitsa Panayotova, Project Coordinator of Green Sofia. 

“The network between 21 European capitals to meet the challenges of digital transformation will help to share knowledge and good practices, which will provide synergies and inevitably accelerate urban transformation. Sofia, being the 14th largest city in Europe, can make a significant contribution to this process,” Vladimir Danailov commented on Sofia’s participation in the program. “Digitalization is the basis of smart cities. By 2050, nearly 70% of the world’s population will live in large cities and the increased pressure on cities will need to be alleviated by new innovative solutions,” he further commented. 

The inaugural meeting was held on January 10 in London. The opening event was attended by teams from all participating cities, including Amsterdam, Madrid, Ljubljana, Athens, Dublin, Vilnius, Riga, Brussels, Budapest, Prague, Stockholm and others.

The new Bloomberg Philanthropies Digital Innovation Initiative is aimed at accelerating digital innovation. The goal of the program is to help European cities deliver high-impact digital services, and share lessons learned with cities around the rest of the world. City officials will have access to a specialized executive education program delivered by Harvard Business School and Harvard Kennedy School faculty to strengthen the skills necessary for leading digital innovation in their cities.

The Initiative provides cities with the opportunity to participate in projects, apply for funding grants and for professional development programs for city management leaders.

You can find the official announcement here.

You can also follow the social media accounts of Sofia’s Deputy Mayor for Digitalization, Innovation, Economic Development and Investment Mr. Vladimir Danailov on Twitter, Facebook and Instagram for news and highlights from digital Sofia.

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 all this

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 in Figures

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’.

Our 2019 Reports

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).

The European Investment Bank (EIB) will support Sofia in the implementation of the Digital Transformation Strategy for Sofia. Sofia, with the support of the Fund of Funds, signed a contract with the EIB for a grant of consultancy support for the development of the conceptual projects identified in the Strategy, as well as for the development of a methodology for the evaluation of projects related to digitalization and smart cities.

This was announced by the Mayor Ms. Yordanka Fandakova and the Chief Executive Officer of Sofia Investment Agency Mr. Vladimir Danailov at an event that outlined the guiding principles, goals and next steps for implementing the Digital Transformation Strategy for Sofia.

The event was attended by the chairman of the Sofia City Council Mr. Elen Gerdzhikov, the head of the EIB Group’s office for Bulgaria Mr. Andreas Baikos, and nearly 100 representatives of the local ecosystem that participated in the preparation of the Digital Transformation Strategy for Sofia. The development process of the Strategy was coordinated by Sofia Investment Agency.

EIB will provide advisory services for the following steps of identification and evaluation of smart city projects and the development of a methodology for the evaluation of digitalization projects in various areas of urban life, incl. the assessment of the projects’ preparedness and sustainability. The aim of the advisory services is to help build on the indicative activities set out in the Strategy, which are currently at an initial conceptual stage and are in the first three priority areas – e-municipality, mobility and utilities.

“More e-services, optimization of the internal processes and services to citizens and business, the use of innovative urban solutions, as well as working together with the IT sector – these are key priorities for me in the coming years,” said Ms. Yordanka Fandakova. In her words, digitalization will give the city more order, more publicity, better control, better speed and will favor local IT solutions, attract foreign investment, enhance the quality of life and it is a vehicle for economic growth.

“I am happy that the European Investment Bank will support this very important project for Sofia,” said EIB Head of Bulgaria Andreas Beikos in his address.

“We view digitalization as a broader process, encompassing not only the Municipality and its services, but the entire urban environment. We see digitalization as an economic development tool. Last but not least, digitalization activities can be part

The new Labor Market in Sofia 2019 report is available for download from investsofia.com. 

Some of the key points from the report:

• In 2018, the employment rate exceeded 75% for the population aged 15-64, close to the figure in the EU’s most economically advanced regions.
• The number of employees has increased over the last five years in all educational groups.
• More than half of the employees in Sofia in 2018 are 30-49 years old, but in recent years there has been a significant increase in employment in the 55+ group.
• During the period under review (2013-2018), between 50 000 and 70 000 new jobs were created in Sofia. Employment is growing in all economic activities except trade and healthcare with the most significant growth being observed in the ICT, outsourcing and real estate sectors.
• The structure of employees by economic activities in Sofia differs significantly from that in Bulgaria as a whole. This is most evident in the role of the manufacturing industry – while at national level it is the leading industry with 600 000 employees in 2018, in Sofia it is smaller than both the trade and, more recently, the ICT sector. 
• The educational structure of the employed also distinguishes Sofia from the rest of the country. While the overall labour market is clearly dominated by those with secondary education – a total of 1 802 000 in 2018, compared to 997 000 with university degrees – the balance in Sofia is in favour of those with higher education.
• Higher education in Sofia it still dominated by the economics and social sciences majors, but in recent years there has been an increasing interest in mathematical and technical specialties. The distribution of graduates by field of education in Sofia demonstrates that there is a discrepancy between the profile of graduates and the structure of the city economy, especially in terms of the fastest growing industries. 
• Following the current dynamics, in the next five years the city economy will add new employment predominantly in ICT and outsourcing but will lose employment in health and trade.
• The last five years have been a period of high wage growth. The ICT sector is leading that trend offering a gross monthly salary of over BGN 3 000 as of end of 2018.
• The salary estimate indicates that all sectors without the hotel and restaurant industry will offer a gross monthly

Vladimir Danailov, Chief Executive Officer of Sofia Investment Agency, participated in the Smart Cities discussion panel of the program of the international AI&I conference, which took place on November 26, 2019 in Sofia Tech Park. The forum was organized by Ikonomika magazine, Economic.bg and Bulgaria’s Digital National Alliance (DNA) and is Bulgaria’s first ever event aimed at bringing together large technology corporations with the startup business community, academia and the public sector to discuss formulas for successful and ethical introduction of artificial intelligence into daily management.

The panel, led by moderator Assoc. Prof. Boyan Zhekov, included representatives from the Ministry of Interior and companies developing products and services in the field of smart urban solutions such as Develiot, Vivacom, Theoremus and Syscom Engineering. 

The panel focused on the challenges facing cities and their possible solutions through the introduction of digital technologies. 

In the discussion, Vladimir Danailov highlighted three major factors that make digitalisation important to cities. It frees up resources and increases productivity, which is especially important for cities with low unemployment (such as Sofia – 2% unemployment rate); enhances services for citizens and businesses and supports data-driven decision-making.

“We believe that the success factors for the digitalisation activities of Sofia are that citizens and businesses should be the focus and they should collaborate together with the city to improve the quality of life and economic development,” said Vladimir Danailov. 

In this respect, the implementation of the Digital Transformation Strategy for Sofia, which was prepared with the support and methodology of the European Commission by the team of Sofia Investment Agency, is crucial. The strategy recommends the following: 

1) Opening the city to the local technology sector and turning the city into a market maker for the IT sector in the first four priority areas: mobility, utilities, e-governance on the demand side and the technology sector on the supply side; 

2) Establishment of a unit in the Sofia Municipality to coordinate the activities of digitalisation and smart urban solutions in coordination with business, development centres and citizens; 

3) Regulation of data exchange processes and creation of data policy to stimulate the start-up sector and innovations. 

The conference also touched on other issues such as the growing impact of AI in financial services, AI against human intelligence, the point where AI will surpass humans – from the perspectives of leading speakers from Microsoft, Google, Facebook, Amazon, Rimac Automobili, and

At a meeting with business representatives organised by magazine and club ‘Business Lady’, Sofia’s Mayor Yordanka Fandakova and Sofia Investment Agency’s CEO Vladimir Danailov presented the tools and activities with which Sofia Municipality supports small and medium-sized businesses (SMEs) in Sofia.

“Small and medium-sized enterprises are the backbone of the economy in Sofia: 97.7% of all companies in Sofia are SMEs. They generate 70% of the city’s production and 63% of the workforce in Sofia are employed in the sector,” Mayor Yordanka Fandakova said at the meeting. According to her, these figures are a recognition of the good business climate in the city and the consistent work towards improving the conditions for starting and developing a business.

In order to promote small and medium-sized businesses in the city as one of the main sources of jobs and economic growth for Sofia, the Sofia Municipality works with a specific unit, the Sofia Investment Agency, to help investors grow their businesses in the city. Thus, the metropolitan municipality is the first in the country with its own investment agency.

Among the instruments that Sofia Investment Agency uses to prop up the local business, our CEO Vladimir Danailov pointed out the support we give to startups and SMEs to compete internationally; our assistance to make the most of the various grants and instruments; the Accelerator Startup Sofia program of the Sofia Municipality to support start-up entrepreneurs. He also pointed to our work on the City-to-City programs for cooperation with other European cities such as Vienna and London, which enables us to support businesses with information, bilateral business delegations, contacts with business communities in partner cities, financial instruments and others.