At the beginning of July Fletcher School at Tufts University in collaboration with Mastercard, released the Digital Evolution Index (DEI17) which analyzes the state and rate of digital evolution across 60 countries. This evolution is the outcome of an interplay among four drivers – Supply Conditions, Demand Conditions, Institutional Environment, and Innovation and Change. The research captures about 170 indicators.
DEI17 reveals what are the patterns of digital evolution around the world and what factors explain these patterns, and how do they vary across regions; which countries are the most digitally competitive and which are the prime drivers of competitiveness: public or private sector?
By measuring each country’s current state of digital evolution and its pace of digital evolution over time (from 2008 till2015), the authors of the index created a map of our digital planet with four zones: Stand Out, Stall Out, Break Out, Watch Out. Some countries are at the border of multiple zones.
Stand Out countries are highly digitally advanced and exhibit high momentum. They are leaders in driving innovation, building on their existing advantages in efficient and effective ways. However, sustaining consistently high momentum over time is challenging, as innovation-led expansions are often lumpy phenomena. To stay ahead, these countries need to keep their innovation engines in top gear and generate new demand, failing which they risk stalling out.
Stall Out countries enjoy a high state of digital advancement while exhibiting slowing momentum. The five top scoring countries in the DEI 2017 ranking — Norway, Sweden, Switzerland, Denmark, and Finland — are all in the Stall Out zone, reflecting the challenges of sustaining growth. Moving past these “digital plateaus” will require a conscious effort by these countries to reinvent themselves, to bet on a rising digital technology in which it has leadership, and to eliminate impediments to innovation. Stall Out countries may look to Stand Out countries for lessons in sustaining innovation-led growth. Countries in the Stall Out zone can put their maturity, scale, and network effects to use to reinvent themselves and grow.
Break Out countries are low-scoring in their current states of digitalization but are evolving rapidly. The high momentum of Break Out countries and their significant headroom for growth would make them highly attractive to investors. Often held back by relatively weak infrastructure and poor institutional quality, Break Out countries would do well to foster better institutions that can help nurture and
Chinese companies are interested in the opportunities for building photovoltaic power systems in Bulgaria, the Sofia Municipal Privatization & Investment Agency /SIA/ reports. Companies are looking for local partners operating in the renewable energy sector. Appropriate partners are landowners or stakeholders and organizations within the field of photovoltaic power system construction. Chinese partners are ready for a direct investment in the construction, percentage of the stake in the company and agreement on the allocation of the financial benefits of the project.
Criteria that are of great importance to the investors are local experience and willingness for cooperation in obtaining the required permits, environmental assessments, land rights, available areas for building a park, electrical grid connection agreements, concluding electricity purchase agreements, knowledge of the procedures for applying for funding under EU programs and other activities for participation in a joint venture for building photovoltaic power systems.
Benefits from an investment agreement with a Chinese investor for building a PV park
– China has a globally recognized experience and contribution to renewable energy.
– PV park equipment manufactured in China is cheaper than the one available for purchase in Europe
– For the last 10 years China holds the highest rate of solar energy development
– The global PV solar energy market survey from 2016 by the International Energy Agency shows that the installed solar power has increased by 75 GW in the past year, exceeding 300 GW, which is 50 times more than in 2006. The largest contributor to this growth is China with 34.5 GW (with accumulation of 78.1 GW). The other two countries in top three are the United States – 14.7 GW (with accumulation of 40.3 GW) and Japan – 8.6 GW (with accumulation of 42.8 GW).
General market data
More data from April this year by the Photovoltaic Power Systems Programme of the International Energy Agency indicates that the global share of the produced photovoltaic electricity is about 1.8% or nearly 375 billion kWh. Its share in Europe is some 4 %. After a stagnation in 2014, the global market for photovoltaics has increased almost everywhere since 2015. In 2015, the photovoltaic market broke several records and continued its global expansion. It rose by 25 percent, reaching 50 GW, according to a report on the development of the sector by the International Energy Agency (IEA).
The development of solar energy in Europe remains insignificant as
From early August passengers at Sofia Airport can use the new free of charge bus connecting the two terminals of the airport. The bus is electric, with a capacity of 65 passengers, equipped with folding seats and a specific area for fixture of wheelchairs as well as a wheelchair ramp. This ensures a convenient and environmentally friendly free of charge transfer of passengers from Terminal 1 to Terminal 2 and the nearby stop of Sofia Metro Line 1, which enables quick access from the airport to the center of the capital.
With the new transportation Sofia Airport becomes the first Bulgarian airport with environmentally friendly passenger transportation and the only one in the country certified under the Airport Carbon Accreditation Program for reduction of carbon emissions of the international airport organization ACI EUROPE.
Another transportation convenience for the residents and for the big flow of tourists in the capital was introduced specifically for the summer season – from July to the end of September 4 additional buses carry the flow of pedestrians and cyclists to the Vitosha Mountain. The line for pedestrians starts from Vasil Levski stadium and reaches the area of Zlatnite Mostove. The bicycle lines start from the city Zoo and have several stops until they reach the end stop – Aleko hut, as well as from the G.M.Dimitrov metro station to the village of Zheleznitsa. Transportation is free of charge and covers the busiest hours of tourist flow to the mountain and back to the city at weekends.:
Image source: Sofia Airport
As of 14.08.2017 state institutions that organize tenders under the Public Procurement Act or EU projects can now electronically receive reports on tax liabilities of applicant companies to Sofia Municipality.
Electronic reports are free of charge and are available after registration of the persons, authorized by the respective state authority on the site of Sofia Municipality https://www.sofia.bg/state-institutions-and-municipalities. If the tax liability report is also required on hard copy a fee amounting to BGN 6 is charged, as specified by the “Municipal Revenue” Directorate of Sofia Municipality.
The new e-service saves a considerable amount of time for the companies participating in tenders as the report will be received officially by the respective state administration. Every month thousands of requests for such reports are sent to Sofia Municipality.
On the web site of the Ministry of Finance (MF), a draft of an Act amending and supplementing the Tax and Insurance Procedure Code (Amendment and Supplement Act of TIPC), as well as a draft of the Regulation on Amendment and Supplement of the Regulation on the application of the Excise Duties and Tax Warehouse Act and the grounds for them have been published for public discussion.
The draft of the ASA of TIPC has been prepared in execution of Decision No 338 of the Council of Ministers from 2017 on the adoption of measures to reduce the administrative burden on citizens and businesses by removing the requirement for provision of certain official documents on hard copy. The proposed changes aim to reduce the number of required documents, simplify the procedure for providing services to citizens and businesses, and reduce the financial burden on individuals by eliminating the need to provide various documents.
The draft of the ASA of TIPC provides that legal persons that have not exercised any business activity during the tax year and are exempted from submitting an annual activity report shall be exempted from filing an annual tax return under the Corporate Income Tax Act and from announcing the annual financial statements in the Commercial Register.
In order to reduce the administrative burden for the business, the draft for amendment and supplement of the Regulation on the Excise Duties and Tax Warehouse Act includes two measures directly influencing the administrative procedures for issuing the permit for trade with tobacco products by the customs authorities.
The proposals for amendments, published for public discussion, are available on the website of the Ministry of Finance.
The economy grew by 3.6% in the second quarter of 2017, the average gross salary increased by 9.9% and the employment rate in Bulgaria is record high since the years before the crisis, according to data of the National Statistical Institute (NSI).
Bulgaria’s Gross Domestic Product (GDP) increased by 3.6% year-on-year in the second quarter of 2017. There was also an increase by 0.9% compared to the first quarter of this year. According to the Institute’s flash estimates GDP in nominal terms reached BGN 24 309 million. Consumer expenditure registered a growth of 4.2%. Exports and imports of goods and services also rose – by 6.1% and 7.0%, respectively.
With this positive trend, Bulgaria stands well among the other countries in the fastest growing region in the EU – Central and Eastern Europe. The Czech Republic (4.5%) and Romania, which again has an increase of 5.7% on an annual basis, are ahead of us.
As in the first quarter, domestic consumption was the leading factor for the economic growth, which went up by 4.2% year-on-year in the second quarter of 2017. This was again probably mainly due to households, rising incomes of the population, rising employment and falling unemployment. The BNB expects the positive trends to continue in the period 2018-2019, thus keeping private consumption as the main driver of economic growth.
Significant salary growth
The latest NSI data show an annual growth of 9.9% in the average gross salary in the country in the second quarter of 2017. This is the largest increase since 2009, at least in terms of the nominal salary growth. Total income per person per household in the second quarter amounted to BGN 1 355. The highest relative share of income was from salaries (56.7%), followed by income from pensions (26.3%), from self-employment (6.8%) and from benefits and social assistance (3.4%).
The percentage change in the sources of income compared to the previous quarter is as follows:
Despite the slight slowdown in the rate of salary increase, the trend for sustainable salary growth remains clearly visible. This is largely
Credissimo is the only Bulgarian company nominated by the organizers for the prestigious European FinTech Awards 2017. The nomination is in the “Alternative Finance” category and the company competes for the “European Innovation of 2017” award as well. The contest was open for voting by the wide audience. The public voting in the “Alternative Finance” category, ranked Credissimo 9th among 80 applications from Netherlands, Germany, Latvia, England and others. Award winners will be announced at a special ceremony on September 27 in Brussels.
Credissimo’s nomination for the European FinTech Awards 2017 was not unexpected. In 2014, the company became the first company for fast cash loans in Bulgaria with iOS and Android mobile app. In 2015, Credissimo again became the first fast credit company to receive a certificate for credit rating excellence, which is currently the highest possible for the country. In 2016 and 2017, the company introduced key innovations in rendering its services. Credissimo signed up key partnerships with international tech companies such as Viber, Facebook, Instantor, Bitcoinpay, the Green Business Bureau, and was invited by Google to participate in Think Finance Central Europe 2017 – the event that brings together the largest financial companies in the sector. In October last year, the company launched a chatbot for its online credits, thus becoming the world’s first in the micro-credit sector with such a service. Automated customer chat allowed the entire process of product selection, application and loan approval process to take place entirely through the Facebook chat service – Messenger. Similar services in the financial sector are used by world leaders such as Bank of America and MasterCard. Since April this year, the company launched another innovative service – the Bitcoin / Currency payment option as an official payment instrument for a credit installment.
Vayant Travel Technologies, a Bulgarian-based company, was sold for US 35 million to US PROS Holdings. Vayant is registered in the United States but is created by Bulgarians and currently almost the entire team of nearly 90 employees is based in Sofia. The company has offices and dealers in both London and Singapore.
Vayant provides airlines with a SaaS (software as a service) platform. The company’s platform for processing of large volume of airline data enables carriers to apply an individual algorithm for pricing and offering to end-customers of an up-to-date ticket price, which includes all pricing factors and related services. This enables operators to keep control over distribution which is major part of their business, instead of outsourcing this service to another company. There are only three companies in the world that provide such solution to air carriers, one of them being the Internet giant Google.
Vayant Travel Technologies was set up in 2007 and was entered at the very beginning by the first Bulgarian venture capital fund NEVEQ. In 2010, Vayant already had a product which attracted the attention of another investment fund, Cape Capital, and the Bulgarian team appointed French Eric Dumas executive director, to bring the company to market. Shortly thereafter, Vayant’s first customer, AirBaltic Airline, appeared. In 2014, the Company also attracted German air giant Deutsche Lufthansa as investor. It continued to grow by a 30% increase in turnover annually.
Vayant’s buyer PROS Holdings is a US company based in Houston, Texas. Its business focuses on personalized b2b cloud software for e-sales. With the acquisition of Vayant, its market capitalization amounts almost to USD 852 million. The new owner plans to expand the company’s business in Bulgaria. Thus, the office in the capital with developers and engineers has the potential to become the second European center of the three-continent PROS.
The 100% acquisition of Vayant can be described as the third major acquisition (over USD 10 million) of a Bulgarian IT company by a foreign buyer in recent years, along with Telerik and Fadata. This successive sale of a Bulgarian IT company is yet another proof of the great potential of the engineering ecosystem in Bulgaria that generates innovative solutions open to the world.
Capital 100 – Bulgaria’s Biggest Companies, the annual ranking of local business weekly Capital, showed that ten years after Bulgaria’s accession to the European Union and after the crisis, the country’s economy seems stable and for thousands of companies the year has been their best so far. According to data of the NRA, the revenues for 2016 of all more than 320 000 companies in the country have reached BGN 333 billion, which is a 1.5% growth in turnover. Two groups have already been established as stable leaders – manufacturing enterprises and high technology. Companies that have searched for and found foreign markets are growing. This year, the economy has been driven not by giants but by medium-sized manufacturing companies.
The sector breakdown indicates that food, technology and machinery have grown the most. Trade and production of clothing and textiles have also gone up. New in the ranking is the steady introduction of software companies in the list of big players. For the first time Paysafe and Telerik appear in the ranking among the first 300. VMWare is the third new company, and for the first time there is an outsourcing company in the ranking, namely Callpoint New Europe.
There is a drop among the big players – the companies in the fuel and metal sector, as well as in the energy sector. Thus, the business of the top ten in the country marks a total decline of 10%, because 7 of the top 10 companies operate in these three sectors. The reason is the decrease of fuel prices on the international markets. Another sector that is declining is the construction sector. The lack of public procurement for major projects and facilities led to a contraction –by 35%. However, this pertains only to large companies, as the small ones are growing due to the intense construction of residential and office buildings in Sofia.
Positive and important news is that profits are rising. In the top 100, the growth is over 21% to BGN 2.6 billion. Two years ago the total profit was BGN 700 million and for the last year it was BGN 2.1 billion. The vast majority of the companies in top 100 made a profit in the past year – 84%, and among the top 300 companies the reported losses were even less.
A record in the ranking is also registered in terms of workforce. For the
Colliers consulting company released a market analysis of the commercial property market in Central and Eastern Europe for the first half of 2017, which states that Bulgaria is the fastest growing market. The analysis reports an increase of 213% on an annual basis in the volume of investments in Bulgaria in the second quarter. This is the highest growth in CEE markets, in the environment of the existing historical investment growth for the whole region – by 17% for the period to EUR 5.4 billion.
Following Bulgaria, the second fastest growing commercial property market is Romania with an increase of 155%, Czech Republic is third with 114%. The experts expect that if the pace remains the same by the end of the year, the 2017 volumes will reach a new record, beating last year’s EUR 12.2 billion..
As an absolute value, the amount of investment in commercial property is the largest in the Czech Republic – about EUR 2,159 billion. This takes Poland down to the second place with EUR 1,520 billion. Bulgaria is at the end of the ranking with EUR 390 million.
The other conclusions of the report:
In a separate analysis of Colliers Bulgaria for office space in particular for the first six months, Sofia maintains the trend of active demand for office space in 2017 and the resurgence of the construction of new sites and the reconstruction of existing ones. A total of
In the middle of August, 31 Bulgarian companies received additional funding from the Ministry of Economy under the “Support for development of innovations by start-ups” procedure. The total amount of the additional funding is BGN 11.4 million and the largest contract amounts to BGN 391 thousand. The additional contracting was made possible following a proposal by the Ministry of Economy to the Monitoring Committee of the Operational Program “Innovation and Competitiveness” to increase the financing and granting funds to companies that have more than 80 points after the application, but have remained in the reserve list.
All the beneficiary companies under the program have presented startup projects from four areas of the Ministry of Economics’ strategy for intelligent specialization – information technology, mechatronics and clean technologies, biotechnology for healthy life as well as creative and recreational industries. The duration of each project should not exceed 2 years as of the date of entry into force of the grant agreement.
In order to boost capital market investments, the Ministry of Economy together with representatives of the Bulgarian Stock Exchange (BSE) are discussing the introduction of incentives to encourage companies to become public and listed on the stock exchange. The idea of providing vouchers in the amount of up to BGN 100 thousand is being discussed, to enable companies to cover the costs for the necessary documentation, investment intermediation and other activities necessary for their listing on the stock exchange. It is expected that the criteria and requirements for applying for funding in this direction will be prepared by the end of the year.
The Bulgarian startup ecosystem has a new online arena where individuals, teams or organizations with an entrepreneurial mindset can step on the scene, connect with others, and participate actively in everything that happens in this vibrant environment. The website is named StartUp Navigator – a platform that aims to provide visibility and to facilitate the connection between people with new ideas, startups and businesses, startups and talent[M1] s, startups and mentors, accelerators, non-governmental organizations, administration, co-working and all other stakeholders in their journey of being entrepreneurs. StartUp Navigator is a project of the Association of the Bulgarian Leaders and Entrepreneurs /ABLE/. The organization launched the first beta version of the platform in June. The second and current one was released at the end of August and it already has more than 400 registered organizations and individuals.
What distinguishes the platform from similar ones in Bulgaria is that it is not profiled on startups in a specific business area, being wide open instead for all industries and all stakeholders along the entrepreneurship chain. If someone has an idea and wants to start a business, they will be able to find support at every stage of the project – from co-founders or mentors, or even professionals, from whom to receive additional training, to getting an investment, then accelerating the idea in order to reach a larger scale and to go beyond the borders of Bulgaria as an established and stable international company. “We are aware that the participants in the entrepreneurship ecosystem know each other absolutely well, but our goal is to attract more participants from the periphery of this society who stand out there with their idea and should dare to start,” this is how Venetzia Netzova, project leader of the initiative and part of ABLE Bulgaria, explained in an interview in the Bulgarian National Radio the core idea behind the platform.
The Navigator has free access and registration. The platform has developed several categories to help registrants find and pin their place on the map of the Bulgarian startup ecosystem. During the registration or later on, anyone can filter to their profile exactly where they are in the ecosystem: an idea, an investor, an accelerator, a mentor, a freelance, a media, a research and development lab, a government or non-governmental organization, a co-working space or other. They can also state the industry, the stage of development, city