Sofia- A Digital and Green Capital

Stable growth in the number of employed in outsourcing and ICT – part of the wider sectors “Information and communication” and “Professional, scientific and technical activities” with a number exceeding 200,000

Representatives of the business, Sofia Municipality and academic structures discussed the development of Sofia as a digital and green capital. The meeting was part of the project Road Show 2017 “Competitive economy through stimulating partnership between local government and business”, organized by the Bulgarian Outsourcing Association (BAO), Association of the Commercial Buildings Owners in Bulgaria (ACBO) and ICT Media, and participants united around the conclusion that Sofia should be positioned as a good place for investment and high tech development, offering education tailored to business needs, high class business properties and attractive living conditions.

“I see the development of the city as a digital capital, partnering with business and academic circles. The rapid expansion of the whole city, coupled with the digital transformation of the world and the growing global competition, poses challenges that we need to tackle together,” said Ms Yordanka Fandakova, Mayor of Sofia Municipality.

One of the most important steps in this direction is the creation of a Cooperation Forum of BAO and ACBO with Sofia Municipality through the Sofia Investment Agency (SIA). By the end of June, the Forum will have a working plan prepared on the basis of the long-term vision for turning Sofia into a digital and green capital. The plan is to hold Forum meetings at least twice a year, and partnerships with both associations will provide professional consultations with specialists on important topics and projects for the development of a smart city.

“IT and outsourcing companies have experience in areas like smart cities and other technologies; they have faced these problems and can share their experience. Direct communication with the municipality will contribute to a faster and more creative solution of current problems with less financial resources,” commented Stanimir Nikolov, Chairman of the Board of BAO.

“Those who invest in both ICT and outsourcing services, and in business buildings also work and live in Sofia. Creating the Forum will help us to work more actively with the municipality and the state to make it a better place to live. The two sectors are drivers of job creation,” added Tanya Kosseva-Boshova, Chairman of the Board of ACBO.

During the lunch, Ms. Fandakova added that Sofia occupies the top place in terms of GDP growth among European capitals in the last 10 years. 54% of the investments in the country take place in Sofia, and the city marks the largest growth of start-ups. And 80% of them are in the ICT sector. Services with high scientific and added value contribute to the growth of the Bulgarian economy. The ICT sector generates 18% of Sofia’s GDP and Sofia’s share of Bulgaria’s GDP is over 40%.

The number of employed in “Information and communication” and “Professional, scientific and technical activities” sectors, including outsourcing and the ICT, shows a steady growth, exceeding 200,000, of which 25,000 are IT professionals. More than 100 IT companies work in Sofia, attracting global R&D leaders who develop additional highly qualified specialists. According to data by the National Statistical Institute for 2015, the average monthly salary for an IT specialist was BGN 2,231, and in the outsourcing branch – BGN 1,565. One of the main incentives for new investors to enter the capital is well-trained staff. Ms. Fandakova identifies education as the biggest asset of the city, where one third of citizens are aged between 15 and 34.

“We work closely with business, we have joint masters programs, joint courses through which our students are touching on good practices in companies,” said Assoc. Prof. Adelina Aleksieva-Petrova, Deputy Dean of the Faculty of Computer Systems and Technologies at TU – Sofia.

Sofia Municipality is preparing a digital map of business areas in Sofia, which will provide useful information about office and industrial areas in the capital, rental opportunities and the class of spaces. At the suggestion of Ms Fandakova, the map will be supplemented with information about access to public and other means of transport. All information will be beavailable in interactive form by the end of July.

Another incentive which attracts investment in the city is tax policy. The business invests in building of infrastructure that is located on municipal and state property. This improves living and working conditions in the urban environment when the municipality is unable to finance certain projects which are of high importance for the business. At present, the organizations that have invested their own funds, are unable to recover VAT. In this regard, ACBO has drafted a bill to amend the VAT Act in order to stimulate public-private partnerships and companies investing in improving the urban environment. The aim is to provide relief at national level, including via the implementation of public-private partnerships. The second major problem for business is the high cost of household waste. Various options are considered at national level, aiming at a methodology that follows the “polluter pays” principle.

The business’s demand for a closer link between the waste tax and the amount of waste generated by companies can be also made at the moment. Legal entities have the opportunity to declare a certain number of waste containers or to conclude direct contracts with waste disposal companies. Direct and rigorous implementation of the ‘polluter pays’ principle has been discussed over the past few years. Certainly, discussions on this issue must be held so as to find a fair payment option applicable also to condominiums and single-family homes, without compromising the collection of the fee. Business urges citizens to take over a larger share of the payment – the ratio is now 70:30 in favor of business. However, a realistic approach with tolerable payment levels needs to be found.

The development of Sofia into a green and innovative city is a vision shared by citizens, enterprises and the municipality. Sofia is the first city in Europe with its own strategy of intelligent specialization aimed at attracting investors in the long term.

More about the Bulgarian Outsourcing Association (BAO):

The Bulgarian Outsourcing Association (BAO) consolidates and represents the interests of the companies offering outsourcing services. The association communicates the benefits of outsourcing to a wider public, boosts the competitiveness of the businesses in the sector and creates favourable environment to attract foreign investments in the sector. BAO envisions to make outsourcing a leading industry in Bulgaria and ensure its growth, respect, trust, innovation and social responsibility.

More about the Association of the Commercial Buildings Owners in Bulgaria (ACBO):

The Association of the Commercial Buildings Owners in Bulgaria (ACBO) is a voluntary non-governmental organization set up in 2013, which is actively working to implement good market practices and ehance professionalism in the sector. The Association comprises 28 companies owning business buildings with a total built-up area of more than 850,000 square meters, located in the Republic of Bulgaria.

More about ICT Media:

ICT Media is the leading publisher in the field of information technologies in Bulgaria, established in 1990. The organization of conferences and events is an important part of the company’s activities, and today ICT Media is the leader in organizing and conducting the most prestigious technology conferences. The company focuses on the application of ICT in different segments of the economy, paving the way for the development of ICT for the benefit of a successful business and administration, and pays special attention to developments in the ICT industry.