Software Industry Maintains its Double-digit Growth

The software industry continues its double-digit growth, according to Barometer 2017 – the annual survey of the Bulgarian Association of Software Companies (BASSCOM) on the development of the sector. The sector is expected to close the year with revenue of BGN 2.3 billion, which is an increase of 12% compared to last year. More than 90% of the surveyed 3 400 companies expect over 10% growth next year.

Here are the main figures and conclusions by Barometer 2017:

• in 2016 the Bulgarian software industry grew by 14%
• for the last five-year period revenues in the sector more than doubled by 121% – from BGN 928 million in 2011 to BGN 2 billion in 2016
• over the same period, the share of the total revenue of the software industry to GDP doubled from 1.16% in 2011 to 2.22% in 2016
• these record-breaking results have been achieved with just 22 000 jobs, the shortage of specialists being a major obstacle for even greater growth
• a new job in the industry generates revenue for the state from taxes amounting to BGN 14 000.  – this corresponds to 47 average pensions for the country
• the specialists shortage leads to a steady rise in remuneration – over 30% growth in remuneration over the past 4 years – currently the average net salary in the sector is 2 900 BGN, which is 4 times the average for the country
• the new jobs in the sector went up by 9% /compared to  the forecast of 5%/; The new jobs in 2016 totaled  1 897.the number of jobs in the industry rose by 67% from 13 627 positions in 2011 to 22 703 in 2016 excluding IT specialists working in other branches such as the banking sector, micro-companies, etc.
• in 2016, the growth of export-oriented sales was very high – 19% or BGN 233 million.
• the export-oriented software industry accounts for nearly 77% of all telecommunication, computer and information services outsourced, and 10% of the export of all services from Bulgaria

On the back of these results, the software industry has emerged as a powerful determinant of a competitive, high value added economy, as well as the industry that brings young people back to Bulgaria. If it keeps the same growth rates, software industry revenue in the country could reach 3.0% of the GDP by 2020. This would not only rank the IT business among the most efficient but also among the largest in the country. Furthermore, it would have increased its share almost three times to the GDP for 10 years. The main contributors to this growth are the outsourcing companies. For the period 2011 – 2016, the revenue of the export-oriented teams doubled from EUR 312 million to EUR 764 million. This was an increase of 145% or between EUR 500 and 600 million in the country’s current account and capital account balance.

According to the forecasts for 2017,the number of new jobs in the software industry in Bulgaria will slow down its growth to 8% and remuneration will increase by another 9%. The software business will pay about BGN 40 million more taxes compared to the previous year, contributing to BGN 360 million tax revenue in the country’s budget (40 million more than last year).

The report concludes that the IT sector is among the most sustainable in the country. According to the report, the industry has successfully shifted the focus of the companies’ activities from carrying out simple coding work to participation in all phases of software production – analysis, design, architecture, implementation, quality control, maintenance and development. The shortage of qualified specialists, needed to take over the growth of the sector, is a major problem for the companies in the industry. At the same time, that is why many talented young people decide to stay or return to the country with a good standard of living.

All figures and conclusions by Barometer 2017 will soon be available in English on the website of BASSCOM. You can follow the uploaded posts here.