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 knowledge into some good cause that would be useful. At first I volunteered, went to numerous courses. During one of these volunteer initiatives, I came across the Agency.
Hellyana Velinova; Most people, when they hear about a government institution or agency, get a little cautious. I myself become a little cautious too. This is not the case with you. Working together with you showed me that you are different, and even the feeling of coming to a meeting at your office is different. How do you differ from a standard state structure, how was Invest Sofia created, and why does it actually exist?
Nadia Soultanova: As I like to joke – we are the municipal startup. We ourselves outlined what to do, what projects (not processes, but projects) to work on. We take something and start digging and kicking it until we decide that we have done it or that we will not do it because it makes no sense to work further on it.
I think this attitude towards state and municipal structures needs to change. Because from now on, successful cities will be those that work for their image, communicate in a cool way and believe in their institutions – not blindly, but to a healthy degree. In everything, Sofia will compete with such cities from now on – for people, for business and for investment. If we don’t believe in ourselves again, our city can’t be successful and it can’t compete with other big cities.
Hellyana Velinova: Nadia, you said that you do not work on processes but on projects. What major projects are you currently working on?
Nadia Soultanova: Do you have two hours? (she laughs) There are many. Some are only at an idea-level, others are more complete, and some we will not finish at all, of course, because in the process of work we might see that they are not quite necessary. We started working on nine priority industries early on. The creative industries was one of them. And in the process of research we learned that the environment is highly fragmented, the representatives of various sub-sectors don’t really know each other, there is a lack of a unified community, there is no way for the needs of these people to be heard by the city government or the society. Then Ana started meeting with various representatives of the creative system, one by one, brought them together, and we started discovering and rediscovering more and more opportunities in the creative industries. We saw that they had a huge potential and we started to tell this story and connect with other cities.
Hellyana Velinova: And what’s the story?
Nadia Soultanova: Well, the story is that there is such a thing as creative industries in Sofia and that it is something that Sofia can boast of and develop further. And we have numbers to support this.
Ana Georgieva: The creative industries are a very broad concept, there are 12-13 sub-sectors there. Some of them are more technologically linked; others – not so much and many of them don’t have that much in common. For example, the sub-sectors of crafts or architecture are not as related to others as gaming or creative visualizations. So our first step was to get to know each of the sectors and start focusing on specific ones. At the moment, our focus is on gaming, creative visualization, video and movie production. Next year we will start exploring the other sectors. Currently, the latest data we have is from 2015, from the NSI, but since we also have a view over the ICT sector, to which the creative sector also belongs to a certain degree, we can say that creative industries are among the sectors with the highest added value and the sector is among the fastest growing. And this is not a myth. While in Europe this industry accounts for about 4-5% in cities, the share in Sofia is around 6-8%. According to a survey by Sofia Municipality and the Observatory of Cultural Economics, creative industries are ranked 4th in terms of value added in Sofia and have created over EUR 911 million in value added at factor cost since 2008.
Hellyana Velinova: If we focus only on ICT and Digital, how do we compare to the rest of the world?
Nadia Soultanova: Among the biggest problems is the lack of staff, this is no surprise to anyone. There are many initiatives, training programs, initiatives to bring people back to Bulgaria. The issue is very complex. Otherwise, we stand very well, this is a success story for many companies that do great things, they are also the middle class of Sofia. Sofia should be proud of this and tell this story. We are looking for success stories and for companies that create something that is of global importance, here.
Ana Georgieva: We even have a section on our website for such success stories in Sofia, we look for all that are happening here.
Hellyana Velinova: And how do you support such companies as an organisation?
Nadia Soultanova: Long established companies with an international presence do not need direct assistance in foreign markets. If they need assistance at the municipal level – yes, we can liaise and assist in concrete case. More important to us, however, is that Sofia is part of the brand of those who enter foreign markets now. It is less and less true, but it still happens when a company is looking for a market abroad to be seen as a “Nigerian prince” and suspicious until proven otherwise, as we joke in the office. We want Sofia to become a brand. Like they do it in Sweden, in France, Italy. That’s the idea. Sofia to be very recognisable with these companies – within digital, gaming, IT and we are speaking about their own products, not outsourcing. And we also see this change happening. The idea is to create more products and more added value. Because we are no longer cheap enough for pure outsourcing and we don’t have enough people to focus on outsourced services, to be honest. We want our companies to co-innovate with external companies and, at best, create their own product.
Hellyana Velinova: Now we can also talk about the entrepreneurial environment in Sofia. Are those companies you’re talking about in the startup ecosystem? Do you support such companies entering foreign markets, finding partners?
Nadia Soultanova: We support them, yes. As for the startup environment, ours is among the more developed in this part of Europe. This development has happened in the last 6-8 years.
Ana Georgieva: Let me join here with some statistics. About 2,000 startups were created in Bulgaria between 2013-2018, and currently, around 600-650 startups and scale-ups are active in Bulgaria. We have over 15 investment funds in our country; we have a growing number of incubators and accelerators – over 15. In fact, Bulgaria, and especially Sofia, is emerging as a growing digital and innovation hub in the Balkans. Last year, Bulgaria was ranked as the second most innovative middle-income country in the world, the most efficient within innovation, with the greatest potential for the development of innovative technologies in Central and Eastern Europe. This is according to the Global Innovation Index. In addition,15% of startups are engaged in the so-called deeptech – this means fintech, biotech, CreaTech, artificial intelligence, the Internet of Things.
Hellyana Velinova: Here in Bulgaria?
Ana Georgieva: Here in Bulgaria, yes! These companies create solutions.
Hellyana Velinova: Let’s go back to whether you are creating connections with foreign investors for these companies? Or for foreign investors who want to come here?
Nadia Soultanova: Starting work three years ago we discovered that Sofia is unknown and we began working with cities of strategic importance to us. There was, of course, the issue of making them want to work with us. But we started such strategic partnerships – with London for a while, and then with Vienna which is also our most successful. We are now also working informally with Amsterdam, with cities in Sweden, and for the next year, we have identified some cities in Asia and North America.
Ana Georgieva: We communicate with more than 50 cities all over the world. The network is expanding.
Nadia Soultanova: The idea is to put Sofia on the map, to build a brand for it, so that other cities know what’s happening here. And while looking for partnerships, not just markets (recently, for example, we had a company looking for researchers in other countries), to have someone to email or call. And our contacts to know what is happening here, what our strengths are, to know what the quality is and that our recommendation of a company means something. In this way, we aim to create an international network effect, which according to our observations is missing here. Our companies, even the large ones, are somehow shy; they do not visit events enough, do not develop enough international partnerships and are a little cautious.
In that respect, our network, our contacts and partnerships are available to companies from Sofia. We do not do business development, I want to emphasize this, but we can always involve them in delegations and create opportunities for networking and contacts.
We do not have the financial instruments, it must also be said. At this stage, that’s how it is. I even think that if we would try to attract investments with financial instruments, there would always be some city able to give more and we would lose this game. However, we do say: we offer contacts, we make introductions in the ecosystem, we show who is who, and we present Sofia’s favourable economic factors such as tax environment, quality of life and more.
Ana Georgieva: But we also have two “tools”, so to speak, for international cooperation. One is “Sofia meets” for bilateral business delegations. For example, companies from Sofia, say with the creative sector, as was the case in September, visited the partner city of Vienna, where 14 Viennese companies joined them, with focus on gaming, video production and CulTech this time. Similar formats take place within one or two days, with organized meetings to get to know the ecosystem, the environment, we know in advance from the companies what type of meetings they would like to hold and we help with that.
The other tool is City-to-City, which is a partnership between two cities. We have such an agreement with Vienna. If the Sofia business wants to develop in Vienna or the Vienna business – in Sofia, both agencies – ours and the Vienna Business Agency – provide the so-called “soft business landing”, which means full institutional support, assistance in organising meetings and exploring the ecosystem, as well as assistance for part of the costs of co-working, transportation, etc.
Hellyana Velinova: And you really don’t charge any fees?
Nadia Soultanova: Exactly. Everything we do is free-of-charge. We work for the municipality.
Hellyana Velinova: You did an investor guide, right?
Nadia Soultanova: Yes, we made a Business Guide for Sofia, which is also available on our website; it is bilingual. Everything we upload on our site is bilingual, that was the principle from the very beginning, because Sofia is opening up more and more to people who do not speak Bulgarian and are not Bulgarian. This, in fact, shows how open a city is, institutions need to speak foreign languages. That is why we aim that everything is bilingual with us.
Ana Georgieva: And we aimed to make this information about Sofia available in one place, to make it accessible and pleasing to the eye. Because there are really tons of information, tons of news, but this information is spread across different agencies and different media. In fact, we are also preparing reports and analyses, which are also available on our website. Recently, we also issued a report on tourism, and two more reports on Sofia’s development will be released next week.
Another of the many projects we are working on is a report on the development of the creative sector in Sofia, starting with two subsectors and a matrix, because it is important to have visibility of who the different stakeholders are. In the longer term, it is important to produce a comprehensive report on Sofia and Bulgaria for all of these 12-13 subsectors, as London did in1998.
Hellyana Velinova: That would be very useful, really, because what I find in my work with game development companies is that we have no official research and no picture of how this industry looks like before the world. So – congratulations on the initiative. And now, since we are called ‘The Digital Optimists of Bulgaria’ and looking at your website, I found something called Digital Transformation Strategy for Sofia. I found it very curious. Could you tell me more about this strategy, how it affects the business and Sofia in general?
Nadia Soultanova: The Strategy was drafted based on a project by the European Commission, and we were provided with a methodology, with which we, as a city, to create a digital transformation strategy. It took 12-18 months of work, we worked with local ecosystem stakeholders, over 100 organisations and experts joined the working groups. We are very thankful to them for taking the time for us.
The Strategy began with an assessment of Sofia and identification of the strengths and weaknesses of the city. We know the strengths – we have a very strong IT sector. The weaknesses were open data и governance. There were recommendations to create a governance structure responsible for digitalization. The idea of the strategy is to make the city a market for services and products that are being created here. On the supply side – we have it and this environment of companies and startups is well developed. They are one side of the equation. On the demand side – demand needs to be created in the direction of e-government, mobility and utilities. These are the three areas we identified as the beginning. Where the supply and demand meet is the space where the digitalization of Sofia will actually happen. This is a simplified overview of the Strategy. It is available on our website – both the complete document and the key points summarized in 2 pages.
The next steps on the Strategy are now ahead. We have applied for the creation of a digital policy for the city, which is very important, and all this must be done in order for all stakeholders to know it. Another thing we will continue with is a project of the European Investment Bank, that will help us to create a tool for evaluation of smart city projects, allowing the city to know which projects are “go” and which are not. We also have good developments within governance. The Mayor of Sofia has announced that there will be a new position within the Municipality – a Deputy Mayor for digitalization. Therefore, we already have developments within governance.
Hellyana Velinova: I think it is high time that there is more work in this direction.
Nadia Soultanova: Yes, that’s right. These are digitalization projects, but they are just the first step. The Strategy itself is just a tool, it is not a result. Now we have to start the real work on this.
Hellyana Velinova: I have no more questions. I am Hellyana. You listened to ‘The Creators – The Digital Optimists of Bulgaria’. Expect us again next week.