After the rock that was the global financial and economic crisis hit the pond, the waves it caused hit every single region, country and industry – outsourcing and offshoring among them. Can Bulgaria ride the wave, or is there a risk of sinking?
 
That is one of the big questions to be raised at a conference on November 11 2010 hosted by the American Chamber of Commerce in Bulgaria (AmCham), the InvestBulgaria Agency and Colliers International.
 
AmCham executive director Valentin Georgiev believes that Bulgaria has a number of competitive advantages to show in the global competition for outsourcing and offshoring, and companies participating in the conference have valuable experiences to pass on.
 
"We can show real examples, really great stories," Georgiev says in an interview with The Sofia Echo, while listing Bulgaria’s advantages in outsourcing as not only its low taxation, but also its skilled human resources, geographic location that for companies in Western Europe and the United States gives the country an edge over competitors in Asia, Bulgaria’s superb level of multilingualism and its cultural ties to the West that add to its assets.
 
The global financial crisis, Georgiev says, has added a new vitality to the rationale for companies to outsource.
 
Outsourcing enables companies to concentrate on their core businesses, leaving other endeavours to firms that offer their own expertise – and possibly also innovations in a particular field, IT being a well-known example.
 
A company that choose to outsource is set free to concentrate on its core activity, in turn potentially benefiting from cost savings and efficiencies.
 
A further benefit is greater productivity, which can have benefits for the company’s host state, Georgiev says, underling that he rejects notions that outsourcing means job losses. On the contrary, a company that has chosen to outsource positions itself for growth, with broader economic benefits, he argues.
 
Outsourcing is among the issues raised by AmCham when it engaged Bulgaria’s Government in a White Paper that it presented to the Cabinet in 2009.
AmCham has told the Government that the chamber believes that a number of industries should be chosen for strategic development.
 
"Bulgaria is small and we can’t do everything. We need to make choices about industries that we will promote heavily to foreign investors – which, of course, doesn’t mean that other traditional industries, such as agriculture for example, would be neglected," Georgiev says.
 
AmCham put outsourcing and offshoring on its list of areas that it proposed to the Government for promotion precisely because of the chamber’s belief in Bulgaria’s competitive advantages in this field.
 
At the same time, Georgiev cautions, there are "challenges", as he puts it.
 
The Government needs to ensure that the educational system can continue to produce a highly-skilled labour force to serve the high demand among local and foreign companies here.
 
It needs to put across predictability in its policies to reassure current and potential investors.
 
"Any kind of talk such as ‘we’re going to change corporate tax, or social security, or VAT’ has the potential to create uncertainty, especially among newcomer investors but even among long-term operations well acquainted with the dynamics of Bulgaria and of Central and Eastern Europe.
 
"Government can prevent this perception of risk by simply avoiding this kind of talk, and so retain an important, and extremely valid, competitive advantage."
 
At the same time, building up Bulgaria’s competitive advantages will also require not only ensuring that IT infrastructure is up to speed with the rest of world, but also developing traditional infrastructure such as roads. For all the popular perceptions, after all, outsourcing is about much more than just IT.
 
AmCham is extremely delighted, Georgiev says, that participants in the conference will include Economy, Energy and Tourism Minister Traicho Traikov, Regional Development and Public Works Minister Rosen Plevneliev, among other members of the Cabinet, all of whom have shown strong enthusiasm and support for the theme of outsourcing and offshoring.
 
Other participants will include senior representatives of Colliers International, Johnson Controls, McKinsey, Hewlett Packard, the AES Corporation and SAP Labs.
 
The conference, entitled Realising the Potential - Bulgaria on the Outsourcing and Offshoring Map, is being held at the Sheraton Hotel. For more information, please visit AmCham’s website.