ABOUT a third of all foreign direct investment (FDI) in Bulgaria in the next several years will be in the sector of information and communication technologies (ICT).
Pavel Ezekiev, executive director of the InvestBulgaria Agency (IBA), made this forecast on December 8. He was attending the opening of the new hi-tech building in Sofia of the Bulgarian subsidiary of German software developer SAP.
In 2004, Bulgaria attracted more than two billion euro in FDI, 20 per cent of which was in the ICT field.
The rising trend persists this year as well, Ezekiev said. In his view, large foreign companies in the sector are interested in moving some of their operations to Bulgaria.
SAP, a leading world provider of business software solutions and among the biggest software developers in Europe, has already realised the potential of Bulgaria as an investment destination, company board member Klaus Heinrich said.
Around 50 Bulgarian and multi-national companies operate in Bulgaria using SAP systems.
SAP’s software development subsidiary in Sofia was established in May 2000 with a team of 60 programmers who worked on Java Enterprise Server projects. In 2002, the company became part of SAP Labs network. Currently, hundreds of Bulgarians work for SAP in Sofia, as well as in the company’s headquarters in the German city of Altdorf.
“The choice of Bulgaria as a development centre is determined both by the skills of Bulgarian programmers and by the similarity in cultures,” Heinrich said, adding that they were “not here because of the low salaries only, but because of the knowledge, skills and enthusiasm of Bulgarian specialists”.
A special SAP programme is to be launched in three Bulgarian universities, aiming at giving students more practical skills in Java technology, SAP Labs Bulgaria manager Plamen Tilev said.
Ezekiev and the head of the newly established State Agency on Information Technologies and Communications, Plamen Vachkov, said they were among the strongest advocates for the SAP education projects, as well as many other such initiatives that would improve the quality of Bulgaria’s education system.
ICT is among the three sectors, together with electrical engineering and outsourcing, that have been recommended as key priorities for the Government in a report submitted on December 7 by Deloitte Bulgaria. Ezekiev was one of the initiators of the report discussed by the Council on Economic Growth.
The Cabinet has to develop a marketing strategy, to serve as a reference point in efforts to attract a bigger volume of FDI, Deloitte said. Romania and Croatia have been indicated as Bulgaria’s main competitors in attracting FDI in the region.
Economy and Energy Minister Roumen Ovcharov said, after the meeting of the council, that a working group would be established that would, in early 2006, prepare a list of measures and a schedule for the inclusion of the strategy in the 2007 budget.
An amendment to the Investment Promotion Act was necessary, as the current act lacked mechanisms to stimulate the building of hi-tech enterprises and activities, such as outsourcing, Ovcharov said.
Deloitte Bulgaria’s managing partner Borislav Stratev said that in view of the competitive advantages and disadvantages of the country, measures for overcoming the competitive shortcomings - such as education and training, infrastructure, management reform and creation of stimuli - were pointed out in the report.
The improvement and provision of infrastructure and the extension of subsidies, aids or credits under promotional conditions are shown as examples of stimuli. Greece, Italy, the US, Germany, Belgium, Austria, the UK, Switzerland and France have been marked as target sources of investments.
