Bulgaria wants to become a technology nation like Israel
Bulgaria has an authentic thousand-year-old culture, recognized know-how in agri-food, high-quality wines, and exceptional mineral water, which everyone knows will be the oil of the 21st century, “White Gold.”
The Bulgarian relief is wonderful with magnificent beaches on the Black Sea such as Karadere beach and world-famous ski resorts such as Pamporovo and Malyovitsa.
Bulgaria’s great strength is technology, with the “Silicon Valley” of South East Europe, where germanium transistors (under license from Thomson) and silicon diodes (with technical assistance from the Soviet Union) were produced in 1964 in the factories of Botevgrad. On this site, where experimental curiosity, proto-entrepreneurship and university and private research were combined, copies of IBM microprocessors were produced and, in small series, the first Bulgarian computers, the “IMKO-1”.
At the beginning of the 1980s, the Soviet computer industry could no longer compete with those of capitalist countries due to the lack of common standards and critical size. The USSR encouraged catching up by pirating Western systems and entrusted Bulgaria with the production of central units and microcomputers.
In 1982, the first “IMKO-2” (combining an Apple II clone and Bulgarian variants of Commodore microprocessors) left the Pravetz factory (near Botevgrad). At its peak in 1985, the Bulgarian industry accounted for 40% of Soviet microcomputer and CPU production and employed up to 130,000 people. At this time, the country earned its nickname, ‘Silicon Valley of the Eastern Bloc.’
The region was originally an ‘Eastern European Silicon Valley’ of global significance. Presented at a conference in England at the height of the Cold War by Bulgarian researchers, the combination of an IMKO-1 with a robot impressed British and Japanese researchers. Another example: in 1975, more than 30,000 ELKA electronic computers, designed at the Institute of Computer Technology in Sofia, were exported to Switzerland (source: Invest Bulgaria Agency).
The legacy of this period is not insignificant. “Today, there is a large and diverse technology cluster: video games, software, algorithms, blockchain, deep technology,” explains a venture capitalist.
After the 1990s, this concentration of IT know-how, combined with attractive conditions, made the country fertile ground for outsourcing by US technology giants such as Cisco Systems, Hewlett-Packard, VMWare, Microsoft and Oracle, which set up production and/or research and development units here.
Following the financial crisis of 2008 and the drying up of foreign investment and available credit lines, the Bulgarian government is investing in developing its technology cluster.
In 2008, an agreement between the national IT agency and IBM paved the way for installing the Blue Gene supercomputer to support pharmaceutical research, DNA diagnostics and financial modelling. The first Eastern European country to have a supercomputer at the time, in 2017, Bulgaria became the tenth European country to join the European HPC-Europa initiative to promote and coordinate research efforts in high-performance computing.
In 2009, the Sofia government decided to create a EUR 30 million nanotechnology research center, again in partnership with IBM.
Bulgaria’s ability to import technology and capital through commercial, industrial, scientific and/or capital cooperation with foreign companies has been proven in other sectors than IT in the strict sense.
Other foreign actors have contributed to the diffusion of ICT. In 2004, the Bulgarian government sold 65% of the capital of BTC (Bulgarian Telecommunications Company) to the American investor Viva Ventures and granted a 3G license to BTC the following year. Today, in a country where the Internet penetration rate is close to 60% (source: standartnew.com), compared to 85% in France and 51% in the world (source: Blog du Moderator), the majority of fixed lines continue to be operated by BTC. Its subsidiary Vivacom is one of the top three mobile phone providers.
Foreigners are also very present in the electrical and electronic sector, which exports more than 75% of its production (source: Invest Bulgaria Agency). Schneider opened offices in Sofia in 1991, Swiss company ABB acquired the national components company Avanguard in 1993, and the Japanese company Huyndai bought Bulgaria’s largest transformer producer in 1997.
In ten years, turnover in the electrical sector has quadrupled. Exports have shifted to higher value-added products: the Bulgarian subsidiary of the US company EnerSys manufactures batteries weighing over 300 tonnes for submarines, while the local subsidiary of Liebherr (which also produces 600,000 refrigerators a year) supplies Bombardier with the ventilation system for the electric train linking Johannesburg to Pretoria.
The sector has also seen the emergence of local companies, such as Datecs, founded in 1990 by researchers from the Bulgarian Academy of Sciences and which is one of the leaders in sales solutions in Eastern Europe.
The European Union and its members, through funds disbursed since 2004, have contributed directly to the reinforcement of infrastructure (transport, energy) and support for the Bulgarian state’s non-regal missions (education, scientific research).
2 billion in pre-accession funds were allocated for the period 2004-2007. 9.9 billion for 2014-2020 (of which 7.4 billion in structural funds and 2.5 billion for the CAP), or about 3% of GDP.
In the field of education and scientific research. In 2014, the Science and Education for Smart Growth (SESG) program, co-financed by €77 million from the Bulgarian government and €600 million from the European Social Fund and the European Regional Development Fund, planned to invest €250 million in R&D and €350 million in education and learning.
In addition to the modernization and stimulus effect, this European support has acted as a spur to local political action. Faced with the risk of misuse of certain funds allocated to motorway projects, the Commission had already decided in 2008 to freeze 800 million euros. And when Brussels turns off the tap, Sofia must review its copy, although there is no guarantee that 100% of the funds will be allocated to the projects in question.
In addition to the so-called structural funds, the EU shapes and irrigates the Bulgarian science system through Horizon 2020, the EU’s €79 billion R&D program for 2014-2020.
In June 2016, the ‘Better Science for a Better Bulgaria 2025’ plan, based on four principles and articulated around four pillars, lists a dozen priority areas, not limited to the hard sciences (unlike most current funding policies in North America and Western Europe).
Bulgaria’s objective is to draw inspiration from Israel’s dazzling success in the field of new technologies and the success of Bulgarian companies such as :
Upnetix JSC in Sofia, established in 2015, today Upnetix is among the largest companies in South East Europe, specializing in the design and development of seamless software solutions tailored to your individual needs. In less than six years, more than 150 jobs have been created, and Upnetix has a turnover of almost 25M euros.
Prime Holding JSC is a product innovation company that excels in developing disruptive digital experiences. Prime Holding JSC promotes digital transformation and offers innovative FinTech, Blockchain, Salesforce and network infrastructure solutions. Founded in 2015, Prime Holding JSC has created 500 jobs and achieved a turnover of more than 77 million euros.
Bulgarian companies are approaching Israeli groups to create JV’s in various fields of activity, including solar energy, artificial intelligence and software.