FT: Foreign Connections Help Bulgaria's Plovdiv 'Restore Past Glory'
And IT and outsourcing boom is helping Bulgaria's second-largest city Plovdiv regain part of its former cultural and economic prominence, the FT reports in an article about Bulgaria.
In a report on emerging industries in Central and Eastern Europe, the FT points to Plovdiv's rapid (12-13% year-on-year) economic growth and the fact that the city will become a European Capital of Culture.
The developments in the IT/Business Process Outsourcing (BPO) industry there are strongly backed by local authorities and the national governments, the Trakia Economic Zone (TEZ) being a particular example of success. A public-private partnership involving six industrial zones in and around Plovdiv and nine municipalities, TEZ recently became Bulgaria's first area with focused support from the state, the FT reminds. With investment into the zone worth EUR 1 B since the 1990s, another EUR 800 M are expected to flow in over the next decade. So far TEZ has brought together over 100 investors, most of who come from Europe, attracted by "business-friendly legislation, low labor costs and the 10 per cent flat tax".
But apart from the zone, which employs thousands of people boosting the economic outlook for the region, other places across Bulgaria (like the capital Sofia, but also the cities of Veliko Tarnovo, Varna and Burgas) are also involved in the boom. The FT cites the 2014 Global Services Location Index by consultancy A.T.Kearney which places Bulgaria ninth as a "most preferred" outsourcing destination. It also gives the example of US tech giant HP, which opened a lab in Sofia, to argue "foreign presence is expanding".
The BPO sector accounts for roughly 4% of gross domestic output. Stefan Bumov, head of Sofica Group and and Chairman of the Bulgarian Outsourcing Association (BOA), is quoted as saying that its share in GDP could double in the next 3 to 5 years.
Challenge to overcome, both in TEZ and in IT/BPO in general, include lack of qualified employees, falling birth rates, and brain drain, various senior executives are quoted as saying.
The full article is available here.
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