The innovation policy in Bulgaria: trends and challenges Assoc. Prof. Teodora Georgieva Applied Research and Communication Fund 1

The ARC Fund’s mission is aimed at concerted development of knowledge-based societies in the countries of Southeast Europe. In 2006 ARC Fund was contracted to develop the country report for DG Regional Policy of the European Commission Bulgaria: Strategic Evaluation on Innovation and the Knowledge-based economy in relation to the Structural and Cohesion Funds, for the programming period ARC Fund was also commissioned by the Bulgarian Ministry of Economy and Energy to develop the Annual Reports on the Bulgarian National Innovation Policy for the years 2006 and ARC Fund is the national correspondent for the ERAWATCH Network, and recently finalized the work on the ERAWATCH Analytical Country Report on Bulgaria

Innovation.bg 2008 Innovation.bg analyzes the development dynamics of the national innovation system during the past year and the growth opportunities in five groups of indicators: –Gross innovation product –Entrepreneurship and innovation networks –Investment and financing of innovation –Human capital for innovation –Information and communication technology (ICT) 3

Innovation firms by number of employees Source: Eurostat, 2008; New Cronos, CIS 4 4 Bulgaria HungaryCzeck Rep.GermanyFinlandEU > 250

Number of EPO patent applications per million inhabitants Source: Eurostat,

Number of patent applications at the Bulgarian Patent Office Source: Bulgarian Patent Office, Bulgarian applicants Foreign applicants

R&D intensity – percentage of R&D expenditures in GDP 7 Source: NSI, Bulgaria EU-10EU-25EU-15

Number of PhDs (Higher education and R&D organizations) 8 Source: NSI, New PhD graduatesStudents

The population aged 20 to 29 holding higher education degree in technological fields (1000) 9 Source: Eurostat, EU-27 Bulgaria

Student mobility to/from Bulgaria, (1000) Source: Eurostat, Foreign students in Bulgaria Bulgarian students abroad

Information and communication technologies The computerization of the Bulgarian firms reaches its plateau of 90% during Only one third of firms has their own website. Although all Bulgarian enterprises, except for micro businesses, have computers, most of them use them only as a means to reduce costs and for information search (60 % of the enterprises) rather than for the introduction of innovative management and administrative solutions (10 %). In 2007, 90 % of the computers in 90 % of the enterprises will have access to the Internet, which is an important prerequisite for making these companies more innovative. 11

The last place of Bulgaria by number of innovative firms and by level of interaction between them in EU Serious barriers towards the entrepreneur ideas of Bulgarians Lack of adequate and sufficient financial instruments supporting innovation Lack of specialized high quality personnel Continuing drain of the intellectual capital from the country 12 The main challenges for the competitiveness of the Bulgarian economy

Recommendations for policy action The Bulgarian government should develop an integrated innovation policy, which incorporates research and technological development, as well as coordination mechanisms to other economic policies such as SMEs, investment, etc.; Review and update the legal and regulatory framework underpinning the national innovation, technology and research policy; Open and focus national innovation and research prgrams towards attracting European and international and reintegrating Bulgarian talent in the Bulgarian innovation system; Develop public-private partnerships for increasing investment in R&D and innovation, including providing direct public support and guarantees for Bulgarian organizations, which have successfully bid for projects under the EU framework programs. 13

Thank you! 14