1. www.basscom.orgwww.basscom.eu BULGARIAN Technology Companies with Global Reach: GoTo NEXT level Capability & Knowledge  Innovation & Entrepreneurship May, 2015 Stamen Kotchkov (Chairman BASSCOM)

2. www.basscom.org www.basscom.eu BASSCOM – Bulgarian Association of Software Companies Established 2001, now 70+ software development companies and 120+ associates Export oriented profile (>60%) Capacity - > 5000 software engineers  Talent Management – Education, R&D and Innovation  Process Improvement – ESI CEE  Marketing Software Business – International & regional branding; export promotion of the BG software and IT  Partnering with local Government - policy reforms, strategies elaboration -> e- Government strategy, etc.  Co-founder and active member of PIN-SME  Co-founder and active member of the SEE ICT Forum Board Main partners: Germany, France, UK, USA, Canada, Scandinavia, China, Japan … Partners for regional cooperation: Macedonia, Serbia, Romania, Croatia, Armenia, Georgia, Moldova… Some BASSCOM history and activities

3. www.basscom.org www.basscom.eu Software is one of the fastest growing sectors in BG - continuous growth 5 times in 10 years, 1.74 % from GDP in 2014 from GDP In absolute terms this is from €130 M in 2005 to €700 М revenue in 2014 (forecast) 60% of revenues are from export – mainly to the rest of EU and the US. Increasing share of products and high-value-added services. Highly qualified work force – wages are 4-6 times the average for BG. The largest tech sector in BG in terms of total wages paid – bigger than telecoms and call centers. 300 companies with >10 employees 17,000 jobs (professional software engineers) BASSCOM 5 th Edition IT Barometer (est. 2008 with GTZ/GIZ support)

4. www.basscom.org www.basscom.eu BASSCOM 5 th Edition IT Barometer (2014) YearRevenue M euro Growth 201470215% 2013 61311% 2012 550* 2010399203% 2005132* * Data - Pannoff, Stoytcheff & Co. >60% Export

5. www.basscom.org www.basscom.eu BASSCOM 5 th Edition IT Barometer (2014) Data: Pannoff, Stoytcheff & Co. And growing… YearRevenue/ employee EUR (K) Growth 20146010% 20135415% 201247* 201049-13% 200556* YearTotal revenue software As % of GDP 2014 (п)7021.74% 2013 6131.53% 2012 5501.39% 20103991.11% 20051320.57%

6. www.basscom.org www.basscom.eu Competitive advantages….. and Bulgarian experience 1/3 Bulgarian IT companies started with significant advantage – LOWEST COST ! But is it enough ? NOT ANY MORE ! … the COST isn’t anymore the key decision factor … EITO/BITKOM survey 2009 Which are the new competitive advantages ?

7. www.basscom.org www.basscom.eu Competitive advantages….. and Bulgarian experience 2/3 “Talent makes capital dance”“Only the process matters” Funky business : talent makes capital dance Funky business : talent makes capital dance by K Nordström; Jonas Ridderstråle

8. www.basscom.org www.basscom.eu  Continuous Talent Management  Technical Skills  Soft Skills  Teamwork & Collaboration  Continuous Process Improvement  Organizational (company) level  Society (public) level  International (branding) level Competitive advantages….. and Bulgarian experience 3/3

9. www.basscom.org www.basscom.eu AT Kearney Global Services Location Index 2014

10. www.basscom.org www.basscom.eu IT Landscape in Bulgaria

11. Capability Creativity Maturity Q&A

12. www.basscom.org www.basscom.eu Type of services foreign investor can find in BG ? Full scope of services – analysis, design, architecture, implementation, QA, maintenance & support, classical & digital marketing, consulting, sales with focus on special quality and added value based on specific domain knowledge. How many foreign investors are already invested in BG software sector ? More than 50 Western European and US-based companies found their partners and/or subsidiaries including SAP-Labs, Software AG, Nemetschek AG, DocuWare AG, Bosch, VMWare, CSC, Prosyst, Johnson Controls, HP, Infragistics, Seeburger GmbH and many others. How many people are involved in BG IT Sector ? Our estimate counts around 100 000 people from which around 40 000 are employed in 1 st level outscoring centers (BPO, ITO, Call Centers, Tech Support Centers, etc.) and around 17 000 as professional software engineers. How many students are graduating annually in IT and IT-related specialties ? Around 2 000 in Bulgaria and another 1 000 in Western Europe (mainly Germany) and USA. BASSCOM is working closely with Bulgarian Government to establish EU Blue Cards working procedure and accommodate thousands of Western Balkans and ex-Soviet countries professionals. Frequently Asked Questions / Answers (1/2) :

13. www.basscom.org www.basscom.eu Fees/Salary ranges and trends ? Bulgarian software companies aren’t applying single fees tables as every deal is based on deep analysis on type of every project, duration, technology, business domain, team structure and management, maintenance and support, etc. Normal range will be 2-3 times less than average Western European rates. Salary ranges are at least 4-6 times above average for BG with 5-10% annual increase. Government fiscal framework – taxation, incentives ? Lowest taxation in EU – flat 10% taxes for both personal income and corporate profit. Best ratio price/quality for all communication lines – voice, data. Well developed office real estate market with competitive prices. Special Investment Promotion Act (well developed incentives for general sectors not for IT especially). General terms – time zone, travelling, legal framework, IPR protection ? ToDo Time zone GMT +2:00 – 1 hour difference with Germany. 10+ flights per day from mayor German Airports (Frankfurt, Munich, Dusseldorf, Cologne, Berlin) with max 2 hours duration. Legal framework fully synchronized with EU directives (incl. IPR protection) Frequently Asked Questions / Answers (2/2) :