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BASSCOM Barometer 2019: Revenues in the software sector exceed €1.5 billion on an annual basis

The Bulgarian software industry continues growing
The Bulgarian software industry continues growing © Pixabay

The Bulgarian Association of Software Companies (BASSCOM) announced the results of its annual report on the state of the software sector in Bulgaria – Barometer 2019. The analysis is based on data from nearly 4,100 companies and covers 2017, 2018, as well as a 2019 forecast.

According to the study, in 2018, the number of jobs in the software industry has increased by nearly 2,400 or 9%. Compared to 2013, job growth is 88%. The outlook for the coming 2019 is that it will reach 10% and the total number of employees in the field will exceed 33 thousand people. Meanwhile, the number of large companies with more than 250 employees has increased by 90% compared to 2011.

Record-breaking revenues

The data also show that the revenues in the sphere have grown by almost BGN 600 million (about €305m) or 23% in 2018 and have already exceeded BGN 3 billion(€1.5 billion) and 2.9% as a share of GDP. This is also the highest growth in the history of the software industry. The main contributors to this are companies operating predominantly in foreign markets, while domestic sales continue to grow significantly, with no signs of this trend changing soon.

“In recent years, the sector has been on the rise and the dynamics of this development are becoming more tangible. It took 21 years to reach total revenues of BGN 1 billion (€510m), it took another four years to reach BGN 2 billion (€1 billion) but only two years to reach 3 billion. At the same time, the software business is also the number one employer in terms of remuneration and offers an average of 3.5 times higher payment than the national average. Adjusted for the standard of living, the average wage is far above that in the UK and is already ahead of the wage in Germany,” said in a press release Dobroslav Dimitrov, Chairman of BASSCOM’s Governing Board.

Economic impact

The Bulgarian software industry seems to be becoming attractive to more foreign investors, with over 50 representative offices of global software companies already operating in the country. The export revenue of an intellectual product in 2018 reaches BGN 2.5 billion (€1.3 billion), a result that only the software industry can boast.

According to CBN assessment, in 2018, one job in the software sector in Bulgaria generated over BGN 24,000 (€12.3k) annually from taxes for the country’s budget, that’s more than two-thirds above the national average. In 2019, the software business is expected to contribute at least BGN 150 million more in taxes compared to 2018. The projected increase in the number of employees in the field will provide nearly BGN 900 million in tax revenues to the country’s budget.

BASSCOM’s projections with a 5-year horizon are revenues to reach BGN 10.3 billion (€5.3 billion) on an annual basis and 7.6% as a share of GDP. The sector is expected to reach 60,000 people. The revenues in the treasury from taxes paid and insurances from the software business alone should exceed BGN 1.4 billion annually.

A digital future

BASSCOM says that more and more key industries are being digitized – for example, the use of artificial intelligence imaging is rapidly emerging in medicine, in the automotive sector – autonomous vehicles, in the banking sector – FinTech and others. At the same time, an increasing number of educational initiatives are coming out of the experimental cycle and reaching a mature and productive phase, and more universities are increasing admission to IT majors. A wave of pre-qualification programs, including European funding, has also started. The trend has been reversed – net migration has been declining for several years and more and more Bulgarians are returning from abroad as the software sector serves as a powerful attraction for professional realization. Decentralization is beginning to happen and more and more companies are choosing Plovdiv, Varna and Burgas to develop their business. Bulgaria has established itself permanently in the minds of many managers from Western Europe and the US as a top near-source destination. Last but not least is the investment ecosystem, which is quickly developing.

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