Innovation in Bulgaria: Sustained or at a standstill?

The state of innovation in Bulgaria remains stable in 2023, but this may be an indicator of stagnation, as data from the analysis of the Global Innovation Index of the Bulgarian Industrial Association (BIA) showed on Wednesday.

The Global Innovation Index measures the current state of innovation around the world," BIA explains.

For this purpose, the analysis examined a number of pillars, including infrastructure, maturity and development of the business environment, institutions and creative impact; and a total of 133 countries were included in it.

Although Bulgaria remains in 38th place for the second year in a row, BIA indicates that this actually represents a deterioration for the country due to worsening performance in various subcategories.

"In this environment of heightened realignment and a race to better position countries in global high-value-added supply chains, any year of stagnation is tantamount to lagging behind. It is a literal truth that the creation and implementation of new knowledge and the fostering of a highly educated population is the key to the prosperity and wealth of the entire society.”

Bulgaria continues to waste valuable time, which at some point it will not be able to make up," BIA writes in their analysis.

They add that among the "obstacles to the development of the innovation ecosystem" in the country are a deepening crisis at the institutional level, the lack of adequate national resources to support innovation, as well as a "deeply outdated, unreformed education system".

For instance, looking at the "Institutions” subcategory, Bulgaria lost 27 positions, falling to 83rd place this year. This is due to the deteriorating performance in terms of the efficiency of the state institutions, with Bulgaria "already performing worse than countries such as Ghana, Tanzania, Kazakhstan, Serbia and North Macedonia".

The development of the business environment, in which Bulgaria usually performs well, is no longer among its strong positions.

A deterioration in the development of the business environment is observed for the entire EU, but for Bulgaria, the deterioration has been more serious. This is directly related to both the lack of a stable government and a long-term strategy for the development of the country's economy, as well as to the lack of urgent comprehensive reforms in the country's education system," BIA explains.

The tendency for a weak "science-business" connection continues to be a reality. This deepening low innovation connectivity for the past year led the country to fall from the 38th to 55^th position. A drastic decline is observed in cluster development, with Bulgaria falling out of the top 50 and occupying the 58th position in that category.

As for business development policies for 2023, Bulgaria is in the 99th position, which represents a drop of 9 positions in a year. "If urgent measures are not taken, it can be reasonably assumed that the collapse will continue and the country may quickly find itself among the 30 least favorable countries for business development in the world," states BIA.

In the Human and Research Capital subcategory, there was a slight improvement of 4 positions to 62nd place, but the overall performance was weaker, which

confirms the trend of continued deterioration of the quality of education in the country".

"(Bulgarian) students' PISA scores continue to deteriorate, leading to the conclusion that increasing the teachers’ pay is not leading to improved student performance," the BIA said, noting that a comprehensive reform of the national education system is needed.

In the "Infrastructure" subcategory, Bulgaria climbs 6 positions to 22nd place, but with a lower overall rating. According to the analysis, the main reasons for this lie in the ICT and the energy sectors. In terms of access to high technologies, Bulgaria falls to the 51st position, which, according to experts in the Association, "shows how slowly the digital transformation is proceeding" in Bulgaria.

In the "Knowledge and technological impact" segment, Bulgaria's position compared to 2022 is improving, but the overall assessment is decreasing, which reinforces the tendency of the country's innovation development to slow down.

It is in the "Creative Impact" subcategory that Bulgaria shows its best upward performance, entering the top 30. In this area, the strongest points of the local innovation ecosystem are also found, namely the "intangible assets" indicators, where the country climbs to 22^nd position, thanks to the high score for its industrial design (12th position).

Translated by Tzvetozar Vincent Iolov