The Northwest That Is Not in Decline

There are regional clichés, such as the one that there is no business in the Northwest region. But a change for the better is happening there that is changing the status quo.

Adrian Nikolov from the Institute for Market Economics commented for the Bulgarian National Radio why it was time to change our perspective on this region. “Bulgarian economy is more and more focused on economic and trade relations with Western Europe. The Danube as a transport corridor, leading directly to the heart of Europe, can be an advantage for these regions. If there is a production in Montana, Vratsa or Vidin, the river is almost next to the factory. Romania’s proximity should also be recommended to investors. Depopulation remains a serious problem, the market is tight, but opens unexpected niches. More and more people are coming back in search of a more purposeful life.”

Elitsa Mollov, founder of the Sharan office space in Lom is an example that the Northwest has no plans to decline. Elitsa gained experience at Junior Achievement Bulgaria, and in 2018, together with her husband, she bought a building constructed in 1903 by Austrian entrepreneurs. They turned it into a business centre, a shared office space and an event hall, which are operating to their full potential. “Every time I was coming back, I was hearing that “there was no” work, “there were no” opportunities, but there are “problems” and idle people. We bought the old bank in order to restore its former glory and prestige, to turn it into a centre for business, entrepreneurship and culture. Riverside Treasury offers modern office spaces, event halls, a shared work space and a private ceremonial hall, she says. This is the only co-working space in the city, but Elitsa is looking forward to “stimulating and healthy competition”. There are active organizations in the city that are keeping the entrepreneurial spirit, as well as sustainable projects with the business sector.

Elitsa Mollov and her husband revive Lom’s business environment - Photo: personal archive

Nikolay Georgiev, Chairperson of the Causes Foundation, which promotes entrepreneurship in the region, adds that the most serious obstacle is the fact that so many labels have been put on the city. “When we say Vidin, for example, business is one of the last associations that comes to our minds. Many ideas of startup entrepreneurs are socially oriented probably because  social problems exist. But during a meeting of women entrepreneurs in Vidin, one participant told us that the people in Northwestern Bulgaria are more ingenious, and often, they have to make something out of nothing. They do not miss an opportunity, if there is any”, he explains. Causes is also partnering with many institutions with traditions in supporting entrepreneurs – chambers, business associations. The culture of looking for support is developing, although the problem with the shortage of highly qualified personnel is serious and affects everyone.

Nikolay Georgiev from Causes Foundation and his colleagues organize fairs for entrepreneurs - Photo by Causes Foundation

But more and more young specialists and entrepreneurs are coming back to Lom “where they have much lower costs, they can work remotely or develop their business ideas in fresh air, on the banks of the Danube”, Elitsa says. According to her, digitalization is a big opportunity for poor regions like this one to attract their residents again. “I tell my family and friends about the potential of the city, I invite them to see Lom for themselves, I convince business partners that here it is not worse than Velingrad, for example, when it comes to corporate events. I firmly believe that sooner or later, Lom and the region will be an attractive place for business and tourism again. In these hard times, we will find the best way to go on, just like everyone else who is trying.”

In Vratsa, Causes found Miglena Mladenova and Katerina Stafanova with their Kakalyashka Box and a company for events planning. Their business idea of marketing local crafts came as a result of the experience of Miglena as a farmer in Chelopek. “The idea for making use of some of the wool from our farm was born at a training for green innovations. I realized what a resource sheep wool was. Consumers are looking more and more for hand-made local products from natural materials. And wool has a lot of properties,” she says. The venture started in 2019, but after several bazaars and strong on-line presence, boxes with local products quickly went beyond the boundaries of Vidin. Miglena uses empathy in marketing, but this will probably not be enough in the current situation. The company reached the final of the B4B HUB project of the Generation Foundation, and Causes is part of the Inspirers entrepreneur club in Vratsa. The main topic there is what comes next after the crisis. “The situation will be detrimental for startups. A very small part of the entrepreneurial environment in the Northwest will be able to cope without government support – tax breaks, payment deferrals, reduction of administrative burdens,” she says.

Miglena Mladenova found out how to turn wool into new products - Photo by Cases Foundation

Tsvetelina Dobreva started her business in Vratsa region entirely with her own capital. With savings from working abroad, she opened an insurance office in Krivodol, and then, in Borovan village and in Vratsa. “I learned about the career opportunities in the insurance industry, I did an internship and shortly afterwards, people that I knew told me that there was no insurance office in their city. This is a niche market in small towns and cities, and despite the shrinked consumption, there are many opportunities. People were not used to being served professionally, and we quickly found our place on the market,” she says. Plati (tr. note – Pay) EOOD started 4 years ago, and Tsvetelina postponed the launch of a vehicle inspection point and a car wash in Krivodol that were intended to close the service cycle for her customers – individuals and carriers. Tsvetelina applied for funding with a project under the Rural Development Program, but it was rejected, in her opinion, because of too high requirements for startups.

Tsvetelina Dobreva finds market niches in the small town - Photo: personal archive

Eleonora Negulova, Chairperson of the National Association of Small and Medium Business, adds that the Northwest lacks an ecosystem for entrepreneurship as a whole, but business opportunities are taken by local and foreign investors. The association supports it with the BASE Entrepreneurship Program in Vratsa and Pleven. “During the Transition, a network of business support centres has not been developed, which is why small businesses are mainly running on autopilot. Entrepreneurs are taking risks, establishing themselves, and this is even more evident in this region. Small businesses work in these difficult times, but without the support of the state, it will be extremely difficult. The situation in Northwestern Bulgaria is worse because the business environment is tougher, but we address the needs for social responsibility in rural municipalities first.”

Eleonora Negulova, Chairperson of the National Association of Small and Medium Business: “In the Northwest, we address the needs for social responsibility in rural municipalities first” - Photo by Krasimir Svrakov

Tsvetelina is optimistic about having reserves to handle the situation despite the reduced consumption, but not for long. And even without these exceptional circumstances, she calls for relieved conditions and more vision for startup businesses in the rural areas. “I expect market fluctuations, but in our region, there will be new investments in the future, and their development will benefit small commercial and service businesses. Young people have great business ideas but they are not supported and funded. It’s time to make it clear that the Northwest has no intention of declining,” she concludes.