According to a World Bank report from February this year, Bulgaria earmarks only 0.48 percent of its gross domestic product for investment in research projects, while for the remaining EU member states the average share is 2 percent. The document also notes that exports during the past decade has increased and now accounts for around 60 per cent of GDP. It is still dominated by traditional products and only 3 percent of it is formed by high-tech products, which is far below the average for the community – 16 percent.
Bulgaria has the unique ability to run its economy through smart and sustainable development, where science, technology and innovation play a leading role, taking the best advantage of the European Union funds, said World Bank Vice President Janamitra Devan.
Opportunity is there, but the money that Europe has given to Sofia for such development remains unused. A check with the Information System on Management and Monitoring of EU Structural Instruments showed that in this respect over BGN482 million has been earmarked for Bulgaria under the priority axis Development of economy based on knowledge and innovation as part of the operational Competitiveness programme. As at May 1, contracts have been signed for a total of 1 24.54 percent of the funds agreed, but what was actually paid was 2.36 percent or just over BGN11.3 million. This is sufficiently indicative of the exact place the scientific development and research ranks in Bulgaria’s priorities. Even the draft bill on innovations developed after a year and a half of delay by the Ministry of Economy and Energy, which was released late last month for public discussion, gives little hope that any change may be expected soon.
In the seven pages of the document there are many vague definitions, but all details in the regulation framework are left to further documents to be composed by the Government and that are subordinated to the law.
For example, the state policy on innovation will be determined by the Council of Ministers. It will be governed by the Minister of Economy and Energy, who in turn will be assisted by a special board consisting of representatives of ministries and other government departments, public research organizations and universities, the six regional Development Councils on Development, financing institutions and representatives of business organizations and NGOs.
The Bulgarian Industrial Association (BIA) are convinced that the Advisory Council will have no real power because it does not include heads of departments but only their representatives. It is not acceptable that the Minister of Economy and Energy should manage the innovation policy in agriculture and food industry, in information and communication technologies, construction, environmental protection, education, health, etc. This can be done only by a dependent to the prime minister body or a special institution, says a press statement of the business organization.
Even more obscure is the question with the money for research and development of new technologies. The text envisages the creation of a Bulgarian Fund for Innovation. It will be the successor of the current National Innovation Fund (which actually has not been working since 2008 when was the last announced competition for project funding).
The Fund will be financed through a budget subsidy to be determined each year. Strangely, among the sources fall at least 25 percent of the received payments from state concessions, given that Brussels gives Sofia money for such activities that the country cannot absorb.
Indeed, options for funding of the future structure are the Cohesion and Structural Funds of the EU, but what the mechanisms and principles for their utilization will be, is not yet clear.
Representatives of the Bulgarian Industrial Association indicate another gap – in art. 5 Paragraph 1, where it is said that the state creates a favourable environment for stimulating innovation through tax, customs, regulatory and other economic, financial and social benefits and immediately the next paragraph specifies that these incentives will be considered in some other special laws.
Obviously, through such normative changes the state will not in any way encourage companies or entrepreneurs to invest in innovation. In countries like Germany, Finland and Sweden the private sector takes over 65 percent of research funding. In Bulgaria the ratio of private to public investment in the sector called research and development is 30/70.
