Sofia, MarchSofia, March 25,25, 200 20033

BULGARIA, BRITAIN AND THE BULGARIA, BRITAIN AND THE LISBON AGENDA: STRATEGIES LISBON AGENDA: STRATEGIES

FOR RAISING EMPLOYMENT AND FOR RAISING EMPLOYMENT AND PRODUCTIVITYPRODUCTIVITY

THE LISBON GOAL: COMPETITIVENESS AND THE LISBON GOAL: COMPETITIVENESS AND GROWTH GROWTH

Growth Employment Productivity

THE KEY WORDS: THE KEY WORDS:

To make the EU the most competitive and dynamic knowledge-based economy in the world by the year 2010, capable of sustainable economic growth, with more and better jobs and greater social cohesion.

THE KEY MECHANISMS FOR IMPLEMENTING THE KEY MECHANISMS FOR IMPLEMENTING THE LISBON STRATEGY:THE LISBON STRATEGY: Combining short-term political initiatives and medium-term and long-term economic reforms by the Open Method of Coordination Benchmarking based on qualitative and quantitative indicators Translation of European guidelines into national and regional policies Setting of specific timetables. Actions

THE LISBON STRATEGY: DIMENSIONS OF THE LISBON STRATEGY: DIMENSIONS OF COMPETITIVENESSCOMPETITIVENESS Information Society for All European Area for Research and Innovation Completing the Single Market

CompetitionState aid regulation Services and Network Industries: Telecommunications. Utilities and Transportation

Efficient and Integrated Financial Markets Strengthening Entrepreneurship

Conditions for Start-ups Regulatory Burden SMEs Development

Social Inclusion Labor Market FlexibilityWorkplace Incentives

Sustainable development Environment Climate Change

BULGARIA – BULGARIA – BENCHMARKING THE BENCHMARKING THE

COMPETITIVENESSCOMPETITIVENESS

INFORMATION SOCIETY FOR ALLINFORMATION SOCIETY FOR ALL

Two best performing EU countries – Sweden – 56; Norway - 50 Two worst performing EU countries – Portugal – 11; Greece - 8 Two best performing accession countries – Slovenia – 27; Estonia –17Two worst performing accession countries – BULGARIA -4; Romania –3

Personal Computers, 2001 /per 100 inhabitants/

Source: International Telecommunication Union, July 2002

5650

27

1711

8 4 3

0

20

40

60

INFORMATION SOCIETY FOR ALLINFORMATION SOCIETY FOR ALL

Two best performing EU countries – Norway – 5 962; Sweden – 5 162 Two worst performing EU countries – Spain – 18 27; Greece – 1 321; Two best performing accession countries – Slovenia – 3 007; Estonia – 3 004Two worst performing accession countries – Latvia – 723; Romania – 446 , BULGARIA - 746

Internet Users, 2001 /per 10 000 inhabitants/

59625162

3007 3004

18271321

746 723446

0

1000

2000

3000

4000

5000

6000

INFORMATION SOCIETYINFORMATION SOCIETY FOR ALLFOR ALL

Two best performing EU countries – Finland – 1 707; Netherlands –1 634 Two worst performing EU countries – France – 132; Italy - 117 Two best performing accession countries –Estonia - 356; Czech Republic - 209Two worst performing accession countries – BULGARIA -33; Romania –20

Internet Hosts, Per 10 000 inhabitants, 2001

Source: International Telecommunication Union, July 2002

1707 1634

356209 132 117 33

200

500

1000

1500

2000

EUROPEAN AREA FOR RESEARCH AND INNOVATION EUROPEAN AREA FOR RESEARCH AND INNOVATION

Two best performing EU countries – Sweden – 3.76; Finland – 3.31Two worst performing EU countries – Portugal – 0.63; Greece – 0.48 EU mean – 0.67Two best performing accession countries – Slovenia – 1.47; Czech Republic – 1.27Two worst performing accession countries – BULGARIA 0.61; Latvia – 0.40

Research and Development Spending, 2000, as a% of GDP

Source: World Development Indicators 2002, WB

3.763.31

1.471.27

0.610.48 0.4

0.67

0

1

2

3

4

EUROPEAN AREA FOR RESEARCH AND INNOVATIONEUROPEAN AREA FOR RESEARCH AND INNOVATION

Two best performing EU countries –Finland – 83.31; Norway – 65.24Two worst performing EU countries – Ireland – 45.29; Portugal – 44.60 Two best performing accession countries – Slovenia – 53.34; Latvia – 50.93, Two worst performing accession countries – Czech Rep. – 26.11; Romania – 24.43BULGARIA – 42.67

Tertiary enrolment rate

83.1

65.24

50.9347.4742.6733.7

26.1124.43

0

20

40

60

80

100

EUROPEAN AREA FOR RESEARCH AND INNOVATIONEUROPEAN AREA FOR RESEARCH AND INNOVATION

Two best performing EU countries –Belgium – 5.9; Austria – 5.9Two worst performing EU countries –Norway –4.3; Portugal – 3.5 Two best performing accession countries – Czech Republic – 6; Slovak Republic – 5.9Two worst performing accession countries – Latvia – 5.1; Poland – 4.9 BULGARIA – 5.1

Quality of math and science /qualitative indicator/

6 5.9 5.95.1 4.8 4.7

4.33.5

0

1

2

3

4

5

6

EUROPEAN AREA FOR RESEARCH AND INNOVATIONEUROPEAN AREA FOR RESEARCH AND INNOVATION

Two best performing EU countries –Finland – 5.9; Sweden – 5.4Two worst performing EU countries – Portugal – 3.4; Italy – 3.4 Two best performing accession countries – Czech Republic – 4.1; Hungary – 3.9Two worst performing accession countries – Lithuania – 3.1 BULGARIA – 2.5

University/industry research collaboration /qualitative indicator/

5.9 5.4

4.1 3.9 3.4 3.43.1

2.5

0

1

2

3

4

5

6

COMPLETING THE SINGLE MARKET COMPLETING THE SINGLE MARKET

Two best performing EU countries – Germany – 5.7; United Kingdom – 5.7Two worst performing EU countries – France – 4.7; Portugal – 4.5 Two best performing accession countries – Hungary –5.2; Czech Republic –5.1Two worst performing accession countries –Slovak Republic – 4.4; Romania – 3.7 BULGARIA – 4.4

Intensity of local competition /qualitative indicator/

5.7 5.7 5.2 5.1 4.7 4.5 4.4 4.4

3.7

0

1

2

3

4

5

6

COMPLETING THE SINGLE MARKETCOMPLETING THE SINGLE MARKET

Two best performing EU countries –Finland – 4.6; Ireland – 4.6Two worst performing EU countries – Greece – 3.0; Germany – 2.5 Two best performing accession countries – Hungary – 4.1; Czech Republic – 3.8Two worst performing accession countries –BULGARIA – 2.5; Romania – 1.7

Extent of distortive government subsidies /qualitative indicator/

Source: GCR, 2002-2003

4.6 4.64.1

3.83

2.5 2.51.7

0

1

2

3

4

5

6

COMPLETING THE SINGLE MARKETCOMPLETING THE SINGLE MARKETTELECOMMUNICATIONS TELECOMMUNICATIONS

Two best performing EU countries –Sweden – 73.91; Denmark – 72.33Two worst performing EU countries –Spain – 43.11; Portugal – 42.68 Two best performing accession countries – Slovenia – 40.09; Czech Republic – 37.43Two worst performing accession countries – Slovak Republic – 28.80; Romania – 18.28 BULGARIA – 35.94

Telephone lines, 2001 Per 100 inhabitants

73.9172.33

43.1142.68

40.0937.43

35.9428.8

18.28

0

20

40

60

80

100

EFFICIENT AND INTEGRATED FINANCIAL MARKETSEFFICIENT AND INTEGRATED FINANCIAL MARKETS

Two best performing EU countries –UK – 6.8; Netherlands – 6.0Two worst performing EU countries – Austria – 4.2; Greece – 3.9Two best performing accession countries – Estonia – 4.8; Hungary – 4.5Two worst performing accession countries – Romania –2.6; BULGARIA – 2.1

Financial market sophistication /qualitative indicator/

Source: GCR, 2002-2003

6.86

4.8 4.5 4.23.9

2.62.1

0

2

4

6

8

10

EFFICIENT AND INTEGRATED FINANCIAL MARKETSEFFICIENT AND INTEGRATED FINANCIAL MARKETS

Two best performing EU countries –UK – 5.5; Finland – 5.2Two worst performing EU countries – Italy – 3.8; Greece – 3.3Two best performing accession countries – Estonia – 3.8; Hungary –Lithuania – 3.7Two worst performing accession countries –BULGARIA – 2.5; Romania – 2.5

Venture Capital availability /qualitative indicator/

Source: GCR, 2002-2003

5.55.2

3.8 3.8 3.73.3

2.5 2.5

0

2

4

6

8

10

STRENGTHENING ENTREPRENEURSHIPSTRENGTHENING ENTREPRENEURSHIPCONDITIONS FOR START-UPS CONDITIONS FOR START-UPS

Two best performing EU countries – Denmark – 3; Ireland - 3Two worst performing EU countries – Italy – 13; Greece - 16 Two best performing accession countries – Latvia – 7; Slovenia - 9Two worst performing accession countries – Poland – 11; Slovak Republic – 11 BULGARIA – 10.0

Number of procedures to start a business, 2002

3 3

79

10 11 1113

16

0

5

10

15

20

STRENGTHENING ENTREPRENEURSHIPSTRENGTHENING ENTREPRENEURSHIPCONDITIONS FOR START-UPSCONDITIONS FOR START-UPS

Two best performing EU countries – Denmark – 3; United Kingdom - 5Two worst performing EU countries – Italy – 64; Netherlands 72 Two best performing accession countries – Latvia – 11; BULGARIA - 30Two worst performing accession countries –Hungary - 66; Czech Republic - 89

Number of days to start a business, 2002

Source: Doing business, World Bank

3 511

30

64 66 72

89

0

20

40

60

80

100

STRENGTHENING ENTREPRENEURSHIPSTRENGTHENING ENTREPRENEURSHIPCONDITIONS FOR START-UPSCONDITIONS FOR START-UPS

Two best performing EU countries – Sweden – 0.70; Finland – 1.01Two worst performing EU countries – Italy –22.50; Greece - 55Two best performing accession countries – Lithuania – 4.89; Czech Republic – 5.30Two worst performing accession countries – Romania – 32.54; Hungary – 66.72 BULGARIA – 7.92

Cost of starting new business relative to GDP per capita, 2002

0.7 1.014.89 5.37.92

22.532.54

5566.72

0

20

40

60

80

100

SOCIAL INCLUSIONSOCIAL INCLUSION

Two best performing EU countries –Netherlands – 3.3; Portugal – 3.3Two worst performing EU countries – Sweden – 2.0; Italy – 1.8 Two best performing accession countries – Romania – 7; Czech Republic – 5.5Two worst performing accession countries – Lithuania – 3.3; Slovenia – 2.3 BULGARIA – 4.0

Labor Market Flexibility /qualitative indicator/

7

5.5

43.3 3.3 3.3

2.32

1.8

0

2

4

6

8

10

SOCIAL INCLUSIONSOCIAL INCLUSION

Two best performing EU countries –Finland – 5.7; UK – 5.6Two worst performing EU countries – Italy – 4.0; Greece – 3.7 Two best performing accession countries – Hungary – 5.2; Latvia – 5.0Two worst performing accession countries – Slovak Republic – 4.2; BULGARIA – 3.4

Workplace incentives /qualitative indicator/

Source: GCR, 2002-2003

5.75.6 5.2 5 4.2

4 3.73.4

0

2

4

6

8

10

BULGARIA – NATIONAL COMPETITIVENESSBULGARIA – NATIONAL COMPETITIVENESS

BALANCE SHEETBALANCE SHEET

Tertiary enrolment Quality of math and science education Quality of scientists and engineers Telephone lines

Irregular payments Number of days to start a business Total costs of starting a business

Flexibility of wage determination Pay and productivity

Corporate income tax rate

NOTABLE COMPETITIVE NOTABLE COMPETITIVE ADVANTAGES ADVANTAGES

NOTABLE COMPETITIVE NOTABLE COMPETITIVE DISADVANTAGESDISADVANTAGES

University/industry research collaboration

FDI and technology transfer Firm level technology absorption Personal computers Brain drain

Property rights Judicial independence

Financial market sophistication Ease of access to credit Investment rate Extend of marketing Extent of staff training

NATIONAL POLICIESNATIONAL POLICIES

INNOVATIONINNOVATION

Development of the HiTech sector – declared as a priority in the economic policy Project for “Innovation Strategy for Bulgaria” E-Government Institutions

ICT Development Agency Coordinating Center for Information,

Communication and Management Technology

Microsoft Products in Bulgarian Language Business incubators etc.

STRENGTHENING ENTREPRENEURSHIP. STRENGTHENING ENTREPRENEURSHIP. REGULATORY FRAMEWORKREGULATORY FRAMEWORK

Legislative and Other Initiatives for Facilitating BusinessLegislative and Other Initiatives for Facilitating Business

Reducing administrative barriers and licensing regimes for starting new business - 74 – abolished; 120 – alleviated; Draft law on Legislative Acts and Administrative Procedure

Improvement of Public Procurement Orders Regulation - Act for amendments to the Public Procurement Orders Act - adopted

Regulation of Bankruptcy Procedures and Procedures for Collecting Receivables

Reform of the Judiciary System - Strategy and Program; Judiciary System Act

Combating Corruption – Strategy and Program, Commission for combating corruption

Administrative Reform and Support for Business - Strategy for Public Administration: Modernization from Accession to Integration; One stop Shop

Improvement of the Protection of Competition - Act on amendments to the Act on Protection of Competition

More Transparency on State Aid - State Aid Act Strategy and Program for SMEs development Telecommunication Strategy – updated

CONCLUSION:CONCLUSION:

Legislative amendments and administrative changes - expected to: Further harmonise Bulgaria’s competition policies with those

of the EU Strengthen market behaviour of economic agents Improve business climate Increase inflow of foreign direct investment

ACTIONSACTIONS

SUPPORTIVE ROLE OF GOVERNMENTSUPPORTIVE ROLE OF GOVERNMENT

Structuring Government policy within the global trends Ensuring a stable macro-economic environment Improving business climate. Promoting competition Stimulating new companies and new industries Stimulating companies to invest in R&D Encouraging business to collaborate more effectively

PROPOSED ACTIONSPROPOSED ACTIONS

Proactive competitiveness promotion policy Strategy for increasing competitiveness Program /action plan for increasing competitiveness/ Competitiveness Council – developing and monitoring the overall competitiveness policy Analyzing the regional competitiveness Proactive industrial policy – regional and sector approach Creative dialogue engaging government and business groups. Cluster development