The boom of IT industry in Bulgaria is possible thanks to local managers who know what they want and how to achieve it
Do we understand the technologies that surround us? Let's do a thought experiment. Imagine a steam locomotive – a huge, massive piece of machinery, solid in its metal core, mesmerising with its smell of oil and coal. When you have a closer look, you see a complex system of wheels and pistons. Yes, the system appears very complex, but at the same time you feel that if you look at it long enough, you will discover the principles that set it into motion. Something more. The machine appears exciting, the very embodiment of the idea for movement and progress, for the human genius that has created a working whole.
Now look at your smartphone or TV, your electric car or your desktop computer. Each of these devices is by far more complex than the old-fashioned steam locomotive. But when you are looking at them do you feel the same respect to the human genius that has created them? Do you feel that you can understand them just by looking at them?
Probably not. This is not only because they look so smooth, clean and monolithic compared to the heavy steam locomotive.
This is the paradox of our times. The first people who travelled to the Moon and back did it with electronics so simple that in the 1980s they were applied in common electronic calculators. However, in the past couple of decades high technologies have become so ubiquitous that we no longer notice them. We take them for normal and even natural.
And they are still evolving – both the hardware and the software that run them. Our lives are already unimaginable without them. All sorts of software control key infrastructure, keep the air, sea and road traffic alive, connect us with our family and friends, allow us to send dozens of e-mails and DMs daily, to share our photos and videos, to create and distribute memes, to bank, order food and track the movement of the goods we bought on the Internet from the other end of the world. The IT dictates the news that we are going to consume, the movies and music we will watch and listen to, and where and when we will go on a vacation or will buy some property. They help us to train and eat better, allow us to turn on the vacuum cleaner without even being at home, to order tickets for the next year's show of our favourite music star, to pay with crypto or to invest in good old gold. The IT made if not redundant then old fashioned century-old great human inventions such as the printed book or the compass. Who uses printed maps nowadays, when each phone has a GPS navigation app?
Modern information technologies appear mysterious for their own users, but there are people who have mastered their potential, know how to create more of them and to develop them in new directions. We all know the names of the giants in this field, such as Steve Jobs, Bill Gates, Elon Musk, Mark Zuckerberg, and Sergey Brin. But they are just the top of a pyramid made of thousands upon thousands of professionals, people with ideas, visionaries, pragmatic leaders, business managers. Thanks to their work the whole industry pushes forward. They have managed to understand both the world of software and the real one, with its complex processes. They have managed to understand the links that connect the two and to build new ones. As a result, we already inhabit a hybrid environment where software managed processes such as finance, manufacture and transportation of food, medicines and strategic raw ingredients are so vital that breaking them can have heavy consequences in the real world – financial crises, famine, riots...
Bulgaria is an important part of this process. If there is an industry that in the past 20 years has developed so rapidly in this country, it would be IT in its many dimensions – from outsourced services and processes to creation of innovative products. In 2022, the country also saw its first unicorn company. It is dedicated to modernising financial services and operations.
Just like analogue machines of the past, such as the steam locomotive from this text's beginning, the software that manages these processes is created by managers with genius insight and intelligent and creative programmers. For the ordinary user the result of this work might appear as a given. But behind it is the human mind with its limitless capabilities to see and bring order in chaos, to transform the complex into something simple, to create processes, products and services that help the individual user, the companies and the economy, the public organisations and the governments.
Good IT managers are a key part in this process. In Bulgaria, in the past 20 years, a new generation of managers of big and small companies appeared that play a crucial role in the technological, business and economic processes. Thanks to these leaders' expertise, their companies create remarkable and popular services and products with application in fintech, logistics, energy, e-commerce, cybersecurity and more. Some of these organisations are local, others are representatives of international leaders – as of 2021 in Bulgaria there were over 60 global software development companies.
Even if they themselves are not programmers and their professional experience is in fields such as finance or human resources management, good IT managers in modern Bulgaria are able to see the processes in depth. They know the different products and services well and what specialists they need in their team to provide the best results for the client companies. They are deeply engaged in what they do and aim to build organisations where everyone feels valuable and valued – regardless of whether we are talking about a company with 1,000 people or with a startup with 20 employees.
This is why it is hardly a coincidence that the IT industry is one of the few in the country that has achieved something seemingly impossible – to inspire young people to return to Bulgaria and to build a career in their homeland. It even attracts professionals from abroad. They come both from former Eastern bloc countries and from big economies such as France, Germany and Italy, attracted by the high quality of living in Bulgaria. The average salaries in the sector are among the top 3 in Bulgaria. According to data by the Bulgarian Association of Software Companies (BASSCOM), announced in June 2022, the average salaries in the sector are 3 to 4 times higher than the national average. Recalculated to Bulgaria's purchasing power, this means a higher standard of living for specialists at similar positions in the UK and Germany.
According to BASSCOM, in 2021 the Bulgarian IT industry grew 20% and the turnover was 5.5 billion leva; outsourced products and services made 80% of those. The IT sector grew more than Bulgaria's GDP and in 2021 it was expected to reach 4.3%. The prognosis for 2025 is very, very impressive – the annual turnover will double to over 10 billion leva, the proportion of outsourced services and product will remain 80%. The number of the employees in the field will almost double, from the current 40,000 to over 70,000.
The perspectives for the development of the IT industry in Bulgaria are logical on the background of the sector's stellar performance during the Covid-19 pandemic. In this critical moment the IT industry demonstrated that it can provide the same quality of work and even to attract new clients and employees in times of unprecedented lockdown.
Behind these achievements of the Bulgarian IT managers stand perseverance, hard work, and overcoming a number of challenges.
The labour force remains one of the biggest hurdles. Bulgaria is located in Southeastern Europe and the EU, and this makes it an excellent nearshore destination for outsourcing of processes and services. It cannot compete with the low expenses and the large talent pools typical for off-shore destinations such as India. Bulgaria's competitive advantages are the time zone that makes work with clients both in East and West effective and convenient, the European business culture, the good connectivity and the quality of the Internet, the talents that are fluent in foreign languages, and the low taxes.
However, Bulgaria's talent pool is small. Young people continue to leave, the population is ageing and the high schools and the universities still struggle to offer education that is adequate to the needs of the market. We are not even talking about programmers – as the scope of activities connected to creation of IT products and services widens, the companies increasingly need HR, finance and many other professionals. Under these conditions each company that wants to continue growing and taking new clients and projects is facing the hard task of finding people to get the job done.
Good IT managers are aware that high salaries are not enough to stimulate young and prospective people. The truly good professionals, who are in the foundation of the organisation's success, need to feel recognised. They want to work on interesting and challenging projects. To know that they are heard by the management and that when a problem arises it will be addressed adequately. They want their ideas to be valued and to know why a certain managerial decision was taken. They want to be a part of the family not only in words, but also in reality, and to have the tranquillity and the opportunity to create products and services that matter.
Achieving this is not that easy. The IT managers need to deal with diverse tasks such as creating a good team, finding interesting and profitable projects, and talent motivation. This is why it is a small surprise that many companies opt for training their own employees. To the talents, it is an opportunity to grow and evolve within the organisation. For the companies, it is an opportunity to create new leaders and even mentors for the next generation of talents.
At the same time, good IT managers know how to make the client companies happy, to give them more and to secure their trouble-free work and increased profits.
To build a working and effective organisation with a future is a task that is hard, demanding and full of challenges. The good IT managers in Bulgaria have proven that despite these obstacles it can be done – and can secure even greater achievements in the foreseeable future.