The outsourcing sector in Bulgaria brings almost 6% of Bulgaria’s GDP
Source：Capital Daily
From：Taiwan Trade Center, Sofia
Update Time：2023/01/08
The revenues of a total of 774 companies for outsourced services in 2021 are 4.2 billion euros, a growth of 22.5% on an annual basis, according to AIBEST data
The total revenues of companies for outsourced services in Bulgaria in 2021 increased by 22.5% to 4.22 billion euros, according to the data from the annual report of the sector association AIBEST. The growth is twice as fast as that reported in 2020. The report is based on data from 774 companies that operate primarily in the business services outsourced (BPO) and IT services outsourced (ITO) space. This year, R&D companies are also included in the report, but there are only 20 of them.
The association's forecast is that in the next three years the revenues will double and by the end of 2025 will be 8.9 billion euros, significantly ahead of the forecasts for the growth of the Bulgarian economy.
In total, in 2021, the revenues of the outsourcing companies were responsible for 5.9% of the total gross domestic product (GDP) of Bulgaria. By 2025, according to the association's forecast, this share should reach 9%.
Even more impressive is the growth in profit for 2021. The total net result of the sector rose by 47.2% to 468.4 million euros. There has also been a growth in profit margins - an average of 11.1%, which is the highest on record over the past five years - the period covered by the report.
ITO companies develop software products for business customers, unlike product companies that sell their developments to end customers. BPO companies take over business processes (call centers, support, staffing) for other companies.
"We are not a cheap destination"
On average, companies spend 3.1 million euros per year on salaries or 23.8 thousand euros per employee. The average amount of employees is significantly raised by ITO services (average 28.8 thousand euros per employee) and R&D companies (over 33 thousand euros per employee), while the lowest average values are in the outsourcing of HR services (just over 11 thousand euros per employee).
"We are not a cheap destination and we must stop advertising ourselves as such. Rather, we are a destination in which the ratio between costs and added value is one of the best on a global scale," commented Iliya Krastev, chairman, at the presentation of the report of AIBEST and CEO of A Data Pro.
Of the entire sector, the BPO business brings in 48% of the revenue, cited in the report, ITO companies 38%, and R&D 14%. More than half of the companies in the report are foreign-owned, with the most frequent investors coming from Great Britain, the United States, Germany and the Netherlands.
The industry is dominated by companies based in Sofia - a total of 81% of all those considered in the report manage their operations from the capital. Outside it, important cities are Plovdiv, Burgas, Veliko Tarnovo, Ruse, Stara Zagora, and Blagoevgrad.
Following the presentation of the report, economists and company directors held a discussion regarding the data and the state of the sector. Lachezar Bogdanov, Chief Economist of the Institute for Market Economy (IPI), warned the others that although so far the tremors in the state have bypassed the industry and it has not paid much attention to what is happening, this will soon change.
"Your sector is too big and politicians have already noticed you. This means that they will pay more attention to you when they consider where they can get money for the budget - the state cannot take from where it does not exist, it takes from where it is there is," comments Bogdanov.
Source: https://www.capital.bg/biznes/tehnologii_i_nauka/2022/11/29/4421551_autsorsing_sektorut_v_bulgariia_nosi_pochti_6_ot_bvp/