EMCC European Monitoring Centre on Change

Bulgaria: ERM Comparative Analytical Report on ‘Public policy and support for restructuring in SMEs’

  • Observatory: EMCC
  • Topic:
  • Published on: 14 May 2013

Nadezhda Daskalova

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The promotion of SMEs has been on (and off) the public policy agenda for the last 15 years. However, the restructuring and specific challenges for SMEs in restructuring processes are rarely an issue of policy debates. The main policy focus is on growth and increasing competitiveness of SMEs. This is due to the lack of a comprehensive and structured framework for restructuring, its types and phases are not clearly distinguished. A variety of public instruments supporting SMEs’ growth and development are available in Bulgaria. The global economic and financial crisis triggered the implementation of some additional support instruments in order to decrease unemployment and foster growth, namely under the ESF funded operational programmes.


Part 1: Overall policy context

1.1. Has there been public or policy debate on the specific challenges for SMEs and/or their employees in restructuring before the global recession of 2008/09? Please specify, for example:• If so, since when (e.g. up to 3 years before, 3-10 years before, longer), at which level (national, regional, sectoral, all of them) and in which form (‘real’ policy debate mirrored in policy documents or rather public debate mirrored in media, or both)?• Which policy areas (for example, SME policy, entrepreneurship policy, employment policy, social policy, regional policy etc.) were involved? Particularly: Does SME policy specifically deal with restructuring? Does ‘restructuring policy’ specifically deal with SME issues?• Did the public and policy discussions deal with restructuring as such or were specific types or phases of restructuring covered?• Which were the issues/contents that have been discussed? Which specific characteristics of SMEs in restructuring were considered in this context? Was the specific case of SMEs as subcontractors a topic for discussions?• Did the discussions rather deal with the enterprise perspective or with the employee perspective or both?

Recently, Bulgaria has a vibrant SME sector. SMEs in Bulgaria exceeded 300,000 in 2009 and represent more than 99% of the non-financial enterprises with 89% of them being micro enterprises. SMEs’ contribution to the GDP is 31%. 44% of all employed in Bulgaria work in SMEs.

While SMEs are considered the backbone of the Bulgarian economy and a driving force of job creation, the issues related to SME restructuring, resulting in job losses or job creation are rarely an issue of policy and public debates. Governments are focused on consolidating macroeconomic stabilisation and the restructuring and privatisation of large companies.

The policy debates on SMEs at national level are influenced by the transition to a market economy and the EU accession and have been on (and off) the public policy agenda in the last decade. In the first years of transition towards a market economy in Bulgaria practically there was no state policy to encourage the development of SMEs. Random activities to this end have been implemented throughout the years, but they were not subordinated to an overall strategy and their efficiency was very low. The decade since late 1990s was marked by the negotiation process for EU membership and the harmonisation with the acquis communautaire. The policy debates were affected by these processes and were related to the development of the legal and institutional framework for SMEs’ promotion.

The Small and Medium-Sized Enterprises Act (SMEA) was passed in 1999, that is ten years after the beginning of transition with view to regulating the public relations concerning the implementation of the state policy of encouragement of the SME creation and development. The Act was since than amended several times in line with the Community SME legislation (for example, European Charter for Small Enterprises which was signed by Bulgaria and Small Business Act).

The SMEA (2004 amendments) provides for two major groups of measures for SME promotion which focused the policy debates:

  • encouraging SME creation through: provision of appropriate conditions for access to capital, incl. provision of financing, providing loan guarantees, development of projects;
  • promotion of development and increase of SME competitiveness through: implementation of projects aiming to introduce new technology and innovation and increasing productivity.

The National Strategy for SME Promotion (2002-2006) seeks to create a SME friendly environment for the development of a competitive SME sector by establishment of a favourable institutional, regulatory, administrative and financial environment. The strategic objective of the new National Strategy 2007-2013 is to increase the effective use of the SMEs’ potential. The priority areas that triggered the public and policy debates include:

  • entrepreneurial education and increasing the entrepreneurship and entrepreneurial skills
  • improving business environment
  • facilitating access to financing
  • competitiveness and innovations
  • development of cluster structures
  • improving the access to the single and external markets
  • intellectual property protection

In 2004, the Bulgarian Small and Medium Enterprises Promotion Agency (BSMEPA) at the Ministry of Economy was set up. BSMEPA carries a responsibility for implementation of the national policy in the field of SMEs and provides:

  • information and consulting services,
  • support to innovative projects,
  • assistance in growing and internationalisation,
  • managers’ training and transfer of experience.

The Annual Report on the Condition and Development of SMEs in Bulgaria provides a review of the SMEs’ development and identies the areas requiring renewed policy focus.

Restructuring, in particular the privatisation, is inseparable part of the changes in the period of transition. However, neither the SME policy specifically deals with restructuring, nor the ‘restructuring policy’ specifically deals with SME issues. Furthermore, in the country there is no comprehensive and structured framework for restructuring, its types and phases are not clearly distinguished. Anticipating and managing change are concepts that are not very popular and that are not subject of public debates. In the policy documents the concepts of anticipation and management of restructuring have not even been mentioned.

The policy and instruments related to the SMEs’ promotion consider such SME characteristics as low productivity and outdated technologies, lack of skills and expertise, more limited access to information in different areas, lack of finance and more limited access to financing, etc.

It should be noted that most of the SME support policies and measures are rather enterprise centered and do not consider the employee perspective completely, leaving the issues of job creation and increasing workers’ employability to the labour market policy. While the labour market policy does not especialy target SMEs’ restructuring, it provides for some measures both for promotion of entrepreneurship and employment in micro firms. The existing economic policies and measures were aimed at fostering growth and increasing the competitiveness of all enterprises, including SMEs, as a tool for increasing the overall competitiveness of the Bulgarian economy and protecting them from bankruptcy rather than creating additional jobs.

1.2. Did the global economic and financial crisis of 2008/09 cause any change in focus of the above (for example, increased/decreased focus on SMEs and their employees in restructuring, change in policy areas or issues covered)?

Recently, there are growing concerns about the adverse impact of the crisis on SMEs, expressed by policymakers, experts, and non-governmental organisations in relation to:

  • • weaknesses and vulnerability of the SME sector;
  • • declining exports and diminished investment;
  • • liquidity problems and inability to serve debts;
  • • employment effects in SMEs;
  • • need for support of the SME sector.

Since 2008, in the face of the financial recession followed by a growing number of bankruptcies and decreasing employment in the country, when designing the support instruments, the most important issues seem to include, on the one hand, reduction of administrative burdens for the businesses in general, on the other hand, providing financial assistance for SMEs. In the political debate, a lot of attention is devoted also to the issues of stimulation of exports, taxation, social insurance contribution policy and efficiency of SME support policy.

New initiatives and programmes are launched in an attempt to anticipate and prevent further downturn due to the economic crisis. The policy focus was on facilitating start-ups and sustaining the businesses, increasing possibilities for financial support through new support mechanisms and improvement of administrative services, including e-government. Limiting administrative and regulative burden on business as whole, including SMEs, is a focus also of the Programme for Better Regulation 2010-2013.

However, in times of crisis and austerity policy, European funds are the major source for supporting SMEs and employees laid off due to the crisis. To this end special programmes are implemented under the operational programmes Human resource development (OPHRD), Competitiveness, Rural development. Measures for development of entrepreneurship and increasing employability of the employed and unemployed through greater possibilities for training and support for business start-ups are also envisaged in the annual National Action Plans for Employment.

1.3. Are social partners or employers’ and employees’ organisations involved in public and policy debate on restructuring in SMEs?• If so, which (types of) organisations and at which levels?• What are their opinions, perspectives, recommendations?• Did they succeed in convincing governments or public authorities at various levels of their viewpoints?

As already said public and policy debates on restructuring of SMEs are not common for Bulgaria. However, the policies for SMEs’ development are often focus of debates with the social partners’ participation.

The social partners are involved in the discussions on SME policy and legislation (strategy and laws) through the participation in the Council for Public Consultations. They are also involved in the elaboration of the employment policy through the participation in the National Council for Tripartite Cooperation (NCTC) and other tripartite bodies in the field of labour market, education and training and participate in design of the policies as far as the SMEs are concerned. Their participation in discussions on issues of different sectors and branches is also active through the established social partnership bodies at this level.

However, while the employers’ organisations are more concerned with the enterprise policy thought the Council for Economic Growth, the trade unions are more involved in the labour market policies, realising projects for employees laid-off during restructuring. The six representative employers’ organisations as representatives of the interests of employers actively participate in the policy debates and design of sectoral strategies for SMEs’ development. They also provide services and assistance to SMEs and particularly to start-ups, support and promote the interests of their members in restructuring, etc.

Furthermore, employers’ organisations and unions cooperate with the regional development agencies (RDAs) and with the regional/municipal branches of the National Employment Agency in the design of the policy and restructuring instruments at regional level. The Bulgarian Association of Regional Development Agencies and Business Centres (BARDA) was created in 1997 and now consists of 33 agencies and business centres for regional economic development. BARDA is the only decentralised non-government umbrella organisation of independent RDAs and business centres in Bulgaria whose activities are focused mainly on the development of the regional economies and SMEs. BARDA member agencies gather together representatives of local government, chambers of commerce, branch unions, local business associations, vocational training institutions, academia, banks, and private companies.

In 2009, the social partners and civil society representatives in the Economic and Social Council of Bulgaria discussed possible strategies to cope with the challenges of the current crisis and paid special attention to the challenges the SMEs face.

The social partnership was intensified in early 2010 in the framework of the NCTC. The NCTC negotiations ended in an agreement on the anti-crisis package containing 59 measures, most of them proposed by the social partners. The most important proposals include: introducing a set of measures funded under the OPHRD aimed at preserving employment in companies experiencing difficulties, including the introduction of flexible working hours and specific unpaid leave for economic reasons; also providing additional funds for subsidised employment under the National Action Plan for Employment; implementation of joint projects of the social partners, including related to support in case of mass redundancies. Part of the measures agreed was in support of SMEs.

Social partners are also members of the monitoring committees of the operational programmes and participate in all stages of OP implementation. They organise training for development of entrepreneurialship for employed and unemployed and support the SME programmes and projects under the OP Competitiveness, which is designed mainly to suport SMEs’ development, including innovation, support services, etc.

Part 2: Support instruments

2.1. Please provide an overall assessment about how accessible and suitable public and social partner based restructuring support for companies in general are for SMEs or their employees.• Do SMEs and/or their employees generally have access to the available instruments and are these suitable for their specific needs in restructuring?• Are there specific (types of) instruments (for example, targeting specific types or phases of restructuring, offered at specific administrative levels) that are more/less accessible and suitable for SMEs and/or their employees that for larger firms? If so, why?

In the political debate, a lot of attention is devoted to the issue of public support instruments for SMEs, since they comprise more than 90% of all active enterprises in the country. Most of existing instruments that support the enterprise restructuring are accessible and suitable for SMEs and their employees. Besides, a variety of public based instruments specially supporting SMEs’ growth and development are available in Bulgaria, namely at national and regional level. The measures dealing with negative consequences of restructuring for SMEs are not well developed. However, there are some measures and programmes especially targeting the employees laid off due to restructuring (e.g., training, support for business start-ups, etc.)

2.2. Do there exist specific public or social partner based support instruments explicitly targeting at SMEs and/or their employees in restructuring? Please specify, for example:• If so, by whom are they offered (public vs. social partners/employers’/employees’ organisations) and at which administrative levels (national, regional)?• Are the activities of different support service providers coordinated? If so, how and how well does this work?• Which phases of restructuring do they target?• Which types of restructuring do they target?• Do they target SMEs in general, or specific size classes, sectors, regions, legal forms, roles (for example, as subcontractors) etc.? Do they target employees of SMEs in restructuring?• What type of support do they provide? What specific challenges for SMEs in restructuring do they address?• Is there some information about how well they are known among SMEs and their advisors and about how they are generally assessed by the SME sector? What are their strengths and weaknesses? Are there recommendations for improvement?

The National Strategic Reference Framework identifies the SME sector as a priority for economic development and defines main areas of interventions – support for increasing the efficiency of enterprises and promoting a supportive business environment, access to finance and promotion of Bulgarian products. These are reflected as priorities and interventions in OP ‘Competitiveness’.

The economic crisis has hindered further SMEs’ access to finance and posed considerable difficulties for enterprises development. In the framework of instruments supporting anticipation of change several schemes have been launched to foster companies’ liquidity, business expansion and technological modernisation.

Below some of the most recent instruments are presented.

In 2008, the Bulgarian Development Bank was established as a successor of the state-owned Encouragement Bank to support the development of the Bulgarian economy by supporting the implementation of the government economic policy related to SMEs. The Bulgarian Development Bank is the only state-owned financial institution in Bulgaria established with the special purpose to provide long-term funding to Bulgarian SME.

The bank group comprises: Bulgarian Development Bank ( BDB), National Guarantee Fund (NGF), Capital Investment Fund (CIF) and JOBS Micro Financing Institution set to fund micro-enterprises, including start-ups.

Presently, most of the commercial banks and foreign branches active in Bulgaria have SME programmes (27 out of 33) and offer financial instruments designed particularly for SMEs. Innovative financial instruments for Bulgarian SMEs offered by some banks consist of various loan schemes considered with the funding and implementation mechanisms of the projects financed by the EU Structural funds.

The purpose of establishing a NGF is to facilitate access and improve terms of loans for micro and SMEs by providing guarantees to the commercial banks for their loans. CIF aims to support the development of Bulgarian SMEs with a proved potential for development by providing venture capital.

Since 2009, the BDB ensured financing or credit guarantees to 4,280 SMEs, the NGF supported 1,911 SMEs and the Jobs MFI provided credits for 1,721 SMEs. The credit lines are part of the governmental package called ‘Market Flexibility’, intended to minimise the global financial crisis impact over the Bulgarian economy.

Further support to SMEs is provided under the Joint European Resources for Micro to Medium Enterprises (JEREMIE) initiative, which offers EU member states the opportunity to use part of their EU Structural Funds to finance SMEs in a flexible and innovative way through their national or regional Managing Authorities. In Bulgaria, the JEREMIE Holding Fund (2010) is financed from the European Regional Development Fund and cofinanced at 15% by the State Budget within the framework of the OP Competitiveness 2007 – 2013. The EIF has signed 5 guarantee agreements with CIBANK, ProCredit Bank, Raiffeisenbank, UniCredit Bulbank and United Bulgarian Bank under the JEREMIE initiative, allowing them to provide up to € 400 million of new loans to Bulgarian SMEs. Following the agreements, the banks will offer financing at preferential conditions in the period 2012 -2015 to over 3,400 SMEs looking to start-up or expand their businesses, and helping to increase the competitiveness of the Bulgarian economy.. Social partners have been involved in the information campaign presenting the JEREMIE. The currently applied financial instruments for improving the SMEs’ access to finance: Seed Venture, Growth, Mezzanine and Guarantee Funds. JEREMIE Bulgaria EAD will use these instruments through a mix of public support and private investment in order to contribute to SMEs’ financing covering all stages of the enterprises’ life-cycle.

The issue of improving the competitiveness of Bulgarian SMEs gets a very important meaning under the conditions of full EU membership. Along with the overall improvement of the business environment, the main factors which would improve the competitiveness of Bulgarian enterprises are associated with promotion of innovations, creation of networks and clusters, more active participation in foreign trade and others. These are areas where in the last years serious measures have been taken by the government. Grant schemes for the modernisation and technological upgrade of SMEs and support of innovation in SMEs, R&D support services, Hi-technology business incubators aimed at raising the ability of Bulgarian SMEs to cope with the competitive pressure of the EU market. The main project activities included provision of consultancy services for SMEs and implementation of a technology grant scheme for obtaining equipment. Three main R&D funding mechanisms/programmes are available for SMEs in Bulgaria:

  • Operational Programme Competitiveness (OPC)
  • National Science Fund (NSF)
  • National Innovation Fund (NIF)

Another measure supporting SMEs’ investments activities is the project 'Promoting the internationalisation of SMEs' (2010-2013) which is implemented by the BSMEPA. It aims at strengthening and expanding the presence of Bulgarian companies at European and world markets and the effective use of the advantages of the single European market. A national export internet portal has been established.

External financial resources for SMEs from venture capital funds and business angels are already available in Bulgaria but still are rarely used by SMEs. These financial instruments are targeted at innovative business ideas, risky projects, and start-up companies with high growth potential. The Bulgarian Business Angels Network (BBAN) was established in 2007. Business angels can provide ‘informal venture capital’ and advice and mentoring making important contributions to SMEs’ development. Business Angels’ Network provides matching services to put potential investors in touch with SMEs. The network comprises private investors interested in doing business in Bulgaria.

A variety of instruments aiming to provide training and information and consultancy services to entrepreneurs and SMEs are also developed in the country. In this respect business incubators play a special role, established in the framework of two successful projects: The Employment Through Business Support Project (JOBS) run in 2000-2009 by the Ministry of Labour and Social Policy, with UNDP support, provided support to SMEs in regions with high unemployment by creating opportunities for new jobs through business centres, business incubators and business facilities, for example internet, IT services, consultancies, etc. that operate in the municipality to encourage the creation of new companies (micro, small or medium enterprises) and self-employment; as well as to support their functioning by technical and financial assistance. According to the evaluation report as of December 2009, , there is a network of 42 business centres; two business centres for information and communication; ten business incubators; 17 windows offices, placed in 60 municipalities. The total number of of sustainable long-term jobs created / maintained was 37,700 and a total of 26,079 enterprises were created or facilitated (11.8% of all SMEs in the country). Other results include: 60,900 people trained, 194,100 business services provided to local companies, 2,174 micro, small and family businesses approved to access financial leasing, 426 companies approved to use grants totaling over USD 3.3 million.

The activities supported by the project are further developed in the framework of the OP Human Resource Development and OP Competitiveness. JOBS Micro Financing Institution was set up to the Bulgarian Development Bank supporting business start ups.

The second successful project is the Programme Active Labour Market Services (ALMS), cofunded by the World Bank. Its aim is: to promote entrepreneurship in regions with high and sustainable unemployment and poverty; to encourage job openings; to support the growth and stability of micro and small enterprises (BG1108031Q, BG1010011Q).

However, Bulgaria lags considerably behind most EU member states in terms of development of business services, stemming from the limited access to, poor dissemination of and poor delivery quality of this type of services. On the other hand, the attitude of the firms towards private consultants in Bulgaria tends to be cautious. The most frequently cited reasons by the respondents in a survey of Vitosha Research are the low quality of the offered private services and their high price.

In order to improve the business environment and ease the administrative regulations the Government adopted the ‘Programme for better regulation in Bulgaria 2010 -2013’. Among the most important changes in Bulgaria in the last years are the introduction of the flat income and corporate tax at 10%, setting up the starting capital for registration of company at € 1, starting the electronic commercial register, etc. which is benefitial also for SMEs and symplifies the administrative environment for SMEs.

While the policy towards SMEs is mostly enterprise centred, the issues related to employees in restructuring are tackled with policies and instruments provided by the OPHRD and the National Action Plan for Employment.

The OPHRD supports actions for improving of the quality of the labour force and equipping potential employees with adequate skills and qualifications that are adjusted to the needs of enterprises. Therefore, the implementation of the OPHRD is supporting and complementing the aims of the OP Competitiveness by facilitating the supply of well prepared, skilful and creative employees to the companies. This will assist the development and market expansion of the enterprises. On the other hand, the OP Competitiveness supports improving working conditions and quality of jobs (due to technological changes promoted), strengthens the demand for workers and will support maintaining the jobs created (due to support for enterprise development).

Since 2008, the policy focus shifted to training and promotion of entrepreneurial skills, considered as part of the flexible labour market options and a possibility to preserve and increase employment against the background of shrinking labour demand. Part of the activities is implemented under OPHRD due to restricted budget spending on ALMP. Training for entrepreneurship and different instruments supporting starting a business are part of the anti-crisis measures. Improving workers’ skills and adaptability is a priority. Vouchers for training in the framework of the OPHRD are also an option for training for starting an own business or for increasing the employability of workers dismissed due to restructuring or under the treat of dismissal. There are series of instruments and measures in this respect, for example, ‘Qualification services and training of employed persons’ - training for increasing productivity and creation of conditions for sustainable employment; ‘Own business – change of occupation’ - provision of motivational and vocational training, training and individual consultations for starting own business - for workers dismissed due to restructuring (tobacco workers, teachers, metal workers); programme ‘Encouragement of starting up projects for own business development’ - through provision of training and services and grants for: start-up of own enterprise; training of the hired personnel; purchase of equipment and materials; carrying out repairs; remuneration of the self-employed and the personnel haired (BG1108031Q, BG1010011Q)

However, the surveys reveal that the SME management and employees are not well informed about the different policy measures and instruments. There is little knowledge of the European programmes and the opportunities they offer, low capacity for participation in tenders as well as lack of finances for collateral and skills for development and management of projects.

Part 3: Good Practice

  • Name of the instrument in national language and English:

Инициатива за развитие на клъстерите (Clusters development initiative)

  • Justification for selecting this measure as Good Practice:

This instrument is selected due to its potential for SMEs’ growth and employment and positive feedback and results achieved by some of the clusters established in mid 2000s. More recently, the government and SMEs have paid increasing attention to the potential of cluster initiatives to bring about anti-crisis effects. Clusters can generate employment, increase competitiveness and opportunities for SMEs to outstand global competition and become drivers of broad-based local and sector economic development.

  • Date of launch of the instrument and end date (if applicable):

2004 - 2013

Two cluster grant programmes of the Ministry of Economy and Energy (MEE) have been financed under PHARE Programme: Introduction of cluster approach and establishment of a pilot cluster model 2005 - 2006 and Initiatives for cluster development 2007 – 2008. In 2011, the initiative continues to develop under the Operational Programme 2007-2013 Development of the Competitiveness of the Bulgarian Economy - grant scheme ‘Support for cluster development in Bulgaria’.

  • Initiator/administrator (organisation):

The initiative to establish and develop clusters was proposed by the representative employer organisations and was launched in 2004 at a decision of the Council for Economic Growth. MEE administered its implementation.

  • Other involved actors and their roles:

PHARE Implementing Agency, Bulgarian Small and Medium Enterprises Promotion Agency (BSMEPA) - intermediate body, social partners - members of the OP Competitiveness Monitoring committee, leaders of the clusters – establishment and overall management, employers organisations, notably the Bulgarian Industrial Association - organisational and methodological assistance.

  • Source of funding:

National, PHARE programme, European Regional Development Fund

  • Target group/eligibility/coverage:

Under the PHARE only SMEs, business associations, research and training institutes, municipalities. Under the OP Competitiveness – all enterprises

  • Phase of restructuring targeted:


  • Type of restructuring targeted:

Business expansion, territorial/sector coordination, fostering innovation and competitiveness, internationalisation and new markets

  • Purpose/content/characteristics/description of services provided:

The aim of this programme is collaboration between companies and building of 'clusters' in support of SMEs’ growth and competitiveness. The clusters consist of SMEs, research institutions, NGOs. The support includes consultancy, investment, training, research and development. The support for the overall cluster operation related to the cluster management will guarantee the sustainability and viability of the cluster itself through enhanced efficiency, good governance and access to new markets. Furthermore, the support provided to the individual participants in the cluster will reduce production costs, promote innovation and good practices and thus contribute to the overall competitiveness of the cluster. Typical cluster activities include: coordinating export initiatives; training in management; improving marketing; building an innovation network for R&D; development and promotion of a trademark; establishing networks (information, training, exchange of technology, staff, skills, etc.).

  • Outcome of the instrument (e.g. number of beneficiaries, effects):

The first PHARE project ended successfully in 2006 with the development of a draft National Cluster Development Strategy 2006-2013 and Action Plan, consultancy and investment support to two pilot clusters. Under the PHARE-2 project 16 clusters were supported. Under the OP Competitiveness at present 8 clusters are funded.

Recently, clusters and clusters initiatives are 42, most of them of SMEs. Association of Business Clusters in Bulgaria (ABC) was established in 2009.

Not all the clusters are however characterised by the same dynamism or indeed by the same economic success. Successful cluster initiatives last beyond the project lifespan (e.g., ICT Cluster, Bulgarian Furniture Cluster, Maritime Cluster, etc.).

  • Strengths/success factors of the measure:

Cluster members were able to develop a common identity and establish trust among businesses and individuals who otherwise competed in the same market. This allows synergies and partnerships to develop and increases the competitiveness of companies involved beyond the potential of individual enterprises, to develop new sources of competitive advantage through active collaboration. When a cluster reaches a high level of competitive success and possibilities of expansion, existing firms can invest in new technologies and employ new workers, new firms enter into the market.

  • Weaknesses/bottlenecks of the measure:
    • Lack of cluster culture and awareness among SMEs
    • SME management typically is good in technologies but is lacking business/market oriented knowledge and skills
    • High administrative load and red tape hindering the cluster activities and participation in projects
    • Lack of finances and expertise
    • Unrealistic expectations for fast success
  • Was the instrument formally monitored/evaluated? If so, please specify (by whom, how, what were the finding and how were the findings used etc.)

Monitoring is realised in the framework of the funding programmes. However, there were very little tangible data about the revenues, employment, and exports of firms in the sectors that was directly affected by the cluster process.

  • Weblink:

PHARE projects on clusters http://www.iaphare.org/bg/project/project_category.php?id=514&t=categories&cid=1827


Competitiveness Operational Programme 2007-2013 - grant scheme ‘Support for cluster development in Bulgaria’. Available at:


  • Information sources used for filling this section:

Bulgaria: Study case on the transferability of the clustering experiences The Bulgarian experience in cluster development and recent cluster initiatives in the intermodal transport and logistics sector in Bulgaria. Available at:


Bulgarian ICT Clusters. Available at: http://ictcluster.bg/en/bulgarian-ict-clusters/

Bulgarian furniture cluster - a good practice. Available at:


Initiatives for cluster development - Phase II. Available at: http://www.iaphare.org/bg/project/project.php?id=3216 and


Introduction of Cluster Approach and Establishing of a Pilot Cluster Model. National strategy for cluster development, Consultation Draft: March 2006. Available at:


ICT clustering efforts in Sofia. Available at:


Marine cluster Bulgaria. Available at: www.marinecluster.com

Mike Ducker Bulgaria ICT Cluster Case Study June 2008. Available at:



Until the end of the 1990s most of the public policies and support instruments focused on the restructuring and privatisation of the big state-owned enterprises. At the beginning of the new century, public support began to be redirected towards promotion of and support for SMEs, especially micro and small enterprises. An important turning point was the establishment of BSMEPA, which, as a government agency, implements programmes supporting the SME sector. The current shape of the policy and public support has been influenced also by the EU accession and the possibility to develop policy and instruments for SMEs within the framework of operational programmes cofunded by the EU structural funds. Currently, the main elements of public support include: improved access to finance, training as well as legislative changes which aim at eliminating administrative burden related to establishing and developing SMEs. However, the policy of encouraging and supporting SMEs is more a matter of growth and competitiveness rather than of employment.

Nadezhda Daskalova, Institute for Social and Trade Union Research

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