Доклад на GEM България за състоянието на предприемачеството 2017/18 & 2018/19

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Докладът е издаден с подкрепата на Bulgarian Entrepreneurship Center, JEREMIE Bulgaria, Superhosting.bg.

Background of the Global Entrepreneurship Monitor

The independent study of entrepreneurship by the Global Entrepreneurship Monitor has welcomed Bulgaria 5 years ago in its annual tracking of entrepreneurship rates and analyzing national environments and global dynamics. GEM Bulgaria launched reports 2015/2016 and 2016/2017 and now presents two years’ worth of data and analysis in the current combined 2017/2018 & 2018/2019 report. In 2019 the Global Entrepreneurship Monitor consortium celebrated its 20th anniversary of research, report, and analyses of over 100 counties!

GEM provides unique information on individuals - attributes, values, activities, and interactions with the environment in practicing entrepreneurial behavior - proactiveness, innovativeness, and responsible choices.

The GEM Consortium publishes a Global report each February following the year of the data collection, while each GEM national team produces a national country report, usually, within ten months of the global. The GEM Consortium also publishes several special topic reports featuring national data.

Objective and scope

GEM is different from most current studies on entrepreneurship. It does not just look at the businesses but also at the individuals between the ages of 18 and 64 years from a demographically representative portion of the population. GEM looks at individuals, their attitudes, aspirations at what makes them think and do or not do, as these indicators play an essential part in the entrepreneurial pipeline moving towards actually starting a business and growing it until it is fully established.

According to GEM:

Entrepreneurial activity is an output of the interaction of an individual‘s perception of an opportunity and capacity (motivation and skills) to act upon this opportunity combined with the distinct conditions of the environment in which the individual is located.

Hence GEM and the current report have three key objectives:

1.     to determine the extent to which entrepreneurial activity influences economic growth; 

2.     to identify the factors which encourage or hinder entrepreneurial activity, and

3.     to guide the formulation of effective and targeted actions to enhance the entrepreneurial capacity in Bulgaria.

To provide reliable comparisons across countries, GEM obtains data using harmonized research design across all participating countries. The data is gathered on an annual basis from two sources locally and submitted to the consortium:

a) Adult population Survey (APS) random representative sample of 2 000 adults between 18 and 64 years.

b) National Experts Survey (NES) providing information on the environment faced by entrepreneurs by interviewing a minimum of 36 experts. Unlike other expert surveys, NES focuses solely on the environmental features that are expected to have a significant impact on the entrepreneurial activities, captured in the nine entrepreneurial framework conditions (EFCs), rather than on general economic factors:
(1) financing for entrepreneurs, (2) Government policies, (3) Governmental programs, (4) Entrepreneurial education and training, (5) Research and development transfer, (6) Commercial and professional infrastructure, (7) Internal market openness, (8) Physical and services infrastructure and (9) Social and cultural norms.

The GEM consortium methodology uses the grouping of countries by economic development stage as developed by Michael Porter: factor-, efficiency- and innovation-driven economies as it matches the patterns of entrepreneurial behavior and often the specifics of the environment. It is a very useful benchmark and is used throughout the report.

Another critical element of the GEM methodology is the data gathering of entrepreneurial activity by phases: nascent, new business, total early-stage (TEA), established business, and discontinuance.

The current 2017/2018 and 2018/2019 report scans through the GEM data across years together with other trustworthy resources for Bulgaria, benchmark groups, and global averages. We do so to outline the current strengths and areas of improvement in the Bulgarian ecosystem and the Balkans. We are drawing from our 5-year research activity and project the key directions for the region to benefit policymakers, investors, educators, corporations, journalists, consultants, service providers, and not last, entrepreneurs and their forms of association.

While there is rarely a particular "right" or "wrong" level or a mix of indicators, they have to be understood in their geographical, political, economic, demographic, and cultural context in order to direct and synchronize the stakeholders' efforts.

 

 

Key findings

ENTREPRENEURIAL ACTIVITY in Bulgaria shows minimal changes for a period of 4 years. Bulgaria has a good share of established businesses and one of the lowest early-stage activity rates (TEA) globally. The latter is of particular concern when combined with almost absent intention to start and mostly not seeing good opportunities to start. Interestingly, fear of failure is not a major deterrent for those who do see opportunities. Entrepreneurship continues to be associated with a good career and a high status. 

Entrepreneurship by stage

·       From 2015 until 2017, the Bulgarian Total Early Stage Entrepreneurship rate (TEA) was in the range of 4- 5% of the adult population, which is low compared to benchmark groups such as geographical sub-groups of countries and by stage of economic development. In 2017, Bulgaria scored the lowest TEA among the 54 monitored economies - 3.7%, while in 2018, the TEA indicator jumped to 6%, exhibiting a significant improvement over the period, still staying at the bottom quarter (42/48). The established business ownership rate is stronger in 2018 at 8.4% (19/48). 

Media attention and high status

·      From 2015 until 2017, the Bulgarian Total Early Stage Entrepreneurship rate (TEA) was in the range of 4- 5% of the adult population, which is low compared to benchmark groups such as geographical sub-groups of countries and by stage of economic development. In 2017, Bulgaria scored the lowest TEA among the 54 monitored economies - 3.7%, while in 2018, the TEA indicator jumped to 6%, exhibiting a significant improvement over the period, still staying at the bottom quarter (42/48). The established business ownership rate is stronger in 2018 at 8.4% (19/48). 

Opportunities and Capabilities

·      Both perceived capabilities and perceived opportunities remained in the ranges 36.9-38.4% and 19.3-19.5%, respectively. This is rather problematic as it indicates people do not find more opportunities to start a business, nor feel more capable of starting one. Both indicators are considerably lower than the corresponding rates of the benchmark groups. Markedly perceived opportunities are more than twice as low as benchmark groups.

Fear of failure as a deterrent

·       In 2017 only 20.9% of Bulgarians reported fear of failure stopping them from setting up a business when they see opportunities, compared to levels twice as high in benchmark countries. This puts Bulgaria 3rd out of 54 participating countries with the least fear of failure globally. The indicator went up to 31% in 2018, yet still a lower level than comparatively.

Planning to start a business

·       This indicator is what feeds early-stage entrepreneurship. Entrepreneurial intentions among Bulgarians were strikingly low in 2017: only 5% of the population planned to start a business in the next three years compared to an average of 26% in the other participating efficiency-driven economies. This indicator hit its lowest level among Bulgarians in 2018 – just 3.9% of Bulgarians intended to start a business, the second-lowest globally.

Motives to do business

·       In Bulgaria in 2017 and 2018, both necessity-driven and improvement-driven TEA were in the range of 26.9-28.5% and not showing a positive trend towards decreasing motivation out of necessity while ranking among the lowest. The difference in favor of improvement-driven entrepreneurship is 3 times larger for the innovation-driven and 4 times larger for Central Europe participating economies. The worrying element for Bulgaria is the absence of a growing trend in a bigger share of improvement-driven entrepreneurship as this is the type of entrepreneurial activity with the highest societal value-added. It is commonly associated with new business model creation, technological adoption, and productivity gains. 

THE PROFILE of the Bulgarian entrepreneur indicates a solid balance between males and females overall with just slightly more males, with a good increasing trend for males toward opportunity-driven motivation. The dominant age for early-stage entrepreneurs is 25-44 years, and for established, 45-54 years

Age profile

·       In 2017 and 2018, one age group with consistent, stable, and growing entrepreneurial orientation was the 25-44 y.o. The absolute levels of early-stage entrepreneurial activity (TEA) in Bulgaria remained very low compared to the benchmark or globally, a fact characterizing every age group, but one: the age group of 45-54-year-olds experienced an increased early-stage entrepreneurial activity in 2018 in Bulgaria.

Gender

·       The ratio of female to male TEA in Bulgaria in 2018 was 0.9. There were more male entrepreneurs than female entrepreneurs. The ratio of female to male TEA is somewhat higher for Bulgaria, scoring in the top 1/2 to 1/3 in the global ranking from 2015 to 2018. This indicates better gender parity regarding early-stage entrepreneurial endeavors than most. Gender inequality in early-stage entrepreneurial ventures is not an issue in Bulgaria’s case. In essence, in Bulgaria, there is no evidence for a systemic gender gap regarding entrepreneurship.

Motivation and gender

·       For the period 2015-2018 in Bulgaria, there was an increasingly larger share of male opportunity-driven entrepreneurs (65%-66.6%-75.1%-77.6%) and a smaller share of male necessity-driven entrepreneurs. 

THE SECTORAL DISTRIBUTION is not exhibiting trends towards a bigger share of knowledge-intensive sectors. The dominance of wholesale and retail orientation is associated with less value-added while higher-skilled sectors are at low levels, a pattern putting Bulgaria far from innovation-driven economies.

Sectors distribution

·       Bulgaria continues to closely match the efficiency-driven economies’ sector distribution with regards to entrepreneurship, probably reflecting the scarcity of know-how, skills, and industrial base that are required by knowledge-intensive sectors. Almost half of the new ventures belong to retail or wholesale, which are highly vulnerable to economic downturns. Bulgaria has a smaller share of early-stage businesses belonging to the knowledge-intensive industry sectors (13%) than the average share exhibited in innovation-driven economies (21%), many of which are Bulgaria’s EU partners.

ENTREPRENEURIAL IMPACT gives particularly insightful metrics for creating and changing trends. Bulgaria scores third lowest globally in “employing 6+ employees in the next 5 years”, combined with dominating share of 2/3 of those not planning any job creation next 5 years. Another concerning indicator is the innovativeness of the product/service, where Bulgaria scores twice as low compared to reference groups. The international orientation is devastatingly low compared to all benchmark groups, despite access to the EU market.

Future hires

·       Bulgarian early-stage entrepreneurs were especially cautious about future hires in 2018, as a massive 73.7% did not expect to create any jobs, while 23.7% expected to create between 1 and 5 jobs in the next five years. There was a negative trend in expectations related to greater entrepreneurial job creation in Bulgaria, where only 2.5% expected to create more than 6 jobs (46/48), compared to 9.4% in 2017. A decrease three years in a row (13.4%-9.4%-2.5%) in the share of entrepreneurs planning to employ 6+ employees in the next 5 years together with almost 10 percentage points increase in the share of sole entrepreneurs, is a concerning trend and highlights the limited capacity of the early entrepreneurs to grow.

Innovative products or business model

·       In 2018 the share of Bulgarian entrepreneurs who considered their product to be innovative (new to all or some customers) increased significantly to 22.4%, the highest for the period 2015-2018, but still very low (one half) compared to reference groups (41/48). In essence, very few early-stage new ventures in Bulgaria, and only a small fraction of them engages in innovation activities. According to the Global Innovation Index, in 2018, Bulgaria is beside PR China and Malaysia and considered an “innovation achiever”. 

Selling abroad

·       11.1% of the Bulgarian entrepreneurs reported that they had a 25% or higher share of international sales in 2017, while in 2018, it went down to 7.4 to the similar levels of 2015 and 2016. Comparatively, this is a very low number. It is remarkable that the international orientation in 2018 is as much as two times lower than the levels in the efficiency-driven economy and almost 4 times lower than innovation-driven economies.

ENTREPRENEURIAL ENVIRONMENT is measured by the GEM methodology using 12 areas. Bulgaria's scores in the GEM Global Report 2018/19 among the 54 participating economies are entirely consistent with the country's well-recognized strengths regarding low taxes and access to commercial and professional infrastructure and weaknesses regarding government support for entrepreneurship and entrepreneurial education.

BALKAN PERSPECTIVE: The entrepreneurial landscape of the Balkans is defined mainly by its success in establishing hubs for digital and tech startups. There are some unquestionable challenges, too: the fragmentation and variety of the small markets within the region are frequently perceived as one of the biggest obstacles that startups in this area face for future growth, along with a scarcity of late-stage funding and ‘brain-drain’ and media freedom challenges. 

Experts’ rating of the Bulgaria entrepreneurial ecosystem

·       In Bulgaria, in 2018, the areas rated less than sufficient are Government policies: support (very low at 46/52), Government Entrepreneurial programs (42/54), Entrepreneurial education in school (low but at 32/54) and post-school (41/54), R&D Transfer (37/54), Internal market: burdens (35/54) & entry regulations (33/54), and Cultural & Social Norms (at the bottom 50/54). The areas marked as sufficient with some extent or neutral are Entrepreneurial Finance (impressive 10/52), Government policies: Taxes and bureaucracy (notably 16/54), Commercial & Legal infrastructure (20/54), Internal market: dynamics (35/54); Physical infrastructure (15/54).

Government programs and public sector

·       The governments of the Balkans and most notably Bulgaria, are given credit for imposing taxes at tolerable levels for new/growing firms.

·       National experts rated government policies related to their support of entrepreneurial ecosystems as low 3.2 out of 9 (ranking 46/54), which is lower than the benchmark groups.

·       Among the best-rated aspects of government entrepreneurship programs in Bulgaria is the support offered by science parks and incubators, where there is significant involvement by the private sector and successful entrepreneurs, who participate as mentors, role models, and investors. The result is highest in comparison to the other factors.

·       GEM data highlights a lack of balance between the priority national and local government give to supporting entrepreneurship. Both measurements are improving, but the levels remain unsatisfactory (score <5 is insufficient). 

Infrastructure, human capital, and innovation capabilities

·       The Bulgarian and the Balkan economies' most significant strengths are access to physical infrastructure and services and access to commercial and professional infrastructure. However, the infrastructure indicator in the Global Innovation Index for the region shows ample room for improvement in this regard.

·       In Bulgaria, the Education act of 2016 introduced the subject of Entrepreneurship in the curriculum of all grade levels. The program started in 2017. It is possible to speculate that this led to a very mild increase in ‘adequate instruction in market economic principles and new firm creation’ recognized by the national experts in 2018. Yet, for a significant change to occur, many more initiatives need to advance, including world-class management education

Universities and entrepreneurship

·       The perception of entrepreneurship education and training at the post-secondary level does not show increasing dynamism or a positive trend with scores below satisfactory (around 4 out of 9) and not showing a positive trend.

·       STEM-related departments occasionally receive some credit for their ability to provide large-scale basic training; the majority of actors in the Bulgarian entrepreneurial ecosystem perceive university processes and their knowledge base as out of sync with the requirements of present-day economies. 

·       The vacuum left by the short-sightedness of the higher education sector in Bulgaria but also South-East Europe is vast. Multiple private initiatives address the unfulfilled need for adequate entrepreneurial skills training. Non-profit, such as Junior Achievement, development agencies, such as SwissContact, and private academies, such as the Telerik Academy and SoftUni, are among the most active educational partners on the Balkan scene. Most recently, the Bulgarian Entrepreneurship Center has been an avid supporter of initiatives in Bulgaria and abroad for the benefit of our ecosystem.

Talent

·       Entrepreneurial ventures from the Balkans have a much higher share of founders with technical degrees as the highest educational achievement; have a much more academically-focused founders’ profile than Central European ventures.

Entrepreneurial finance

·       The region faces a lack of fully-functioning late-stage funding opportunities, which prompts promising local entrepreneurial ventures to sell prematurely, as they do not expect to be able to access readily available funds to fuel their growth. This, however, is a dilemma all entrepreneurs in young ecosystems might have as it is a reliable indicator that the base of the ecosystem is solid and set for expansion.

·       During 2015-2018 in Bulgaria, we see a notable increase in the experts’ responses with regards to every single funding channel, especially in the case of equity, business angel, VC, and crowdfunding and to some extent, debt funding, FFF, and IPO. Government subsidies (including EU funding) also exhibit an upward trend.

Market functioning and sophistication

·       Bulgaria has very good scores for commercial /professional infrastructure to support its entrepreneurs, ranking 20/54 in 2018. Banking services, legal and accounting, and consultants are well-perceived, as well as the selection of subcontractors and consultants.

Startup internationalization

·       Two significant challenges arise from the fact that local markets are small and unsophisticated. (1) Balkan entrepreneurs experience a shortage of business skills when it comes to internationalization because the majority of them lack proper business training; (2) the mostly negative image of Balkan until recently countries produced a negative spillover effect, even for the most innovative ventures.

Multinationals and labor market

·       The small size of the Balkan states makes the 'brain drain' even more significant, reducing private sector activity, productivity, competitiveness.

·       The export of IT-related products and services has grown more than four-fold since 2008. However, these powerful IT companies also impose a heavy burden on the Bulgarian entrepreneurial ecosystem because they compete against domestic entrepreneurial ventures for the same local talent.

Culture

·       Existing and dominant social and cultural norms in the Balkans have traditionally discouraged individual actions leading to new ways of conducting business activities. This might, in turn, lead to greater dispersion of personal wealth and income. GEM data suggests that there might be a trend emerging for younger generations showing more proactive entrepreneurial behavior.

Media

·       There are frequent accusations that media freedoms are restricted in the region due to political pressure from governments; subsidies that result in political bias and intimidation, and violence against journalists. The problematic media ownership that is often subject to personal relations and interdependencies and the influence of political power. This furthers the problem of transparency, making it hard for new media outlets to enter the market without entering into political power struggles (Brogi, 2017).

Research institutions and R&D transfer

·       Innovation and entrepreneurship depend on R&D investment as % of GDP by public & private contributors. Countries with a higher % of R&D score higher in innovativeness indices. For public R&D This alone will not be sufficient unless combined with modernization of the public R&D bodies so that they are a beneficial partner to business & own commercialization.

Gig Economy

·       Gig work could be a stepping-stone toward entrepreneurship. Bulgaria, in particular, shows internet economy characteristics similar to its regional neighbors and does not seem to experience the strong impact of the gig/sharing economy, as do more innovation-driven countries, since financial effects are relatively low.

Family Business

·       Europe/N. America shows moderate to high rates of family entrepreneurship. One-fifth of all early-stage endeavors start with family members. Bulgaria shows the highest a ‘strong indications[1]’ of family-based early-stage entrepreneurship (% of TEA)- just below 30%. The majority of family businesses in Bulgaria are small scale with only 10% of those are knowledge-intensive and 8% in manufacturing.

Recommendations

Note: Annex 4 contains recommendations from GEM Bulgaria National report 2015/16 and 2016/17

While conditions for doing business are an integral part of a country’s story, entrepreneurship results from a combination of environment and actual activity and can rarely be disentangled from regional and global influences. GEM has measured the spectrum of ecosystems globally for 20 years. The data allows us to see patterns globally while also becoming particularly valuable on a national level when monitoring progress from year to year, tracking the impact of a new/revised policy and benchmark analysis. The Bulgarian Entrepreneurial Ecosystem is multifaceted and with opportunities to shine with well-targeted policies and initiatives supporting high-impact, high-growth ventures.

Job growth

·       The nature of early-stage entrepreneurship in Bulgaria is to gravitate toward low-tech solo projects. The current industry sector distribution of entrepreneurship and its high exposure to economic cycles can also be blamed. The scarcity of relevant skills in the local labor market can also explain these expectations. 

·       In order to fuel Bulgaria’s economic growth, it is crucial to identify the high-growth early-stage ventures and create the necessary regulatory environment that encourages their growth, as they are the ones expected to add new dynamism to the economy. Regulatory improvements alone will hardly be enough, and improvements in the market functioning and the education system will also be necessary. Managerial capacity is going to be critically important too.

·       For Bulgaria to reverse the current negative trend of growth expectations, a systemic vision and program have to be put into place spanning over education and life-long learning programs, entrepreneurial finance mechanisms, global talent attraction, and retention, and a comprehensive national innovation strategy. 

Innovation

·       The low level of uptake of innovation in early-stage entrepreneurship is a significant constraint of the competitiveness of new ventures in Bulgaria; moreover, it limits the competitiveness of the national economy.

·       This pattern of ‘elite’ innovation suggests that there might be a two-tier population of both early-stage and established businesses: one small group of innovation-active businesses and a much larger group of companies that do not engage in innovation. The real challenge of the public policy then continues to be to spread the innovation culture and innovation management processes to the second group and thus expand the base on which the international competitiveness of the Bulgarian economy relies. 

·       The long-standing challenges in the way Bulgarian companies report innovation have also to be resolved in order to have a more precise diagnostic and initiatives in this domain. It is a well-established fact that Bulgarian companies systematically underreport innovation as there is no mandatory mechanism to report and measure such activities.

Internationalization

·       The small size of the national market does not provide strong enough scale advantages for most early-stage entrepreneurs to pursue opportunities abroad. Informing and educating them to identify opportunities and scale them up abroad can make a difference in the quality of their business opportunities and their growth rates. This, however, implies a change in the vision and skill-set available to local businesses.

Government programs & Public sector

·       Government programs and policies and the functioning of the public sector are essential factors in entrepreneurial ecosystems as they are the most critical drivers in turning entrepreneurial intentions into actual entrepreneurial behavior. Even though it is not the government that starts new businesses in modern market economies, government policies and initiatives can shape the conditions conducive to entrepreneurial endeavors.

·       One reason for the very limited support for entrepreneurship at a local level can be a shortage of instruments the local authorities have at their disposal. Bulgarian regional governance is centralized, and it is an area to explore if entrepreneurial activities are to succeed outside the capital or district cities.

·       None of the GEM indicators related to government programs to support entrepreneurship see a solid positive trend between 2015-2018. Nevertheless, mild improvements exist in indicators related to working with a single agency, the role of the science park and incubators, competency of government agency’s personnel, access to information, and efficiency of new programs aimed at new/growing firms. This very slow improvement primarily indicates that entrepreneurship is not prioritized and support is happening in silos, without a long-term vision, strategy, and coordination.

·       Better coordination of government programs with the private sector and the developing regional entrepreneurial community can improve the talent pool and the efficiency of existing government programs designed to stimulate entrepreneurship in Bulgaria.

Infrastructure, Labor, and innovation 

·       There are frequently voices in favor of more aggressive government programs of high-skilled immigration from outside the region. If there is a broad consensus between actors to sustain a vibrant entrepreneurial ecosystem - the most important elements are the people, the passion, and the commitment to do something different.

·       There is evidence that practical entrepreneurship training may better prepare school leavers for the transition from school to the labor market, enabling them to identify business opportunities and improving their chances of success in business and self-employment ventures (Cheung, 2011)

Universities and R&D

·       Universities are key players in the entrepreneurial ecosystem because they hold and attract young talent, shape and influence students' mindset, create and serve as a repository of knowledge and expertise in learning and education, all of which nurture entrepreneurial ecosystems. Universities can commit to the support of the entrepreneurial ecosystem if they inspire proactiveness and promote a culture of innovation. 

·       Innovation capabilities require a business environment that facilitates entrepreneurship and provides access to the necessary finance to create and grow innovative firms. Such an environment needs to be supported by effective universities and research institutions with strong links to industry and an ability to integrate with local industrial clusters.

·       It is clear from the data that participants in the Bulgarian entrepreneurial ecosystem believe that universities do not play a central role in facilitating knowledge transfer and stimulating innovation. The virtual circle between university-based innovation, entrepreneurship, and competitiveness is broken. Key stakeholders in the regional entrepreneurial ecosystem believe that the root cause of the problem is the broken linkage between the academic and research entities and the market. In this domain, there is a massive opportunity for improvement with selected public policies.

Finance

·       The experience in the Balkan shows that governments need to focus more on creating a broad context for the functioning of the entrepreneurial ecosystem - governments cannot be an active manager of the funds, as the right incentives lie with the partners and managers, not bureaucrats. There are still challenges, and there are market gaps in equity and debt instruments and a marked scarcity of investment funds beyond the seed level.

Startup internationalization

·       Branding the region and Bulgaria, in particular, is very important for the future of the Balkan entrepreneurial ecosystems, and there has been an exponential growth in awareness and efforts in this regard. Getting recognized as an attractive place to live and work by citizens and foreign talent is essential for the further maturing of the young regional ecosystems.

Culture

·       Bulgaria ranks relatively low (50/54) for its cultural and social norms towards entrepreneurship. These are indicators that take time to change. It is important that key stakeholders such as media, serial entrepreneurs, educators, policy-makers, influencers, and parents, work together to influence the understanding of success through own personal efforts, emphasizing self-sufficiency, autonomy, and personal initiative as well as entrepreneurial risk-taking, creativity, innovativeness and the responsibility of the individual to make proactive choices for her life.

Media

·       Despite many laws and policies regarding free media has been established, the proper application of these has been challenging and is not very effective because of the media market concentration.

Areas of recommendations by Experts

·       Besides the areas of Financial support and, to some extent, Education and training, the top 5 areas identified as needing improvement are mostly connected to policy-making, public administration, and the rule of law. 

Gig economy

·       Gig workers represent an exciting pool of potential entrepreneurs. 

·       Bulgaria and the economies of the Balkans are among these places when it comes to innovation-driven entrepreneurship. Still, the general overview of the entrepreneurial landscape in Bulgaria has to improve in multiple dimensions before the country stands out in international rankings of entrepreneurial activity.

The common use of data and analysis and impact assessment are slowly becoming a norm in policy-making in Bulgaria. To consistently benefit from its insights, the public and private stakeholders need to recognize and support this regular exercise using global, recognized methodologies used by international organizations and national government. The Global Entrepreneurship Monitor methodology, its national team, and analysis has a strong record of providing evidence for entrepreneurs, educators, policy-makers, and other entrepreneurial ecosystem stakeholders.

Conclusion

·       The future of the nascent entrepreneurial ecosystems in Bulgaria and the Balkans is clearly set. These economies are walking away from outsourcing and entering into a phase of building genuine entrepreneurial ecosystems, whose growth is a positive sign for all classes of stakeholders within the region.

·       The innovation-driven entrepreneurs in Bulgaria are not many, but they understand the advantages and disadvantages of their institutional and historical context, geographical location, talent pool, and cost drivers.

·       Innovation-driven entrepreneurial ventures in Bulgaria are built for the most part on solid business and economic logic, cost advantages, the strong value proposition in challenging market conditions due to the small size of the markets, and the price sensitivity of local clients. The business logic is strong, while local culture is biased towards pessimism rather than optimism.

·       The connecting tissue of the Bulgarian entrepreneurial ecosystem – the entrepreneurial communities – has started to function as such. The notion of giving back and the idea of being a part of a network to which entrepreneurs contribute but from which they also benefit has already crystallized.

The focal points around which these networks form have less to do with country boundaries and more essential resources for entrepreneurism, such as finance and talent. The Balkan region is very diverse, and some generalizations will certainly apply more to some rather than to all entrepreneurial ecosystems. Still, without any doubt, the Bulgarian entrepreneurial ecosystem is one of the essential drivers of the development of the regional community.

[1] ‘Strong indication’ represents family members co-owning and co-managing part of a business, and ‘some indication’ represents full ownership by an entrepreneur, at least one employee, and co-management by family members (GEM Global report 2018/19)