It is expected to account for 7.9% of the country’s GDP by 2021.
The outsourcing sector in Bulgaria is developing rapidly and continues to position the country as a leading global outsourcing destination. According to the Global Services Location Index for 2019, the analyst company A.T. Kearney ranks Bulgaria first in attractiveness in Southeastern Europe, and fourth in Europe as a whole after the UK, Estonia and Germany, and 17th in the world.
In recent years, the country has made a transition from a place for outsourcing services such as call centres to offering more developed and sophisticated services such as BPO and ITO. Back-office offices of global organizations, shared service centres and outsourced R&D centers are among the key outsourcing activities in the industry.
The outsourcing industry in Bulgaria is entering a mature phase of development
According to a report by the Bulgarian Outsourcing Association (BAA), the revenues of the outsourcing sector in Bulgaria in 2017 amounted to 2.1 billion euros, and while maintaining the positive development trend, by 2021 they are expected to double to 4 billion euros, while the relative share of the industry in the country’s GDP is expected to reach 7.9%.
By the end of 2017, over 67 300 people were employed in the outsourcing sector in Bulgaria, which is equivalent to a 2.4% share of the country’s labour market. It is expected that by the end of 2021 this number will exceed 79 000.
In the first phase of its development between 2008 and 2015, the industry achieved an average annual growth of 25%. Now the outsourcing business in Bulgaria is entering a more mature stage and although growth is still visible, it has slowed down to nearly 10-15% on an annual basis. According to industry experts, this trend is logical and understandable, as a large part of the largest local players are already established, and are in the process of expanding their local structures outside the capital.
Sofia, Plovdiv and Varna are the three largest outsourcing centres in Bulgaria, while Veliko Tarnovo and Burgas are attracting more and more new companies.
More than half of the companies (52%) in the outsourcing in the country have Bulgarian owners, while in the companies with foreign participation, 53% of the investors are from the UK, USA, Germany and the Netherlands, according to BAA data. Among the foreign clients of Bulgarian outsourcing companies are companies from Western Europe, the UK, and the United States.
Why Bulgaria?
There are many reasons for Bulgaria to be chosen as an outsourcing destination, including its geographical location, developed infrastructure, properties that meets the needs of the industry, educated employees, a favourable tax system, well-developed secondary cities and lower costs.
Bulgaria maintains its high position in Europe in the field of outsourcing thanks to the coordination between the government, the associations and the businesses. In addition, the country invests more in future skills within its educational programs, ensuring a robust availability of IT resources.
Last but not least, there is an expectation that the favourable tax system will make more Bulgarians return to their homeland, bringing a variety of key skills and competencies. According to some forecasts, 20 000 new jobs will be created in the Bulgarian outsourcing sector by 2020.
