Bulgaria Has Strong and Structurally Important IT sector
Georges Panitchersky, Ph.D., president of the Canada-Bulgaria Business Council
Dear Prof. Dr. Panitchersky, how do you see your role as counsellor of InnoCenter Bulgaria?
– In the developing process of the InnoCenter idea, I already had the pleasure of suggesting some existing models of innovation centers with their mission, vision, governance and mode of operation mainly on the basis of Canadian and American examples.
InnoCenter Bulgaria is well acquainted with my competencies and therefore, I believe they will seek my advice and expertise according to their specific needs.
From the perspective of your remarkable experience in public and business administration, what kind of changes are necessary in the strategic management model in Bulgaria to have an accelerated economic development?
– As a member of the EU, Bulgaria benefits from the European experience and its management tools, but it also has the respective obligations and has to comply with certain restrictions.
Currently, there are government programs and strategic models for individual branches of the economy, such as the Strategy for the Development of e-Governance. All these tools are professionally developed and would certainly be or are already very useful for the country's economic development.
What could be done to make them work better and lead to measurable and quick results so that people feel a real improvement in their living standards?
According to my professional experience and the existing examples in highly developed countries, the path of accelerated economic development goes through greater and more real decentralization, with all the ensuing rights, for example economic and fiscal autonomy at regional and local level. Small Is Beautiful, Schumacher taught in 1973, and his model for sustainable development has been even more relevant since then. Think global, act local is another fundamental principle of governance that we must not forget. The realization of complete food independence is also the basis for any economic development.
The topic is too broad to be exhausted in a few words. I am available for further discussions and work on the topic, in case of interest.
Where do you see Bulgaria's greatest development potential in the coming years with the help of quality human capital at the forefront?
– This is another broad subject for discussion and reasoning.
Bulgaria, like the other countries of the former Eastern Bloc, was exposed to prolonged and large-scale emigration. Whole sectors of the economy were closed down.
At the same time, however, Bulgaria opened up to the world and the youngsters were given the opportunity to study abroad or to study from foreign teachers in the country. The new generations of the Bulgarian diasporas abroad are increasingly interested in participating in the reform and development of our economy. A number of business councils and chambers of commerce have been set up to support the economic ties between Bulgarian and world-leading companies.
Bulgaria is shaping up as a country with a strong IT sector and I think it will be structurally important in the coming years. Obviously, our people have talent and are attracted to new technologies, therefore, we must find ways to better sell our services to the global market, as does India, for example. We have the potential to become a true Hub and a link between East and West.
Of course, the tourism industry, in all its diversity, is a traditional, structurally identifiable economic sector that we must continue to develop. However, this development must not disturb our natural resources and be of a human scale, so that we do not kill the goose that lays the golden eggs, as it is about to happen in our big Black Sea resorts.
Last but not least, road and other technical infrastructures are vital to the economic upturn. Via vita est, the old Romans said, and this maxim is still valid today.
IT Leaders Are Strategic Factors in Digitisation
Assoc Prof. Velizar Shalamanov, Ph.D.
Dear Assoc. Prof. Shalamanov, how do you see your role as counsellor of InnoCenter Bulgaria?
– My entire career has developed in large IT organizations as the Institute of Command and Control Systems of the Ministry of Defense, the Institute of Information and Communication Technologies of the Bulgarian Academy of Sciences, the NATO Communications and Information Agency.
Focus was the development of information systems and partnerships with consumers and industry, creating new business models: customer funding, service-based organizations, multinational projects, partner networks, trust funds, innovation management, experimentation and exercises.
During my terms as Deputy Minister and Minister of Defense, I had the opportunity to observe the system from the customer point of view, and then at certain period, from the industry point of view.
InnoCenter Bulgaria creates an environment for development and testing of new concepts and concrete solutions for the digitisation of the industry. Next will be the public administration and the security sector where my experience can be useful both to the members of the InnoCenter to develop this environment, as well as to attract customers to achieve their digital transformation goals.
I believe this is the necessary platform to reach next level of development both in the administration and in the industry.
What are the important steps in building an effective and efficient IT governance model and enhanced cyber resilience in organizations and companies?
– In the process of digital transformation, the focus is on building of an effective, efficient and cyber-resilient IT organizations that will add value to business processes, create new opportunities and ensure increased adaptability and business continuity. This defines IT organizations as a strategic success factor and imposes their build-up and further development through processes of change management and continuous improvement. IT leaders (CIOs) are part of the strategic leadership team together with CEO, COO, CFO.
In this context, the important steps towards efficiency and cyber resilience are: the adoption of a sound mandate for the IT organization; the development of an IT strategy and a business plan related to the strategy of the company or the administration; efficient management of resources and the application of discipline in portfolio, programs, projects management and IT services management; the systematic effort to develop IT staff and manage IT risks.
The other group of significant aspects for effective IT governance includes: the application of architectural approach, systematic development of new concepts, experimentation and validation of new solutions as part of the innovation process, partnership with all the stakeholders in the digital transformation.
The InnoCenter focuses on IT related innovations but also deals with process changes, business models, organizational changes and training. All are important aspects of the overall process of transformation at the stage of verifying and validating concepts, preparing for the realization of large scale transformation programs before launching competition procedures in the implementation of specific projects.
How EU and NATO good practices can help further in development of the governance model in Bulgaria?
– A vital part of our membership in NATO and the EU is the opportunity to apply the good practices created in these two alliances. My experience is mainly in NATO, where in 2010 the nations decided to consolidate in one agency all the expertise in the digital transformation of the Alliance. A life-cycle of IT systems was created: from defining requirements through building capabilities and providing services to decommissioning, as well as personnel training.
This naturally requires a very well-organized governance and funding system, efficient management, industry relations, partnership with customers at the various stages of digital transformation and the functioning of the Alliance IT environment.
Both in NATO and in the EU, good practices and technological solutions are available to member states, but their use implies capacity for transfer and adaptation of these solutions. Indeed, the InnoCenter could be the platform for adapting NATO and EU solutions, achievements in other countries to the requirements of Bulgarian companies and administration.
Inclusion of InnoCenter in networks of similar organizations in NATO, the EU and the member states, creates a platform for the transfer of good practice in both directions. Examples such as the NCOIC (Network Centric Operations Industrial Consortium), the NICP (NATO-Industry Cyber Partnership) and the DIG (Defense Innovation Greenhouse) provide a promising idea of how InnoCenter can use best practices in the interest of Bulgarian industry and administration.
This largely depends on the willingness and readiness of companies and public organizations to take advantage of this model, which is a good European and NATO practice. The InnoCenter also has the task to motivate the industry and the administration to use such an approach. In the European context, project funding for networks of innovations centers in digital transformation and cyber security is also a great incentive and opportunity to develop and use the InnoCenter for transfer and development of good practices.
New Advanced Composite Materials Solve Complex Problems of Civil Infrastructure
Dr. Damian Kachlakev, professor in the Department of Civil and Environmental Engineering at the California Polytechnic State University
Dr. Kachlakev, how do you see your role as counsellor of the InnoCenter Bulgaria?
– I have many years of experience as a founder and director of a unique national research facility in the US. similar to the InnoCenter Bulgaria, the research institute which I guided was established as a response to the needs of the business. I sincerely hope to be able to translate this experience to the new center. This entity is completely different institution compared to anything known in Bulgaria. The main idea is a direct collaboration between the science and the industry in which the business dictates the research topics and pays for them. Unlike the most traditional approach (particularly in the Bulgarian universities), where the scientists offer some new solutions and the industry tries to integrate into its needs, the new approach is structured vice versa. The business defines its problems (learned as a result of real situations) and the scientific institutions try to solve them and to suggest new forthcoming potential problems based on the analysis and innovative thinking the scientists possess. Thus, everybody shines in the area he is best.
The main purpose of the research we conduct is to solve particular problems identified by our business partners, not driven by the academic curiosity as in many other research endeavors. The needs of the business change, problems arise and manifest themselves during the daily operations of the companies. This requires very dynamic thinking and actions in structuring the research topics on the go within the constraints of the infrastructure, personnel and budges availability. It is not an easy job, but the satisfaction is enormous. As scientists we are not only concerned about future imaginary advancement of the human civilization in our respective areas of study, but also be more in-tune with the current imminent goals and problems of our industry partners.
In addition, such an approach stimulates the collaboration between the companies from the same branches of the industry, encourages them to seek their common problems and challenges and finance solutions mutually. Thus, the funds they dedicate to research and problem solving are utilized more efficiently. As a result, the business is satisfied, because its problems are solved faster and more effectively. The scientific institutions are also trilled, because more funds are available to them as a result of the collaborative funding of common industry problems. As an end result, the society in general is the biggest beneficent. And that is a good feeling.
How important is the use of advanced fiber-reinforced polymer (FRP) materials for the needs of civil engineering and infrastructure and how are they implemented in Bulgaria?
– The current infrastructure of Bulgaria is old; majority of it was built after the WWII. The need of rehabilitation is more than obvious to anyone walking or driving on the streets and roads of the country. This problem is not unique to Bulgaria. Almost all EU countries, United Stated, Canada and Japan are facing similar situations. The main difference between us and them is than most of the countries have national strategies realizing the limitations of the traditional construction materials and looking for new, more advanced technologically and financially cheaper solutions.
The traditional materials used for construction simply do not possess the durability required in the current century. Such shortcomings can be seen in many of the newly rehabilitated projects in Bulgaria, staring with some of the main boulevards in Sofia to the retrofits of some of the country’s major bridges. The life expectancy of a new bridge used to be 40 years, now is 120. The reason of this drastic increase of the requirements for the new structures is dictated by the exponentially increased cost of construction and maintenance over the past 50 years. In brief, the society cannot bear anymore the cost of maintaining and enlarging the civil infrastructure.
Unique to Bulgaria (and some other countries from Eastern Europe) is the problem with the buildings utilizing the pre-cast panel technology, mainly from late 1960s to 1990. While cheap and serving the purpose of providing new homes for the growing population of the cities during these years, this technology suffers many limitations, the most important of which is the structural integrity of the connections between the different panels. Correction of these deficiencies with the means of traditional construction materials and techniques is simply not possible, because it requires these buildings to be evacuated at the time of retrofit. I would guess that more than half of the population of Sofia inhabits such buildings, which makes vacating them impossible. The prohibitive cost of the traditional construction techniques is just another factor.
Furthermore, Sofia and many other parts of the country are considered high risk seismic zones. Most (over 90%) of our infrastructure, including buildings, bridges, etc. does not comply with the current European standards requirements for earthquake safety. Many structures must be retrofitted for seismic upgrade. The huge problem arises from the fact that some, if not most of them are also in need of structural (load carrying) rehabilitation. The two upgrades are mutually contradicting each other from a technical point of view. It is not possible to achieve both objectives with the use of the traditional materials.
In conclusion, the utilization of the new advanced composite materials in the civil infrastructure is not only a matter of financial benefits and shortening the times of reconstruction projects. It many cases they it is the only possible way (from engineering point of view) to achieve the required performance of the structures. The use of such materials is a must, if Bulgaria is planning to maintain its infrastructure in times of ever shrinking budgets and increase of performance requirements. It is the only way.
Would you mention some of your most successful research projects?
– In my professional career the research and its practical implementations are directly related. I have the privilege to be one of the pioneers of the development and implementation of the advanced composite materials for the civil infrastructure worldwide. More than 20 years ago I conducted one of the largest studies of the performance of FRP (fiber reinforced polymers) for civil engineering applications.
The study was funded by the Federal Highway Administration (equivalent of the Bulgarian Ministry of Infrastructure). All major FRP manufacturers from Europe, Japan and the USA participated in it. The results largely benefited the preparation of the design standards with FRP composites. On the more practical side, the research allowed me to design the very first bridge in the Western US using composite materials. It was considered such a breakthrough that the event was covered in prime time by the TV media, in the Journal of Commerce and many newspapers. I still consider it one of the feathers in my hat.
Another project of mine, which had a large impact on the industry, was the establishment of the national Pool Industry Research Center (NPIRC). The center’s research united the efforts of the entire pool industry in the US, including builders, materials manufacturers and suppliers, chemical companies producing various sanitizers, SPA manufacturers, even companies related to the health aspects of the swimming pools industry.
Since its establishment in 2003, the center solved many technical problems of the industry, but I consider its main contribution from another point of view. It managed to unite the companies from different branches of the industry, which previously were suing and blaming each other for various failures and business malpractices. The impact of the center nationwide was considered so profound that in 2006 I won the Northrop Grumman award for excellence in research and development (the same aerospace company that manages Lockheed, Martin Marietta, space missions and many space and defense industries).
Tourism Needs Radical Innovations through Digital Platforms
Prof. Nikolina Popova, Ph. D., International Business School
How do you see your role as counsellor of the InnoCenter Bulgaria?
– In linking education and science with business (mainly SME-s) in the process of digital transformation of tourism industry in Bulgaria through a variety of projects on good practices (sharing information and experiences), pilot projects and conferences.
What is your focus point in the educational programs and plans in which you are actively involved?
– We aim to adapt the learning objectives in response to emerging business models in terms of knowledge, skills and competences of students. Knowledge on emerging business models, including an innovation of a business model. For example, online travel agencies (Expedia Inc., Orbitz). The intermediary platforms such as Tripadvisor or Trivago. Business models based on the principle of circular economy: Circular Supply Chain, Recovery and Recycling, and Product Life Extension. Moreover, the collaborative consumption business model (AirBnB, HomeAway, Zipcar, Uber), in tour guiding Vayable, Viator, ToursByLocals, AnyRoad) and F&B (Kitchensurfing, Cookening, FatFeastly).
There is a radical innovation through partnerships and collaboration due to transformation of value chains by digital technologies. The skills are abilities to analyze and generate new business models, to work in an online environment, plan and expand online operation, to develop and maintain communication and partnership relationships. The competences relate to values and attitudes, and life-long evolving learning.
In Bulgaria, tourism is well developed, but the client still does not receive the highest quality of service, which creates a tide to other tourist destinations? What should be changed in the tourism business model?
– My main consideration relating to the industry itself is that the tourism is a priority economic sector with constantly high contribution (12-14%) of Bulgaria’s GDP. At the same time, the business is dominated by SMEs with limited resources for digital transformation on their own. There is low level of innovative technologies application, negatively affecting quality of tourism product and services under conditions of dramatic changes in the way value is produced and delivered in the tourism sector.
Regarding the external environment opportunities that could change the environment are: the Operational Program “Science and Education for Intelligent Growth” under the Ministry of Education and Science. The program facilitated the creation of Regional Scientific Centers (RSC) as project centers. Sofia is excluded as RSC location. The beneficiaries are business companies, public, scientific and educational institutions, associations and NGO. The first one was established in Rousse. The next locations will be Varna and Bourgas. In my view, in long-term perspective, the InnoCenter would be successful, if it would establish collaborative relationships with technical higher schools involved in the above mentioned RSC.
Bulgaria and Singapore Can Successfully Cooperate in IT and Innovation
Martin Angelov, vice-president, Korea Development Bank in Singapore
Mr. Angelov, how do you see your role as counsellor of the InnoCenter Bulgaria?
– I think the InnoCenter and its participants may be interested in my 15-years’ experience living and working in Singapore, as Singapore puts great focus and resources for the positioning of the Asian country as an “Innovation Hub” for the Asian region. Many of the world’s giants are opening their innovation research and development offices in Singapore. There may be some takeaways from this. On the other hand, all projects require capital – in whatever form. My experience in the project finance sector my come handy for certain projects.
You have established the Bulgaria-Singapore Partnership Alliance. How does it further help the business contacts and cultural relations between Bulgaria and Singapore?
– The establishment of this partnership aimed to compensate the lack of activity from both Bulgaria and Singapore and to promote these relations. It is true that the two countries are far apart from each other geographically and Singapore is a relatively small market (around 5.5 million people). Many of the businesses here have not heard of Bulgaria, or are much more focused in the close-by countries like China and Indonesia where the market is huge and the economy is growing with fast pace. The projects we do so far are primarily one-off projects from single investors. The partnership also represents Bulgaria at the European Chamber of Commerce in Singapore, where I am a member of the Board of Governors together with 12 other representatives from Western European countries under the patronage of the Ambassador of the Delegation of the European Union in Singapore. Bulgaria is the only country represented from the Central Eastern European region.
Could Bulgaria benefit from the successful economic model of Singapore and implement it in practice?
– Complex question. I think everyone could learn from the successful economic model of Singapore. To try and replicate that in Bulgaria – I think rather not. Generally, I do not see much similarity between the two countries. Singapore’s successful economic model is possible due to factors which are not present in Bulgaria, as we have different history, geographical location and state governance system. Where I do see similarities, however, is that Singapore and Bulgaria both thrive to position their countries as regional information technology and innovation hubs. In Bulgaria we have outstanding resource of qualified professionals with quality education and international experience. This is something that is still missing in Singapore and this is why the country invests heavily in this sector. I see some potential for collaboration.