SUMMARY

The vision of the first Bulgarian Innovation Strategy is to transform Bulgaria into a modern state through achieving stable economic growth with low inflation rate as a prerequisite for increasing incomes and improving people's well-being taking into consideration the future integration of the country into the European economic and social area. The strategic goal of the Republic of Bulgaria is to become a full member of the EU.

In the process of joining the EU, Bulgarian companies should improve their competitiveness and their ability to withstand competitive pressure and market forces within the EU. Commercialization of R&D results, new technologies and the development of the innovation potential of the companies have crucial importance for strengthening the Bulgarian economy, hence for the increase in employment and economic growth.

The EU's Lisbon Strategy and the subsequent Council decisions taken in Barcelona in 2002 became the basis for the formulation of specific measures to increase the efficiency of the European scientific research and its impact on innovation. The application of the spirit of the Lisbon's Programme for Economic Reforms will be of great significance. Its priorities should be widely adopted, especially by the candidate countries.

The efforts of the Bulgarian government are directed towards the creation of an environment, favorable for the development and marketing of innovative products. These products will be created as a result of R&D, supported by public funds or private capital. The role of the state in the management of the innovation processes will be limited to the development of the framework conditions and incentives for entrepreneurs to take greater risk and invest in new products.

A consistent policy to stimulate innovation and R&D should be conducted since competitive advantages in industry could be achieved through developing, implementing and spreading innovation on a wider basis. The economic growth and the resulting increased productivity heavily depend on the speed and the efficiency of deploying innovations in the economy. It is necessary that all spheres of economy apply innovative solutions.

With this document the Bulgarian government aims to create the framework for future actions in the process of strengthening the links between science and business, and hence to achieve wider application of modern scientific solutions in the real economy.

The research and analyses developed for the elaboration of the Innovation Strategy outlined the main challenges Bulgarian companies face in the transition period - their low technological level, low rate of productivity, lack of adequate management, and lack of innovation-oriented culture. The weak innovation performance of the Bulgarian entrepreneurs stems from the fact that they follow a strategy of survival. It should be replaced by a policy of constant developments, which means they should think in broader terms and plan their activities in a longer-term horizon.

In order to survive in an environment of strong competition, enterprises cannot keep the same position for a long period of time. Bulgarian companies should introduce in their operations new products, more efficient ways of organization and more efficient technologies. The number of companies that have realized the importance of investing in increasing their personnel's qualification, in improving the production quality and production processes and in marketing is growing. But the majority of companies still cannot grasp the necessity to establish a long-term policy in terms of furthering their company's development.

The task of the Innovation Strategy developed by the Ministry of Economy is the elaboration of solutions to the problems stated above. The most important measures which the Strategy envisions are summarized in four main directions:

1. Strengthening the institutions, companies and organizations operating in the field of development, transfer and application of new technologies (know-how) which form the National Innovation System;
2. Encouraging the cooperation between the R&D sector and the business and at the same time their cooperation with the Ministry of Economy and the Ministry of Education and Science;
3. Establishing a well-functioning mechanism to coordinate the implementation of the Innovation Strategy;
4. Ensuring financing for the implementation of the measures of the Innovation Strategy.

The objectives of this strategy are:

- to stimulate industrial R&D and the cooperation between the company R&D departments, universities and research and technological organisations;
- to increase available financing for innovation through establishing mechanisms for attracting private investments;
- to encourage companies to introduce new technologies and to improve their innovation activity;
- to encourage the establishment of clusters in traditional sectors;
- to support start-ups and well-functioning companies in order to increase their innovative potential;
- to build up mechanisms for attracting foreign investments towards scientific areas.

The proposed measures for realisation of the strategy completely correspond to the well-established European practices and aim at stimulating the development of all innovation spheres on project basis. They are divided into 2 groups:

1. Financial measures:

• to stimulate innovation and technological development through establishment of a National Innovation Fund that will ensure financing to innovative and market-oriented projects through partnerships with the state administration, scientific institutions and companies;
• to encourage the employment of experts in the field of science and SME technologies through adequate financial stimuli;
• to create new and/or to enlarge existing technology centers which should expand the opportunities for utilisation of scientific achievements from the real business.
  

2. Non-financial measures:

• to optimise the potential of the scientific and technological sector with the help of a continuous dialogue among all participants in the process of creating, implementing and realising the scientific knowledge;
• to train into entrepreneurship;
• to establish clusters in Bulgaria, i.e. to activate the vertical and horizontal integration of the value-added chains;
• to adopt the European indicators that measure the innovation potential of enterprises in order to create a system for assessment and analysis of innovation processes and opportunity for management decisions to be made;
• to attract foreign investments in the field of R&D and to encourage the transfer of technology thus making use of the achievements of established Bulgarian scientific units;
• to support existing technology parks and to set up new ones;
• to establish centers for entrepreneurship at the universities, which will teach modern business practices to students who are willing to transfer their knowledge into practice.

The vision of the Bulgarian government concerning the innovation policy is to continue the process of strengthening the existing framework with regard to improving the business environment and the investment efficiency, and strengthening the spirit of entrepreneurship. The state expenditures for developing science, technologies and innovation according to the mid- and long-term budget programme will become the basis for attracting private investments in market-oriented projects and encouraging cooperation between science and business.

The Innovation Strategy determines the indicative financial framework for the period till 2014, which will be regularly updated depending on the current economic status during the respective years. According to it the funding will be ensured from the state budget, from local and foreign investors, as well as from external financial sources.

Part of the monitoring and evaluation process of the strategy's implementation will be the reports on the innovation policy's results and efficiency which will be made by the Minister of Economy and submitted to the Council of Ministers. These reports will contain not only the measures already adopted, but will also present the future actions needed for the next budgeting period together with the respective financial and economic justification. The reports will be the starting point for raising discussions on long-term programming and budgeting of innovations in Bulgaria. In the work process the Minister of Economy will be supported by the National Council on Innovation that has as members representatives of the Ministry of Economy, the Ministry of Education, the Ministry of Finance, university rectors, the Managing Board of the Bulgarian Academy of Science, the Managing Board of the National Innovations Fund, business organizations, and a designated representative of ARC Fund.