Telematics And Communication
Technologies Industrial Comparative Study
The material for this page was presented at the Southeast Europe Economic Forum 2000, held in Sofia, October 17, 2000.
by Dr. Ivan Tchalakov, E-mail: tchalakov@sociology.bas.bg
Institute for Financial Studies and Innovation (IFPI); Technology Studies Group, Institute of Sociology - BAS
TACTICS is supported by the European Commission DG 'Research' within the Framework IV INCO-Copernicus programme.
For an introduction to the TACTICS project go to: TACTICS home page
For other EC projects go to: Isomatic table of contents
This page shows the results of the survey that formed a major part of the project work. The numbers of samples and statistical errors are shown in the table below.
The information technologies and telecommunications sector, 10 years ago almost entirely possessed by the state, is now completely privatised, the state or municipalities having a control share in less than 2% of the firms.
The share of foreign capital in the sector is low. With 8.3% Romania has the highest share of foreign capital controlled companies. Although small (3.2%), the control share of foreign capital in Bulgaria is bigger than the state one (1.6%), and if estimated along with the presence of foreign investors in the Bulgarian firms, it increases to 5.2%.
The former big IT enterprises have been privatised or have disappeared and the vast majority of firms are new, established after 1990. There are important variations between the countries concerning number of newly established firms during the years.
Legal entities dominating the sector are sole traders in Bulgaria and limited liability companies in Romania and Macedonia. Share holding companies account for approximately 10% of the firms (slightly lower in Macedonia - 6.5%).
There are important differences in the dominant economic characteristics of the firms between the countries:
In Bulgaria the largest type are self-employed and micro firms with a turnover below DM 10 000 per year and personnel numbering less than 5 people (over 40% of the firms);
In Romania and Macedonia there is a more even distribution among the economic types of firms.
Importing (and assembling) of hardware and production of software account for the biggest share of firms' technological activities in Romania and Macedonia, followed by systems integration. In Bulgaria we observed a more evenly distributed profile, industrial automation being more represented.
We clearly observed the effects of the global process of integration of the century-old telephone utilities and their equipment suppliers with the younger computer industry together with publishing, television, entertainment, cable and film companies just entering the field. This process is more advanced in Romania.
Clustering of technological profiles reveal another aspect of this process of integration, identifying the important group of advanced communication firms (30.5%), combining hardware and software with at least one type computer communications - system integration, Internet, telecommunication, telematics,).
Complex hardware firms are another group with 14.5%. There are several smaller groups of specialised mono-profile firms, software producers being the largest one (16%).
Analysis of firms activities in the fields of production, assembly, trade, public services, consulting and system solutions shows domination of trade and service oriented firms - the four groups of service and trade firms account for 53,6% of the firms. Production oriented firms are 14.5% (together with assembly-oriented firms their share increases to 27.1%).
Distribution of these activities among the countries reveals significant variations, production and services being well represented in Bulgaria, trade oriented firms - in Macedonia and Romania.
The business activities in this sector are oriented towards the domestic market - almost 4/5 of the firms have no exports !
The exporters are divided into three well defined groups:
These groups share a number of important characteristics related to their R&D activities, business interactions (types of collaboration and competition), intensity of contacts with public bodies, etc.
Multiple correspondence analysis indicates not simply exports, but the type of foreign business partnership is most important. It shows that about 45% of the firms have no foreign business partners at all, but the rest are engaged in some type of foreign relationships - import, export, non-trade partnership (R&D, staff training, etc.).
There is a small group of firms (8.7%), which are obliged by their foreign partners (mostly multinational companies) to sell on the domestic market only. However, the majority of these are big firms - 2/3 are with a turnover over DM 1 million (few below DM 50 000).
About 1/3 of firms in this sector are high-tech firms (28.6%), investing over 20% of their annual turnover in R&D; other 18.2% investing between 5-19% of their turnover in R&D. As a whole 52.4% of the studied firms have R&D activities. Another 11% declare that they did in the past, but ceased doing R&D because of the difficult economic situation !
The average investment for 1999 for Bulgarian R&D firms is DM 100 297 (taking into account the confidence interval the average annual investment in R&D is between DM 56 000 and 144 000, the highest amount being DM 1.865 millions).
The largest share of investments in R&D came from own resources. Our conclusion is that conducting R&D is a strategic choice for an important part of firms in the sector as a way to survive in the difficult situation of 1990s, closely related with their strategy for export. This is particularly true for software and industrial automation firms.
More than 1/3 of the new IT and telecommunication firms employed R&D staff of former state-owned IT and telecommunication industries.
Most of the studied firms experience problems when subscribing or using national telecommunication operators' services. The share of firms reporting problems is lower in Romania (especially in operation and maintenance) - the only country with privatised national telecom.
Problems in opening of phone post and during its operation are higher in Bulgaria. Macedonia has the higher share of firms complaining of problems during subscription and use of advanced telecommunication services - connection to Internet, ISDN and data transmission network.
Less than 1/5 of firms use (regularly or incidentally) advanced communication service (IP telephony, video-conferences) in their contacts with customers. (The share of Bulgarian firms is lower, if in the margin of statistical error).
The share of customers with national and international computer network vary from almost 1:3 for Bulgarian firms to almost 1:2 for Macedonian firms. The higher share of small firms in Bulgaria reflects in the lower share of customers serving their own country and especially international computer networks.
2/3 of Bulgarian and Romanian firms and 4/5 of Macedonian firms have customers with their own web-site. For about 10% of the firms more than half of their customers possess such a web-site.
Web sites are used mostly for advertising and for supplying information to the customers. Still almost 10% of the firms have customers making steps in e-commerce and on-line maintenance.
Possession of licences - for type approval, voice, data, paging, Internet, etc. - and licence-based relationships are an important aspect of a firm's involvement in the legal framework of the business. Licensing regimes varies among the countries (for example Bulgarian and Macedonia have different regimes for Internet providers), but data describe the general situation in licensing for number of advanced communications activities.
The survey has shown that majority of firms in Bulgaria and Macedonia (about 68%) have no type of licences (including type approval), while 56% of Romania firms possess some type of licences.
Approximately the same share of Romanian and Bulgarian firms (13-14%) had some problems with their business partners because of their lack of licences. In Macedonia 1/3 of the firms had such problems with their business partners.
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The TACTICS consortium gratefully acknowledges the financial support by European Commission DG 'Research' within the Framework IV INCO-Copernicus programme. Without that support, this work would never have been undertaken.
Copyright for the contents of this web page is owned by the TACTICS consortium. Reproduction is permitted without charge on condition that the TACTICS project and the support received from European Commission DG 'Research' within the Framework IV INCO-Copernicus programme are acknowledged.
This report was originated by the Bulgarian scientific co-ordinating team at the Institute of sociology, Bulgarian Academy of Sciences. Please send any questions or comments on the scientific content to scientific co-ordinator Ivan Tchalakov tchalakov@sociology.bas.bg
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