2. Europe has been ill
“European Central Bank President Mario Draghi is signaling he may
go negative in his campaign to rescue the euro-area economy.”
(Bloomberg, May 3, 2013: http://bloom.bg/18y1OSe)
“The eurozone is now in its longest ever recession”
“The eurozone is facing a double blow from necessary restructuring
of its domestic economy..” - Marie Diron, senior economic adviser
to Ernst & Young
(Source Time May 15, 2013: http://ti.me/14nGHlb )
3
3 years of austerity, 2 years of recession
3. EU illness left some stuck half way
EU: GDP/capitaEU: GDP/capitaEU: GDP/capitaEU: GDP/capita Emerging EuropeEmerging EuropeEmerging EuropeEmerging Europe Black Sea regionBlack Sea regionBlack Sea regionBlack Sea region
$39,028 $36,941 $35,548
$15,001 $14,312 $12,808
$7,374 $5,930 $5,838
Germany UK France Turkey Bulgaria Romania Ukraine Georgia Armenia
Source: IMF
4. “We’re now trying to attract private investors to take more risk
that will help boost economic growth and create jobs.” -
Finland’s Economy Ministry
“In it’s venture capital program, Finland wants to attract 1billion
euro, where 10 funds will invest in about 100 companies, helping
to create about 6,000 jobs over five years.”
(Bloomberg April 5, 2013: http://bloom.bg/Xh8h27 ) 5
Helping oneself in 2013:
Finland turns to venture
5. Global Index of Cognitive Skills and Educational Attainment: Overall Results
Note: Numbers next to each country’s name indicate the country’s place in the overall ranking
Source: Economist Intelligence Unit
Group 1 Group 2 Group 3 Group 4
-1
-0.5
0
0.5
1
1.5
Finland (1) South
Korea (2)
Hong Kong
(3)
Japan (4) Singapore
(5)
UK (6) Denmark
(12)
Poland (14) Germany
(15)
Czech
Republic
(22)
Spain (28) Bulgaria
(30)
Greece (31) Romania
(32)
6
Leadership in knowledge helps
6. Top 6 Bottom 6
Note: Numbers next to each country’s name indicate the country’s place in the overall ranking
Source: INSEAD
68.2
64.8 63.5
61.8 61.2 60.5
45.3 44.5
41.4 40.7 40.4
37.8
35.3
0
10
20
30
40
50
60
70
80
Score(0–100)
Global Innovation Index 2012
7
Gap to bridge
As knowledge is power...
7. 1. CEE in its current form will not exist any more –
Europe will consist of EU and non-EU countries,
and the region will be much more diverse
2. The region will not be among the global
emerging markets but will remain the main
European growth region. GDP growth will
plateau at about 2% above WE level
3. Although the CEE countries continue to
develop from "workbenches" to innovation-
driven economies, the gap between Western
Europe and CEE will persist
4. Lack of basic requirements (institutions,
infrastructure) will remain CEE's main weakness,
whereas efficiency enhancement is a
competitive advantage
5. Human capital issues (demographic
development, brain drain, education) will
remain the second bottleneck for further
economic development
6. In 2020, CEE will still be dependent on
Western Europe – Pan-CEE business is
developing fast and may become a
potential way out
7. Its unique position as a bridgehead between
the emerging markets of Russia, Turkey,
China and the advanced economies of
Western Europe is CEE's future capital
8. Counteracting the scarcity of energy & raw
materials, the consolidation of public
finances and the consequences of
technological progress are the main tasks for
the next decade
9. The regional growth industries will be energy
& utilities, IT & telecom and pharma &
healthcare – Shift toward future industries
needed
10.The main future growth drivers are thought
to be energy-related (energy efficiency,
renewables) and IT solutions
Ten assumptions for CEE through 2020
Source: Roland Berger – CEE 2020 study
8
Emerging Europe: an account
8. 9
So, it’s difficult, but..
“In the middle of difficulty lies opportunity”
Albert Einstein
9. Entrepreneurial ecosystem – the ideal case
Entrepreneursh
ip
Policy
Finance
Culture
Support
s
Human
Capital
Markets
Leadership
Unequivocal support
Social legitimacy
Open door for advocate
Entrepreneurship strategy
Urgency, crisis and challenge
Government
Institutions e.g. investment, support
Financial support e.g. for R&D, jump start funds
Regulatory framework Incentives e.g. Tax benefits
Research institutes
Venture-friendly legislation e.g. Bankruptcy, contract enforcement,
property rights and labor
Financial Capital
Micro-loans
Angel investors, friends and family
Zero-stage venture capital
Venture capital funds
Private equity
Public capital markets
Debt
Success Stories
Visible successes
Wealth generation for founders
International reputation
Societal norms
Tolerance of risk, mistakes, failure
Innovation, creativity, experimentation
Social status of entrepreneur
Wealth creation
Ambition, drive
Non-Governmental Institutions
Entrepreneurship promotion in non-profits
Business plan contests
Conferences
Entrepreneur-friendly associations
Support professions
Legal
Accounting
Investment bankers
Technical experts, advisors
Infrastructure
Telecommunications
Transportation & logistics
Energy
Zones, incubation centers,
clusters
Early Customers
Early adopters for proof-of-concept
Expertise in productizing
Reference customer
First reviews
Distribution channels
Networks
Entrepreneur’s networks
Diaspora networks
Multinational corporations
Labor
Skilled and unskilled
Serial entrepreneurs
Later generation family
Educational institutions
General degrees (professional
and academic)
Specific entrepreneurship training
10
10. Romania
Population: 21.4 million
Internet penetration: 44.1%
Greece
Population: 11.3 million
Internet penetration: 53.0%
Russia
Population: 142.5 million
Internet penetration: 47.7%
EU
Population: 504 million
Internet penetration: 73%
Turkey
Population: 74.7 million
Internet penetration: 45.7%
Serbia
Population: 7.3 million
Internet penetration: 56.4%
Macedonia
Population: 2.1million
Internet penetration: 56.7%
11
RegionalRegionalRegionalRegional VC fundsVC fundsVC fundsVC fundsUniversitiesUniversitiesUniversitiesUniversities
Exit RoutesExit RoutesExit RoutesExit Routes
NEVEQ (NEVEQ (NEVEQ (NEVEQ (€€€€26M)26M)26M)26M)
Eleven (€12M)
LAUNCHub (€9M)
Bulgarian Business Angels Network
(>400 projects; 3 funded)
AUBG
Sofia University
Technical Universities
Bulgaria-based IT companies
2012 revenues > $200M
including multinationals > $500M
BULGARIABULGARIABULGARIABULGARIA
Population: 7.3 million
Internet penetration: 51%
VMware/Sciant
Sanoma/NetInfo
Velti/M-Telecom
Apptix/Webmessenger
Sources: Eurostat; www.internetworldstats.com
IT multinationalsIT multinationalsIT multinationalsIT multinationals
NEVEQ
MCI
3TS
Summit Partners
BLUERUN Ventures
Index Ventures
Entrepreneurial ecosystem – Bulgaria today
11. How to boost an entrepreneurship
ecosystem: A Formula That Works
12
