News

One of the main focuses of IME’s latest Regional profiles is the observation that the periphery of the big economic centres in the country is moving ahead. The Sofia district, which houses both the industrial zones of the city - for example, Bozhurishte and Kostinbrod, as well as part of the heavy industry in the Srednogorie region - such as Pirdop and Chelopech, is already catching up with the capital both in terms of employment and per capita production. That is why it is important to go out of the ordinary lines of discussion, which increasingly emphasizes the big regional differences and the gap between the capital and every other place.

The other centres with widespread peripheries - mainly Plovdiv and Varna - are often underestimated despite showing great progress in the last couple of years.

It is important to focus on the secondary centres because this is where more profound changes to the regional map are actually made. There is no way to talk about economic development and/or reducing inequalities between poor and affluent districts without first paying attention to the revival of some major cities outside the capital. Plovdiv and Varna are particularly interesting, not only because they are the second and third largest cities in the country, but also because, along with their peripheries, they already have more than 1 million inhabitants. By "periphery" we mean these towns and villages - the surrounding municipalities, which have close economic ties with the big city and in fact complement the economic centre.

The similarity between Plovdiv and Varna is that both centres have extremely strong industries located in the peripheral municipalities. Maritsa and Rakovski near Plovdiv, as well as Devnya near Varna, are in the top 10 municipalities in the country by production in manufacturing - each within the range of 1-1.5 billion BGN per year. Strong industries also affect wages, with three municipalities, particularly among the maritime capital's satellites, making it to the top 15 in salaries. These are Beloslav, Suvorovo and Devnya with average salaries of 1300 - 1700 BGN per month. Similar to the industry around the capital, Plovdiv and Varna show that strong manufacturing in peripheral municipalities is key to the prospects for the big city.

Plovdiv and Varna are among the few district centres that managed to increase their population in the last couple years.

This means that the positive influx of people – i.e. more people moving in rather than moving out – manages to compensate the country-wide negative natural increase. The reasons for this, along with the strong industry, are both in the high number of students - over 50 in every 1000 people in both fields, and in the increasing opportunities for young people in the service sector.  And although Varna remains highly dependent on the seaside tourism, in this case we are referring the development of information technologies.

A general look at the ICT (information and communication technologies) sector shows that this is currently the most dynamic economic activity in the country - with the strongest employment growth in recent years and undoubtedly the highest salaries. Sofia remains the absolute leader in this field, but in the last few years things have started moving towards larger secondary centres. Plovdiv already has 4,000 employees in the ICT sector at an average salary of 2,500 BGN per month, while in Varna there are 3,600 employees at an average salary of about 1,900 BGN per month. This number may still look very limited, but it is a clear signal for the expansion of the ICT sector in Plovdiv and Varna and the emergence of a high-paying opportunities for young people outside the traditional industries.

If we take a look at the next largest secondary centres - these would be Burgas, Stara Zagora, Ruse and Pleven, we will see that they unavoidably have one or more weak sides compared to the discussed Plovdiv and Varna. Whether that would be a weaker industry in the periphery (Burgas), severely negative demographic trends (Pleven and Ruse), poor educational structure of the population (Stara Zagora), or fewer students (Burgas, Pleven, Stara Zagora) these are all factors that in one way or another limit their potential. The ICT sector, although making timid steps in these cities, has not yet taken the lead.

All that said goes to show that the next regional news will most probably be about the rise of leading secondary centres.

The big cities that traditionally have an influx of students and attract young people, where university graduates are a solid share of the working population, cities which have a strong industry in their periphery and manage to become part of the growing ICT sector, are beginning to unlock their potential. This is evident not only from the economic indicators but also from the change in the social environment - including the emergence of multiple alternative urban spaces.

The secondary centres following them, such as Burgas, Stara Zagora, Ruse and Pleven, also have their potential, but they also face the challenge of turning demographic processes steadily to their advantage.