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SOFIA (Bulgaria), December 7 (SeeNews) - The percentage of Bulgarian companies which made no investments in the last financial year is the second highest in the European Union, and the local business is even less optimistic about investments in 2018, mainly due to lack of skilled workers and uncertainty about the future, according to a survey by the European Investment Bank (EIB) presented on Friday.
Only 64% of Bulgarian companies made investments in the last financial year, compared to 87% EU-wide, the annual EIB Investment and Investment Finance Survey (EIBIS) showed.
The results of the survey were presented at a conference in Sofia organised in partnership with the Chambers of Commerce of Austria, France, Germany, Greece and Italy. The findings are based on interviews with 476 firms in Bulgaria in the April-August period of 2018.
Corporate investments in intangible assets and development of new products and services in the country are 14 percentage points lower than the average in the bloc - at 22% versus 36% in the EU - and innovative firms rely mostly on adopting innovation rather than developing it. At the same time, investment in machinery and equipment has the highest share in the total investment of Bulgarian companies - 59%, as compared to an EU average of 47%.
Nearly a fifth of Bulgarian firms assess their investment over the past three years as insufficient. As a result, the quality of corporate fiscal assets is relatively low and the share of state-of-the art machinery and equipment of Bulgarian firms is only half of the EU average, the survey showed.
Consequently, the companies' productivity remains significantly lower than the EU average, with most Bulgarian companies in the lowest EU quintile.
The percentage of finance-constrained firms in Bulgaria, 9%, is among the highest in the EU. Internal funds account for 75% of investment finance as the cost of finance and collateral requirements are a major impediment to external finance for local businesses.
According to the EIB, to address these risks to ensuring sustainable growth in the country, the government should come up with incentives for corporate R&D, create an environment for cooperation between universities and businesses, and improve access to risk finance for scaling operations.
Around one in five companies in Bulgaria says it has developed or introduces new products, processes or services in the last financial year, as compared to 34% in the EU. Innovative firms export more and are mostly concentrated in manufacturing - 31% of all, the survey found out. As many as 27% of large firms report innovative activities, as compared to 17% of SMEs.
Only 2% of Bulgarian companies invested abroad in the last financial year, which is well below the EU average of 12%.