Encouraging the Investment Activity in High Value-Added Economic Sectors and Activities in Conditions of Demographic Restrictions of the Labour Force in Bulgaria
Encouraging the Investment Activity in High Value-Added Economic Sectors and Activities in Conditions of Demographic Restrictions of the Labour Force in Bulgaria

Summary/Abstract: The decrease in the labor force as a result of the on-going demographic processes of decrease in the natural growth rate of the population and the sustainable emigration raises a series of questions about the possibilities to achieve better balancing of the demand and supply for labor through restructuring of employment. The goal of the study is to conduct an immediate situational analysis of the opinions of the main “players” in the investment process in order to examine, analyze and assess the investment environment and the stimuli for creating more jobs in sectors and activities with higher added value. The main thesis is that creating more jobs with higher productivity of labor and higher wages could be a successful policy for better balancing of the demand and supply of labor, for compensation of the shortage of labor force and for improvement of its quality. The better working conditions and the higher wages are prerequisites for improving the quality of life, which is an important condition for stimulating the reproduction of the population and for decreasing emigration intentions. The study presents economic arguments for the need for more active stimulation of the investments in economic activities and sectors that create higher added value on the basis of an analysis of various aspects of the structure of the economy; created added value; employed labor force; share of highly technological exports in total export and others. The analysis indicates that the dynamic of job creation in sectors that generate added value is not sufficient, which also conditions the lagging behind of the country in a series of indicators for science intensity and innovation in the European space. These conclusions are supplemented by the results from in-depth interviews, conducted with representatives of branch organizations, employers, local authorities and national institutions, which focused on the conditions and stimuli for investment in sectors and activities with high value added. The summary of the voiced opinions and assessments allows for the synthesis of key aspects of policies that encourage the improvement of the environment and stimulate the creation of workplaces in sectors and activities that create higher value added.

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