2

DigiWALKA digital entrepreneurship network for Southeast

Europe

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 )

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3 years of austerity, 2 years of recession

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

“We’re now trying to attract private investors to take more riskthat will help boost economic growth and create jobs.” -

Finland’s Economy Ministry

“In it’s venture capital program, Finland wants to attract 1billioneuro, 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

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 rankingSource: Economist Intelligence Unit

Group 1 Group 2 Group 3 Group 4

-1

-0.5

0

0.5

1

1.5

Finland (1) SouthKorea (2)

Hong Kong(3)

Japan (4) Singapore(5)

UK (6) Denmark(12)

Poland (14) Germany(15)

CzechRepublic

(22)

Spain (28) Bulgaria(30)

Greece (31) Romania(32)

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Leadership in knowledge helps

Top 6 Bottom 6

Note: Numbers next to each country’s name indicate the country’s place in the overall rankingSource: INSEAD

68.2

64.8 63.561.8 61.2 60.5

45.3 44.541.4 40.7 40.4

37.835.3

0

10

20

30

40

50

60

70

80

Sco

re (

0–1

00

)

Global Innovation Index 2012

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Gap to bridge

As knowledge is power...

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 study8

Emerging Europe: an account

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So, it’s difficult, but..

“In the middle of difficulty lies opportunity”Albert Einstein

Entrepreneurial ecosystem – the ideal case

Entrepreneurship

Policy

Finance

Culture

Supports

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

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Romania

Population: 21.4 millionInternet penetration: 44.1%

Greece

Population: 11.3 millionInternet penetration: 53.0%

Russia

Population: 142.5 millionInternet penetration: 47.7%

EU

Population: 504 millionInternet penetration: 73%

Turkey

Population: 74.7 millionInternet penetration: 45.7%

SerbiaPopulation: 7.3 millionInternet penetration: 56.4%

MacedoniaPopulation: 2.1millionInternet penetration: 56.7%

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Regional Regional Regional Regional 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)

AUBGSofia University

Technical Universities

Bulgaria-based IT companies2012 revenues > $200Mincluding multinationals > $500M

BULGARIABULGARIABULGARIABULGARIAPopulation: 7.3 millionInternet penetration: 51%

VMware/SciantSanoma/NetInfoVelti/M-TelecomApptix/Webmessenger

Sources: Eurostat; www.internetworldstats.com

IT multinationalsIT multinationalsIT multinationalsIT multinationals

NEVEQMCI3TS

Summit PartnersBLUERUN VenturesIndex Ventures

Entrepreneurial ecosystem – Bulgaria today

How to boost an entrepreneurship

ecosystem: A Formula That Works

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DigiWALK: an initiative of DigitalK

and Red Innova

DigitalK participant

DigitalK participant

DigitalK participant

DigitalK participant

DigitalK participant14

DigitalK partner