IS BULGARIAN BUSINESS READY FOR INDUSTRY 5.0?

At what level are digital competencies in our country, how are companies preparing, how will work change with the introduction of AI, Tomcho Tomov, director of the National Competence Assessment Center at BIA, in an interview for Jobs.bg

BIA publishes data from analyzes and studies conducted within the framework of the "Ready for Digital Transformation" project. According to them, 60% of enterprises in our country are defined at a low and moderate level of digitization, and only 19% of people in key positions possess the necessary digital skills. At the same time, 38% of those surveyed have only basic digital skills.

Economy.bg met with Tomcho Tomov, director of the National Competence Assessment Center at BSK, to talk more about the research, what is missing in terms of competencies, what the labor market needs, what businesses should focus on, what the market looks like of labor today and what it will look like in 5 years.

The study of BIA within the project "Ready for digital transformation"

We conducted several studies, covering over 130 enterprises from 16 economic sectors, about 1500 individuals. Some of them hold key positions in these enterprises, the other part are employees and workers. The data is alarming because our economy in general and these industries in particular are actually lagging behind in the digital transformation process. Two-thirds of enterprises are defined as having a low and moderately low level of digitalization. This means that some problems related to the transformation of analog information into digital are solved, the efficiency of some processes and management systems is increased, but these are isolated and sporadic solutions, not in an overall context related to the transition to digitalization.

The reasons are mainly that digitization is not a priority at the moment, they have other priorities caused by the economic crisis, the financial situation. Another reason is related to the low level of digital skills of employees. A third reason is that there is a lack of strategy, an overall strategy. Only 20% of these enterprises have a digitalization strategy and any long-term investment plans and intentions in this area. They must calculate, optimize, understand the benefits, the effects of digitalization for the future, for the development of the enterprise, for the improvement of processes. And there are many inhibitions and barriers in people.

What the research shows is that 90% of jobs have been transformed in terms of the tasks and functions that are required. About 50% of jobs are covered in completely new business processes, new business management systems and technological development. No matter how much digitization is at a slower pace in Bulgaria, it is starting to put pressure on people, the demands are constantly growing. In practice, digital skills are at a, I would say, basic level.

What can also be said as a result of the project is that around 30% of employers are actively investing in digital skills development. For the rest, it is only partially related to solving and implementing some software. In some places, people are hardly educated. That is, we pay more attention to technology and not to people.

An example of a specific competency that a person should possess in a certain position, but does not have it

They are a lot. They are different competencies. Here we even have to include not only digital skills but also soft skills, they go hand in hand. Specific competencies that are needed - say, not just being able to work with some software, but to think creatively, to think critically, to look for new opportunities to use different software, to implement new technologies, to be able to develop a task to the specialists who prepare the software.

Other problems and acute deficits are related to working with modern systems, ERP systems for customer relations, enterprise resource management systems, specific competencies related to working with modeling software, technical drawing, design. Even skills related to creating spreadsheets and cloud computing are very seriously lacking.

What does this mean for the quality of the workforce in our country?

It means that there is a mismatch between demand and supply of skills or quality in the labor market. And this scissor, this gap is opening ever wider. It means that a significant part, I said around 30% and maybe more of the workforce, is at real risk of being digitally isolated. This is a new type of social inequality, which, however, leads to many consequences and loss of work, dropping out of the labor market, more limited opportunities. For employers themselves, this is a serious problem and very active measures must be taken and investment in people's skills must be taken. Even as I said, to invest in future skills.

One of the conclusions of this research is that thousands of people are at risk of dropping out of the labor market because of low digital competence.

From which sectors and in what type of positions are they most at risk of dropping out of the labor market?

Of all the sectors we have observed now. This inequality is also observed between the economic sectors themselves. There are sectors that are much more technologically mature. People have access to higher technology in the conditions of work itself. There are sectors in which technology is limited, so investments in automation, in the development of new technologies, in improvements are smaller.

In light of the results, what does the labor market look like in our country?

The need for qualified personnel continues and exceeds the 200-300,000 shortage. The vast majority of employers claim that they cannot find people who even partially meet the requirements for the positions they are looking for. The deficits are the same. In the field of STEM skills, STEM, qualifications, technical and engineering personnel, IT specialists.

Deficits are observed in relation to people with analytical professions, prognostic professions, managerial positions. Things also have a regional expression and inequality. Qualified personnel are concentrated in ten cities of Bulgaria. Including physical labor shortages are observed in many sectors, especially those that employ seasonal workers.

And what will it look like in 5 years?

It depends on many factors – the crisis, the war in Ukraine, resource problems, ecology. But in any case, our economy will move at a much wider pace towards digitization and towards limiting harmful emissions, i.e., towards a green economy. In other words, digital jobs and green jobs. There will be many new skills that will be required of people. Again, I emphasize both STEM skills and soft skills. However, the labor market in Bulgaria does not look good and this is related to aging. If we look at the issue demographically, in 5 years people over the age of 50-55 will make up about 40-47% of the labor force in Bulgaria.

If there are no serious tremors with migration etc. Then it will be even worse. And now we see that about 200-300,000 retirees are still working, and serious attention needs to be paid to the environment that is being created, with a view to keeping them for a longer period of time, that is, keeping them not by force, but keeping people in good health with good potential in the workplace. Shortages of IT professionals will grow.