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emergence of backward linkages replacing imports with parts domestically produced. Both developments have positive spillovers.

The shift towards specialization in furniture parts is indicative of Bulgaria’s overall progress in industrial restructuring following the pattern of earlier and more consistent reformers. Consider that while in 1995 only Slovenia, one of the most industrialized countries among CEEC-10 and important supplier to EU furniture producers already in the 1980s and to a lesser extent Hungary specialized in furniture parts, the situation changed already by 1999. For most CEEC-10 economies (except Latvia, Lithuania, Slovakia), exports of parts increased more than exports of final products in 1999-2003 (Table 29). Furniture parts have also become the driver of furniture network exports for most countries including most recently Bulgaria.

**Table 29:** _Bulgaria’s involvement in furniture network in comparative perspective in 1996, 1999 and 2003_

||Sh<br>manufact|are in exports<br>ures (chemic<br>(inpercent)|of<br>als excl.)|Share<br> furniture<br>(i|of parts i<br>network's<br>npercent|n total<br>exports<br> )|Import i<br>(parts<br>network|ntensity<br>as % of<br> exports)|Exports (cu<br>total<br>Index,2003|rrent US $)<br>parts<br>Index,2003|
|---|---|---|---|---|---|---|---|---|---|---|
||1996|1999|2003|1996|1999|2003|1999|2003|1999=100|1999=100|
|Czech R.|3.1|3.5|3.1|51|62|68|23|20|168|183|
|Estonia|7.2|7.4|8.1|27|37|45|8|5|228|278|
|Hungary|3.8|2.8|2.4|47|73|76|19|23|148|154|
|Latvia|5.7|9.3|8.9|47|45|37|9|10|169|138|
|Lithuania|3.5|5.8|9.2|18|36|27|9|6|383|292|
|Poland|10.0|10.1|9.7|12|17|31|9|10|199|354|
|Slovak R.|3.8|2.4|4.8|14|36|24|30|25|461|310|
|Slovenia|7.1|9.1|9.0|49|64|67|11|13|143|149|
|**Bulgaria**|**1.7**|**2.4**|**3.0**|**14**|**20**|**22**|**18**|**11**|**284**|**318**|
|Croatia|4.5|3.8|4.6|26|32|44|22|23|169|232|
|Romania|9.0|6.9|5.8|3|10|16|3|5|184|296|
|Albania|1.1|1.8|1.5|79|74|56|194|69|107|82|
|Macedonia|0.5|1.0|0.6|23|17|17|22|43|74|74|
|Moldova|4.2|1.5|0.5|2|50|37|58|112|69|52|
|Serb&Mont|6.2|4.2|3.2|12|11|11|15|28|120|126|

Note: For Serbia and Montenegro the most recent data available are for 2002. Source: Computations based on UN COMTRADE Statistics.

Although the share of furniture network in Bulgaria’s exports of manufactured goods, excluding chemicals, remains low, it almost doubled between 1996 and 2003. Moreover, it is low only by standards of CEEC-8 and Romania but not in comparison to SEE economies except Serbia and Montenegro. However, in the latter, these exports have been falling since 1996.

In all, developments in trade of ‘buyer-driven’ value chains seem to support the following observations: Respective industrial sectors in Bulgaria are not enclaves, but appear to be soundly immersed in the domestic economy. All of them have been very competitive in EU markets indicating significant progress in industrial restructuring. They have become part of global value chains, organized mainly by EU firms.

# **B** **_._** _‘Producer-driven’ chains: automotive and information technology networks_

Despite huge differences, both ICT (information communication technology) and automotive sectors share an important characteristic; under the pressure of technological change released by Information Revolution “one stop shop” industrial structures have practically disappeared. Miniaturization, exponential growth in information processing and storage capacities combined with integration of Internet and imaging technologies have been the major driving forces behind transformation of both auto industry and ICT sectors worldwide over the last two decades. While several large MNCs coordinating production and marketing activities across the globe have traditionally dominated both sectors, MNCs in both of them have undergone dramatic change over the past two decades. Their common denominator has been