DIGITAL TRANSFORMATION OF ENTERPRISES: ASPECTS OF INNOVATION FINANCING

The digitalisation of enterprises is considered a fundamental factor for increasing the competitiveness, efficiency and sustainability of economies in the European Union (EU). According to the literature, the process of digital transformation in Bulgaria continues to lag behind EU averages, indicating unrevealed potential for Small and Medium Enterprises (SMEs). This study aims to present an exploration of the current state of digitalisation in SMEs in Bulgaria and to reveal the potential benefits and restraining factors of digital transformations. We use data from Eurostat on the European Commission's Digital Economy and Society Index (DESI) and the Digital Intensity Index (DII). The main barriers hindering the digitalization process are summarized and presented, such as the lack of qualified staff, limited financial capacity of SMEs, insufficient digital literacy and the lack of effective interaction between actors in the process. Important benefits related to digital transformation are highlighted, including cost optimisation, facilitating access to new markets, and improving customer service. Finally, the main financial instruments applied under the European Structural and Investment Funds (ESIF) to support digital business transformation are systematized, including loans, equity investments, guarantee mechanisms and combined financial products.