Technology Infrastructure

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Technology Infrastructure

• SCIENCE TECHNOLOGY PARKS
• IN TURKEY
• MUSTAFA ATILLA
• CEO, Ankara Cyberpark, Turkey
• Knowledge Economy Forum IV
• March 22-24, 2004
• Istanbul, Turkey

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TURKEY RD CAPACITY

• GERD / GDP around 0.64
• RD expenditures by sector
• 60 in universities
• 30 in private sector
• 10 in public sector
• Number of registered patents around 1,200
  (less than 100 of which are native patents)
• Number of scientific publications more than
  10,000

Number of people in RD by Sector  
(SSI, 2004)
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TURKEY RD CAPACITY
Source OECD MSTI database, Nov. 2003
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SOME RD RELATED PROBLEMS OF TURKEY

• Legislation (particularly inefficient and
  insufficient incentive mechanisms) was the
  biggest barrier in front of RD activities for
  many years.
• An important portion of RD investment is made by
  governmental institutions or universities
• Insufficient financial resources and bureacuracy
  in access to existing financial resources
• Absence of incentive mechanisms for RD
  commercialization
• Weak innovation culture and poor RD
  infrastructure
• IT related products and software form an
  important import category. There is a big
  negative imbalance in IT exports/imports.
• The imbalance between the number of scientific
  publications and patents is an important
  indicator showing Turkeys inability to convert
  the scientific research studies into applicable
  knowledge and technological products.

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HOW STPs EMERGED IN TURKEY?

• Technopark concept taken in the agenda of Turkey
  only in the mid 90s (40 years after
  establishment of Silicon Valley!)
• Like many developing countries, such as India,
  China, Malaysia, Singapore, Taiwan, Thailand
  Turkey also started to use STPs as its primary
  strategy for
• promoting research and development, and
  technology transfer,
• reducing brain drain by providing employment for
  high-skilled IT and RD workers
• attracting foreign direct investment and
  generating foreign exchange from selling software
  and RD products for export
• generating sustainable economic growth and local
  know how

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TECHNOLOGY DEVELOPMENT ZONES LAW (LAW NO4691),
TURKEY

• To promote the establishment of science and
  technology parks under the guidance and lead of
  universities some legislations were made by
  Ministry of Industry and Trade
• Technology Development Zones (TDZ) Law (Law
  No4691), which came into force on 06.07.2001,
  and
• Application Regulation of this Law, which came
  into force on 19.06.2002.
• With this law, companies are encouraged to invest
  more in RD and software development, through tax
  incentives.
• Any kind of software development activity is
  considered as an RD activity according to the
  law.
• In establishing a STP, involvement of an higher
  education or a research institution as a founder
  is a mandatory requirement in the law

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TECHNOLOGY DEVELOPMENT ZONES LAW (LAW NO4691),
TURKEY

• The aim of the law is
• to increase synergy between universities,
  research institutes and industry,
• to increase international competitiveness and
  export potential of industry by
  adapting/developing high/advanced technologies,
• to facilitate more innovations,
• to increase the quality of technological
  products,
• to increase productivity,
• to commercialize technological knowledge,
• to support technology based entrepreneurship,
• to enable SMEs to adapt to new and advanced
  technologies,
• to create investment opportunities in technology
  intensive areas,
• to create employment opportunities for
  researchers and qualified persons,
• to help technology transfer,
• to provide technological infrastructure
  attracting foreign capital and international
  firms providing high/advanced technologies.

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TECHNOLOGY DEVELOPMENT ZONES LAW (LAW NO4691),
TURKEY

• Tax Exemptions and Incentives provided with
  the law (till the end of 2013)
• Income and corporate tax exemptions for the
  operating company
• Income and corporate tax exemptions for the
  incomes generated from software development and
  RD activities of the companies operating in
  these zones
• Income tax exemptions for the salaries of the
  researchers, software development staff and RD
  personnel working in these zones
• VAT exemptions for the sofware development
  activities
• Sponsored aid and donations for the individuals
  and institutions having RD activities in the
  zone
• Right of recruitment of individuals from
  government research organizations or universities
  in the zone with the approval of their
  organizations. (The income obtained in the zone
  by academicians or research personnel are
  exempted from the university revolving fund
  deductions)
• Legal permission for academicians to establish
  firms or become a partner of existing firms in
  the zones to commercialize their academic works
  (with the approval of their university)

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Similar RD Tax Incentives in USA and Europe
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TDZs in TURKEY(As of March 2005)

• Ankara Cyberpark (Bilkent University, Ankara)
• METU Technopolis (METU, Ankara)
• Hacettepe Technopolis (Hacettepe University,
  Ankara)
• GOSB Technopark (Sabanci University and Kocaeli
  University,Kocaeli)
• TÜBITAK MAM (TÜBITAK MAM, Kocaeli)
• Istanbul Teknik University ARI Technopolis (ITÜ,
  Istanbul)
• Izmir TDZ (Izmir YTE, 9 Eylül Univ., Ege Univ.,
  Izmir)
• Yildiz Teknik Üniversitesi TDZ (YTÜ, Istanbul)
• Kocaeli Üniversitesi TDZ (Kocaeli University,
  Kocaeli)
• Eskisehir TDZ (Anadolu Univ., Yunus Emre Univ.,
  Eskisehir)
• Istanbul University TDZ (Istanbul University,
  Istanbul)
• Selçuk University TDZ (Selçuk University, Konya)
• Bati Akdeniz Univ. TDZ (Bati Akdeniz University,
  Antalya)
• Karadeniz Teknik Univ. TDZ (Karadeniz Tek. Univ.,
  Trabzon)
• Erciyes University TDZ (Erciyes University,
  Kayseri)
• Çukurova University TDZ (Çukurova University,
  Adana)

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TDZS in TURKEY(As of March 2005)
Active Technoparks 1.Cyberpark 2.METU 3.Hacettepe
4.GOSB 5.TÜBITAK MAM 6.ITU ARI Technoparks
atInitial Dev. Stage 7. Izmir 8. Yildiz 9.
Kocaeli 10. Eskisehir 11. Istanbul 12.
Selçuk 13. Bati Akdeniz 14. Karadeniz Teknik
15. Erciyes 16. Çukurova
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6
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9
5
4
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1
3
2
10
12
15
7
16
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TDZS in TURKEY

• Number of Companies more than 300
• Number of RD personnel around 2500
• Number of support personnel around 1100

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HOW STPs ARE INTEGRATED WITH THE OTHER COMPONENTS
OF NATIONAL INNOVATION SYSTEM OF TURKEY?

• RD support infrastructure in Turkey have been
  comprised of some institutions providing RD
  financing, while these supports are usually very
  limited and diffucult to obtain.
• After the Technology Development Zones Law
  providing important incentives for companies
  located in STPs, STPs have been important
  components added to our national innovation
  system.
• A new RD loan In 2005, more than 300 million
  USD RD loan is allocated from the governmental
  budget, which will be distributed through TÜBITAK.

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INSTITUTIONS PROVIDING RD FINANCING

• 1. TTGV - Technology Development Foundation of
  Turkey
• Technology Development Financing - Support RD
  activities on marketable product and process
  development / improvement
• Venture Capital
• Technoparks -Innovation Centers Start-ups
• Training, Tech. Assist. and other activities
• Sources of Fund
• Treasury-World Bank funded RD Programs
• UFT Undersecreteriat of Foreign Trade funded RD
  Program
• Own resources

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INSTITUTIONS PROVIDING RD FINANCING

• 2. TÜBITAK-TIDEB / Scientific and Technical
  Research Council Of Turkey-Technology Monitoring
  and Evaluation Board
• As of 2004, total support of around 160 M for
  2000 RD projects
• Support on grant basis
• From concept development to trial production
  stages, exclusively the costs of the research
  activities
• Sources of Fund
• UFT Undersecreteriat of Foreign Trade Fund
  (DEFIF-Support and Price Stabilization Fund)
• New RD Loan gt 300 million USD for 2005 (support
  mechanisms will be determined soon)

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INSTITUTIONS PROVIDING RD FINANCING

• 3. KOSGEB - Ministry of Industry and Trade /
  Small and Medium Size Industry Development
  Organization
• Technology RD Support
• Supports on Repayable Basis
• Supports on Grant Basis
• Source of Fund State Budget
• 4. International Resources, like 6th Framework
  Program

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HOW BEING LOCATED IN A STP PROVIDES AN ADVANTAGE?

• Some research findings (UKSPA 2003) show that
  STPs have a positive affect on economic
  development of a region / country. Accordingly,
  STP based companies
• Have higher growth rates than similar companies
  at other locations in terms of employment,
  business potential and physical area.
• Have better overall commercial performance than
  similar firms located elsewhere.
• Have higher proportion of qualified scientists
  and engineers than off-park companies.
• Have easier access to finance, like venture
  capital and governmental grants on RD.
• Believe that STPs are prestigeous places to work
  on.
• Believe that the joint facilities create a better
  working and living environment.

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SOME PERFORMANCE INDICATORS OF STPs in TURKEY

• Research among different Turkish STPs showed
  that
• Through tax incentives, companies are encouraged
  to invest more in RD and software development,
  so RD expenditure of the on-park companies have
  generally increased.
• IT related activities and the establishment of
  new companies working on software development
  increased
• Since the cost of RD personnel have decreased,
  employment of qualified staff has increased among
  on-park companies, as well as increased
  employment through newly established companies
• Positive effects to universities increased
  image, additional income, increased joint RD
  projects with private sector
• Increased usage of university resources
  (academics, students, laboratories, social
  facilities etc.) by on-park companies

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FACTORS AFFECTING THE SUCCESS OF STPs

• Legislation, particularly related to incentives
  and tax exemptions
• Existence of qualified human resources and
  scientific know-how in the region
• Existence of supporting research and higher
  education institutions
• Sufficient financial resources to make the
  necessary investment
• Entrepreneurship and business know-how in the
  region to convert the scientific studies into
  commercial products and services
• Geographical factors such as the location of the
  park, as well as the local communitys social,
  cultural and economic status
• Supporting governmental and non-governmental
  organizations
• Demand for high technology and technological
  products in the region
• Overall macro-economic situation of the
  country/region

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FINANCIAL SUPPORT MECHANISMS FOR TECHNOPARKS AND
INCUBATORS IN TURKEY

• Governmental aids through Ministry of Industry
  and Trade, for land acquisition, infrastructure
  and management building construction costs
• World Bank credit to STPs by Industrial
  Technology Project through TTGV (only to
  Cyberpark, ARI technopark)
• Other international credits and funds like World
  Bank InfoDev Incubator Initiative (Cyberpark
  Technology Incubator)
• KOSGEBs support for TEKMERs

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INCUBATORS IN TURKEY

• Parallel to the poor entrepreneurial culture,
  incubation culture is too poor as well.
• Currently available incubators (12) in Turkey,
  called TEKMERs (Technology Development Centers),
  are managed by KOSGEB (SME Development
  Organization), a governmental agency.
• There is no private or PPP incubator except
  Cyberpark Technology Incubator which has been
  granted with 250,000 USD WB grant through InfoDev
  Incubator Initiative Program.
• Only two TEKMERs are located in STPs and have tax
  incentive advantages.
• Grants available for incubatees for many
  purposes, however access is relatively
  bureaucratic and limited.
• Services provided by KOSGEB in TEKMERs are
  rapidly improving, but still an effective private
  or PPP model incubation is required.

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MAIN CHALLENGES RECOMMENDATIONS

• Insufficient know-how and best practices in STP
  management
• Insufficient financial resources for land and
  institutional development (limited governmental
  support, need for international loans with
  favorable conditions, like from WB, EIB, etc.)
• Need for support mechanism for private incubators
  (Knowledge Economy Project may reserve some funds
  for supporting private incubators.)
• Need for effective RD finance mechanisms like
  seed or venture capital funds
• Establishment of most of the STPs as land
  development projects
• Poor Institutionalization, insufficient technical
  infrastructure and support services in existing
  STPs (absence of technology and business support
  mechanisms, incubators, consultancy on IPR,
  access to financial resources, etc.)
• Need for being a Business Park before being a STP

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MAIN CHALLENGES RECOMMENDATIONS

• Wrong location selection for some STPs (absence
  of required RD and industrial capacity,
  insufficient scientific, technological, cultural
  and social infrastructure in the selected zone)
• Need of more emphasis to modify the existing
  education system - education of academics to have
  more entrepreneurial skills
• Requirement of an NGO to provide a platform for
  cooperation and best practice sharing (Turkish
  Science and Technology Parks Association)
• Too much focus on ICT, need for attracting other
  technologies to have crosssectoral RD.
• Need for other attraction elements, other than
  tax advantages, providing the permanent success
• Need for implementing auto control mechanisms
  incentives are open to abuse!

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MAIN CHALLENGES RECOMMENDATIONS

• Requirement for special purpose STPs by
  considering regional capacities and priorities
  (Agroparks, mediparks, etc.)
• Lacking synergies among different STPs and host
  universities (Most of the universities impose
  barriers for their academics to work in other
  universities science parks)
• Need for funding of commercialization of RD
  studies
• Need for promotion of collaborative studies
  international cooperations especially to direct
  funds to more relevant activities (like FP6)
• Requirement for additional tax incentives to some
  crucial support organizations like venture
  capital funds
• Importance of international recognition and
  attraction of FDI.

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• THANK YOU !

Cyberpark / Contact Information Tel (312) 265
00 40 Fax [phone] Address
Cyberpark Cyberplaza B Blok Kat 1 Bilkent
06800 ANKARA Web www.cyberpark.com.tr E-mail
info_at_cyberpark.com.tr