WHERE DOES TURKEY STAND IN NATIONAL INNOVATIVE CAPACITY

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• WHERE DOES TURKEY STAND IN NATIONAL INNOVATIVE
  CAPACITY?
• RD Expenditures of developed countries
• 1-3 of GDP
• Turkey 0,5 in 1996
• US 114. 7 billion USD
• Japan41.7 billion USD
• Germany 22 billion USD
• Britain 15.8 billion USD
• SCI Index
• US35
• Britain, Japan, Germany, France 5
• Turkey (1996) 0,43 29.place
• The RD expenditures are done predominantly by
  universities (68) by public sector (8) and by
  private 24

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• According to the World Bank Competitiveness
  indicators of 1996, scientists and technicians
  per number of 1000 people in 1981-1995 was only
  0.2 (1.3 for lower middle income countries),
  average research and development expenditures as
  of percentage of GNP was 0.4 (0.6) and number
  of patents granted in 1995 was 722 (1441).
• World Competitiveness Indicators

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• WHY IS TURKEY LAGGING BEHIND?
• 1-INITIAL INDUSTRIAL ORGANIZATION IN TURKEY
• rapid industrialization through State Economic
  Enterprises (SEE) and import substitution.
  capital-intensive investments through SEE.
• utilization of foreign capital under protective
  tariff barriers, joint ventures, transfer of
  technology through licensing agreements. Except
  for automobile and chemical industry, the
  transfer of turnkey factories and assembly units
  had created very limited backward and forward
  linkages.
• Textiles, food industries, chemical industries,
  iron-steel industries, automobiles and
  agricultural sector account for the 83 of the
  manufacturing activity and 66 of the employment.
  The primary sectors of Turkish industry rely more
  on labor intensive industries thus do not demand
  RD activity. Despite total share of foreign
  capital as high as 60 in manufacturing
  activities by 1998, this did not contribute to
  the domestic RD capability.
• Concerning the composition of the Turkish
  manufacturing exports in 1996 only 8 (17.8 for
  lower middle income average) constitutes the high
  tech products

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2-SME POLICIESmacroeconomic environment
characterized by high inflation and interest
rates create limited operation capitals and low
turnover ratios for SMEs in Turkey. Due to
limited reserve of personal savings, inadequacy
of the capital market and lack of venture
companies in Turkey, it is very difficult for
SMEs to find investment capitals. commercial
banks are reluctant to give loans to SMEs since
they find them risky and majority of SMEs is not
strong enough to meet the mortgage claims of
credit lending banks. This is to say that SMEs
are predominantly depend on their own capitals
and the share of small industry in the overall
financial and fiscal incentives is only 4-5 .
Thus they do not have funds for RD, education,
technology needs.The share of Turkish SMEs in
export is 10-15. Competitive Pressures for RD
is missing.
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• 4-PROBLEMS WITH EDUCATION SYSTEM and HUMAN
  RESOURCE DEVELOPMENT IN TURKEY -vocational
  training-school business cooperation-certificati
  on and skill formation-occupational training

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• 5-LACK OF SYSTEMATIC RD POLICY,
  UNIVERSITY-INDUSTRY COOPERATION (KOSGEB
  INTERVIEWS)
• -University and industry do not know each other
  very well.
• -University Programs should be flexible and
  adaptable to the demands of industry
• -The programs that do not match the market should
  be limited
• -Cooperation and services are limited between
  universities and industry
• -Lack of organization to regulate financial and
  cooperation issues
• Academic attitude to the demands of industry is
  perceived as waste of time by industry
• Universities are emphasizing more primary
  sciences as opposed to application
• Technical equipment, laboratories are used
  predominantly for education not for RD
• Insufficient wages and incentives for university
  personnel to conduct research
• Psychological barriers towards RD activities in
  Turkey
• Lack of RD units in Turkish industries
• Bureaucratic obstacles for RD activities.
  Insufficient organization
• Need to reflect the knowledge of university
  personnel to industry

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• 1993-2003 Science and Technology Policy of
  TurkeyNational Innovation System Action Plan was
  proposed in order to transform the science and
  technology into economic and social utility.

UNIVERSITY
Knowledge
RD Institutions
INDUSTRY COMMERCE
FUND
GOVERNMENT SUPPORT
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• Critical RD sectors for Turkey
• -Information Technologies
• -Telecommunication
• -Transportation
• -Water Sciences
• -Environment
• -Agriculture and Biotechnology
• -Energy Technologies
• -Robotic, Automation
• Textiles
• Modern Manufacturing Processes
• Medical and Pharmaceutics
• Mining
• Space, aviation and defense

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• The KOSGEB initiative is one of the major step
• According to the Technology Development
  Foundation of Turkey, between 1995-1998 period
  there have been 320 applications among which 210
  projects receive RD support and 5 million USD
  financial support was provided to the SMEs under
  KOSGEB.