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Technology Innovation in Technology Innovation in Turkey: Turkey: Opportunities & Opportunities & Challenges Challenges A. Mete ÇAKMAKCI A. Mete ÇAKMAKCI Technology Development Foundation of Technology Development Foundation of Turkey Turkey Turkey Business & Investment Summit Turkey Business & Investment Summit 6 June 2008, İstanbul 6 June 2008, İstanbul

Investin Turkey

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Page 1: Investin Turkey

Technology Innovation in Technology Innovation in Turkey:Turkey:

Opportunities & ChallengesOpportunities & ChallengesA. Mete ÇAKMAKCIA. Mete ÇAKMAKCI

Technology Development Foundation of TurkeyTechnology Development Foundation of Turkey

Turkey Business & Investment SummitTurkey Business & Investment Summit

6 June 2008, İstanbul6 June 2008, İstanbul

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One of the fastest growing tourist attractions in the world.One of the fastest growing tourist attractions in the world.

Brand often associated with excotic fun.Brand often associated with excotic fun.

Can we develop a technology aspect to attract investment Can we develop a technology aspect to attract investment

and talent?and talent?

The StoryThe Story

A blessing or a curse?A blessing or a curse?

Many potential social problems. Growth and job creationMany potential social problems. Growth and job creation

is an urgency. is an urgency.

(urban population : 55%, will be 85% in 2015)(urban population : 55%, will be 85% in 2015)

Public funded many mega infra-structure projectsPublic funded many mega infra-structure projects

Recently BOT and privatization is picking-upRecently BOT and privatization is picking-up

Most modern infrastructures of the regionMost modern infrastructures of the region

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Turkey is excelling in production of light commercial vehicles.Turkey is excelling in production of light commercial vehicles.

Many facilities receiving `best in the world` awards. SectorMany facilities receiving `best in the world` awards. Sector

exports are leading, R&D is picking up.exports are leading, R&D is picking up.

Will consumer products be next?Will consumer products be next?

OutlookOutlook

Competition is forcing the manufacturing sectors seek value inCompetition is forcing the manufacturing sectors seek value in

design and innovation. design and innovation.

Will strategic focus on R&D for early entry to the markets follow?Will strategic focus on R&D for early entry to the markets follow?

Some `sunset` sectors are shining again.Some `sunset` sectors are shining again.

Will textiles be next?Will textiles be next?

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Human CapitalHuman Capital

1,900,000 students in 76 universities (%40 female) 1,900,000 students in 76 universities (%40 female)

110,000 working towards advanced degrees (25,000 PhD)110,000 working towards advanced degrees (25,000 PhD)

76,000 academicians (%37 female) 76,000 academicians (%37 female)

Engineering Dept. : 113,681 registered (16,481 graduated in 2003) – Top students still Engineering Dept. : 113,681 registered (16,481 graduated in 2003) – Top students still

choose engineering !choose engineering !

Science Dept. (including computer) : 102,897 registered (14,700 graduated)Science Dept. (including computer) : 102,897 registered (14,700 graduated)

R&D Staff : 28,964 (FTE - 2002) ; Private : 5,918 – very low (Germany ~480,000 (FTE) R&D Staff : 28,964 (FTE - 2002) ; Private : 5,918 – very low (Germany ~480,000 (FTE)

total)total)

There are over 50,000 Turkish students enrolled in University Programs abroad. (Over There are over 50,000 Turkish students enrolled in University Programs abroad. (Over

13,000 are in the US, %2,6 of all foreign students in the US, in the top 10)13,000 are in the US, %2,6 of all foreign students in the US, in the top 10)

340 from Turkey out of 11,516 S&E PhD awards in the USA in 2005340 from Turkey out of 11,516 S&E PhD awards in the USA in 2005

1,355 Turkish Academic Scholars employed in the US in 2005 - 20061,355 Turkish Academic Scholars employed in the US in 2005 - 2006

Ministry of Education and Higher Education Authority have generous scholarship programs.Ministry of Education and Higher Education Authority have generous scholarship programs.

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National Innovation SystemNational Innovation System

YPK : Supreme Planning Council BTYK : Supreme Council on Science and Technology YÖK : Council on Higher Education MEB : Ministry of Education MB : Ministry of Finance DPT : State Planning OrganizationDTM : Undersecretariat for Foreign Trade STB : Ministry of Industry and Trade KOSGEB : SME AgencyTPE : Patent Institute TSE : Standards Institute

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R&D ProgramsR&D Programs Turkey has an extensive experience in R&D support programs. Established structures Turkey has an extensive experience in R&D support programs. Established structures

and processes. However lacks large integrated sector/technology specific national and processes. However lacks large integrated sector/technology specific national

programs. Many replications in investments. Effect analysis and inventory lacking.programs. Many replications in investments. Effect analysis and inventory lacking.

IPR issues with TUBITAK funding. (new legislation in the pipeline)IPR issues with TUBITAK funding. (new legislation in the pipeline)

2002-2006 period national R&D spending doubled. 2013 target 26 Billon YTL (50% by 2002-2006 period national R&D spending doubled. 2013 target 26 Billon YTL (50% by

private sector.) Issues with human supply. 7 Billion YTL to be spent on R&D support private sector.) Issues with human supply. 7 Billion YTL to be spent on R&D support

programs. programs.

2008 Government R&D funding 1,3 Billion YTL2008 Government R&D funding 1,3 Billion YTL

Share of Private Sector in R&D spending : 37% Share of Private Sector in R&D spending : 37%

Basic Research and Applied Research Programs in 2008 :Basic Research and Applied Research Programs in 2008 :

TARAL by TUBITAK : 702 Million YTL (270 Million in Project Supports)TARAL by TUBITAK : 702 Million YTL (270 Million in Project Supports)

R&D Infrastructure Supports : 260 Million YTLR&D Infrastructure Supports : 260 Million YTL

Industrial R&D Supports to Private Companies in 2008 :Industrial R&D Supports to Private Companies in 2008 :

285 Million YTL (260 Million YTL by TUBITAK as grants, 21 Million YTL by TTGV as 285 Million YTL (260 Million YTL by TUBITAK as grants, 21 Million YTL by TTGV as

loans)loans)

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A ComparisonA Comparison

Turkey Compared in terms of selected KE MetricsTurkey Compared in terms of selected KE Metrics

SourceSource : WB Knowledge Assesment Methodology Homepage : http:// : WB Knowledge Assesment Methodology Homepage : http://www.worldbank.org/kamwww.worldbank.org/kam

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Specializing in Mid-High TechnologiesSpecializing in Mid-High Technologies

Turkey as a specialist in mid-high Turkey as a specialist in mid-high

technology sectors is slowly progressing technology sectors is slowly progressing

high-tech markets. high-tech markets.

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SourceSource : OECD STI, 2005 : OECD STI, 2005

Cross FundingCross FundingPrivate Sector Funds University ResearchPrivate Sector Funds University Research

Ratio of Government Funded Business R&D : %4,2 (2004) Ratio of Government Funded Business R&D : %4,2 (2004)

(OECD : %7,0 EU-27 : %7,9 Spain : %12,5 Poland : %13,7 (2004))(OECD : %7,0 EU-27 : %7,9 Spain : %12,5 Poland : %13,7 (2004))

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SourceSource : OECD STI, 2005 : OECD STI, 2005

Attracting International R&DAttracting International R&D

Turkey’s Branding as a R&D Center is Still WeakTurkey’s Branding as a R&D Center is Still Weak

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Tax Incentives to R&DTax Incentives to R&DTax incentives developing as incentives for university collaboration, Tax incentives developing as incentives for university collaboration,

aglomoration effects and critical R&D massaglomoration effects and critical R&D mass

SourceSource : OECD STI, 2007 : OECD STI, 2007

Technoloy Development Zones : Tax exemptions for corporate, personal and VATTechnoloy Development Zones : Tax exemptions for corporate, personal and VAT

Universal Tax Law (recent) : tax deductions for cost of R&D, personal income exemptions Universal Tax Law (recent) : tax deductions for cost of R&D, personal income exemptions

and social security payment subsidies. and social security payment subsidies.

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Research Clusters : AnkaraResearch Clusters : Ankara

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Research : Critical MassResearch : Critical Mass

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TTGV : Who are we?TTGV : Who are we?

A public private partnership specialized as a program agency established in 1991. Not A public private partnership specialized as a program agency established in 1991. Not

for profit structured as a foundation, founders include large Turkish companies, for profit structured as a foundation, founders include large Turkish companies,

government agencies, NGOs and private citizens. Private sector absolute majority in government agencies, NGOs and private citizens. Private sector absolute majority in

the board, transparent accountable light structure (subject to 4 separate audits the board, transparent accountable light structure (subject to 4 separate audits

including by one international independent auditor) with only 47 full time employees. including by one international independent auditor) with only 47 full time employees.

Operates public loan programs for private sector technological innovation and Operates public loan programs for private sector technological innovation and

environmental conversion programs, advanced institutional investor in PE/VC fundsenvironmental conversion programs, advanced institutional investor in PE/VC funds

Technology Development Funding : matching funds soft loans upto 1 M USD in TTGV Technology Development Funding : matching funds soft loans upto 1 M USD in TTGV

funding for max 24 months operated since 1991.funding for max 24 months operated since 1991.

Institutional Investor : TURKVEN TPEF-1, IşGirişim, TeknolojiYatırım, iVCi.Institutional Investor : TURKVEN TPEF-1, IşGirişim, TeknolojiYatırım, iVCi.

Programs towards environment technologies in industry (soft loan schemes)Programs towards environment technologies in industry (soft loan schemes)

Operates Technology Service Centers for various sectors. Funded Technopark Operates Technology Service Centers for various sectors. Funded Technopark

projects.projects.

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Geography of TDFGeography of TDF

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TDF : StatisticsTDF : Statistics

Average TDF Project Size is 300 K USDAverage TDF Project Size is 300 K USD

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TDF : StatisticsTDF : Statistics

Demand remains to be an issue for the support deliveryDemand remains to be an issue for the support delivery

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iVCi : Istanbul VC InitiativeiVCi : Istanbul VC Initiative

A dedicated fund of funds operation to expand Turkish A dedicated fund of funds operation to expand Turkish VC markets launched in November 2007.VC markets launched in November 2007.

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Gradual non-captive spin-off processGradual non-captive spin-off process

In-house capacity toIn-house capacity toselect, close, manageselect, close, manageand divest. and divest.

ProfessionalProfessionalExpertsExperts

InvestorsInvestors

Lead-invest, Co-investLead-invest, Co-invest

Services, ConsultancyServices, Consultancy

ValidationValidationCredibilityCredibilityReferenceReference

Identifying opportunitiesIdentifying opportunitiesPre-incubation, Pre-incubation, mentoring, ,mentoring, ,advise (if needed)advise (if needed)

High-tech start-upsHigh-tech start-ups

Institutional InvestorsInstitutional Investors

Start-up : Teknoloji Yatırım ModelStart-up : Teknoloji Yatırım Model

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Innovation Profile of Turkish IndustryInnovation Profile of Turkish Industry

SourceSource : World Basnk ICS Turkey, 2007 : World Basnk ICS Turkey, 2007

Nature of Innovation ActivitiesNature of Innovation Activities

Sources of Innovations to the FirmSources of Innovations to the Firm

Page 21: Investin Turkey

Photo : kind courtesy of METUTECHPhoto : kind courtesy of METUTECH

Arı TeknokentArı Teknokent

Arı 2 Binası A Blok Kat:7Arı 2 Binası A Blok Kat:7

İTÜ Ayazağa Yerleşkesi Koru YoluİTÜ Ayazağa Yerleşkesi Koru Yolu

Maslak 34469 İstanbul, TURKEYMaslak 34469 İstanbul, TURKEY

www.teknolojiyatirim.com.trwww.teknolojiyatirim.com.tr

Cyberpark, CyberplazaCyberpark, Cyberplaza

B Blok Kat:6B Blok Kat:6

Bilkent 06800 Ankara, TURKEYBilkent 06800 Ankara, TURKEY

www.ttgv.org.trwww.ttgv.org.tr