General View To Istanbul’s Entrepreneurship Ecosystem

What should be the vision of Istanbul?

“Being the leader in its region in the medium term, and being one of the first 20 entrepreneurship centers of the world in the long term”

Entrepreneurship is adapting a continuative mechanism by becoming integrated with different ideas after brainstorming and fulfilling the needs of the society with a commercial concerned product. In every country, which comes to the forefront with entrepreneurship, public institutes, universities, nongovernmental organizations, business incubators, acceleration programs and other actors like these such as mechanisms, which fund entrepreneurs, accept entrepreneurship as an ecosystem, support it and play an active role in the strengthening of the ecosystem. The relationship between entrepreneurship and innovation is not different than the relationship between chicken and the egg. Innovation is not a fact, which occurs in a closed environment without the ecosystem. On the contrary, it is a result of a systematical operation, which occurs as a result of the support, which is given to the entrepreneur by the institutions and organizations, that cooperate with each other compatible and integrated. In this framework, risk-taking based on information and analysis and being successful of an entrepreneur, who starts an innovative business and operates in an uncertain environment, depends on the sociological, psychological, educational and financial environment, infrastructure and opportunities.

Starups and mechanisms, which support them
One of the most components of the entrepreneurship ecosystem is the existence of the innovation infrastructures and organizations, which support the entrepreneurs in the process, which lasts from the arising of the idea until the growth of the idea. An enterprise goes through different phases in the process of creation and development. The entrepreneur matures his project idea, which he developed in order to solve a problem, by developing the simplest product, which shows how to fulfill the needs of the potential customer, with income and expense calculations in a cognitive framework.

Istanbul’s entrepreneurship ecosystem possess in accordance with the “Startup in Istanbul, Develop and Globalize” slogan an innovation infrastructure, where an enterprise can get all kinds of support, which is needed in the development process, and it continues growing and developing in different areas. The adventure beginning from the birth of a startup, which operates in the ecosystem, until its internalization, is shown in the figure above.

Istanbul’s Current Stuation
In the last 15 years, Istanbul’s economy has come through a fast structural transformation. Thanks to multifaceted international networks, which strengthen the vision of Turkey, Istanbul is being evolved into a modern city economy. The city economy offers important diversity thanks to a lot of innovative sectors, which include also the clustering in the sectors, which create high added value based on the information.

According to the data of TOBB, 118.021 new companies were established in Turkey in 2017, 45.204 companies, which adds up to %38,3 of these, were established in Istanbul. Companies established in Istanbul possess with 16,7 billion TL %60 of the total capital of companies established in Turkey. According to the data from the International Direct Investment Data Bulletin of the Ministry of Industry and Technology General Directorate of Incentive Practices and Foreign Capital, Istanbul is well ahead with 36.653 companies in the distribution by cities of 60.280 companies with foreign capital, which operated in our country between 1954 and February 2018. Lots of international companies in Turkey choose Istanbul as their regional center in order to operate in East Europe, Middle Asia, and the Middle East.

How Are The Indexes?
Almost every work, which is at the top in the indexes, and which examines successful ecosystem examples, emphasizes the local diversities and indicates the existence of some global patterns. The principal factors of these are the development of strong research infrastructures/universities of successful entrepreneurship ecosystems; the existence of supporting fund sources in the different phases of startups; establishment of entrepreneurship culture, which encourages and uses innovation and entrepreneurship, tolerates trail and error and supports the working of the whole ecosystem in short. Our country and especially Istanbul are located in most of the international entrepreneurship indexes. The ecosystem indicates, that there are problems in the supply of information, which enables continuative and detailed analyses to measure our entrepreneurship performance. Being and rising in the indexes is a reflection of the ecosystem performance and is directly related to the measurement of the development. In the determination of entrepreneurship action plan activities, above stated indexes have been examined and activities, which will meet the criteria used in the indexes, and reporting activities have been listed. With the implementation of the foreseen activities, transmission of data to the indexes correspondingly and reporting Istanbul’s location in the international ranking will be raised.

Table 1. Location of Turkey and Istanbul in Entrepreneurship Indexes (Ranking/Total Number of Countries and Cities)

Name of the Index Turkey Istanbul
GEM – Global Entrepreneurship Monitor (2016/2017) -Early Stage Entrepreneurship According to Activity 14 / 64
-Work Services of Entrepreneurship

According to the Share in Sector

56 / 64
GEI – Global Entrepreneurship Index (2018) 37 / 137
Startup Blink – Ecosystem Ranking (2017) 34  / 125 44  / 200

According to the “Emerging Startup Frontiers” report published by CB Insights in 2017, Istanbul comes as the fourth in the ranking among startup centers, which make fastest progress in the world. In the mentioned ranking investment shares taken from the entrepreneurship capital numbers in the world have been paid attention to.
Table 2. Ranking of the Mostly Developed Startup Centers

Ranking City Enterprise Capital Share
1 Jakarta % 0,35
2 Dubai % 0,18
3 Wien % 0,17
4 Istanbul % 0,16
5 Kuala Lumpur % 0,13
5 Bangkok % 0,13
7 Warsaw % 0,12
8 Auckland % 0,09
9 Mexico City % 0,08
9 Buenos Aires % 0,08

How Can We Better?
Istanbul is the natural leader of the region, which contains East Europe, Middle Asia, Middle East and Africa. Besides its natural leadership, being one of the leading twenty entrepreneurship centers of the world is a compatible goal with Istanbul’s potential. Correspondingly with the Istanbul International Finance Center Strategy Vision, “Being the leader in its region in the medium term, and being one of the first 20 entrepreneurship centers of the world in the long term” confronts us as a correct vision.

There are 5 strategical goals in order to reach this vision.

  • Extending the Entrepreneurship Culture
  • Increasing the Number and the Quality of Entrepreneurs
  • Increasing the Number and the Quality of Investments
  • Strengthening of the Mechanisms, which support the Entrepreneurship
  • Development of Global Interaction

Note:

Number of Recently Established Companies
Turkey: 118.021
İstanbul: 45.204
Source: TOBB – 2017

Fixed Capital Amount of Companies Established in Istanbul
16,7 billion TL
(%60 of Turkey)
Source: TOBB – 2017

Number of Companies with Foreign Capital
Turkey: 60.280
Istanbul: 36.653
Source: General Directorate of Incentive Practices and Foreing Capital– February 2018

By: Mehmet Onur PARTAL

* Project Director at Istanbul Development Agency & Invest in Istanbul

*This article was  published in the  January– February issue of Marmara Life. 

 

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