Turkey’s Test With Innovation

Turkey Has Published Different Strategy Papers That Put Innovation In The Center In Order To Increase The Production Of High Quality Products In Variable Conditions Of The Global Economy.

National Targets
2015-2018 Turkey Industrial Strategy Paper set the goal “to increase Turkish industry’s competitiveness and efficiency and to accelerate the transformation to an industrial structure that has a higher share in world exports, produces high value-added and advanced technology products, has a qualified workforce and is sensitive both to the environment and society ”, with a vision “to be production base of Afro-Eurasia (Regions that we have historical relations such as North Africa, Middle East, Balkans, Caucasus and Central Asia) for medium-high and high tech products”.

The commercialization and exportation to global markets of high value-added products and services generated as a result of R&D and innovation efforts is also of great importance in terms of their contribution to the struggle against the current deficit problem faced by our country. With 2023 Turkey Export Strategy, within the framework of the vision of “making our country reach 500 billion American dollar-exportation in 2023 and rank among the leading countries in world trade, Turkey will be able to reach 1.5% share in world exports in the centenary of its foundation. Turkey can reach its target to rank among the world’s ten largest economies with R&D, innovation, advanced technology and knowledge-based production.

Let’s Review the Current Situation
In National Innovation System 2023 Document where Turkey set its targets for 2023, the private sector has a particular importance and two sub-goals for this sector have been identified. The first of these targets is to make the ratio of R&D expenditures of the private sector to Gross Domestic Product (GDP) to reach 2% in 2023. The total R&D expenditure in 2017 reached approximately 29.9 billion TRY, but the share of this expenditure in GDP was limited to 0.96%. Another target is that the private sector will employ 180 thousand researchers in Full Time Equivalent (FTE) positions in 2023. The number of the researchers in FTE positions including private sector, public sector and academy in Turkey is only 154 thousand as of the end of 2017.

Manufacturing Industry and Services Sector are Leaders in Innovation
According to the innovation research conducted by TSI in order to measure the innovation performance of enterprises in the three-year period covering the years 2014-2016, 61.5% of enterprises with ten or more employees carried out innovation activities. When the enterprises are analyzed according to the sectors in which they operate, it is noticed that the rate of innovative enterprises in the industrial sector is 64.5% while the ratio of innovative enterprises in the service sector is 57.7%. One of the important results of the research is that large-scale firms according to the number of staff they employ are more innovative than small-scale firms. For example, 70.4% of enterprises with 250 or more employees engage in innovation activities, while this rate was 60.4% for enterprises with 10-49 employees. When the enterprises are evaluated according to the types of innovation, it is seen that the innovation activities mostly performed are respectively the marketing innovation (42%), the organizational innovation (34%), the process innovation (34%) and the product innovation (31%).

Inter-institutional cooperation plays an important role in all stages like the emergence of innovation activities, its successful execution, and commercialization of the outputs. It is seen that only 23% of the enterprises that carried out product and/or process innovation activities in the three-year period covering the years 2014-2016 cooperated with other enterprises or organizations, while 88.2% of the cooperated enterprises were other enterprises within the same group. This result reveals that the cooperation between different enterprises, institutions and organizations in the field of innovation is not sufficiently developed in our country and supports should be provided for the development of cooperation among ecosystem shareholders. In addition, the majority (88.2%) of enterprises which did not engage in innovation activities (35.8%) stated that there was no reason to necessitate innovation, and 17.8% stated that there were many factors preventing innovation activity. This also suggests that innovation culture and awareness are not sufficiently developed.

What should we do?

First of all, we should be able to measure our own performance.
Despite significant developments in innovation in some of the leading cities of our country, there is no consistent and comprehensive evaluation system for the performance of service infrastructure and mechanisms. Only the Ministry of Industry and Technology conducts a regular performance evaluation based on the internal functioning of the Technology Development Zones. However, there are no regular public performance evaluations for mechanisms such as research centers, laboratories and innovation centers. While developing innovation strategies and intervention tools, this lack of data adversely affects the quality of decisions. Therefore, measuring the performance of all innovation mechanisms by scientific methods and their transparent publication will help both the decision-making process and the elimination of the differences between the mechanisms.

 Building Sustainable Business Models
Although there are deficiencies in the existing innovation infrastructure, it is possible to mention an unutilized capacity. Some of the established centers and laboratories are idle, used only for academic purposes, or their capacity to commercialize their studies remains low. The use of this idle capacity depends on the development of cooperation-based business models rather than building new infrastructures. Therefore, “Sustainable Business Models Report” which is suitable for the use of different mechanisms should be prepared as quickly as possible.

OIZ Based Technological Transformation Strategy and Action Plan
Manufacturing industry has an important place in terms of employment generation capacity. In addition, it contains the main export items of our country. However, our current production technology in the manufacturing industry is not compatible with our global goals. Our medium-high and high-tech production lags behind low and medium-low production. In addition, in our trade, exports consist of relatively low-tech products and imports consist of relatively high-tech products. This situation leads to foreign trade deficit in Turkey. Consequently, for the transition to a technology-intensive approach in the current production, mechanisms to facilitate the transition of the producers operating in our country’s OIZs to technology and information intensive production infrastructures and to meet their common technological and strategic infrastructure requirements are needed.

In this context, it is essential to determine which types of OIZs are needed and to develop OIZ-based Transformation Strategy and Action Plan based on these determinations.

We should be the Leader of Innovation in Our Own Region!
All shareholders have important roles and duties to bring Turkey closer to the vision to be the manufacturing base in the Afro-Eurasia for middle-high and high-tech products, a vision that takes part in 2015-2018 Turkey Industrial Strategy Paper. The target of developing our current innovation capacity should be achieved in order to enable all the studies in the field of innovation to spread more rapidly to the Eurasian macro region (Europe, Balkans, Middle East, Caucasus, Central Asia and North Africa). Moreover, it is important to establish the Eurasia Innovation Platform based in Istanbul to effectively promote the authentic, ancient and rich cultural life that will enable this capacity to develop rapidly, to ensure the establishment of the necessary network structures and to develop the existing ones.

NOTES

What Is Innovatıon?
Innovation is a concept that comes to the fore in modern times when economic hinterland approaches the saturation point in business, production, industry and trade sectors and its value is more and more understood every day. Although its definition differs by nuances according to sectors and academic studies, it is generally explained as “commercialization of something new in a manner to turn it into an economic and social value added.”

The Importance Of Innovation In Social Development
Academic research on the importance of innovation, which stands at a key point in the relationship between economy, production, employment and social development, focuses on some basic principles. These researches indicate that the innovation contributes to achieving sustainable economic growth for local-regional and global economies, increasing the level of social development and welfare for societies, and making it the basic dynamic of competitiveness for businesses and national economies.

By: Mehmet Onur Partal

*This article was  published in the  July– August issue of Marmara Life. 

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