ENTREPRENEURSHIP AND SMEsin

TURKEY

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Necla Halilo lunecla.haliloglu@kosgeb.gov.tr

nhaliloglu@gmail.com

19 Aral k 2012Baku

SME DEFINITION IN TURKEY AND IN THE EU

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SME DEFINITION micro small medium

Turkey

#of employees <=9 10-49 50-249Annual net sales(million TL)

<=1 <=5 <=25

Annual balancesheet

<=1 <=5 <=25

EU

#of employees <=9 10-49 50-249Annual turnover(million Euros)

<=2 <=10 <=50

Annual balancesheet total(million Euros)

<=2 <=10 <=43

Source: KSEP 2011-2013

THE PLACE OF SMEs IN TURKISH ECONOMY

SIZE # of enterprises Employment Added value(Billion Euro)

Number % Share Number % Share Number % Share

Micro/small 2 392 928 99,3 6 018 131 63,5 49 35,9

Medium 13 290 0,6 1 368 608 14,4 26 19,1

SME 2 406 218 99,9 7 386 510 78 75 55,1

Large 2 796 0,1 2 086 733 22 61 44,9

Total 2 409 014 100 9 473 243 100 136 100

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Source:SME Policy IndexWestern Balkans andTurkey, 2012

THE PLACE OF SMEs IN TURKISH ECONOMYThe share of SMEs

in sales % 65.5

in investments % 50

n exports % 59

n loans % 24

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Source: X th DevelopmentPlan Commission Report2012

Regulatory an support environment

ENTREPRENEURSHIP and SMEsin

TURKEY

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Social, culturaland politicalcontext

General framework conditions•Economic stability•State’s involvement in economy•Efficiency of financial markets•Technology and R-D level•Physical infrastructure•Labor market flexibility•Government institutions

Entrepreneurial frameworkconditions

•Access to finance•Government policies andprograms•Education system•Knowledge dissemination•R-D commercialization•Regulatory framework•Sophistication of markets•Access to physical infrastructure•Cultural, social norms

Majorestablishedfirms

Micro enterprisesand SMEs

Entrepreneurialopprtunities

Entrepreneuriallcapacity•Skills•Motivation•Supports

Newestablishments

Newentrepreneurs

GEM, 2005

Entrepreneurship-economicgrowthrelationship

NationalEconomicGrowthEmploymentInnovation

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SME supports

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Turnover andemployment

Established firms

Growth and export firms

Youngentrepreneur

Start-ups

candidates time

Social, cultural and political context in Turkey

Social attitudes towards entrepreneurshipMedia attentionPolicy makers’ approachLife-long learningCommercial banks

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General framework conditions in Turkey

• Economic stability• State’s role in economy• Physical infrastructure

Small industry estatesOrganized industry zonesFree zones

• Labor markets• Government institutions (Rule of Law)

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Entrepreneurial framework conditions in Turkey

• Trade and legal systemTurkish Trade LawLaw of ObligationsBankruptcy LawTax LawLaw No 4691, 6170, 5746 (Technology/ R and D)

• Regulatory environment

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Entrepreneurial framework conditions in TurkeyAccess to finance

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BanksKGFKOB A. .VC

Angel investors/incubatorsEmerging enterprises market

New/sophisticated markets

Entrepreneurial framework conditions in TurkeyGovernment programmes and policy documents:

2023 visionScience and technology policy, Science and Technology BoardMedium term programme5-year development plansSME Strategy and Action PlanIndustrial StrategyEU Small Business actInput supply strategyPublic procurement strategyEntrepreneurial Counci/public-private consultation

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Entrepreneurial framework conditions in Turkey• Education System

PrimarySecondaryUniversityNon-formal training

• R and D commercializationTechnology zonesIncubatorsTÜB TAK supportsKOSGEB supports

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Entrepreneurial framework conditions in TurkeyIncentivesSupports

KOSGEBTÜB TAKMinistry of EconomyDevelopment agenciesEU IPA fundsOther supports

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ENTREPRENEURSHIP and SMEsin

TURKEY

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INTERNATIONAL INDEXES

International Indexes

GEDI Global Entrepreneurship and Development IndexGlobal Competitiveness IndexWorld Bank Doing Business IndexGlobal Entrepreneurship Monitor Index

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KOSGEB SUPPORTS

ENTREPRENEURSHIP and SMEsin

TURKEY

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Paradigma shifts

Micro level

Support tools

Direct services to the targetgroup(private markets can notdevelop)

Mezo Level

Macro level

Subsidies

Subsidies

The role of privatesector

Services delivered throughproviders(private markets candevelop)

Sustainability(decreasing subsidies)

Public-private co-operation(NGO’s)

Establishment offramework conditions

Sustainability -non profit companies-for profit companies-public-privatepartnership-social responsibility indevelopment

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KOSGEB Supports

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KOSGEB Supports

SMEs Entrepreneurs

Start-up tarining start-up capital Incubators Business plan award

Entrepreneurship Council

KOSGEB Entrepreneurship Support Program

START-UP TRAINING

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Start-up training

70 hours of applied trainingWorkshop modules insertedClass specific extra modulesFREE OF CHARGETrainers: private service providers

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Start-up training

GRADUATES OF START-UP TRAINING PROGRAMMESIMPLEMENTED BY KOSGEB OR OTHER INSTITUTIONS

(INCLUDING UNIVERSITIES) ARE ELIGIBLE FOR KOSGEBSTART-UP CAPITAL

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KOSGEB Entrepreneurship Support Program

START-UP CAPITAL

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Start-up capitalGrant

3,000 TL registration costs15,000 TL equipment12,000 TL operating costs

Loan70,000 TL

24 months grace24 months repayment, 8 installments

%60-70-80 support ratio

241 USD=1.6 TL (March 2011)

KOSGEB Entrepreneurship Support Program

BUSINESS INCUBATORS

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Çorum Hac bekta

Kütahya Pendik

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Tarsus GEM

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Permission to use “ GEM” logo and nameSupport for establishment costsSupport for operating costs

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Business Incubator Support

Business Incubator Support

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Support Maximum limitSupport ratio

Regions 1,2 Regions3,4,5,6

Establishmentsupport

Building renovation 600.000 TL

%60 %70

Equipment-furniture 125.000 TL

Manager’s salary 25.000 TL

Operationsupport

Staff costs 30.000 TLTraining-consultancy 50.000 TLBuilding maintenance 20.000 TL

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Incubator Managing

Company

Local NGO

KOSGEB

MainShareholder

ClientCompany

ClientCompany

ClientCompany

ClientCompany

ClientCompany

Application witha business plan

Approval

Funds

Tripartiteagreement

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2

3

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Servicesrents

KOSGEB INCUBATOR SUPPORT MODEL

Support criteria

PromotersLegal status of the operating companyBuilding and locationMission and strategic objectivesTenant companiesServices for tenantsOccupancy rateManagement and organizationBusiness model and revenuessustainability

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KOSGEB Entrepreneurship Support Program

BUSINESS PLAN AWARD

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Business plan awardUniversity studentsFirst winner: 15.000 TLSecond winner :10.000 TLThird winner :5.000 TL

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ENTREPRENEURSHIP COUNCIL

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Public leaders and governmentsCultureSuccess storiesHuman capitalCapital sourcesInfrastructure and institutionsEducation and trainingClusters and other networksSupport systemsCustomers

ENTREPRENEURSHIP ECOSYSTEM

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Linking the chains of the ecosystem for a holisticapproach

A platform with currently 32 members representing eachchain

Not an exclusive platformThe main actor being the entrepreneurs!

ENTREPRENEURSHIP COUNCIL

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KOSGEB SME SupportsGenaral supports (participation in fairs, training, consultancy,,business visits, promotion etc. vs.)Thematic ProjectsCo-operation projectsR and D, Innovation and Industrial applicationEmerging enterprises market SME support

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OTHER ACTIVITIES

GEMEuropean Enterprise Promotion AwardsSEECELEU Small Business Act

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ENTREPRENEURSHIP AND SMEsin

TURKEY

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Necla Halilo lunecla.haliloglu@kosgeb.gov.tr

nhaliloglu@gmail.com

19 Aral k 2012Baku