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ENTREPRENEURSHIP AND SMEs in TURKEY 1 Necla Halilo÷lu [email protected] [email protected] 19 AralÕk 2012 Baku
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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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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