1. Supporting Private Sector Impact in Turkish RTDI A. Mete akmakc Technology Development Foundation of Turkey World Bank Workshop - Science, Technology and Innovation- Challenges and Opportunities for Turkey TPE-Ankara, 12 March 2007

2. One of the fastest growing tourist attractions in the world. Brand often associated with excotic fun. Can we develop a technology aspect to attract investment and talent? The Story A blessing or a curse? Growth and job creationis an urgency. (urban populationwill be 85% in 2015)There are over 50,000 Turkish students enrolled inUniversity Programs abroad. (Over 13,000 are in the US,%2,6 of all foreign students in the US, in the top 10) Ministry of Education and Higher Education Authorityhave generous scholarship programs.(critical mass?) Our exports are driving up our imports. Turkey is becoming a med-high tech manuf. specialist. Sustainability? 3. Outlook Competition is forcing the manufacturing sectors seek value in design and innovation.Will strategic focus on R&D for early entry to the markets follow? Some `sunset` sectors are shining again. Will textiles be next? Turkey is excelling in production of light commercial vehicles. Many facilities receiving `best in the world` awards. Sector exports are leading, R&D is picking up. Will consumer products be next? 4. TTGV in Short

Technology Development Foundation of Turkey (TTGV) was established in 1991 to promote global competitiveness of the private sector through supporting technology development and innovation projects.

TTGVs founders are 26 private companies, 6 government organizations, 10 umbrella organizations ve 14 individuals.

TTGV is managed by a 15 member Board of Directors. 5 are appointed by government organizations, 10 are elected by the Founders Assembly from among representatives of the private sector.

TTGV has 47 full-time employees however it contracts short-terms services of a pool of 1,500 field experts.

TTGV is audited by four times annually by different institutions including one by an International Auditing Company.

5. TTGV So Far

Since 1991, under the Technology Development Funding (TDF), over 530 projects by around 450 companies were supported with commitments of 187 M USD, and disbursements as of January 2007 reaching 128,5 M USD. TTGV helped creation of R&D volume in excess of 400 M USD in Turkey.

Technoparks of Bilkent University and T were provided with 12 M USD in funding through a WB project credit.

Two active VC operations, TURKVEN ve Giriim were invested with 7 M USD.

Turkeys obligations under the Montreal Protocol were supported through the PODS program with a 24,1 M USD grant from the GEF. Phasing out of the ozone depleting substances succeeded %95 with the supports provide to the Turkish companies.

6. Our Supports

Technology Development Supports

• Technology Development Projects (TDF) Support(1M USD, 24 Months, 4 Years)

• Commercialization Support(1M USD, 12 Months, 4 Years)

• Joint Technology Development Projects Support(2,5M USD, 24 Months, 4 Years)

Environmental Technologies Supports

• Environment Friendly / Clean Production Technologies Projects Support(1M USD,

• 18 Months, 4 Years)

• Energy Efficiency Projects Support(1M USD, 18 Months, 4 Years)

• Renewable Energy Projects Support(1M USD, 18 Months, 4 Years)

Technology Enterprenuership Supports

• Pre-Incubation Support

• Risk Sharing Support

• Start-up Support

7. Technology Development Funding - TDF Regional Breakdown of TTGV Supported Projects 8. Statistics on TDF - I Meaningful R &D Average size of TTGV supported projects is 300 K USD. 9. Ratio of First Time Companies to TTGV TDF Support Statistics on TDF - II 10. Support Pipeline For Support Impact a Continuum of Succeeding Support Devices to Better Match / Follow Company Development 11. 2010 Objectives Source: EU Trendchart on Innovation, 2005 Catching up and keeping up with EU-27 ? Technology added value in manufacturing ? Technology balance of payments 1,24 (CY) 11,4 (DE) - 6,6 Employment in mid-high & high-tech manufacturing (% of total) 2,7 (LU) 55,5 (MT) 1,8 17,8 Exports of high-tech products (% of total) 1,45 (PT) 4,85 (SE) - 3,19 Employment in high-tech services (% of total) 0,001 (CZ) 0,065 (FI) - 0,025 (EU-15) Early Stage VC (% of GDP) 0,2 (MT) 31,4 (BG) 22,0 6,6 University R&D expenses financed by business (% of total) 0,7 (PL) 18,7 (FI) - Enterprises receiving public funding for innovation (% of total) 50,3 (RO) 93,7 (SE) - 89,2 (EU-15) Share of med-high & high-tech R&D (% of total) 0,08 (MT) 2,93 (SE) 0,19 1,26 Business R&D Expenses (% of GDP) EU min EU max TR EU-25 12. R&DDriven GrowthTake-off Source: U.M ldr, EC %1 of GDP in R&D Spending is accepted as a structural refraction point. Old ways will not longer work as a sustainable state! We estimate our current level ~0,87%... 13. From Research to Market We must develop research as an economic activity. 14. A Comparison of Knowledge Metrics Source: WB Knowledge Assesment Methodology Homepage : http:// www.worldbank.org/kam Effects of Globalization will be the hardest on populations of 50M 100 M! 15. Structural Trends - I Source: OECD STI, 2005 16. Structural Trends - II Percentage of University Researchers to all Researchers (OECD STI Scoreboard, 2005) Turkey: %75 Spain: %51 Korea: %16 Germany : %25 USA: %12 Source: TUIK, 2004 17. Structural Trends - III 18. Attracting Global R&D Source: OECD STI, 2005 19. Innovation Synergy Strategic projects to create sectoral synergies :eg. `a light commercial future platform` 20. Diffusion of R&D 21. High Growth SMEs A small percentage of SMEs create themost of new quality employment They succeed in becoming global enterprises

Strong global vision and will to grow

30% - 50% annual endogenous growth

Global niche markets

High capacity to adapt and lead

Can selectivity be applied with early detection of the potential? 22. Policy for Growth SMEs Source : Erkko Autio, 2006 Industry, Competition and Innovation Policies Industrial, Social and Employment Policies Other Policy Liason Supporting against social cost of failure Preventing bankrupcy and failure Failure for the Enterprise Encouraging investment and capital Easing the tax burden Financial Favoring growing enterprises Protecting small enterprises AdministrativeFacilitating growth Simplifying new business establishment Main Objective Regulation Emphasis Prioritization for potential Equality in access Selectivity Criteria Strategy, Globalization and Growth Basic Business, Planning, Operations Complementary Supports R&D and innovation aids, Venture Capital Grants, Subsidies, Loans Devices Public private integrated Public dominant Source Supports Growth friendly Small enterprise friendly Business Environment Only the betterMore enterprise Enterprise Right enterpreneurs More enterpreneurs Enterpreneurship Policy Targets High Growth SME Traditional SME 23. Learning Innovation Regions 24. Program Design - Trends

Buttom-up design and project development : beneficiaries have a stronger say in program design >>> a capability to identify and design programs

Open flexible architectures

Integrated more dimensional programs

Beneficiary-driven and defined open structure Innovation ProgramsStrategic large scale early market R&D Programs witha phased approach Vertically integrated,Multi-Agency Programs : Irish Bioventure Program 25. Spanish Fund of Funds Program Source: NEOTEC / EIF TTGV is working with the EIF to setup a similar programcalled iVCi in Turkey. Spanish Blue-Chips 26. Concluding Remarks

There is an urgency to create critical mass for R&D in private sector for strategic projects in early technologies - with collaboration of early international research networks : integrated multi component programs

Integration to global knowledge skills network : expats, immigration, acqusition

More emphasis to advanced learning regions : clusters, next stage development of technoparks and capacity building on management companies including in international promotion, mentoring and technology transfer.

Quick revision of bottleneck legislation in tax code, higher education and VC

27. Technology Development Foundation of Turkey Cyberpark, Cyberplaza B-Blok Kat:6 Bilkent, 06800 Ankara www.ttgv.org.tr Photo Kind Courtesy of METUTECH