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Is Innovation a Turks' Game to Create New Wealth?
A. Mete ÇakmakcıHE Ambassador of Spain’s Residence in Istanbul
February 18th, 2010
Innovation Mercenaries
Source : Sak (2009) “Küreselleşmenin Türk KOBİ’lerine etkileri”, TEPAV
Catching up or Lagging Behind?
Source : European Innovation Scoreboard 2008
Turkey is labeled under “catching up with moderate growth”
Demographics
In 2009, 2,731,878 students were
registered in undergrad university
programs. 397,884 graduated from
undergrad programs.
28,681 master and 3,744 PhD degrees
were awarded.
Source : US Census Bureau, 2010
In 2009, 13,263 Turkish students were enrolled in the US universities, (10,2% increase from 2008 and 8th most populous group)
Many return with business ideas.
A Definition of Innovation
Often worshiped as a “myth” or “taboo” innovation still deserves a simple definition.
Creating new VALUE
using/utilizingexisting/available
KNOWLEDGE.
Innovation and Enterpreneurship
The who has the will, means and ways to manage the conversion of knowledge into value is an enterpreneur. Market is where value is converted into other forms of value.
Value is a perception and highly context dependent. Hence innovation is a dynamic process.
Innovation involves acquisition/processing of knowledge.Knowledge (not necessarily technical or scientific) is the main barrier to/frontier of innovation.
Innovation Cycle
OpportunityEquity
Value
Knowledge
Value
MARKET
INVESTMENT VISION
EXECUTION
Public Intervention Comfort Zone
Our Ecosystem of Innovation
KNOWLEDGE – RESEARCHERS : highly motivated to publish, low motivation for research projects, often on own devices to pursue business, lured to easy cash from consultancy (corporate researcher is a difficult carreer choice)
OPPORTUNITY – BUSINESS DEVELOPMENT : Almost always focused on immediate opportunity, more of a follower’s attitude
VALUE – DEVELOPMENT/PRODUCTION/SALES : Strongest component of the eco-system. Often top skills and top innovators around.
EQUITY – OWNERS, INVESTORS, BANKER : Strongly conservative, often orthodox non-believers in innovation, often believe what they see on paper in numbers.
Innovation Dynamics
Knowledge is GLOBAL, value is LOCAL
Innovation Dynamics
Intrapreneurial Company is the Future
Organizational skills to adopt new ideas
and diversity.
Intrapreneurship is underrated,
enterpreneurship is overrated.
High Value Add ≠ New Company
Value Pyramid
Cost
of I
nnov
ation
Barr
iers
for C
ompe
tition
Risk
of I
nnov
ation
Technical & Non-technical Innovation
Source : OECD STI Scoreboard, 2008
Systemic Linkages
Source : OECD STI Scoreboard, 2008
Firms collaborating on innovation with higher
education institutions by size, 2004-06
Firms collaborating on innovation with government institutions by size, 2004-06
Firms collaborating on innovation activities by size,
2004-06
Structural Performance
Source : OECD STI Scoreboard, 2008
Elements of design for R&D Structure :
Profile of researchers, performers and
Cross financing based on the
Characteristics of priority areas.
Converting High-Tech to Low-Tech
Source : TUSİAD, (2008) “Türkiye Sanayiine Sektörel Bakış”
Source : OECD STI Scoreboard, 2008
Capturing Value
Source : Linden, Kraemer, Dedrick (2007) “Who captures value in a global innovation system? The case of Apple’s iPod”
Cost of Innovation
Inno
vato
rVa
lue
Incr
ease
s
Cost of innovation (rather cost of
failed innovation) is probably the single
most important barrier to innovation.
Recent tax incentives had limited
additionality for various reasons.
In spite of “unlimited” supply of youth,
talent and skills are limited.
Investment in skills is extremely limited
and conservative.
A Map of Technological Innovation
A Regional Production Specialist
Source : The World Bank
Global Benchmarking
Source : www.worldbank.org/kam
European Benchmarking EU-27 Turkey Spain Poland
Life-long Learning 9,7 1,5 10,4 5,1
Pubic R&D Expenditures 0,65 0,37 0,55 0,38
Private Credit 1,31 0,29 1,83 0,4
Non-R&D Innovation Expenses 1,03 0,16 0,49 1,03
Public-private Co-Publications 31,4 0,3 10,6 1,3
EPO Patents 105,7 1 29,3 3
Technology Balance of Payments Flows 1,07 0,12 0,28 0,4
SMEs introducing product or process innovations 33,7 29,5 29,5 20,4
SMESs introducing marketing or organizational innovations 40 50,3 29,5 29,1
Employment in Medium-high & High-tech Manufacturing 6,69 3,6 4,47 5,5
Employment in knowledge-intensive services 14,51 5,53 14,22 10,33
Medium-tech and high-tech manufacturing exports 48,1 38 52,3 48,9
Knowledge-intensive Services Exports 48,7 12,9 27,9
New-to-market sales 8,6 4,65 7,37 4,56
New-to-firm sales 6,28 11,17 8,48 5,55
Source : European Innovation Scoreboard 2008
About Technoparks 37 Technology Development Zones are approved, 23 are operational
1,254 firms (of which 53 are foreign owned with a total investment of 450 M USD) are operating in the region with 8,708 R&D staff
3,403 projects are active, 297 patents received, 540 M USD in exports
Source : OECD STI Scoreboard, 2008
Cluster Development
Cluster Development
Outlook
New generation of young enterpreneurs (especially out of top universities) have the proper skills and high capacity to learn fast. They ask and learn.
Second/third generation is taking over in the family owned SMEs.
Investors and Banks are quickly adopting to finance innovation.
Big companies are still a big ?
Capacity on the demand side is developing faster than the suppy side of policy and programs. Civil initiatives are mobilizing.
Innovation and related buzzwords are still crowding out the agenda.
Buttom up processes is still a requirement.
Türkiye Teknoloji Geliştirme VakfıCyberpark, Cyberplaza B-Blok Kat : 6
Bilkent 06800, Ankara
www.ttgv.org.tr