ttgv ferdi miskbay director, corporate planning and finance technology development foundation of...

TTGV

Ferdi MiskbayFerdi Miskbay

Director, Corporate Planning and Director, Corporate Planning and

FinanceFinance

Technology Development Technology Development

Foundation of TurkeyFoundation of Turkey

TTGV

•TTGV Programs:•Investment Advisory Committee, Venture Capital•Technoparks Finance

•Development Bank of Turkey, 14 Years•Former Director, Deloitte and Touche


TTGV

WORLD BANKWORLD BANK

& TÜRKİYE TEKNOLOJİ GELİŞTİRME TÜRKİYE TEKNOLOJİ GELİŞTİRME

VAKFIVAKFI TECHNOLOGY DEVELOPMENT FOUNDATION OF TURKEY

INNOVATION & COMPETITIVENESS PRACTITIONERS WORKSHOP

R&D Financing for SMEsCase Study:Turkey Financing Programs

FERDİ MİSKBAYFERDİ MİSKBAY

Türkiye Teknoloji Geliştirme Vakfı

İstanbul, 20 March 2004

TTGV

• Common problems of SMEs

• Institutions providing R&D financing to SMEs

• Sources for R&D financing to SMEs

• Definition of SME

• TTGV and its support programs

• TÜBİTAK TİDEB and its support program

• KOSGEB and its support programs

• Technology Development Zones - Technoparks

Outline

TTGV

• Lack of Enterpreneurial Culture, Innovation Culture and Management Skills

• The Matter of ‘Scale Economy’ and the Absolute Need for External

Services

• Lack of Financial Resources• Complexity of Business Environment for SMEs

• Bottlenecks in Internationalisation and Globalisation

• Restrictions for Women Enterpreneurs in SMEs

• This categorisation has been extracted from OECD and EU reports and modified to reflect the priorities of the countries like Turkey, by Aykut Göker, Advisor to the Secretary General of TTGV

Common Problems of SMEs

TTGV

Institutions providing R&D financing to

SMEs

• TTGV Technology Development Foundation of Turkey (TTGV Türkiye Teknoloji Geliştirme Vakfı) -founded in 1991

• TÜBİTAK-TİDEB Scientific and Technical Research Council Of Turkey-Technology Monitoring and Evaluation Board (TÜBİTAK –TiDEB Türkiye Bilimsel ve Teknik Araştırma Kurumu Teknoloji İzleme ve Değerlendirme Başkanlığı) -started operation in 1995

• KOSGEB Ministry of Industry and Trade-Small and Medium Size Industry Development Organization (KOSGEB T.C.Sanayi ve Ticaret Bakanlığı Küçük ve Orta Ölçekli Sanayi Geliştirme ve Destekleme İdaresi Başkanlığı) –established in 1990

TTGV

Sources for R&D financing to SMEs

• TTGV• Treasury-World Bank funds • UFT Undersecreteriat of Foreign Trade Fund- (DEFİF*-Support and

Price Stabilization Fund)• Own resources

• TÜBİTAK-TİDEB• UFT Undersecreteriat of Foreign Trade Fund (DEFİF*-Support and

Price Stabilization Fund)

• KOSGEB• State Budget

* DEFİF: this fund is being used for various supports. One of these support is for R&D financing through TTGV ( on repayable basis by the companies) and TÜBİTAK-TİDEB (on grant basis)

TTGV

TTGV• Companies operating in the manufacturing and software development sector

• Number of employees up to 200

• Operating independently (i.e are not a part of a holding company/group of

companies)

TÜBİTAK• Companies operating in the manufacturing and software development sector


• Net fixed assets (excluding property and buildings) not exceeding $ 2 M

KOSGEB• Companies operating in the manufacturing sector


Definition of SME

TTGV

TTGVTTGV

TÜRKİYE TEKNOLOJİ GELİŞTİRME TÜRKİYE TEKNOLOJİ GELİŞTİRME VAKFIVAKFI

TECHNOLOGY DEVELOPMENT FOUNDATION OF TURKEY

TTGV

• TTGV was founded on June 1, 1991 as a non-governmental, not for profit organization, to support improving Turkish Industry’s competitiveness in global markets through technology driven innovation.

• Founders include 26 private companies, 6 public institutions, 10 NGOs and 14 individuals.

• Board of Directors : 9 members; including 6 members from the private sector and 3 members from the Undersecretariat of Treasury, KOSGEB and TÜBİTAK.

• Number of permanent staff is around 40; a pool of experts with nearly 500 people.

• Independent monitoring and evaluation of activities; auditing according to IAS. Subject to laws and regulations of Rep. of Turkey, concerning the foundations.

TTGV

TTGV

1) Treasury-World Bank funded R&D Programs

1st Program: Technology Development Project (TDP) (1991-1998)

2nd Program: Industrial Technology Project (ITP) (1999-2004)

2) UFT Undersecreteriat of Foreign Trade

funded R&D Program (1995- )

TTGV’s Programs

TTGV


1st Program: Technology Development Project (TDP) (1991-1998) Technology Development Financing $38.7 M Consultancy services $2.2 M

Total $40.9 M

2nd Program: Industrial Technology Project (ITP) (1999-2004) Technology Development Financing $43.0 M ($11.0 M is financed from TTGV’s own resources) Venture Capital $7.0 M Technoparks -Innovation Centers – Start-ups $14.8 M TSS, Training, Tech. Assist. and other activities $6.2 M

Total $71.0 M

2) UFT Undersecreteriat of Foreign Trade funded R&D Program (1995- )

R&D Support

Financing Product and Process Devolopment $38.7 M

TTGV’s Programs

TTGV


2nd Program: Industrial Technology Program (ITP) (1999-2004)

Technology Development Financing main features :

• Total budget $ 43M ($32 M plus $11 M TTGV’sown resources)

• Support of the R&D activities on marketable product and process

development / improvement • Max. 50% of the total project budget

• Max. Financial support $ 2 M

• Interest free, low management fee

• Project duration max. 24 months

• 1 year grace period following the project completion, repayable in 3 years

in 7 equal installments

TTGV’s Program (ITP)

TTGV

2) UFT Undersecreteriat of Foreign Trade founded R&D Program (1995- )

Product and Process Development Financing Main features :

• Support of the R&D activities on marketable product and process development / improvement• Max. 50% of the total project budget• Max. Financial support US$ 1 M• Interest free, low management fee• Project duration max. 24 months• 6 months grace period following the project completion, repayable in 3 years in 7 equal instalments

TTGV’s Program (UFT)

TTGV

As of 29.2.2004 ITP UFT TDP TOTAL

Number of Project Applications 582 266 272 1.120

Number of projects Supported 203 82 84 369

Completed 96 71 84 251

In Progress 101 3 - 104

Terminated - 2 - 2

Withdrawn by the Company 6 6 - 12

Committed Amount ($ M) 56 30 45 131

Disbursed Amount ($ M) 29 19 39 87

TTGV’s Programs

TTGV

22%

78%

SME

LARGE

BREAKDOWN OF TOTAL NUMBER OF COMPANIES SUPPORTED BY SIZE OF COMPANIES

TTGV’s Programs

TTGV

BREAKDOWN OF TOTAL FINANCIAL SUPPORT PROVIDED BY SIZE OF COMPANIES

$34 M

$100 MSME

LARGE

$31 M

TTGV’s Programs

TTGV

SECTORAL DISTRIBUTION OF THE SUPPORTED PROJECTS

Electronics21%

Biotechnology7%

Materials18%

Chemistry7%

Machinery31%

Information Technologies

20%

TTGV’s Programs

TTGV

RANGES OF THE ALLOCATED AMOUNTS FOR THE SUPPORTED PROJECTS ($)

4%

16%

18%

62%

0-100,000 100,000-500,000

500,000-1,000,000 1,000,000-2,000,000

TTGV’s Programs

TTGV

AGES OF THE SUPPORTED COMPANIES (years)

0-1050%

11-2025%

21-3017%

>308%

TTGV’s Programs

TTGV

• ITP is the follow-up to the WB’s first Technology Development Project (TDP-$100M)

• The major objectives of the ITP are: to assist in the upgrading of Turkish technology

infrastructure to EU standards, to strengthen technology institutions and establish

stronger links with the industryand to assist firms in upgrading their technological

capacity.

• ITP ($155M-incl.WB fee) comprises four main components:

• TPE Turkish Patent Institute - strengthening industrial property rights (IPR) services ($15M)

• UME National Metrology Institute - expanding metrology services ($45.5)

• MAM Marmara Research Center – restructuring of R&D institutions ($33M)

• TTGV Technology Development Foundation of Turkey – supporting technology upgrading by firms ($60M-plus $11M from TTGV’s own resources)

Industrial Technology Project (ITP)

TTGV

An evaluation study based on client interviews was performed for the

Industrial Technology Project (ITP) and a report depicting the findings

were prepared by Professor Erol Taymaz of Middle East Technical

University and Professor Sanjaya Lall of Oxford University.

The report is expected to provide feedback to the implementing institutions

and in monitoring the implementation,

The study used two sources of information: quantitative data from a

survey of client firms and qualitative information on the impact of ITP and

client perceptions of institutional effectiveness collected through structural

interviews.

Monitoring and Evaluation of the ITP

TTGV

Relevance and Impact of Institutional Support

• The firms almost uniformly regarded TTGV’s impact on productivity to

be positive,

• A number of firms expressed that ITP helped them develop an R&D

culture and improve quality of R&D,

• A majority of firms expressed that winning TTGV projects raised their

reputation which is an indication of the high regard which the domestic

sector attributes to TTGV.

Monitoring and Evaluation of the ITP Some Findings

TTGV

Quality, Delivery, Interactions and Cost of Services

• Most firms regarded TTGV support for technology development

favorably but some felt its procedures were too lenghty,

• It was expressed by the respondents that TTGV had become ‘too

much like a bank’ to secure repayment and placed more emphasis on

rapid commercialization rather than on innovation,

• In the light of these comments, TTGV should pay attention to

diversifying its financial techniques and monitor its tendency to

emphasize financial security rather than innovation.


TTGV

Need for Complementary Services

• Responses were mixed regarding the need for complementary

services. Need for comlementary services were expressed for

• venture capital

• commercialization of R&D results

• finding partners in international projects

• training in project planning and management


TTGV

TTGV’s vision is to become TTGV’s vision is to become an internationally recognized an internationally recognized

best practice best practice as a principal player as a principal player

in technology development, in technology development, research and innovation support research and innovation support

in Turkey.in Turkey.

TTGV

• TTGV has been part of the last two World Bank Technology Development Programs. Progress on TTGV programs has been steady with a positive outlook in spite of major economic crises.

• TTGV has established a strong fund management background, in compliance with the World Bank requirements and objectives. (Independent, transparent and accountable).

• TTGV has completed the TSS program, to support technological infrastructure and professional business culture among SMEs.

• TTGV has established four Technology Service Centers.

• Technopark programs are progressing.

• Start up pilot program has been launched in 2003.

• TTGV is a junior partner in two Venture Capital funds (İş Risk and TPEF).

What TTGV Has Accomplished

TTGV

• Corporate structure (non-profit, non-govermental) is perceived very positively by the clients and stakeholders.

• Flexilibity in human resources management.

• Acting as a coordinating body with a pool of experts has been proved to be dynamic, efficient and cost effective.

• Board structure is very important for bridging the gap between private and public sectors.

• Appointing external experts from the universities, private and public sectors for evaluation of the project proposals and an expert from the university for supervising the project helps building confidence and linkages.

• Cooperation with national/international organizations and experts are very important for increasing the success rate.

How TTGV Has Accomplished

TTGV

• To strengthen and deepen TTGV’s existing programs of support to R&D in industry and funds such as start-up and venture capital,

• To contribute and support development of regional/local level innovation support mechanisms, integrate them to a national pipeline of complementing support schemes and International networks and programs,

• To promote and support cooperative research between and among the universities and the industry,

• To finance activities that provide the basis for future rapid technology based growth: pre-competitive projects, spin-offs and activities related to start-ups,

• To take the lead in advocacy for building the legal and institutional framework for innovation activities.

• To contribute and support exploitation of IPR

• To establish schemes for supporting commercalization

Priorities for TTGV

TTGV

• Incubators-innovation centers– Establish and operate new innovation centers particularly close to

the universities and industrial clusters to encourage spin off type ventures, industry-university cooperation including employment programs for students and faculty, including regional/local setups.

• Venture Capital and Start-up finance– Extending the start-up program into a full featured program– Build on the startup program to help create an environment – Extend participation into additional VC funds, for a better insight

and understanding for future more comprehensive programs.

• Industrial R&D Financing

• Technical Support Services– Provide training and consultancy to SMEs to improve on

manegerial, financial and marketing skills and capabilities.– Help them develop capabilities technological or otherwise to

participate in networks to be set up by TTGV or others.

Deepening and Expanding Current Programs

TTGV

TTGVTTGVTürkiye Teknoloji Geliştirme VakfıTürkiye Teknoloji Geliştirme Vakfı

TECHNOLOGY DEVELOPMENT FOUNDATION OF TURKEY

www.ttgv.org.trE-mail : [email protected]

Tel : +90 312 467 21 78Fax : +90 312 467 40 70

Atatürk Bulvarı No:221K.Dere /ANKARA - TURKEY

TTGV

TÜBİTAKTürkiye Bilimsel ve Teknik araştırma Kurumu

Scientific and Technical Research Council of Turkey

TİDEBTeknoloji İzleme ve Değerlendirme Başkanlığı

Technology Monitoring and Evaluation Board

TTGV

TÜBİTAK - Scientific and Technical Research Council of Turkey

Founded in 1963, TÜBİTAK is the supreme organization put in charge of promoting, developing, organizing and coordinating research and development in the fields of exact sciences in Turkey in line with the national targets of economic development and technical progress.

It functions under the fold of the Prime Ministry with adequate administrative and financial autonomy. The Council’s decision-making body is the Science Board, composed of the President and 12 members. The President, as the chairman of the Science Board implements its decisions and is the head of the entire administration.

TİDEB - Technology Monitoring and Evaluation Board

TİDEB monitors the research projects of industrial establishments aimed at developing new products, production methods and innovative technology to see whether they conform to international rules and are on par with current R&D standards. It also plans supportive studies to enhance technology development capability and devise policies to increase cooperation between universities and industry.

TÜBİTAK TİDEB

TTGV

• UFT Undersecreteriat of Foreign Trade funded R&D

Program (1995- )

Main features:

• Support on grant basis• From concept development to trial production stages• Exclusively the costs of the research activities • Max. 50% of the project cost, in some case max. 60%• Project duration max. 3 years

TÜBİTAK TİDEB’s Program

TTGV

As of 31.12.2003 TÜBİTAK TİDEB

Number of Project Applications 2.568

Number of projects Supported 1.847Completed 959

In Progress 673

Withdrawn by the Company 215

Committed Amount ($ M) 157

Disbursed Amount ($ M) 147


TTGV

%78

%22

%54

%46

%36

%64

# of COMPANIES # of PROJECT # of TOTAL COST (M$)

SME LARGE

Breakdown of Projects Supported by Size of Companies


TTGV

1.1

2.0

2.48,0

10.4

6.5

14.1

20.6

11.3

23.5

34.8

16.4

38,1

54.5

19.4

65,0

84.4

26.4

82.8

109,2

39,7

107,7

147.4

157,4*

1996 1997 1998 1999 2000 2001 2002 2003

TOTAL

LARGE

SME

Amount of Financial Support (Cumulative)($ M)


TTGV

279116

395 406255

661550

382

932

666517

1183

785658

1443

926850

1776

10561094

2150

1175

1393

2568

1995-1996 1997 1998 1999 2000 2001 2002 2003

LARGE

SME

TOTAL


Project Applications (Cumulative)

TTGV

%47

%33

%12

%5

%2%1

<150 150-500 500-1000 1000-2000 2000-5000 5000>

Breakdown of Projects by Cost ($ 1000)


TTGV

85 95

180

120

200

320

147

286

433

162

373

535

183

451

634

199

565

764

221

697

918

241

869

1110

1995-1996 1997 1998 1999 2000 2001 2002 2003

LARGE

SME

TOTAL

Number of New Companies (Cumulative)


TTGV

TÜBİTAKTÜBİTAK

Türkiye Bilimsel ve Teknik Araştırma KurumuTürkiye Bilimsel ve Teknik Araştırma Kurumu

Scientific and Technical Research Council of Turkey

www.tubitak.gov.trE-mail : [email protected]

Tel : +90 312 468 53 00Fax : +90 312 427 74 89


TTGV

TTİİDEBDEB

Teknoloji İzleme ve Değerlendirme BaşkanlığıTeknoloji İzleme ve Değerlendirme Başkanlığı

Technology Monitoring and Evaluation Board

www.tideb.tubitak.gov.tr

E-mail : [email protected]

Tel : +90 312 467 18 01Fax : +90 312 427 43 05


TTGV

KOSGEB

T.C Sanayi ve Ticaret Bakanlığı Küçük ve Orta Ölçekli Sanayi Geliştirme ve Destekleme

İdaresi Başkanlığı

Ministry of Industry and Trade Small and Medium Size Industry Development Organization

TTGV

• KOSGEB, established by a special law in 1990, is a public body acting as both a consultancy services provider and technology suppplier for SMEs, at the national level.

• Besides establishing different centers, KOSGEB carries out the necessary development and support programs for SMEs under 22 different support schemes.

• One of these schemes is ”Technology R&D Support”a) Supports on Repayable Basis

b) Supports on Grant Basis

KOSGEB

TTGV

Technology R&D Support (defined with a decree from the Ministry of Industry and Commerce on 30 June 2003)

a) Supports on Repayable Basis: interest free, 1 year grace period following the support period, repayed in 2 years with installments every 3 months.

1) Material, machinery and equipment, prototype production and trial production raw material cost support: max 85% of the cost

with upper limit €70.000 (TL equivalent)

2) Quality Improvement-Technological Hardware support: max 85% of the cost with upper limit €30.000 (TL equivalent)

b) Supports on Grant Basis Financial supports under 7 different headings with limit between

€500-€10.000 (TL equivalent)

KOSGEB’s Programs

TTGV

KOSGEBKOSGEB

T.C Sanayi ve Ticaret Bakanlığı Küçük ve Orta T.C Sanayi ve Ticaret Bakanlığı Küçük ve Orta Ölçekli Sanayi Geliştirme ve Destekleme Ölçekli Sanayi Geliştirme ve Destekleme

İdaresi Başkanlığıİdaresi Başkanlığı

Ministry of Industry and Trade Small and Medium Size Industry Development Organization

www.kosgeb.gov.trE-Mail : [email protected]

Tel : +90 312 212 81 90Fax : +90 312 212 25 08

KOSGEB MKEK Binası 9.Kat06330 Tandoğan / ANKARA

TTGV

Technology Development Zones Technopraks

TTGV

Law Concerning Technology Development Zones has been put into effect

on 6 July 2001and the related Implementation Communique has been published

by the Ministry of Trade, on 19 June 2002.

The objectives of this Law is:

• to establish cooperation among universities, research and development institutions and the production/manufacturing sector • to encourage and enhance domestic industry gain international competitiveness • to produce technological knowledge, be innovative in manufacturing methods and products• to commercialize technological knowledge• to encourage technology focused production and entrepreneurship• to encourage technology transfer and inflow of foreign investment that will bring along high technologies

Technoparks

TTGV

New Regulations Regarding Technoparks

The following incentives that provide indirect financial supports, have been recently granted to the enterpreneurs/companies operating within Technology Development Zones.

Enterpreneurs/Companies operating within Technology Development Zones are exempt from VAT for their softwares/programmes and research and development products they produce within the Zone.

Income and Corporate Tax exemption for entrepreneurs/companies operating within Technology Development Zones is extended until 31 December 2013, for income they earn from software/programme development and research and development activities performed within the Zone.

Income tax exemption for salaries of the R&D and software personnel working within the Zone is extended until 31 December 2013.

Technoparks

TTGV

Current Situation

Up to date 12 Technology Development Zones (TDZ) were approved by the Council of Ministers. Of these, 5 Technology Development Zones (2 in İstanbul, 2 in Ankara and 1 in Kocaeli) are currently active.

Among these active TDZs, 2 are being supported by TTGV:

• Bilkent Cyberpark in Ankara • İTÜ Arı Teknokent in İstanbul

Technoparks

TTGV

Bilkent Cyberpark (Ankara)

TTGV provided consultancy in the preparation of the Business Plan and committed $8M financial support to Bilkent Cyberpark.

Construction of 2 buildings (20.000m2), parking area (12.000 m2) and basement is expected to be completed in June 2004.

In collaboration with Bilkent Cyberpark, TTGV plans to establish a 1000 m2 innovation center within the technopark.

İTÜ Arı Teknokent (İstanbul)

TTGV provided $4M financial supprt to Arı Teknokent.

Construction of the building (18.000m2) is expected to be completed in November 2004.

In collaboration with Arı Teknokent, TTGV plans to establish a 500 m2 innovation center within the technopark.

Technoparks

TTGV


Director, Corporate Planning and Director, Corporate Planning and

FinanceFinance

Technology Development Technology Development

Foundation of Turkey Foundation of Turkey

ttgv ferdi miskbay director, corporate planning and finance technology development foundation of...

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