Research and innovation policy-making and funding from developing country perspective

1. Research and innovation policy-making and funding from developing country perspective Science, Technology and Innovation Policy Workshop Sarajevo, 29 January 2010 Şirin Elçi Director, Technopolis Group Turkey

2. Road map for this presentation • STI in Turkey • Policy mix and main programmes for funding STI • Lessons Learned and Recommendations

3. STI in Turkey • Early recognition of the need for S&T policy • The First Development Plan (covering period 1963-1967) included the elements of an explicit S&T policy • Policy measures for encouraging R&D • Grants, tax incentives, technoparks, etc. • Relatively well-developed institutional framework for STI policy-making and implementation • Direct involvement of the Government through the Supreme Council of Science and Technology

5. Since the turn of the century… • Increased political commitment to raise the R&D investments –2013 targets: • achieve R&D intensity of 2% (from 0.53% in 2002) 0.73% in 2008 • private sector contributing to half of it (from around 20% in 2002) 44% in 2008 • increase the number of R&D personnel to 150,000 (from 29,000 in 2002) 67,244 in 2008

6. Since the turn of the century… • Increased public funds for R&D activities • the total amount of funds in 2005 and 2006 is approx. €1.5billion as opposed to €1 billion allocated for five years between 2000 and 2004 • Between 2003-07, GERD more than doubled (from US$ 2.8 billion (PPP) to US$6.8 billion (PPP) • higher than the EU-27 average (9%) and matched globally only by China.

7. Policy mix Mainly focuses on • Increasing academic research • Developing human resources for S&T • Increasing R&D expenditures in enterprises, • Intensifying co-operation between universities and firms on R&D

8. Main programmes • R&D grants and loans • Support for the creation of technoparks • Establishment of technology incubators • R&D tax incentives

9. R&D Grants and Loans • since 1991 and by three main agencies • the responsiveness of the respective target groups to the measures is low due to • the low priority attached to R&D and innovation in the private sector, • low awareness on available support schemes, • the implementation conditions of the measures.

10. Technoparks in Turkey • Established under the Law issued in 2001 • Generous incentives for tenants • 37 technoparks as of September 2009 (of which 21 active) • In 2007 • 7.3 technoparks for every 10,000 researchers, relative to 1.9 in Canada, 1.2 in the US and 4.2 in the UK • 12.3 technoparks per US$1 billion (current PPP) of R&D performed by the HE sector, relative to 2.9 in Canada, 3.5 in the US and 8.3 in the UK (source: World Bank)

11. Results from evaluation • 81% of tenants were already conducting R&D • 39% of firms were collaborating with universities/RIs • 52% of tenants were already collaborating with other firms before locating in technoparks. • 25% of firms reported increase in their turnovers and 24% reported profitability increase • 21% claim their annual exports have increased • 29% increased their employment after locating in technoparks. Survey by Technopolis Group for the World Bank

12. Technology incubators • established since 1991 • infrastructure, start-up and prototype development support • the most important motives for incubatees: • sharing financial risk, • benefiting from low cost office space and • establishing new relations and networks

13. R&D tax incentives • Under the technoparks law (in 2001) • Through a separate law covering companies outside of the technoparks (in 2004 and then revised in 2008) • R&D centres with more than 50 full-time researchers are able to apply a double tax exemption of R&D expenditures (40% of R&D costs are subsidized) • Increased incentives for those employing 500 or more reseachers • 80% of income tax (90% for PhD holders) are deductible for R&D employees and 50% of employer’s social security contributions.

14. STI co-operation with the EU • full association with the Sixth Framework Programme in 2003 • Turkey provided this programme with 250 million euro, the largest contribution among the candidate countries) • is expected to contribute 423.5 million euro to the Seventh Framework Programme by the end of 2013.

15. Recommendations • Develop policies, strategies and programmes in a participative and transparent way using evidence-based knowledge • Design programmes by assessing real needs and demand of the target groups • Train and educate those involved in policy-making, programme design and implementation • Always monitor and evaluate policies, system and programmes as well as the performance of organisations involved in the design and implementation of STI policies and programmes • Invest in awareness raising and capability building on innovation • Actively promote and market (and provide coaching for) support programmes

16. Recommendations • Focus on innovation (and research commercialisation), not only on science and research “If the companies founded by MIT graduates and faculty formed an independent nation, the revenues produced by the companies would make that nation the 24thlargest economy in the world.” “MIT-the Impact of Innovation”, 1997 BankBostonreport • Empower diaspora and the civil society on STI promotion • Stimulate innovation in traditional industries, not only in technology sectors • Encourage innovation-based entrepreneurship • What is important is not how much you fund but what you fund and how you fund it…

17. Thank you. sirin.elci@technopolis-group.com www.technopolis-group.com Technopolis has offices in Amsterdam, Ankara, Brighton, Brussels, Frankfurt/Main, Paris, Stockholm, Tallinn and Vienna.