SME and innovation from a Turkish perspective Klaus

SME and innovation from a Turkish perspective Klaus Jurgens (MSc. LSE) TEPEK Train the Trainers Programme Ankara, Turkey 24 th November 2008 www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net

Contents We need more entrepreneurs! Entrepreneurship and SME A brief introduction to SME/SME module Clustering facilitates innovation! Innovation and TEPEK Introducing Cost Benefit Analysis www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 2

We need more entrepreneurs! Decisions about setting up or expanding a business must be quality assured, risk assessed and based on knowledge A knowledge based economy relies on the willingness to use new approaches One such approach is a reinforced support for entrepreneurship based on innovation www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 3

Entrepreneurship and SME Entrepreneurship stabilizes the emerging economy Most Turkish companies are indeed SME Knowledge and the access to it is a key requirement Turkish SME must learn how to add more value to stay competitive Value adding is likewise based on knowledge about processes Traditional SME can survive with knowledge Innovative SME can prosper with knowledge Different levels and types of knowledge are required www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 4

A brief introduction to SME § I will first guide you through the ABC of ‘what is a SME’ in both Turkey and the EU of 27 MS § We will then approach the key obstacle being Turkish SME do not as yet understand the value adding chain – and whether innovation can remedy that situation § Clustering and Knowledge Pools will form part of that analysis www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 5

www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 6

www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 7

www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 8

A brief introduction to SME § Whereas the actual number of SME is the same, and employment data differ by only ten per cent the key difference is the value as added to the two economies, respectively (here measured for the EU of 25): § EU SME add 56. 9 per cent of value to the EU economy as opposed to 26. 5 per cent of value added by Turkish SME to their economy § So can we list obstacles as currently faced by Turkish SME? www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 9

A brief introduction to SME/SME module The first module teaching about Turkish SME with a cross-border perspective in the English language was established at Bilkent University Its design was decided upon in close cooperation between academicians and practitioners from the UK in particular It is planned to roll out this module to other parts of Turkey in a Turkish language version, too There is of course a copyright issue as we will discover during the course of ‘tepek. org’ too; knowledge is not for free or is it? ? ? www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 10

A brief introduction to SME/SME module § Course: Obstacles for SME in cross-border § § ventures – SME and Entrepreneurship and research in entrepreneurship Introduction to SME Technical readiness for SME: Candidate Countries versus Member States The EU acquis communautaire and chapter 19 www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 11

A brief introduction to SME/SME module § Market research for cross-border ventures: § § § regionalisation and Europeanisation Why market research is vital for succesful cross-border ventures, Case studies old EU versus new Member States/CC VAT, currencies and payment matters – Computer Lab session: EU online search engines What is VAT and why it is relevant, Why currencies still matter, From invoice to settlement: differing European business practices, Company law in the United Kingdom and Turkey, New limited company models as discussed on EU level www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 12

A brief introduction to SME/SME module § Human resources and the link between technical readiness and well § § § § -trained staff SME as feeder-industry only? Introduction to people management, Interview and selection techniques, Who selects the HR Team (incompetence versus overqualification)? , Do SME need HR managers? , Personnel consultancies and their impact on SME, The dangers of outsourcing HR decisions Quality definition and assurance, Access to testing/accreditation, Cost as factor not to go it alone? , Introduction to costing, The role of the purchasing manager, The role of SME consortia in Europe, The role of SME associations in Europe, Local craftsmen/artisanat versus supplying the big corporation www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 13

A brief introduction to SME/SME module § Introduction to practical business plan drafting for start-ups, § § § § Expansion and tendering purposes, What is tendering? , What is public procurement? , How SME participate in cross-border procurement and tendering, Case study recent tender, Particularities of European tendering Funding for expansion and Risk Capital for SME An overview of various funding sources currently available to SME, Local – Regional – National - European and International Export Promotion An introduction to Impact Analysis and clustering theory Regulatory Impact Analysis, Their importance for Turkish business, Clustering as one option to overcome obstacles once impacts have been analysed www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 14

A brief introduction to SME: ‘Fieldwork’ § Company Restructuring and Innovation § Innovation Policies, Business Creation and Economic Development: § § A Comparative Approach (International Studies in Entrepreneurship) by Neslihan Aydogan (Hardcover - Nov 18, 2008) Buy new: $119. 00 $102. 03 Available for Pre-order Eligible for FREE Super Saver Shipping. Excerpt - Front Matter: ". . . Neslihan Aydogan Editor Innovation Policies, Business Creation and Economic Development A Comparative. . . "Surprise me! See a random page in this book. § http: //www. amazon. com/s/ref=nb_ss_b? url =search-alias%3 Dstripbooks&fieldkeywords=Neslihan+Aydogan&x=0&y=0 www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 15

Clustering facilitates innovation! § The term innovation means a new way of doing something. It may refer to incremental, radical, and revolutionary changes in thinking, products, processes, or organizations. A distinction is typically made between Invention, an idea made manifest, and innovation, ideas applied successfully. (Mckeown 2008) In many fields, something new must be substantially different to be innovative, not an insignificant change, e. g. , in the arts, economics, business and government policy. In economics the change must increase value, customer value, or producer value. The goal of innovation is positive change, to make someone or something better. Innovation leading to increased productivity is the fundamental source of increasing wealth in an economy. (Wikipedia on innovation) www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 16

Visualising a Cluster Green Biotech Drug Discovery/ Tissue Engineering Environmental research Bioinstruments Research establishments Biotech and Life Sciences Cluster Central Germany; copyright: Klaus Wurpts www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 17

Basics of Clustering • it strengthens co-operation, supplier networks, value chains in those sectors that have critical mass • is open to all companies as well as research facilities and integrates existing networks and initiatives • is coordinated and initiated by the CS Pr oje c (Economy, Science. Gouvernment, Administration) e ffic improves the national and international Clusterboard no shapes the profile of the business region, tio • ina tte a ms (Cluster-Speaker) d -or provided by the enterprises themselves Co contents of cluster activities that are perception of a region Cluster-Forum (All relevant participants of each sector) Theory and Practice, copyright: K Wurpts www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 18

Innovation and TEPEK We must understand the ‘before’ the Lisbon Objectives in order to talk about the ‘beyond’ Differing industry sectors and segments of society have differing knowledge requirements Innovation and ICT may work for some, while not for all Clustering is a perfect tool to bringing industry and academia together, central Germany as example www. tepek. org: can foster links between various actors within our society and in particular help to establishing synergy between the research community, industry and government = think our three consortia! www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 19

Introducing Cost Benefit Analysis Turkish industry must wake up to Europe including hiring more EU – educated managers, and start sending their future managers to Europe and not only the US § Cost benefit analysis is the tool § An EU trained high caliber Turkish junior manager will have learned about Turkey and the EU (both from an academic, as well as industry perspective) § Turkish universities must show to Turkish industry that they can deliver § This process must be finalized come EU accession around 2012 -2014 www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 20

The ‘Arrow Principles – ten elements of high quality regulatory impact assessment’ (1996) by Nobel-laureate Kenneth. J. Arrow Can we measure the usefulness of innovation for Turkish SME? Two principles are of particular importance for deciding about whether innovation, clusters and other tools work Principle no 1: The impact assessment contains the expressive comparison of the favourable and adverse outcomes of the regulation considering a) costs and benefits of monetizable nature, b) costs and benefits of not monetizable nature, and their allocation www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 21

The ‘Arrow Principles – ten elements of high quality regulatory impact assessment’ (1996) by Nobel-laureate Kenneth. J. Arrow Principle no 8: Elements/factors of uncertainty shall be handled with 'safety margins', indicating the reasons and degree of insecurity www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 22

Acknowledgements § K J Arrow (1996) Nobel Laureate on RIA as introduced by § § § Zsombor KOVÁCSY, J. D. , M. D. , Head of Department (kovacsyzs@im. hu) and Krisztián ORBÁN, Master of International Relations and Economics (orbank@im. hu) for the Republic of Hungary - Ministry of Justice, Department of Impact Analysis, Deregulation and Registration of Law İstanbul Kültür Üniversitesi Panel on SME (4 th SME Congress December 2007) www. iku. edu. tr İstanbul Kültür Üniversitesi Panel on Clustering (5 th SME Congress November 2008) www. iku. edu. tr Bilgi Üniversitesi İstanbul Guest Lectures on EU Law (2006), www. bilgi. edu. tr Klaus Wurpts, General Manager, Central German Cluster, http: //www. mitteldeutschland. com/ http: //en. wikipedia. org/wiki/Innovation www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 23

Bio § Postgraduate degree in Government www. lse. ac. uk § Present affiliations: Columnist www. todayszaman. com. tr, § § § www. voicesnewspaper. com, EU grant partner institution project coordinator: TEPEK www. tepek. org, EU grant financial expert: TOWARDS www. ruraleurope. info, Lecturer on EU law making, Turkish SME www. bilkent. edu. tr Previously team member EU FP 6 grant ‘Polarization and Conflict’ www. polarizationandconflict. org EU Youth Forum chairperson Brussels Hospitality management, Conference and event management MB Consulting İstanbul www. mbconsulting. com. tr Expertise: Organic food, Tourism industry, SME financing, SME restructuring, Clustering, Chemical sector (REACH), Regulatory Impact Analysis, Industry Sector Impact Analysis, Technical readiness of Turkey as CC to the EU, Proposal preparation for EU/Turkish CFCU/Europe. Aid Funds, Project management, Team leader www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 24

Çok teşekkür ederim! Contact details www. tepek. org, Contacts, Bilkent as Partner Institution, jurgens@bilkent. edu. tr and alternatively phone in Turkey: +90. 555. 493. 68. 29 e-mail: klaus. jurgens@alumni. lse. ac. uk Thank you for your attention! www. tepek. org is part of EU-Turkey civil society dialogue projects: www. csdproject. net 25