Dr. Mustafa Atilla Meeting Industry Demand for R&D and Technology

Dr. Mustafa Atilla

Meeting Industry Demand for R&D and Technology

• SCIENCE & TECHNOLOGY PARKS

• IN TURKEY

• MUSTAFA ATİLLA

• CEO, Ankara Cyberpark, Turkey

• Innovation and Competitiveness Practitioners Workshop

• April 19 –21, 2004

• The Marmara Hotel

• Istanbul, Turkey

• “

TURKEY R&D CAPACITY

TURKEY R&D CAPACITY

TURKEY R&D CAPACITY

• Some Facts:

• The amount of investment in R&D in comparison with developed countries is dramatically low

• An important portion of R&D investment is made by governmental institutions or universities

• Weak innovation culture and poor R&D infrastructure

• Legislation (particularly inefficient and insufficient incentive mechanisms) was the biggest barrier in front of R&D activities for many years.

• IT related products and software form an important import category. There is a big negative imbalance in IT exports/imports.

• The imbalance between the number of scientific publications and patents is an important indicator showing Turkey’s inability to convert the scientific research studies into applicable knowledge and technological products.

SCIENCE PARK?

• “A Science Park is an organization managed by specialized professionals, whose main aim is to increase the wealth of its community by promoting the culture of innovation and the competitiveness of its associated businesses and knowledge-based institutions. To enable these goals to be met, a Science Park stimulates and manages the flow of knowledge and technology among universities, R&D institutions, companies and markets; it facilitates the creation and growth of innovation-based companies through incubation and spin-off processes; and provides other value-added services together with high quality space and facilities.” (IASP web page, 2003).

MAIN OBJECTIVES OF SCIENCE PARKS

• Stimulate the formation of start-up new-technology-based firms (NTBFs)

• Encourage the growth of existing NTBFs

• Foster the technologies of the future

• Create synergy between firms

• Create new jobs for the region

• Improve the performance of the local economy

• Improve the image of the location, particularly for areas of industrial decline

• Shift local / regional industrial base from declining to new industries

• Counter the regional imbalance of R&D capability, investment, innovation

• Improve national competitiveness level

• Stimulate science-based technological innovation

• Encourage spin-off firms started by academics

TECHNOLOGY DEVELOPMENT ZONES LAW (LAW NO:4691), TURKEY

• Technopark concept taken in the agenda of Turkey only in the mid 90’s.

• To promote establishment of science and technology parks under the guidance and lead of universities some legislations were made by Ministry of Industry and Trade:

• Technology Development Zones (TDZ) Law (Law No:4691), which came into force on 06.07.2001, and
• Application Regulation of this Law, which came into force on 19.06.2002.

• With this law, companies are encouraged to invest more in R&D and software development, through tax incentives.

• Any kind of software development activity is considered as an R&D activity according to the law.

• In establishing a STP, involvement of an higher education or a research institution as a founder is a mandatory requirement in the law

TECHNOLOGY DEVELOPMENT ZONES LAW (LAW NO:4691), TURKEY

TECHNOLOGY DEVELOPMENT ZONES LAW (LAW NO:4691), TURKEY

• Tax Exemptions and Incentives provided with the law (till the end of 2013) :

• Income and corporate tax exemptions for the operating company

• Income and corporate tax exemptions for the incomes generated from software development and R&D activities of the companies operating in these zones

• Income tax exemptions for the salaries of the researchers, software development staff and R&D personnel working in these zones

• VAT exemptions for the sofware development activities

• Sponsored aid and donations for the individuals and institutions having R&D activities in the zone

• Right of recruitment of individuals from government research organizations or universities in the zone with the approval of their organizations. (The income obtained in the zone by academicians or research personnel are exempted from the university revolving fund deductions)

• Legal permission for academicians to establish firms or become a partner of existing firms in the zones to commercialize their academic works (with the approval of their university)

SCIENCE & TECHNOLOGY PARKS IN TURKEY

SCIENCE & TECHNOLOGY PARKS IN TURKEY

SCIENCE & TECHNOLOGY PARKS IN TURKEY

SCIENCE & TECHNOLOGY PARKS IN TURKEY

SCIENCE & TECHNOLOGY PARKS IN TURKEY

SCIENCE & TECHNOLOGY PARKS IN TURKEY

SCIENCE & TECHNOLOGY PARKS IN TURKEY

SCIENCE & TECHNOLOGY PARKS IN TURKEY

• The TDZ Law enforces involvement of universities for establishment of STPs

• All of the STPs in Turkey are situated within or near the lands (within < 5 km radius) of universities, in order to create close relationship with university community.

SUPPORT MECHANISMS FOR TECHNOPARKS AND INCUBATORS

• Governmental aids through Ministry of Industry and Trade, for land acquisition, infrastructure and management building construction costs

• World Bank credit to STPs by Industrial Technology Project through TTGV (Cyberpark, ARI technopark)

• Other international credits and funds like World Bank InfoDev Incubator Initiative (Cyberpark Technology Incubator)

• KOSGEBs support for TEKMERs

INCUBATORS IN TURKEY

• Parallel to the poor entrepreneurial culture, incubation culture is too poor as well.

• Currently available incubators (12) in Turkey, called TEKMERs (Technology Development Centers), are managed by KOSGEB (SME Development Organization), a governmental agency.

• Except one incubator (Ericsson’s Creaworld) there is no private or PPP incubator

• Cyberpark technology incubator will be unique with its governance model by being first incubator with public private partnership and having a private management. Cyberpark incubator has been shortlisted for app. 300.000 USD WB grant through InfoDev Incubator Initiative Program.

• Only two TEKMERs are located in STPs and have tax incentive advantages.

• Grants available for incubatees for many purposes, however access is relatively bureaucratic and limited.

• Services provided by KOSGEB in TEKMERS are rapidly improving

MAIN CHALLENGES AND RECOMMENDATIONS

• Poor Institutionalization:

• Still many universities are planning to establish new STPs. However, the focus should be on quality rather than quantity. Most of the STPs suffer from insufficient know-how and best practices.
• Most of the STPs are established as land development projects, so the required institutional development has not been achieved (technology and business support mechanisms, incubators, consultancy on IPR, access to financial resources, etc. are absent)

• An NGO is required to provide a platform for cooperation and sharing best practices. (Turkish Science and Technology Parks Association)

• Too much focus on ICT. Attracting other technologies is crucial to have crosssectoral R&D.

• The main attraction argument in most STPs is tax advantages (other attraction elements providing the permanent success of the zones are mostly absent!)

• Special purpose STPs are required. Regional capacities and priorities should be considered. (Agroparks, mediparks, etc.)

• Lacking Synergies: Most of the universities impose barriers for their academics to work in other universities’ science parks

MAIN CHALLENGES AND RECOMMENDATIONS

• Assurance of financial support for initial setup:

• Existing governmental support is not sufficient to meet the required investment even for a single STP. Total governmental budget is around 2 million USD, which should be more than 50 million USD.
• World Bank credit through the Industrial Technology Project was very limited and only covered a part of construction costs of two STPs (Cyberpark, İTÜ technopark), so new WB financed projects may have larger components.

• There is no support for commercialization of R&D. TTGV may devise new support mechanisms and tools for commercialization of R&D results.

• Similarly, there is no support mechanism for private incubators. Knowledge Economy Project may reserve some funds for supporting private incubators.

• Tax incentives in STPs may be given not only for software companies and companies having R&D activities but for support organizations such as venture capital funds as well.

• International recognition and attraction of FDI.

Dr. Mustafa Atilla

• THANK YOU !