Turkey’s Research, Development and Innovation Targets for 2023: Realistic or Far-fetched?

Turkey’s Research, Development and Innovation Targets for 2023: Realistic or Far-fetched?

Abstract

Research, Development and Innovation (R&D+I) is of crucial importance for the Turkish economy. For 2023 – the centennial of the Republic – the Prime Minister-led Supreme Council of Science and Technology (BTYK) envisages that Turkey should 1. devote at least 3% of its GDP to R&D activities, of which two-thirds should come from business and 2; have 300,000 full-time equivalent (FTE) researchers of which 180,000 are private sector-employed. Trend analyses in this paper show by that – although great increases in spending and human resources have been achieved over the past decade – Turkey is currently not at all on track to achieving its 2023 targets. Besides stating that Turkey’s R&D+I targets have been over-ambitious, this paper argues that the used indicators fail to grasp genuine progress in R&D+I. Therefore it calls on Turkish policy-makers to focus less on quantitative input-indicators such as spending, and more on qualitative output-indicators such as education, academic excellence and skills development.

Introduction: the need to foster research and innovation

Research, Development and Innovation (R&D+I) is currently high on the agendas of Turkey’s policy-makers. Highly visible and Türk malı (Made in Turkey) projects and products such as the Göktürk 2 observation satellite, the major FATİH-project (aiming to make Turkey’s schools “smart”) and ambitions to construct an electric vehicle help the Erdoğan Administration and his Justice and Development Party (AKP) to convey an appealing message of strength and progress both domestically and internationally.

However, R&D+I not only serves Turkey’s policy-makers’ political motives. From a pragmatic perspective, R&D+I is of crucial importance to the Turkish economy. Although three-times Prime Minister Erdoğan has gained widespread acclaim for a seemingly stellar performance of the Turkish economy (i.e. a nearly three-fold increase of the nominal Gross Domestic Product [GDP] between 2002 and 2012, reigned-in inflation while having modest public debt), all that glitters is not gold.

In order to satisfy the demands on an ambitious government and young and consuming populace, Turkey continues to lean heavily on foreign imports and credit supplies. Accounting to 7.5% of GDP in 2012, the resulting Current Account Deficit (CAD) is one of the world’s highest, which is not only costly but also renders Turkish economy vulnerable to shocks (as could be observed during June’s Gezi Park protests when the Istanbul Borsa lost 10% over the first weekend of the protests, while the Lira diminished in value and bonds interest rates soared to 7%).

Additionally, Turkey faces a considerable hurdle in the upcoming years: escaping the middle income-trap. Undeniably, Turkey’s economy has progressed considerably during the past years. However – and in an increasingly global world – Turkey risks to becoming a victim of its own success. As income per head has risen to nearly $11.000, Turkey has largely lost – or risks losing – the ability to effectively compete with low-tech, low-wage countries, while its performance is (still) not up to mark with the world’s economic and innovative forerunners.

This paper will provide a brief assessment of Turkey’s R&D+I targets for 2023 – the centennial of the Republic. This paper will critically assess the nature of the target-indicators and – by means of trend analyses -whether Turkey is on track to achieving its 2023 R&D+I goals.

R&D+I targets in Vizyon 2023 and the current policy framework

Turkey’s policy-makers seem to have well-understood that R&D+I is of crucial importance to strengthening the Turkish economy and reducing its external dependence.

In this regard, an ambitious set of targets has been identified by the Prime Minister-led Supreme Council of Science and Technology (BTYK). Vizyon 2023 - Erdoğan’s visionary roadmap for Turkey – envisages that by 2023, Turkey should have become one of the world’s top-10 economies which:

  • devotes at least 3% of its GDP ($60 billion) to R&D activities of which two-thirds should come from business;
  • has 300,000 full-time equivalent (FTE) researchers of which 180,000 are employed in the private sector.

These targets are ambitious, and upon attainment Turkey would – at least in terms of spending and human resources – have an innovation capacity roughly comparable to contemporary Germany or France.

In order to attain these goals, a robust policy framework has been in place since 2010: the National Science, Technology and Innovation Strategy 2011-2016 (UBTYS).

Implemented  by the Ministry of Science and Technology (MoST) and the Scientific and Technological Research Council of Turkey (TÜBİTAK), UBTYS aims to deliver targeted support to Turkey’s competitive sectors (Automotive, Manufacturing and ICT), sectors of potential (Defense, Space, Health, Energy, Water and Food) as well as basic research while fostering six horizontal policy goals (Figure 1).

Additionally, a score of measures has recently been taken to strengthen private sector engagement with R&D+I. For instance, decrees have been adopted which facilitate R&D intensive start-ups with ready-access to finance and complementary mentoring; governmental organizations have been enabled to participate in venture capital schemes, thus potentially enhancing their effectiveness; an entrepreneurial university scoreboard has been set-up, and currently support schemes for technology transfer are being devised.

Figure 1: Turkey's National Science, Technology and Innovation Strategy 2011-2016. (Source: TÜBİTAK, 2013a).

Figure 1: Turkey’s National Science, Technology and Innovation Strategy 2011-2016. (Source: TÜBİTAK, 2013a).

Turkey’s R&D+I performance between 2002 and 2011

Closer examination of Turkey’s R&D+I performance learns that Turkey is still considerably lagging behind its main interlocutor/competitor, the European Union (Figure 2). Yet, Turkey’s policy-makers are often eager to point out Turkey’s rapid catch-up process with regard to R&D+I. For instance, Yücel Altunbaşak, the President of TÜBİTAK, was recently quoted saying: “Our overall numbers may not be impressive but the change is absolutely impressive .We are coming up to the top extremely fast. (University Worldnews, 2013).”

Figure 2: Turkey's R&D profile and growth rates - compared to the EU (Source: European Commission, 2013).

Figure 2: Turkey’s R&D profile and growth rates – compared to the EU (Source: European Commission, 2013).

And indeed R&D+I spending figures show a tremendous increase: between 2002 and 2012 nominal spending on R&D increased more than 3.5 times to over $11 billion, whereas R&D-spending as a percentage of GDP increased with 58% to 0.84 – a growth pace only second to China (Figure 3; Figure 4). A similar picture can be depicted for the number of full-time equivalent (FTE) researchers which has increased three-fold as well to 72,000 (Figure 5). Moreover, and in the meantime, business has steadily overtaken the government as the main spender on R&D, and accounts for 45.8% of Turkey’s total R&D efforts (Figure 6).

Figure 3: Total GDP Spent on R&D 2002-2011 (Source: TÜBİTAK, 2013).

Figure 3: Total GDP Spent on R&D 2002-2011 (Source: TÜBİTAK, 2013).

Figure 4: Percentage of GDP Spent on R&D 2002-2011 (Source: TÜBİTAK, 2013).

Figure 4: Percentage of GDP Spent on R&D 2002-2011 (Source: TÜBİTAK, 2013).

Figure 5 : Number of Full-time researchers 2002-2011 (Source: TÜBİTAK, 2013).

Figure 5 : Number of Full-time researchers 2002-2011 (Source: TÜBİTAK, 2013).

Figure 6: Division of total R&D expenditures in Turkey (Source: TÜBİTAK, 2013).

Figure 6: Division of total R&D expenditures in Turkey (Source: TÜBİTAK, 2013).

By itself, these growth figures look extremely robust. However, simple trend analyses show that at the current pace Turkey is not at all on track to attain its 2023 goals.

Ceteris paribus Turkey is expected to reach the following targets by 2023:

  • 1.39% of Turkey’s GDP ($21 billion) will be devoted to R&D of which 61% will be covered by the private sector (Figure 7, 8 and 10);
  • The total number of FTE researchers will amount to 129,000 of which 21,000 will be employed in the private sector (Figure 9).
Figure 7: Total GDP spent on R&D in Turkey Forecast (Source: Author's calculations).

Figure 7: Total GDP spent on R&D in Turkey Forecast (Source: Author’s calculations).

Figure 8: : Percentage of GDP spent on R&D in Turkey Forecast (Source: Author's calculations).

Figure 8: : Percentage of GDP spent on R&D in Turkey Forecast (Source: Author’s calculations).

Figure 9: Number of FTE Researchers in Turkey Forecast (Source: Author's calculations).

Figure 9: Number of FTE Researchers in Turkey Forecast (Source: Author’s calculations).

Figure 10: Division of total R&D expenditures in Turkey Forecast (Source: Author's calculations).

Figure 10: Division of total R&D expenditures in Turkey Forecast (Source: Author’s calculations).

Conclusion

Turkish Minister for Science, Industry and Technology Nihat Ergün recently stated that “In 2023, the rate of financial resourced allocated to R&D will be 3 percent, which will correspond to $60 billion because Turkey will reach its 2023 goal of $2 trillion in GDP” (Today’s Zaman, 2013). However, this paper has shown that Turkey is currently not on track to meet Vizyon 2023’s R&D+I targets. In this respect, it seems unlikely that policy measures such as UBTYS – the effects of which will be only visible in the years to come – will be able to solely bridge the considerable gap between expectations and reality. Instead, one can safely assert that the 2023 R&D+I targets have been over-ambitious.

Perhaps more important is that Turkish political discourse appears to be dominated by a sole focus on quantitative input indicators, i.e. R&D+I spending and FTEs. However, these indicators do not guarantee progress in R&D+I per se. After all, it is output that really counts, i.e. that what is actually achieved with the resources allocated.

And it is exactly with regard to actual output where Turkey is lagging behind and has shown limited progress over the last decade. Whereas Turkey shows a tremendous increase in R&D spending and the number of FTEs, it does not so in other categories.

For instance, the European Commission’s Innovation Union Progress Report (2013) indicates that Turkey ranks 27th out of 33 European countries as regards growth rates in “Excellence in Science and Technology” – a composite indicator aggregating a country’s share of highly-cited publications, the number of top universities per million inhabitants, patent applications and the number of prestigious European Research Council Grants. The same study found that during the past decade Turkey has made very limited progress as regards increasing the knowledge-intensity of its economy (28th place).

The sharp contrast between Turkey’s great increase in resources and limited progress in terms of excellence and knowledge-intensity indicates an imbalance between quantity and quality in the Turkish R&D+I ecosystem and hints to a saturation in funding-absorption capacity.

Therefore, instead of merely focusing on achieving headline targets, Turkish policy-makers should strive to strengthen those elements which lie at the basis of Turkey’s R&D+I ecosystem, namely secondary and tertiary education, skills development and academic excellence – all elements where Turkey is in dire need of progress. Only by doing so, Turkey will be able to transform itself into a truly innovative economy, which generates high-quality R&D output.

Gerben K. Wedekind, Brussels Representative, Centre for Policy and Research on Turkey (Research Turkey)

Please cite this publication as follows:

Wedekind, Gerben K. (October, 2013), “Turkey’s Research, Development and Innovation Targets for 2023: Realistic or Far-fetched?”, Vol. II, Issue 8, pp.19-29, Centre for Policy and Research on Turkey (ResearchTurkey), London, Research Turkey. (http://researchturkey.org/?p=4239)

References


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