TTGV Ferdi Miskbay Director, Corporate Planning and Finance Technology Development Foundation of Turkey.
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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
Ferdi MiskbayFerdi Miskbay
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
• Number of employees up to 200
• Net fixed assets (excluding property and buildings) not exceeding $ 2 M
KOSGEB• Companies operating in the manufacturing sector
• Number of employees up to 150
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
1) Treasury-World Bank funded R&D Programs
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
1) Treasury-World Bank funded R&D Programs
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.
Monitoring and Evaluation of the ITP Some Findings
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
Monitoring and Evaluation of the ITP Some Findings
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 : info@ttgv.org.tr
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
TÜBİTAK TİDEB’s Program
TTGV
%78
%22
%54
%46
%36
%64
# of COMPANIES # of PROJECT # of TOTAL COST (M$)
SME LARGE
Breakdown of Projects Supported by Size of Companies
TÜBİTAK TİDEB’s Program
TTGV
1.1
2.0
2.48,0
10.4
6.5
14.1
20.6
11.3
23.5
34.8
16.4
38,1
54.5
19.4
65,0
84.4
26.4
82.8
109,2
39,7
107,7
147.4
157,4*
1996 1997 1998 1999 2000 2001 2002 2003
TOTAL
LARGE
SME
Amount of Financial Support (Cumulative)($ M)
TÜBİTAK TİDEB’s Program
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
TÜBİTAK TİDEB’s Program
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)
TÜBİTAK TİDEB’s Program
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)
TÜBİTAK TİDEB’s Program
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 : www-adm@tubitak.gov.tr
Tel : +90 312 468 53 00Fax : +90 312 427 74 89
Atatürk Bulvarı No:221K.Dere /ANKARA - TURKEY
TTGV
TTİİDEBDEB
Teknoloji İzleme ve Değerlendirme BaşkanlığıTeknoloji İzleme ve Değerlendirme Başkanlığı
Technology Monitoring and Evaluation Board
www.tideb.tubitak.gov.tr
E-mail : tideb@tubitak.gov.tr
Tel : +90 312 467 18 01Fax : +90 312 427 43 05
Atatürk Bulvarı No:221K.Dere /ANKARA - TURKEY
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 : kos@kosgeb.gov.tr
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
Ferdi MiskbayFerdi Miskbay
Director, Corporate Planning and Director, Corporate Planning and
FinanceFinance
Technology Development Technology Development
Foundation of Turkey Foundation of Turkey
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