Strategies of the Development of Entrepreneurship and SME

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industrial enterprises. Undersecretariat of State Planning Organization (SPO) prepares longtermdevelopment plans and annual programs, develops future-oriented strategies and policiesin cooperation with related institutions. KOSGEB supports mechanisms for increasingcompetiveness of SMEs, encouraging entrepreneurship and innovative start-ups. TheUndersecretariat of Treasury deals with state aid for investments, financial transfers to publicenterprises. The Undersecretariat of Foreign Trade provides support mechanisms for improvingexport capacity. Ministry of Labor and Social Security engages with rules for employment,registration. Ministry of Finance deals with taxation, finance matters for enterprises. TUBITAKfocuses on support and policy making for R&D, scientific research, innovation activities. TheUnion of Chambers and Commodity Exchanges of TURKEY (TOBB) represents private sector,ensures unity and solidarity between chambers and commodity exchanges, facilitatesprofessional work of members, and promotes confidence in the relations of members with thepublic. The Confederation of Tradesmen and Artisans of Turkey (TESK) coordinates andrepresents tradesmen, craftsmen chambers and the federations, takes vocational measures forits members according to national and global economic development, provides vocationaltraining. Turkish Technology Development Foundation (TTGV) supports technologydevelopment projects. Export Promotion Center of Turkey (IGEME) is a non profit publicorganization and its main responsibility is developing and promoting the country's exportlevels. Tradesmen and Artisans Credit and Security Cooperatives Union Central Association ofTurkey (TESKOMB) was established as an umbrella organization bringing together all thecooperatives established throughout and it is providing guarantee to its members in order formembers of TESKOMB to contract loan with low interest rates from Halkbank. Furthermore,Second National Market and New Economy Market were established by Istanbul StockExchange (IMKB). Aim of the Second National Market is to promote trading in stocks of SMEs inorder to provide liquidity. New Economy Market, on the other hand, consists of technologycompanies such as IT companies, electronic and telecommunication companies, etc., andprovides liquidity by offering their stocks to the public via the ISE. Another significant supportto SMEs is given by Turkish Standards Institution (TSE) for the purpose of preparing standardsfor every kind of item and products together with procedures and services. Turkish PatentInstitute (TPE) provides effective protection and widespread usage of industrial property rights.Also several measures are implemented in Turkey to facilitate and increase innovative capacityof SMEs. Some of them are presented below:R&D Tax Exemption: This measure aims at stimulating investment in R&D by the industrythrough tax incentives of 40% of the expenditures of companies, including SMEs.Support for Hiring Qualified Personnel by SMEs: With this measure, grants are provided forSMEs to hire qualified personnel with a university or vocational higher school degree to improveSMEs access to new technologies and know-how. The level of finance varies.ICT Support: This measure targets diffusion of information technologies and e-business inSMEs such as computer aided design, e-commerce activities etc.Machinery/Equipment Support for Common Use by SMEs: The measure targetsestablishment of Common Facility Workshops (ORTKAs) and the Common Purpose Laboratories(ORTLABs) for the use of SMEs. They are founded by the KOSGEB together with SMEs andregional umbrella organizations.Support for R&D Investment: This measure targets to increase R&D investment by theindustry by financing (50% of machinery, equipment and software expenses) the procurement ofR&D related equipment.Industrial Property Rights: This measure aims to support protection of IPR by SMEs. Grantsare provided for patent, useful model and industrial design applications of SMEs to the TurkishPatent Institute.Training Support: The measure aims to increase the competitive advantage of SMEs byupgrading their human resources, giving them the necessary qualifications, knowledge and skillsto apply new high technologies.132
State Support for R&D (loan by TTGV): This measure aims to stimulate investment in R&Dby the industry by providing soft loan up to 50% of the project budget with a maximum durationof 24 months.State Support for R&D (grant by TUBITAK-TEYDEB): Grants are provided for R&D projectsof the industry up to 60% of the project budget with a maximum duration of 36 months. Cooperationbetween the research and business communities is promoted under this measure.Consultancy Support for SMEs: The measure foresees fostering innovative organizationaland management practices in SMEs by supporting procurement of consultancy. Percentage of theproject budget to be financed changes from 60% to 80%, depending on the level of developmentof the region where the SME is located. 100% support is provided for start-ups.Technology Research and Development Support: The measure aims to support researchand development activities of SMEs. A mixture of grants and soft loan is provided for this purpose.6.2.3. Financing Start-upsAlthough the first organized attempt to raise a PE fund targeting Turkey was undertakenin 1991, the first regulation, related with VC, was made by Capital Markets Board of Turkey in1993 and three amendments were made in 1998, 2003 and 2004 to develop the sector. Untilnow, the sector has shown several fluctuations because of political and macro economicalconditions as mentioned above. It is estimated that between 1993 and 1999, approximatelyUS$ 36 million was invested into 10 companies. Especially in this term, there was high volatilityin the market and political conditions did not support the for long term investments. Specificallyin 1999-2000, it was the first time in Turkish market history, a relatively larger number of PEinvestors started entering and investing in Turkey due to international macro economicconditions and IMF-Turkey relations. It is estimated that approximately US$ 114 million wasinvested in 13 companies during this term. However, these favorable conditions changedsuddenly and activities had started to decrease pertaining to the sudden change of goodconditions due to several reasons such as earth quakes, economic crises and the 9/11, etc.,until 2003. Since 2003, “private equity investments started to increase in 2003 and 2004 as EUaccession negotiations became a possibility and as the economy responded positively to strictimplementation of the IMF measures by the governments in power after the February 2001crisis…approximately US$ 167 million was invested in the above 13 companies during thisperiod” (article). During 2006 and May 2007, 15 investments were made and approximatelyUS$ 2.5 billion was invested. The summary of investments can be seen in Table 32.Table 32.Number and Amount of InvestmentsBefore19991999-20012001-20052006-2007TotalEstimatednumber of 10 13 13 16 51investmentsEstimatedtotal investedamounts USD36 114 167 2.527 2.844(million)Source: Deloitte, 2007Although several legal regulations and measures have been implemented by Turkey, -forinstance, new entrepreneur support mechanism that aims to promote and disseminate the cultureof entrepreneurship by financial supports and loans, which are EUR 6,250 and EUR 25,000respectively-, it is commonly accepted that instruments, especially financial, are not enough tofacilitate establishment of start-ups and the huge increase in investment, realized in the last twoyears, still depends on considerable efforts of a few Turkish intermediary institutions and key133
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1. SME DECLARATION AND WORKING GROU
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While comparing the BSEC and EU doc
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cooperation with the United Nations
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GENERAL ASSESSMENT OF THE BSEC WG O
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“Armenia's new law introduces a n
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(iii)Share of the labor force of SM
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The following data represents some
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RankDocuments for export(number)Tra
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• Industrial zones/Business incub
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3.1.4. FINANCING SMEsProf. Dr. Sela
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• the loan is secured with movabl
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3.1.4.3. Mutual and loan guarantee
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introduction of e-signatures, only
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The Code of Conduct for Civil Serva
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Trading Across Borders Enforcing Co
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as with all non-governmental organi
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Bulgarian SMEs obtain additional ca
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• Project BG 2004/016-711.11.04 -
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usiness is not approaching them oft
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• Romanian citizens are recognize
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The preparatory project of the NDP
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• To support participation in eco
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In 2004, the National Institute of
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Incubators host on average 11 SME,
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Programs. The program is implemente
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development instrument is extremely
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accounting standards, including med
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corporations and open held corporat
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promoting SME sector, cooperation w
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• for unemployed (micro credit)
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are private pension funds, broker h
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very early steps of its democratic
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Another negative factor that is mor
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economy. The so called in the organ
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Federal funds, private capital, esp
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4.3. MOLDOVATable 14.Dimensions Neg
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Related andsupportingindustriesDome
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Technological:Internetaccessibility
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Domesticdemand• Still not many pe
Page 82 and 83: international investments• Govern
Page 84 and 85: 3. Hamel, G., Prahalad, C.K. (1994)
Page 86 and 87: 5.2 DEVELOPMENT OF THE SME SECTOR I
Page 88 and 89: General Characteristic of SME Devel
Page 90 and 91: Index of SME Development in Armenia
Page 92 and 93: The same problem exists in getting
Page 94 and 95: SME support infrastructure in Armen
Page 96 and 97: 5 million was provided by UNDP and
Page 98 and 99: 5.3 DEVELOPMENT OF THE SME SECTOR I
Page 100 and 101: Diagram 1. The number of small ente
Page 102 and 103: The privatization process of object
Page 104 and 105: 13.Cabinet Provision on “Distribu
Page 106 and 107: 5.3.3. SME support infrastructure i
Page 108 and 109: The role of the state in technical
Page 110 and 111: General situation of credit marketT
Page 112 and 113: After creation and starting impleme
Page 114 and 115: At the meantime, small enterprise s
Page 116 and 117: Table. 32.Ease of businessDoingBusi
Page 118 and 119: people who start small businesses t
Page 120 and 121: are salaried and the medium - sized
Page 122 and 123: Technology Foresight in Greece 2001
Page 124 and 125: Greek VC market started to develop
Page 126 and 127: In the area of bankruptcy and restr
Page 128 and 129: enterprises. According to TURKSTAT,
Page 130 and 131: small size enterprise or micro ente
Page 134 and 135: individuals, rather than well struc
Page 136 and 137: 7. SUGGESTIONS FOR THE SME DEVELOPM
Page 138 and 139: Annex 1.MAP OF THE BLACK SEA COUNTR
Page 140 and 141: 17-18 June 2005 1 st Moscow Interna
Page 142 and 143: ARMENIASTRENGTHS• Application of
Page 144 and 145: BULGARIASTRENGHT• Flexibility and
Page 146 and 147: GREECESTRENGHT• They have a vital
Page 148 and 149: ROMANIASTRENGHTWEAKNESS• Stabilis
Page 150 and 151: REPUBLIC OF SERBIASTRENGHT• Longe
Page 152 and 153: UKRAINESTRENGTHS• Well educated l
Page 154 and 155: In compliance with the Resolution m
Page 156 and 157: 1. Please provide definition of SME
Page 158 and 159: 7. Did you establish a dedicated bo
Page 160: 11. Do you have any suggestions for
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