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ANNEX 2Sustainable Development Goals and

Total Factor Productivity

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Executive SummaryTotal Factor Productivity (TFP) can be regarded as the basis of economic growth and improved welfare in the long term. In our country, the importance of TTVF increases particularly during the process of transition from agriculture to industry and within an economic structure evolving towards the services sector. Aiming to contribute to the process of definition and development of steps to be taken for TFP, the UN Development Programme (UNDP) has introduced the Support for the Development of a Policy Framework for TFPproject, where the T.R. Presidency, Strategy and Budget Office is the main beneficiary. The comprehensive research, analyses, discussions, designs and suggestions held during the project process are aimed at highlighting the path that Turkey will take while taking steps to increase the effect of TFP in economic improvement.

Through this additional document, the UN Development Programme aims to fulfill its duties of assessing the subject of TFP and all other associated studies in terms of global targets and the 2030 Agenda; identifying the potential links of such studies to TFP; and bringing a sustainable development approach to the attention of relevant parties in the context of TFP.

TFP’s generation of effective outcomes as well as its increasing share in economic growth must be considered in relation to the sustainable development approach. When economic growth is not shaped by a perspective of social justice and when it doesn’t take into account environmental sustainability, it can create negative social and political consequences and cause irreversible and destructive impacts on the environment. It may not be possible to assess the arising social and environmental impacts and hence identify and address the obstacles in the way of economic welfare with a development approach which does not anticipate the relationships between the environment and socioeconomic development as it should. Such an environment leads to the creation of environmentally, socially and politically vulnerable sectors that are not robust enough. In order to avoid this negative situation, the direction and manner of growth must be identified through a sustainable development approach.

This document aims to raise the awareness of the sector representatives of institutions related to TFP and other related institutions on the issue of Sustainable Development Goals. Thus, it is encouraged to act within a sustainable development approach concerning actions and plans related to TFP with the actors of the national and global development process urged to assume responsibility of their roles in the process.

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Six main targets directly related to TFP will be focused on for this purpose. Although the focus of the supplementary document is limited to six targets, many issues and objectives related to sustainable development can be found within the objectives included in the document due to the inclusive nature of the issue.

GOAL 1: ENDING POVERTY

The framework of the relationship between Goal 1 and TFP is handled within the inclusive economic growth approach. Within the policies intended to increase TFP, the main goal should be to enable the participation of all men and women in economic growth in accordance with the principle of leave no one behind and inclusive growth and to ensure they fairly benefit from this growth.

GOAL 5: GENDER EQUALITY

The elimination of all forms of discrimination against women and girls is secured as a fundamental human right by several international documents, particularly the CEDAW, which has also been ratified by Turkey. Several studies show that the empowerment of women and girls and providing a favorable environment for their active involvement in development enhances economic growth and development in other fields and produces positive effects on productivity and welfare. Different policy areas related to TFP such as the use of labor, labor skills, company management quality, and investment climate, incentives for innovation and entrepreneurship, and easy access to funding are closely related to gender equality and women’s empowerment perspectives. Therefore, the policies regarding these areas should be carefully developed to include gender equality perspectives.

GOAL 8: DECENT WORK AND ECONOMIC GROWTH

Economic growth equality, one of the main themes of Goal 8, stipulates the realization of inclusive and sustainable economic growth taking into account social and environmental justice. It harbors an inclusive understanding of growth that ensures everyone benefits fairly from economic welfare. Productivity is an indicator of economic growth; and the labor force is one of the five outputs- with capital, energy, material and services- that determine TFP. In this sense, TFP policies must be implemented in tandem with Goal 8 in several stages and the emphasis on Goal 8 must be carefully articulated.

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GOAL 9: INDUSTRY, INNOVATION AND INFRASTRUCTURE

Industrialization, technological progress, infrastructure investment and innovation are crucial drivers of TFP, and thereby economic growth and development. An increase in TFP that is based on sustainable development is particularly important for the realization of targets contained in Goal 9 including job-creation, inclusive and sustainable economic growth and promoting progress in industry. Moreover, the encouragement of an inclusive and sustainable industry is closely related to the policy of production incentive which is one of the four main policy areas for TFP, including the development of technology and industry.

GOAL 12: RESPONSIBLE CONSUMPTION AND PRODUCTION

It is evident nowadays, that non-sustainable consumption and production habits, especially in societies where economic prosperity is high, are pushing the limits of the planet. In this regard, areas such as research and development, innovation and technological improvement which are addressed within the TFP approach must be considered in a way that is open to the propositions of the green growth approach. Those structures which uphold fundamental rights in production, act in an environmentally-conscious way, and respect gender equality are often preferred by customers at various levels and positions particularly the global markets and large companies. This tendency is one of the processes that is significant for TFP.

GOAL 17: PARTNERSHIPS FOR THE GOALS

Sustainable Development Goals can only be achieved through a multi-stakeholder structure and global partnership and cooperation characterized by a common approach. Accordingly, Goal 17 sets out this pre-condition as a standalone target. Promoting international trade and encouraging developing countries to increase their exports are matters that are closely related to a just, open, universal and fair trade system for all as well as the integration into the global market. They can also be associated with efficiency. Since Goal 17 sets forth the manner in which to implement the approaches for realizing the aforementioned TFP-related goals, it emphasizes all the targets, and the steps that need to be taken as regards their connections with the TFP.

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GOALS OF SUSTAINABLE DEVELOPMENT AND TOTAL FACTOR PRODUCTIVITY1

INTRODUCTION

Total Factor Productivity (TFP) can be regarded as the basis of economic growth and improved welfare in the long term. In our country, particularly during the process of transition from agriculture to industry and within an economic structure evolving towards the services sector, it is observed that TFP is not as effective as desired and experiences ups and downs. This indicates that actions taken for the purposes of TFP need to be defined and improved. Aiming to contribute to this process, the UN Development Programme (UNDP) has introduced the Support to the Development of a Policy Framework on TFP project, where the Presidency of Turkey, Strategy and Budget Office is the main beneficiary. The comprehensive research, analyses, discussions, designs and suggestions held during the project process are aimed at highlighting the path that Turkey will take while taking steps to increase the effect of TFP in economic improvement.

Through this additional document, the United Nation Development Programme aims to fulfill its duties of assessing the subject of TFP and all other associated studies we have mentioned above in terms of global targets and the 2030 Agenda; identifying potential relationships with the TFP; and bringing a sustainable development approach to the attention of relevant parties through TFP.

The concept of development has adopted the view that economic development is not possible and permanent without a just social order and a habitable environment thanks to a trend that began in the late 1980s. Accordingly, the 2030 Development Agenda does not only consist of economic development but also contains a wholistic approach that includes the concepts of social justice and environmental sustainability. The Sustainable Development Goals set out the necessary priorities that should be taken into consideration in all phases of development in order to ensure that every person who is currently living and likely to live until 2030 properly benefits from non-discriminatory, equal and fundamental rights and freedoms. These goals can be connected with a wide range of levels, scopes and processes, from individual activities to provide livelihood for our families or

1 This attachment was prepared by summarizing one of the parts of the report titled “Sustainable Development and a Favorable Environment for TFP”, which was prepared within the scope of the Project to Support the Development of a Total Factor Productivity Policy Framework. For the full report, see: Gökçe Bayrakçeken Tüzel, Sustainable Development and a Favorable Environment for TFP, (2018) (www.tfvp.org)

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to entertain ourselves to development of regions, economic welfare of countries and global economic transformations. The place and the way to create these connections are closely associated with the extent to which we undertake this responsibility as individuals and organizations.

TFP is one of these processes and cannot be considered independently of the Sustainable Development Goals and underlying approaches such as humane growth models, sustainable development, inclusive growth and green economy. Similarly, TFP’s generation of effective outcomes as well as its increasing share in economic growth must be considered in relation to the sustainable development approach.

When economic growth is not shaped by a perspective of social justice and when it doesn’t take into account environmental sustainability, it can create negative social and political consequences and cause irreversible and destructive impacts on the environment. A development strategy that does not anticipate the relationships between the environment and socioeconomic development as it should, may meet current needs but could jeopardize the prospect of meeting the basic needs of future generations2. In such a case, it may not be possible to assess the arising social and environmental impacts and hence identify and address the obstacles in the way of economic welfare. Such an environment leads to the creation of environmentally, socially and politically vulnerable sectors that are not robust enough. In order to avoid this negative situation, the direction and manner of growth must be identified through a sustainable development approach.

This document aims to raise the awareness of the sector representatives of institutions related to TFP and other related institutions on the issue of Sustainable Development Goals. Thus, it is encouraged to act within a sustainable development approach concerning actions and plans related to TFP with the actors of the national and global development process urged to assume responsibility of their roles in the process. Six main targets directly related to TFP will be focused on for this purpose. Although the focus of the supplementary document is limited to six targets, many issues and objectives related to sustainable development can be found within the objectives included in the document due to the inclusive nature of the issue. This attachment serves as a document of recommendation that provides insights into the relationships between environmental, social and economic dimensions of sustainable development and TFP, while providing a new approach to TFP based on the common and holistic aspects regarding the

2 http://www.surdurulebilirkalkinma.gov.tr/temel-tanimlar/

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sustainable development targets, namely, a sustainable environment, gender equality and inclusion of young people in the growth process.

GOAL 1: ENDING POVERTY

By 2030, according to national definitions, the general framework for Goal 1 comprises of the following: halving the number of men, women, and children of all ages living in poverty in all aspects; eliminating all forms of poverty continuing to be one of the most challenging areas facing humanity in the modern age; providing equal access to economic resources and ensuring equal participation in economic activities; improving social security systems and the inclusion of poverty-stricken/vulnerable regions; and increasing the resiliency of these regions3.

The framework of the relationship between Goal 1 and TFP can be established within the inclusive economic growth approach. Inclusive economic growth refers to the members of society equally benefiting from and contributing to economic growth. In addition to a balanced distribution of income, inclusive growth also ensures that everybody has equal access to opportunities and that the most disadvantaged equally benefit from opportunities such as the right to education, health, and employment. It is not only closely related to the income-generating aspects of the economy but also to the social and political aspects. It is a growth approach that takes into account many social issues including poverty4.

As an important component of economic growth and welfare, productivity delivers long-term and sustainable solutions in the fight against poverty. An increase of productivity directly leads to an increase in income. It provides a significant input for the goal to prevent poverty by allowing new job opportunities to emerge. The increase in real wages is positively reflected in different areas such as food safety, health, and education. In fact, Goal 1 stresses a perspective that is both national and global. In this context, in different stages of the global value chain, various aspects of poverty in different regions can affect production processes.

Sub-goal 1.4 that prioritizes access to economic resources for all men and women refers to inclusive economic growth. Access to financial means like loans and providing necessary support for small-scale businesses failing in the market are factors in preventing poverty and increasing producer capacity.

3 http://www.tr.undp.org/content/turkey/tr/home/sustainable-development-goals.html4 See. Cengiz Cihan: Brief Report on Integrating Inclusive Growth Project with Total Factor Productivity Project, (2016)

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The policy framework involving TFP should consider prioritizing equal access to economic resources for all men and women. The topics included in Goal 1 should be addressed in the TFP policy as a method of fighting poverty such as having access to financial services including land ownership and microfinancing. Within the policies intended to increase TFP, the main goal should be to enable the participation of all men and women in economic growth in accordance with the principle of leave no one behind and inclusive growth and to ensure they fairly benefit from this growth. The steps to be taken in this direction will contribute to the realization of Goal 1 and relevant other goals (for instance, Decent Work and Economic Growth - Goal 8; Gender Equality - Goal 5; Reduced Inequalities - Goal 10).

GOAL 5: GENDER EQUALITY

The elimination of all forms of discrimination against women and girls is secured as a fundamental human right by several international documents, particularly the CEDAW. As a fundamental right, this is one of the main components of inclusive growth and sustainable development. As stated in the Beijing Declaration, “eliminating poverty on the basis of sustainable economic growth and social improvement, protection of the environment and social justice is possible only when women are involved in economic and social development and when men and women participate in human-centered sustainable development with full and equal opportunities as actors and beneficiaries”5.

In the Sustainable Development Goals which has the perspective of gender equality and women’s empowerment, gender equality is included in line with the two-way approach of the UN: One of the seventeen goals (the 5th goal) Goal) is devoted to gender equality with the purpose of ending any kind of discrimination against women and girls. However, the other sixteen goals must also be addressed through a gender equality lens6. The sub-targets of Goal 5 refer to issues related to the labor productivity in terms of women’s representation in development and business life.

Sub-goal 5.5. includes determining goals for the full and active participation of women in various processes of development7. When those goals are addressed in terms of economic growth, we need to focus on helping women participate in production processes, decision-making mechanisms and management.

5 http://www.un.org/womenwatch/daw/beijing/platform/declar.htm (See. Paragraph 16)6 Transforming Our World: the 2030 Agenda for Sustainable Development http://www.un.org/en/ development/desa/population/migration/generalassembly/docs/globalcompact/A_RES_70_1_E.pdf7 Turkey ranks 128 in the Gender Gap Index which rates 144 countries in terms of labor force participation and opportunities.

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Gender-based inequalities systematically cause women’s exclusion from the labor force; however, this does not manifest as a direct form of discrimination. The pretexts that normalize societal control on women’s labor and bodies such as domestic responsibilities, marriage, forms of decision-making for familial matters,8 and traditional gender relations lead to women’s exclusion from employment and this is acknowledged to be “natural”, “normal”, and even “given”. These inequalities cannot be identified and are maintained and reproduced when a perspective on gender equality is not developed. And this in return may complicate the approach of inclusive and sustainable development. In the long term, this might result in women’s absence from the labor market, failure to create productive work relations, a reduction in family income, and the inability to benefit from existing production power, all of which could negatively affect productivity.

Several studies show that the empowerment of women and girls and providing a favorable environment for their active involvement in development enhances economic growth and development in other fields and produces positive effects on productivity and welfare.

In the report prepared in 2014 for the labor force and employment meeting for the G20 process, it is stated that the equal participation of men and women in the labor force is expected to grow by 12% in the total economies of OECD countries by 20309. As can be understood from this, women’s participation in the labor force is a productivity variable. Therefore, increasing their participation in the labor force is also a matter of Total Factor Productivity. Regarding the determinants of women’s participation in the labor force and productivity growth, Loko and Diouf (2009) show in their studies, which include a data set of 62 countries from 1970 to 2005, that an increase in the number of women in the labor force has a positive effect of over 3.4% on TFP10. Applied by Catalyst to the top 500 companies in the USA, the research titled “The Bottom Line: Corporate Performance and Women’s Representation on Boards and the research11 “Women in the Executive

8 For more information about the patriarchal power over women’s labor force, see: Heidi I. Hartman “The Unhappy Marriage of Marxism and Feminism”, L.Sargent (ed.) , The Unhappy Marriage of Marxism and Feminism: A Debate, Pluto Pres, London, Sidney,(1981).9 Achieving stronger growth by promoting a more gender- balanced economy, Report prepared for the G20 Labour and Employment Ministerial Meeting Melbourne, Australia, 10-11 September 2014 https://www.oecd.org/g20/topics/employment-and-social-policy/ILO-IMF-OECD-WBG- Achieving-stronger-growth-by-promoting-a-more-gender-balanced-economy-G20.pdf. 10 Claudia Villosio, Maria Laura Di Tommaso, Elena Grinza, Maria Cristina Rossi, Daniela Piazzalunga, Katerina Mantouvalou and Jakub Caisl (2017). Economic benefits of gender equality in the European Union, Literature review: existing evidencand methodological approaches, Luxembourg: Publications Office of the European Union, 2017 11 Nancy M. Carter and Harvey M. Wagner The bottom line: corporate performance and women’s representation on boards (2004-2008), Catalyst, (USA, March 2011). http://www.catalyst. org/system/files/the_bottom_line_corporate_performance_and_women%27s_representation_on_ boards_%282004-2008%29.pdf

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Suite Correlate to High Profits” published in Harvard Business Review12 show that companies with more female managers perform better in terms of market share, capital and equities.

Different policy areas related to TFP such as the use of labor, labor skills, company management quality, investment climate, incentives for innovation and entrepreneurship, and easy access to funding are closely related to gender equality and women’s empowerment perspectives. Therefore, the policies regarding these areas should be carefully developed to include gender equality perspectives.

The internal and external factors affecting TFP should be addressed with regard to inclusivity and planned to facilitate equal participation of men and women. Within this context, it should be considered that men and women may have different interests, needs, and expectations as investors, producers, employees, and consumers.

The effects of gender equality and, more generally, the subject of diversity and inclusivity on productivity could be assessed with respect to manufacturing type, product diversity, labor, long-term customers, marketing, and so on. The prevention of discrimination against women on issues such as education, decision-making, professional development, investment, initiatives, incentives and support is a public responsibility that was secured by CEDAW (Convention on the Elimination of all Forms of Discrimination Against Women) and several ensuing international documents.

Proposals for the proper sharing and derivatization of work performed by women, essentially for nursing services which are included in Sub-Goal 5.4, are closely connected to women’s participation in the economy and potential impact on productivity. It was stated in the third issue of the Women in Business report by TÜRKONFED that in female and family friendly work places, female employees’ motivation, their loyalty to the business, and labor force productivity increase whereas, the rate of labor transfer and absenteeism due to family responsibilities decrease. It articulates that such business approaches can increase women’s employment, institutionalization and profitability13.

12 Quoted by: Women’s Empowerment Principles (WEPS), Equality Means Business, UN Women and UN Global Compact Joint Initiative, 2017. (page 18)13 Oğuz Karadeniz& Hakkı Hakan Yılmaz, Women in Business Volume 3, Turkish Enterprise and Business Confederation (TÜRKONFED) Official Register, (Istanbul,2018). Page 21.

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The presence of gender equality perspectives in economic policies enables us see the consequences of steps taken or planned more clearly in terms of men and women. It bears importance for both the prevention of inequality and inclusive growth. The economic costs of gender-blind approaches as well as economic advantages that gender-sensitive policies yield are numerous14. The economic loss due to women’s insufficient participation in the labor force amounts to 25% of Turkey’s gross national income based on the 2015 data15.

The economic policies that are set to improve TFP must be extensive enough to evaluate processes based on gender equality and aim to ensure equality. An example of the development of a policy inclusive of the aforementioned priorities is the analysis titled “The Impact of Public Investment in Social Care Services on Employment, Gender Equality, and Poverty: The Turkish Case” prepared by İpek İlkkaracan, Kıjong Kım and Tolga Kaya 16. According to the joint study of UN Women, UNDP, and ILO, investing in preschool education not only promotes gender equality but also help decrease poverty and support financial sustainability. Such investments will help children receive a better education, increase the employment of mothers of young children, and create a large potential for employment in the early childhood care and preschool education sector. The study points out that the employment potential that investment in early childhood care could create is 2.5 times more than the same amount of investment in the construction sector. The fact that these newly-created jobs are filled by women will result in a significant increase in women’s employment. This will enable us to actively use a labor force previously not included in the labor market and also provide the necessary services for women to stay employed in various areas17. This proposal is efficient for TFV as a policy framework in increasing labor force productivity and acquire economic return from full employment.

Innovation, another policy priority that is frequently addressed in the context of TFP, is a function relevant to today’s markets that is emphasized in the development agenda. Innovative approaches and investments in technology

14 According to The Household Labor Force Statistics of Turkish Statistics Institute’s (TÜİK) 2016 data, the rate of women’s participation in the labor force (15+) is 32.5%. As for the sectoral breakdown, women are employed in Services (55.4%); Agriculture (28.7%); and Industry (15.9%). https://kadininstatusu.aile.gov.tr/.../TÜRKİYE’DE%20KADIN%20(Mart%202017)%20sonnn. 15 IMF Staff Discussion Note, Fair Play: More Equal Laws Boost Female Labour Force Participation, 2015, https://www.imf.org/external/pubs/ft/sdn/2015/sdn1502.pdf, p. 5.16 İpek İlkkaracan, Kijong Kim, and Tolga Kaya,The Impact of Public Investment in Social Care Services on Employment, Gender Equality, and Poverty: The Turkish Case (Istanbul, 2015).17 ibid.

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should be addressed in relation to gender equality18. Women and girls’ access to technology and especially ensuring that they gain IT knowledge and skills is a commonly addressed priority in the Sustainable Development Goals and the UN’s agenda. It is important to ensure that female empowerment and gender equality are considered in all processes relating to access to information and technological progress. Women’s access to new technologies and information should be regarded as an area of investment. When considered from the point of view of marketing and e-commerce, digitalization can become a great opportunity for women. In the markets shaped by gender-based prejudices, digital marketing and sales methods facilitate producers’, female investors’ and entrepreneurs’ access to the market and promote entrepreneurship.

Sectoral transformation made a significant change in the quality of women’s labor in Turkey from 2005 to 2015. After agricultural disintegration, women who work as family workers in rural areas become urban unemployed persons or move into informal economy19. As a policy priority, taking into account the labor force of agricultural production within the framework of the TFP approach through the strengthening of rural industry, taking measures to prevent the agricultural labor force, the vast majority of which are made up of women20, from remaining idle with the transition from the agricultural sector to the services and industrial sector, are in compliance with a productivity approach which has a sustainable development perspective. On the other hand, in the transformation process, making the labor market more qualified and helping potential employees gain the necessary skills to use technology should be considered as investments in the labor force. Achieving sectoral transformation in an inclusive and sustainable way as TFP increases is possible through this and similar approaches.

Female entrepreneurship in Turkey is another priority that needs to be improved for women’s economic empowerment. Within the context of strengthening networks related to the policy priorities for an increase in TFP, the proposal to

18 See. Esen Çağlar and Emre Koyuncu, Total Factor Productivity Support Project for Policy Framework Development, Beyaz Kitap, (Ankara,2018) (page 18)19 After services sector, agriculture is the second largest sector where women are most commonly employed. However, along with sectoral transformation, between 2005 and 2016, the share of the agriculture sector dropped from 46.3% to 28.7% while the share of the services sector rose from 37.1% to 55.4%. 22% of unregistered workers working as unpaid family members in rural areas are men while 78% are women. See: Women’s empowerment strategy document and action plan 2018-2023, ASPB, KSGM, (Ankara, 2018).

20 For TFP approach in agricultural production, please see: Global Harvest Initiative, GAP 2016 report, http://www.globalharvestinitiative.org/GAP/2016_GAP_Report.pdf

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establish international21 connections of entrepreneurial ecosystems should be a priority for studies on female entrepreneurship.

One of the most important responsibilities of companies in terms of economic growth is to contribute to the increase in women’s presence in all aspects and levels of economic life. The inclusion of more female employees in companies’ labor force, regardless of their size, not only helps them strengthen the representation power of their customer base but also provides more information and foresight about consumer preferences22.

The gender equality perspective is important not only for women’s participation in economic processes but also for the establishment of a gender-sensitive and anti-discriminatory approach in communication processes. There are many programs being conducted in Turkey and the rest of the world for establishing the principle of gender equality in the private sector. These programs have a significant impact on productivity growth thanks to the positive effect they have on the quality of company management and institutionalization, labor productivity and human resources, decision-making, responsible production, and consumer relations. The recommendation to “bring global knowledge accumulation to Turkey”23 mentioned under Priority #5 of the policy framework should be coupled with programs and practices related to gender equality. To name a couple these include, “Women’s Economic Principles” conducted in cooperation with UN Global Compact and “Gender Equality Seal for Private Enterprise” planned by the UNDP.

GOAL 8: DECENT WORK AND ECONOMIC GROWTH

Global economic growth does not guarantee the elimination of inequalities and welfare for all. The concept of growth must be designed around an inclusive perspective. GOAL 8 refers to the tangible practices to create and realize this perspective. There is a direct connection between TFP and GOAL 8 because strong and sustainable economic growth requires an increase in TFP. On the other hand, the increase in TFP will generally contribute to the realization of Goal 8.

Economic growth equality, one of the main themes of Goal 8, stipulates the realization of inclusive and sustainable economic growth taking into account social 21 See: Çağlar, E. and Koyuncu, E. (2018) Total Factor Productivity Support Project for Policy Framework Development White Paper, (Ankara,2018) (Page: 68-69)22 See. Women’s Empowerment Principles (WEPS), Equality Means Business, UN Women and UN Global Compact Joint Initiative, 2017. (Page: 19)23 Esen Çağlar, ve Emre Koyuncu, Total Factor Productivity Support Project for Policy Framework Development, Beyaz Kitap, (Ankara,2018) (Page: 54)

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and environmental justice. It harbors an inclusive understanding of growth that ensures everyone benefits fairly from economic welfare. Continuous and inclusive growth, social development and protection of the environment are among the common goals in The Future We Want report24. Productivity is an indicator of economic growth and the labor force is one of the 5 outputs that determine TFP. In this sense, TFP policies must be implemented in tandem with Goal 8 and the emphasis on Goal 8 must be carefully articulated.

An increase in TFP creates an effect that particularly helps to achieve sub-goals 8.1 and 8.2. The goal to increase income per capita in 8.1 is one of the issues to address within the scope of TFP. Increasing labor force productivity through technological development and innovative approaches as emphasized in sub-goal 8.2 is also referred to in Beyaz Kitap as another measure to increase TFP.

All of the matters that fall into the scope of Goal 8 such as expanding job opportunities to respond to the increase in the labor force; increasing employment opportunities; protecting employee rights; full employment; participation of youth and women in employment; and access to employment for disadvantageous populations are crucial topics for TFP. These topics also refer to guiding notions for a productivity understanding built on sustainability.

According to the 2017 report, “World Employment Trainings” and its social reflections by the International Labor Organization (ILO), registered businesses in the private sector plays a decisive role in creating decent work. The sustainable development agenda considers creating new businesses, entrepreneurship, registration and growth of small and medium scale businesses as playing a pivotal role in the goal of “decent work and growth” (Goal 8)25.

Creating opportunities for decent work for all sections of society and providing youth and women equal access to employment opportunities26, as included in sub-goal 8.5, is one of the issues addressed in the 10th Development Plan. Increasing

24 The Future We Want, United Nations Conference on Sustainable Development (Rio+20) Rio de Janeiro, Brazil, 20-22 June 2012, Outcome of Conference.25 ILO, World Employment and Social Outlook 2017 Report, executive summary https://www.ilo. org/ankara/news/WCMS_581095/lang--tr/index.htm26 According to the definition by International Labor Organization (ILO), decent work “reflects what people desire in their work life. What it means is that it is any job that is: productive with fair pay; safe with social protection for families; comes with better opportunities for personal development and social integration; where people are free to express their anxieties and form organizations to participate in important life decisions; and where men and women benefit from equal opportunities”. See: http://www.ilo.org/ankara/areas-of-work/dw/lang--tr/index.htm

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qualified labor force to strengthen TFP, providing occupational training for intermediate staff needs, and facilitating access to jobs are again closely related to the statement “providing a complete and efficient employment” included in sub-goal 8.5. When the role of the labor force in TFP is calculated, the priority should not be addressed based on absolute productivity, which is the difference between input and output, but in terms of achieving inclusive growth and decent work.

For measures to be taken to increase labor force efficiency in TFP, all collected data must be divided based on gender, age, and other classifications. Thus, it will be possible to contribute to the steps towards achieving inclusive economic growth and accessible employment for all and identify other areas open to development.

Entrepreneurship and relevant issues are another common area between Goal 8 and TFP. Support for entrepreneurship, as one possibility of full employment, is addressed in several contexts as one of the methods to enhance TFP. Entrepreneurship is also expressed in connection to supporting innovative and creative enterprises within Sub-Goal 8.3, and is mentioned in Sub-Goal 8.10 as a supporting factor.

Enhancement of financial institutions’ capacities and their functions are addressed within the eight priorities in TFP, which is one of the common areas on the agenda within the scope of Sub-Goal 8.10. In this context, one of the priority fields proposed for TFP is to create entrepreneurial capital funds and ensure continuity of entrepreneurial support. Access to financial services and funds is an effective tool for women’s employment as well. Funds allocated for female entrepreneurs have a major place within the funds for small and medium scale businesses. On the other hand, entrepreneurship is a crucial tool for women’s participation in employment. Nevertheless, the number of female entrepreneurs in Turkey remains quite low27. Supporting entrepreneurship is one of the action fields as defined by the Women’s Empowerment Action Plan.

Since 2011, the war in Syria has forced a substantial amount of people to emigrate and according to 2018 data, there are currently 1,916,528 men and 1,617,294 women of Syrian origin living under temporary protection28. This population

27 As of 2016, the number of employers and self-employed individuals is 5.775 million. Of this total, 4.928 million are male while 846.000, approximately one-seventh of the total, are female. See: Women’s Empowerment Strategy Document and Action Plan, 2018-2023, ASPB, KSGM, (Ankara, 2018). http://www.sp.gov.tr/upload/xSPTemelBelge/files/RySPo+KADININ_GUCLENMESI_ STRATEJI_BELGESI_VE_EYLEM_PLANI_2018-2023_. pdf 28 http://www.goc.gov.tr/icerik6/gecici-koruma_363_378_4713_icerik

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creates a vulnerable labor force in Turkey. This vulnerability created by poverty, deprivation and desperation makes this population vulnerable to insecure jobs and exploitation. Under these conditions, limited employment opportunities and a rapidly increasing labor force are expected to put pressure on the labor force balance. These conditions bring about a need to address the elimination of practices such as forced employment, low wages, human trafficking, and child labor which are also stated in sub-goal 8.7. Sub-goal 8.8 also focuses on preventing employment in insecure jobs, predominantly for migrant populations. In this sense, efficiency policies and private sector employment policies play a crucial role in achieving these goals.

GOAL 9: INDUSTRY, INNOVATION AND INFRASTRUCTURE

Economic growth and social progress depend on promoting inclusive and sustainable industrial development that is built upon strong infrastructure consisting of physical structure, information, technology and other mechanisms. Consolidation of solid infrastructure and industrialization for the strengthening of both social life and production processes, and supporting skilled labor through innovations, and technological progress are topics included in GOAL 9. Industrialization, technological progress, infrastructure investment and innovation are crucial drivers of TFP, and thereby economic growth and development. The development of industry and a related increase in TFV were included in the 10th Development Plan of Turkey. In this context, areas such as increasing the level of technology and proliferating information technologies are also emphasized within Goal 9. An increase in TFP that is based on sustainable development is particularly important for the realization of targets contained in Goal 9 including job-creation, inclusive and sustainable economic growth and promoting progress in industry.

The other components of GOAL 9 are technological progress, creating new job opportunities and increasing energy efficiency with a focus on seeking durable solutions for economic and environmental problems such as working with environmentally-friendly technologies. Supporting sustainable industries, developing environmentally-friendly technologies, providing equal access to information and knowledge, investing in scientific research and innovation, planning the gender dimension of these actions and taking these priorities into account in all aspects of construction and finance are ways to make sustainable development possible.

Encouragement of inclusive and sustainable industry, included in Sub-Goal 9.2, is closely related to the policy of production incentive which is one of the four main

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policy areas for TFV, including the development of technology and industry29. For an understanding of efficiency that is based on the Sustainable Development Goals, production planning must contain the development of industry and technology, be accessible for all and implemented in an environmentally-sensitive fashion. Digitalization, one of the priorities stated in TFP, and steps taken towards improving infrastructure, or digital infrastructure in broader terms, and increasing relevant information and skills will also serve to achieve GOAL 9.

Sub-goal 9.3 emphasizes the goal of access to financial services and integration into the value chain, particularly for small scale businesses. This topic is one of the areas that directly corresponds with both TFP and the Sustainable Development Goals. Integration into the global value chain is regarded as one of the main ways of increasing TFP and therefore, is mentioned within policy recommendations to increase TFP30. To realize the Sub-Goal 9.3, these recommendations must be brought to life within the context of the Sub-Goal 9.3.

The Sub-Goal 9.4 sets forth an inclusive and sustainable industrial approach in order to address environmental sustainability in industrial and technology related processes as a priority. The availability of TFP is related to the existence and adequacy of natural resources. In particular, preventing the negative impacts caused by industry on water and land, and strengthening resource efficiency and the effectiveness of resources in the long-term are issues which fall within the scope of both TFP and sustainable development. A co-operation between these two approaches is the prerequisite for long-term and stable economic growth, as well as ensuring the sustainability of the planet and future generations.

The prevailing approach to development tends to support the method known as “grow now, clean later” in disregard of the socio-economic and environmental costs born mostly by the most vulnerable in the society. However, climate change brought about by this approach adversely affects productivity growth31. For a sustainable environment, an approach that considers adaptation to climate change and emission reduction as a primary area of investment in production processes is required and therefore, the private sector has great responsibilities in this area.

29 See: Esen Çağlar ve Emre Koyuncu Total Factor Productivity Support Project for Policy Framework Development Beyaz Kitap, (Ankara,2018) (Page: 39).30 bid. (Page: 14-17)31 Shamshad Akhtar, Hongjo Hahm, & Aynul Hasan, Economic and Social Survey of Asia and the Pacific 2016 Nurturing Productivity for Inclusive Growth and Sustainable Development, Chapter 3 Increasing productivity for reviving economic growth and supporting sustainable development. (New York,2016)

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From the point of view of the manufacturing industry and regarding the implementation of Sub-Goal 9.4, a set of indicators relating to clean production were identified by the General Directorate of Efficiency on February 12th, 2015 consisting of 8 indicators divided into 5 main groups, namely Waste density, Greenhouse gas density, Water efficiency, Waste recycle rate, Environmental expenditure and employment 32. Sustainable production indicators in the manufacturing industry for cleaner production demonstrate a number of indicators relating to environmental variables, including energy efficiency.

The relationship of development to innovation is one of the subjects that are addressed with increasing interest and importance. Encouraging innovation, another policy area for TFP, is directly connected to the goal of promoting innovation as set out in the Sub-Goal 9.5. It is essential that these approaches adopt the perspective of sustainable development and promote not just economic growth but also support approaches that care about the environmental, social equality, gender equality and social justice. Promoting new approaches, products, methods and organizational forms as well as conducting research and investing in development are an important priority for both TFP and the Sustainable Development Goals.

Another priority expressed within the scope of supporting the TFP policy framework is the improvement of production technology, the advancement of national technology, and the placement of products from these technologies in the global market. This proposal is closely related to the goal of increasing the value of industrial products and the development of national technologies as set out in Implementation Goal 9.b.

GOAL 12: RESPONSIBLE CONSUMPTION AND PRODUCTION

It is evident nowadays, that non-sustainable consumption and production habits are pushing the limits of the planet, and if the world population reaches 9.6 billion by 2050, we will need three planets like our own in order to maintain our current lifestyle33. Therefore, it is crucial to create, promote and adopt consumption and production patterns with an approach that prioritizes efficient and sustainable use of our natural resources not only by decision-makers and producers but also consumers.

32 See: http://www.temizuretim.gov.tr/33 http://www.tr.undp.org/content/turkey/tr/home/sustainable-development-goals.html

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GOAL 12 refers to two main topics. The first is directly connected to the main criteria of responsible production. It addresses efficient use and sustainable management of natural resources, taking precautions against polluters that harm the environment and human health as well as emphasizing effective solid waste management.

Responsible production and consumption refer to a production and consumption system that asserts the right to live in a favorable and healthy environment and having access to natural resources, which belong to both present and future generations, namely, humanity as a whole. This is also the prerequisite for the right to live, which is the most fundamental right of human-beings34. Especially, costs related to energy efficiency and the use of renewable energies, which are stated in GOAL 7, could be one of the factors that increase efficiency in the long term due to the positive effect they will have on the responsible use of resources. In the short term, during a time when responsible consumption is becoming the trend, such investments create positive effects on the reputation of companies and responsible production can become a preference for consumers facing too many options.

Integrating climate change measures into policies, plans and strategies must be a priority not only for the public sector but also for the private sector, one of the primary stakeholders in sustainable development35. Planning documents which identify the actions and guide the relationships of the large corporations in the sector, in particular sustainability strategies for the private sector, not only define the steps that the private sector itself will take but also affect other activities they are connected with in the supply chain.

In this regard, areas such as research and development, innovation and technological improvement which are addressed within the TFP approach must be reconsidered in a way that is open to the propositions of the green growth approach. Ultimately, this would also provide an enriched basis for discussion for the redefinition of TFP and even the review of priorities and components with new perspectives.

34 The right to live has only meaning in an environment with conditions that allow a person to develop their physical and spiritual existence and lead their lives in a healthy way, and in this sense, any threat to the environment also threatens the right to live. See: Dadak, Kemal (2015) Yeni Kuşak Hak Olarak Cevre Hakkı, Uyuşmazlık Mahkemesi Dergisi, Issue: 5, p. 324. Experts working in the field of human rights historically address categories of right within 3 generations. Fundamental freedoms, personal and political rights constitute the first category, economic, social and cultural rights constitute the second category and global rights including solidarity and the rights of the future generations constitute the third category. See: Gönüllü, Günay (2014) Çevresel-Kentsel Hakların Gelişimi: Dünyada ve Türkiye’de Kentsel Haklar, İnsan Hakları Yıllığı, Volume 32, 2014, p. 31-52.35 10. Kalkınma Planı, (2014-2018) www.resmigazete.gov.tr/eskiler/2013/07/20130706M1-1-1.doc.

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Another topic highlighted in GOAL 12 is the reflection of sustainable production and consumption in legislation, plans and programs, in order to raise awareness and create behavioral and conceptual change.

The 10th Development addresses several points related to responsible production set out in GOAL 1235. The main aspects around the transformation in the manufacturing industry in order to achieve the goal of increasing TFP to above average in the long term, are innovation and company skills; effective participation of the regions in production; inter-sectoral integration; green technology; and production and foreign market diversity. The plan aims “to increase productivity and domestic added value through improving green production capacity, innovation, company skills and inter-sectoral integration as well as to secure consistent high growth through improving foreign market diversity and regional production capacities”36.

Green economy or green growth, often cited in the Development Plan and defined by UNEP as “an economic model that significantly lowers environmental risks and ecological scarcity while enabling human prosperity and societal equality” is enabled by public and private sector investments that reduce carbon emission levels and pollution, increase energy and resource effectiveness, and prevent losses in ecosystem services37. Moreover, “defining economic values of natural resources, and improving environmental standards in production and consumption through competitiveness and green growth”38 is also mentioned in the plan. This target which is included in the plan is expected to be maintained in direct connection with GOAL 12 within the 2030 Agenda and with a stronger approach.

Responsible production with its various aspects, i.e. production and consumption approaches based on gender equality, social justice and environmental protection, is becoming increasingly mainstream for large companies and is being reflected in behavioral codes in the global market. Especially in sectors with high natural resource dependency, this approach can be an important factor for increasing the productivity in a sustainable and stable manner.

Determination of companies that are positioned at the end of the value chain and play a decisive role in the chain to adopt responsible production methods can impact

36 bid.37 UNEP, (2011). Towards A Green Economy: Pathways to Sustainable Development and Poverty Eradication http://www.unep.org/greeneconomy/portals/88/documents gerGreenEconomyReport.pdf38 10. Development Plan, (2014-2018) www.resmigazete.gov.tr/eskiler/2013/07/20130706M1-1-1.doc.

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not only their own production processes but also those of other companies in the supply chain. In a manufacturing industry shaped by a responsible production approach, lagging behind this trend and failing to implement this approach to production processes may lead to exclusion from the global market. On the other hand, GOAL 12 will be more easily achieved when the Sustainable Development Goals are a criterion not only in relationships between private sector companies but also in other public purchases and new incentives are offered to implement responsible production processes.

As stated in the Sub-Goal 12.6, it sets an example for other companies and suppliers that transnational corporations reflect their responsible production approaches and Sustainable Development Goals in their production processes using data from their sustainability reports. It is recommended to share the success stories within the scope of the support project for the TFP policy framework in order to convey experience and knowledge of good examples and best practices. This proposal will contribute to the achievement of GOAL 12 by enabling the establishment of sustainable consumption habits in the context of GOAL 12.

GOAL 12 proposes the questioning of global tendencies not only for responsible production but also for responsible consumption. New consumers contribute to responsible production by adopting responsible consumption habits. New consumers prefer products that do not harm people or the environment and that follow responsible production processes. Thus, new consumers can pioneer fair and egalitarian companies with regards to the labor force as well as environmentally-friendly production methods39. Nowadays, customers are presented with more choices thanks to product diversity and a large number of companies, which leads them to multiply their selection criteria. In such a competitive market environment “responsible production” continues to attract customers’ attention as a criterion. Among customers’ genuine needs and expectations, there is a need for companies to adopt inclusive and responsible forms of production such as ‘gender equality, low carbon economy, and green growth’.

Responsible production and consumption are also important for establishing trust-based relationships with customers, thereby preventing any decrease and

39 Two-thirds of the participants in the global sample of the survey, conducted by HAVAS, with more than 10 thousand participants, state that the private sector is responsible for social change as well as governments. On the other hand, 62 percent of the participants state that they wish the top preferred brands could be more effective in solving social problems. 78 percent of the consumers prefer brands with a waste reduction strategy. For more information, see: https://download.havas.com/prosumer-reports/project-superbrand-10-truths-reshaping-the-corporate-world/

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ensuring increase in the number of customers in the long term and gaining new customers. Those structures which uphold fundamental rights in production, act in an environmentally-conscious way, and respect gender equality are often preferred by customers at various levels and positions particularly the global markets and large companies. This increase in demand is one of the processes that is significant for TFP.

Moreover, it is emphasized that direct communication with consumers or customers is a facilitating factor for TFP and indicates a structure where the manufacturing method is shaped by customers’ preferences about the production process. The importance of the capacity to create tailored solutions in line with customers’ needs for TFP is also mentioned in the White Paper. It is also possible to say that these solutions will increase competitiveness and have more importance within the global market when handled within a framework of inclusive growth, sustainable development and responsible production.

GOAL 17: PARTNERSHIPS FOR THE GOALS

As mentioned in the introduction section, the Sustainable Development Goals can only be achieved through a multi-stakeholder structure and global partnership and cooperation characterized by a common approach. Accordingly, GOAL 17 sets out this pre-condition as a standalone target. The mechanisms, tools, economic environment, financial resources, institutional structures, technology, and data collection methods that can lead to the realization of the Sustainable Development Goals are considered within the scope of this goal.

GOAL 17 outlines the tools that are required to achieve the GOAL 16 and identifies the structures required to realize them. The necessary steps to be taken toward the goals may correspond to a correlation stipulated in GOAL 17. GOAL 17 stipulates suggestions that are significant for the realization of all other global goals such as facilitating an international financing approach; a non-discriminatory, equitable and rules-based international trading system; promoting transfer of technologies through improved access to knowledge, science, technology and innovation with regional and international cooperation; and the availability of high-quality and comparable data: In addition, GOAL 17 identifies the structures that are required to utilize the tools needed to realize the global targets. These are the “political will”, the public “capacity” to put into action the political will and use the aforementioned tools in an efficient way, as well as “partnerships and collaborations” at international and sectoral levels.

In previous sections in different contexts, we have discussed the necessity of the development of an efficiency approach that takes the Sustainable Development

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Goals into account to be a part of the global economy and become integrated into the market. In addition, we see certain suggestions in GOAL 17 about how to establish these partnerships. Promoting international trade and encouraging developing countries to increase their exports are matters that are closely related with a just and open, universal and fair-trade system for all as well as the integration into the global market. They can also be associated with efficiency.40 Besides introducing the way to implement practices about the aforementioned TFP-related goals, GOAL 17 emphasizes the targets themselves and the TFP connections that these goals contain. In addition, some sub-goals are highly associated with certain policies and priorities that are suggested in terms of TFP.

Sub-goals 17.6 and 17.7 and 17.8 try to create opportunities for technology transfer and these sub-goals are closely associated with the needs relevant to a potential policy framework for TFP. Sub-goal 17.6 also includes facilitating and accelerating access to technology and innovative practices, as well as creating a global technology platform to develop the technologies required for the global targets in line with the principle of global accessibility. Sub-goal 17.7 focuses on the prospective contribution to the environment by technological transformation. It also promotes incentives for products that are produced with environmentally-friendly technologies which facilitate the protection of the environment and contribute to the fight against climate change.

Sub-goal 17.9 points out that the capacity required to realize the global goals can be ensured by international and regional partnerships. In this way, the intentions to ensure a balanced development and growth will be realized in accordance with the principle of not leaving anyone behind.

Efficient data collection and disaggregated data models addressed in sub-goal 17.18 not only refer to the economic contribution of the steps taken for efficiency but also help us realize the relevant impacts on climate, natural resources, biodiversity and environment, as well as women and men of different ages, economic status, ethnic backgrounds, nationalities and physical and mental capacities. It is possible to define the relationship between disaggregated data and TFP and sustainable development, and to develop an understanding of efficiency based on inclusive growth and sustainable development.

40 http://www.tr.undp.org/content/turkey/tr/home/sustainable-development-goals/goal-17- partnerships-for-the-goals.html

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Conclusion

This additional document to the White Paper discusses the relationship between the 2030 Development Agenda put together by member nations of the United Nations, or in other words the sustainable development approach within the framework of six targets chosen out of the Sustainable Development Goals and the TFP. In this sense, it can be considered as a study toward implementation of the Sustainable Development Goals. The discussion over the six chosen targets should be considered as an example that refers to possible relationships to be formed between the targets and various activity fields related with TFP.

One of the most significant conclusions of the discussion above can be explained as the fact that a TFP approach that includes a sustainability perspective indicates certain relationships conflicting with productivity. Because economic growth within a perspective of sustainable development may require investing in many diverse and non-traditional areas. Some investments which at first glance appear to be at odds with productivity, calculated based on the ratio between inputs and outputs, may generate significantly positive results in the long term. On the contrary, inequality and environmental destruction are expected to have a significant cost in terms of productivity. However, as cited through examples in previous sections, a TFV approach with a consciousness of Sustainable development emphasizes that “capital, workforce, energy, materials and services” must be addressed in terms of environmental and social justice and basic rights, not only economic growth. This framework for the Sustainable Development Goals, provides a resilient and stable understanding of productivity and a favorable environment for TFP.

Placing importance on the Sustainable Development Goals and having an understanding of inclusive growth play a key role in the integration of different sized companies operating in different industries and at different stages of the value chain into the global supply chain. Monetary affairs do not suffice alone but should be considered together with global values and trends in order to be a part, or one of the main actors of the global market. Sustainable Development Goals are made up of values sensitive to the environment and social justice which are to

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be followed by the private sector in their relations with industry and production processes. Sustainable Development Goals provide practical suggestions related to the implementation of these values by all stakeholders in all economic processes and the private sector including production processes.

There are significant duties and responsibilities falling upon each one of us from individuals, countries and companies to industries, academia and non-governmental organizations so as to implement this critical framework that gives us the opportunity to live in an equal, non-discriminatory and peaceful environment.

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