tepav The Economic Policy Research Foundation of Turkey

Symposium on New Technologies, Jobs, Growth and development

Washington, DC

22.September.2017

Neither good nor bad: Just already around

Framework How to make use of the new industrial revolution?

Biotechnology, Nanotechnology, ICT from blockchain to IoT

What NIR means? From carbon based to non carbon based growth

Low oil prices here to stay

No trade off between jobs/growth and climate change measures

SDG agenda will be strengthened

New tech mean productivity growth in all sectors at the same time

Innovation based growth in developing countries

Better G20 agenda

How to do it in developing countries? Structural reforms agenda for tech transfer and most importantly technology

diffusion

Localization agenda to become structural reform agenda

Decentralization of innovation through startups: Global diffusion of innovation

• New outlets for local value creation?

Slide 2

From carbon based to non carbon based growth

Low oil prices here to stay Bad for exporters good for importers. (GCC, AZ) (TR)

No trade off between jobs/growth and climate change measures Good for SDGs.

SDG agenda will be strengthened Social, economic and environmental vulnerabilities

From sustainable cities to sustainable employment

New tech mean productivity growth in all sectors at the same time From structural change to within sector productivity growth

Good for TR

New industrial policy: Focus on Technology not on sectors

Innovation based growth • Tech transfer/diffusion means innovation based growth everywhere

More symmettric G20 agenda Asymmetry between finance and development tracks is no more

Slide 3

Looking at the big picture...

Slide 4

1992

Source: Defense Meteorological Satellite Program, based on TEPAV Analysis

…no need to feel anxious

Slide 5

2016

Source: Defense Meteorological Satellite Program, based on TEPAV Analysis

Turkey has a new structural issue Turkey grew through internal migration in the past 30 years. It can no longer do so.

Slide 6

Urbanization rates of Finland, Germany, China, Egypt and Turkey (1850-2015)

0

10

20

30

40

50

60

70

80

90

19

20

19

00

18

80

18

60

20

00

20

10

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90

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80

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60

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70

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50

20

20

19

40

19

30

19

10

18

90

18

70

18

50

Finland

Germany

Egypt

Turkey

China

Need to increase Turkey’s capability set in new technology platforms

7

Technological advantage in biotechnology, nanotechnology and ICT, 2013

Source: OECD

An agenda for development?

How to achieve innovation based growth in developing countries? Structural reforms agenda for technology transfer

Structural reforms agenda for technology diffusion

Localization agenda to become structural reform agenda? How to define accelarator projects

Large public expenditure program, bargaining power

A sector where new tech is already commercialized

Decentralization of innovation through startups: Global diffusion of innovation

Are startups new outlets for local value creation for MNCs?

Slide 8

Slide 9

Innovation=Technology transfer through FDI

Concrete Tools/

Projects

Public procurement

policy

Technolojgy specific

clustering

Policy/ Strategy

Oversee Unit

Ecosystem pioneers &

Funds

Start-up incubators

Redirecting funds

according to goal & focus

Vision

Sustainable Growth Sustainable

Development and Green Industry

High Tech Production and Export

Horizontal Areas

Macroeconomics

Efficiency of Administration

Foreign Policy/EU process

Education/ Human Capital

Law

Urbanization

Science

Life Sciences

Material Sciences

Computer Sciences

Technology Platform

Biotechnology

Nanotechnology

ICT

Accelerator Sector and

Project

Pharmaceutical Industry

Construction

Digital economy

Sectors to be transformed

through Innovation

Textile

Plastics

Chemistry

Automotive

Food

Medical Device

Agriculture

Energy

Transportation

Slide 10

New Drugs (NMEs) Approved by Size of Drug Sponsor/Owner

How to do it in Turkey? Technology start-ups?

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13 13 13 14 18

4

13 16

7 2

2 4 5 4 6

9

10

14

4 9

5

9 4 10

11

11

16

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0

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30

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Nu

mb

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NM

Es

Ap

pro

vals

New Drugs (NMEs) Approved by Size of Drug Originator

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15 14 15 18

22

15 20

29

13 2

1 3 5 6

5 6

12 8

2 9

4 8 2 4 7

2

6

8

4

0

10

20

30

40

50

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Nu

mb

er

of

NM

Es

Ap

pro

vals

Smaller pharma/biotech companies Other large pharma/biotech companies Top ten pharma companies

Source: FDA

Looking for structural reforms including concrete programs for a viable doing business agenda?

Slide 11

Source: WIPO Global Innovation Index, TEPAV calculations

Global Innovation Index heatmap of G20 countries in comparision with Turkey, 2016

Innovation Input Innovation Output

Global Innovation Index

Institutions Human

capital and research

Infrastructure Market

sophistication Business

Sophistication

Knowledge & technology

outputs

Creative outputs

Turkey 42 82 43 62 46 86 45 31

UK 3 13 7 4 4 14 9 3

USA 4 17 14 13 1 11 4 13

Germany 10 18 10 22 16 15 8 7

South Korea 11 31 3 9 14 13 5 21

Canada 15 6 22 11 3 20 23 23

Japan 16 15 13 7 8 10 13 36

France 18 26 11 8 15 16 21 15

Australia 19 10 9 6 10 23 32 18

China 25 79 29 36 21 7 6 30

Italy 29 38 31 18 25 36 25 32

Russia 43 73 23 60 63 37 40 66

Saudi Arabia 49 72 32 39 38 66 75 47

South Korea 54 46 55 85 17 56 63 77

Mexico 61 65 53 67 51 77 70 62

India 66 96 63 87 33 57 43 94

Brazil 69 78 60 59 57 39 67 90

Argentina 81 106 47 65 106 69 97 83

Indonesia 88 122 92 80 62 106 71 85

Note: Coloring is based on Turkey’s performance. Green if country is doing better than Turkey, red if vice-versa

Conclusions

NIR neither good nor bad: Already here

“Best of the times, worst of the times”

New technologies are bringing in a solution to countries like Turkey

Better than what we now have

How to define an agenda for tech transfer and tech diffusion in the developing world?

New framework for structural reforms

Slide 12