Commentary, Economy

Smart economic planning and new Turkey

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A major theme that will occupy our agendas on the road to the construction of the new Turkey will be the importance of effective R&D and science-industry policies designed to overcome the “middle income trap.”

The evolution of the global development and macroeconomic governance paradigm after the financial crisis in 2008 triggered a debate concerning the gradual reinvention of “planned” or “coordinated” approaches to the market economy. The coordinated response of leading central banks to the global crisis via various forms of “consumption planning” or “credit planning,” as well as the rise of emerging economies led by the BRICS countries under largely coordinated economic regimes contributed to this debate.

Following three decades of neoliberalism since the 1980s, finally it seems that references to science and industry policy, or smart economic planning that could be compatible with the norms of a globalized world economy, are not ideologically rejected outright.

Over the course of the last week, I had the opportunity to participate in two crucial meetings that focused on industrial policy, research and development strategies and coordinating regional and social aspects of development processes. The first meeting was the Anatolian Trade Forum organized by the Kayseri Chamber of Commerce that brought together economy journalists, academics and businessmen from around Turkey and the world to discuss new trends in global trade, development and innovation strategies. Key participants of the forum included professor Raymond Saner, professor Lichia Yiu, professor Pedro Cardoso, professor Elif Çepni, CEO of Acwa-S.Arabia Abid Hussein Malik and CEO of China Sun Energy (CSUN) Steve Chen.

Expectedly, the main agenda of the discussions concerned the rapid diffusion of the knowledge economy on a global scale and the urgent need for entrepreneurial communities in developing countries such as Turkey to expand their knowledge base and high valueadded production capacity in line with global trends. Meanwhile, the importance of public policies through new generation science and industry strategies, public-private partnerships to cater for innovative environments and market-augmenting micro planning schemes were also emphasized.

The second crucial meeting that I participated in as a moderator was a timely conference at Istanbul Commerce University titled “Smart Economic Planning and Industrial Policy” (SEPIP). Aside from high-level political and bureaucratic representation by Science, Industry and Technology Minister Fikri Isık, Deputy Minister of Development Mehmet Ceylan and Deputy AK Party Chairman Numan Kurtulmus, the conference hosted leading global experts on industrial policy and economic management. Among these, leading expert on East-Asian political economy professor Meredith Jung-en Woo and development economists such as professor Hongyul Han, professor Franco Mosconi, professor Toh Mun Heng and professor Murat Yülek made crucial points that relate to the development vision of the new Turkey.

They emphasized that corporate actors in developing countries tend to focus on improving organizational aspects of mid-tech manufacturing sectors such as automotive, white goods and machinery, and as a result these countries turn into “licensed production hubs” for global brands. However, license systems slow down the pace of technological upgrading in the absence of strong university- industry linkages and substantial research and development (R&D) spending. That is almost a complete summary of our industrialization experience in Turkey. Neither largescale family companies, nor the smaller enterprises here have yet internalized the culture of R&D spending as an element of continued market success. Therefore, despite considerable export expansion in recent years, the respective share of high-tech products in exports remained at unsatisfactory levels.

Accomplishing the formation of an entrepreneurial environment suited to high value-added production and services is a key requirement of structural transformation in the modern world. A major theme that will occupy our agendas on the road to the construction of the new Turkey will be the importance of effective R&D and science-industry policies designed to overcome the “middle income trap.”

Resource: Daily Sabah, June 7, 2014

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Sadık Ünay worked as an academic at the Universities of Manchester, Birmingham, Huddersfield in the UK; and at Maltepe, Yıldız Teknik and İstanbul Şehir universities in Turkey. He is the author of Kalkınmacı Modernlik: Küresel Ekonomi Politik ve Türkiye (Developmentalist Modernity: Global Political Economy and Turkey) (2013) and Neoliberal Globalization and Institutional Reform: Political Economy of Development Planning in Turkey (2006). He currently teaches at Istanbul University.