If you want to compete in the new world economy, you need to increase the value of small enterprises and get yield from them. In doing so, it is important to determine the financial-technical needs of the startups correctly, to ensure that universities operate as entrepreneurs, to bring together major brands and start-ups, and to unleash the potential in technoparks.
So, who “pinpoints” in the entrepreneurial ecosystem?
This task falls upon the Development Agencies of the Ministry of Industry and Technology. Unlike other public institutions that support entrepreneurs in Turkey, the Istanbul Development Agency (ISTKA), which has an economy of around $350 billion, carries the heaviest burden among the Development Agencies that fill strategic gaps over time and prioritize innovative projects. ISTKA, which has met the micro needs of high-tech start-ups with fast reflex capability for nine years, acts as a driving force, especially for scale-ups. In the new entrepreneurial ecosystem led by technology and sociological development, we can say that ISTKA constitutes the angel investment-incubation-acceleration pillar of the public sector. Dr. Fatih Pişkin, young Deputy Secretary-General of ISTKA, which is trying to make Istanbul an attractive city for international start-ups and investors, explained the role of the institution and how it has transformed in recent years to increase its efficiency.
“The issue of entrepreneurship was a little more horizontal for us between 2010 and 2016. We supported entrepreneurship within innovation programs and creative industries. We even backed the projects to develop the entrepreneurial spirit and culture of children and women,” Dr. Pişkin noted. “In 2016, we received feedback to let entrepreneurship be a vertical program and support entrepreneurship with various elements. In the 2016 Entrepreneurship Program, we supported entrepreneurship projects to increase the capacities of technology-based and innovative entrepreneurship, women entrepreneurship, social entrepreneurship, and children’s entrepreneurship. Afterward, the institutions that benefited from our projects and actively operated in this ecosystem gave feedback as follows: ‘You have been supporting the infrastructure since 2010. No matter which university you go to, you have established either an incubation center or an accelerator program. It is too much. You leave this area’. They told us in which area there was a gap and need at the moment. One of them is the acceleration of scale-ups.”
Dr. Pişkin recalled that young scale-up startups that can compete internationally need to master many issues to determine their direction. “We are now trying to support entrepreneurs who have established their company, started to make out an invoice, but need to scale, grow, and do not know how to do so. Young people know what they do. However, production, marketing, sales, and establishment of a company are the accounts of the business,” he continued.
“It is unfair to expect everything from them. In our system, independent evaluators handle the applications. We assign a monitoring expert and a financial expert to support each project. The monitoring expert monitors whether the activities are performed as promised and whether there is a delay. It does not end after we close the project under our legislation. We have an obligation to follow the project for three years. Then we do impact analysis. To date, we have conducted an impact analysis of eight financial support programs,” he added. “We put these analyzes in front of our management board and said, ‘Unfortunately, the support we provide to businesses does not create the desired effect. There are nearly 800,000 small and medium-sized enterprises (SMEs) in Istanbul. The number of SMEs that we will reach with a program is 15-20. What they do is to purchase a couple of machines, which has no contribution to the region’. They were convinced. After that, we have supported the mechanisms and structures that will support the startups.”
HOW DOES THE START-UP ECOSYSTEM DEVELOP?
What does Istanbul need in the venture-startup-technology triangle? Dr. Fatih Pişkin and his team have been well acquainted with Istanbul‘s start-up ecosystem for the last six years in which technology has progressed rapidly. That is why we should listen to Pişkin‘s words. “As far as we can observe, in order to develop the start-up ecosystem, major companies or large public companies in the center should direct their needs to these start-ups instead of conducting R&D projects and design within their own body. For example, Istanbul Metropolitan Municipality has tremendous data such as traffic and health,” Dr. Pişkin further stressed. “For example, if you have a traffic problem, there is a company called BELBİM. These data should be opened to start-ups in fields such as automotive and mobility. They do not want to share data, and institutions have their own egos. They want to do it on their own. We want to open cooperation channels. They can solve many needs, such as communication and information technologies, with start-ups. Without such developments, we will no longer be able to carry the start-up ecosystem in the future. We provide support and give incentives to technoparks as the state, but there should be major corporations in the center.”