Marching to the Future: R&D and Innovation
The latest addition in the series of reports, the TSKB View, prepared by the TSKB Economic Research department, “Marching to the Future: R&D and Innovation” has been published. The report emphasizes how the developments of the last 30 years have made information and technology an important part of economic value generation and that those countries able to create a knowledge-based economy have carved out an advantage over the international competition.
The TSKB Economic Research department, which conducts research on macroeconomics, development economics and sectoral dynamics, has drawn attention to the importance of R&D and innovation in Turkey's efforts to escape the middle income trap in its latest report. In the report entitled “Marching to the Future: R&D and Innovation” prepared by the TSKB Economic Research Economist, Mr. Cem Avcıoğlu, research and development (R&D) activities, which are the driver of the new knowledge generation process, will be of great importance for countries seeking to maintain and improve the performance of their economic growth. The report also evaluates the top 10 countries as of today in terms of the R&D intensity indicator, which is expressed as the ratio of R&D expenditures to Gross Domestic Product. It points out that these countries increased their investment intensity by an average of 30% between 1998 and 2017, and raised the ratio to 3.2%.
According to the report, widening the spread of information and increasing the share of high-tech products in total production will be the crucial in ensuring that Turkey’s high economic growth performance is permanent and inclusive. The report points out that the income convergence between developed economies and Turkey has slowed in the period following the global financial crisis.
As the information included in the report, developing the ability to produce products focussed on innovation is expected to contribute to the rise in export revenues. While Turkey earns USD 1.32 per kilogram in export revenues, this figure exceeds USD 2 in developing Eastern European countries such as the Czech Republic and Poland.
Mr. Avcıoğlu, who prepared the report, drew attention to the fact that while Turkey’s R&D intensity stood at 0.96% in 2017 - below the 1.78% average of high-income countries - it has been maintaining its steady increase over the last 20 years. Mr. Avcıoğlu mentioned that R&D investments represented the cornerstone of a talent-intensive and innovative manufacturing sector, adding: “If ongoing efforts in this area become successful, significant improvements will be achieved both in terms of the sustainability of growth and an improvement in employment conditions”.
With its 70 years of development banking experience, TSKB supports investments undertaken by Turkey’s private sector with its thematic loans and innovative financing products. It continues to create added value for the business world through the sector specific consulting services which offering for 35 years. The Bank’s specialist teams, distinguished with their economist, financial advisors and technical advisor staff, guide companies operating in the fields of energy, industry, finance, food, logistics, agriculture, tourism in their transformation, development and sustainability journeys. The Economic Research department operating under the umbrella of TSKB Consulting Services directs the development economy through the reports it publishes.
The full report, “Marching to the Future: R&D and Innovation” can be accessed here.
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