1. 11 TURKEY, SMEs & KOSGEB KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION CICA “Conference on Interaction and Confidence Building Measures in Asia” Turkey, İstanbul, 24.01.2011

2. 22 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION CONTENT  AN OVERVIEW TO TURKEY  SMEs IN TURKEY  KOSGEB AND ITS SERVICES

3. 33 AN OVERVIEW TO TURKEY KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION

4. 44 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION TURKEY IS LOCATED IN THE HEART OF A REGION WITH MORE THAN ONE BILLION POPULATION AND ALMOST ONE QUARTER OF WORLD OUTPUT.

5. 55 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION ADVANTAGES OF TURKEY  STRATEGIC GEOGRAPHICAL LOCATION  HUGE DOMESTIC MARKET  QUALIFIED AND COST-EFFICIENT LABOUR FORCE  STRONG LOCAL INDUSTRY  OFFERING INVESTORS A MARKET POTENTIAL  NEARBY EXTERNAL MARKETS

6. 66 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION BASIC STATISTICS AND SOCIAL INDICATORS OF TURKEY   GEOGRAHICAL AREA (KM2) İS 780 576  POPULATION IS 71.5 M ILLION,  POPULATION OVER 15 YEARS OLD IS 52 M ILLION,  75 % OF THE POPULATION LIVE IN CITIES, APPROXIMATELY 36% OF POPULATION LIVE IN 5 BIG CITIES,  ANNUAL POPULATION INCREASE RATE IS 1.31%,  AVERAGE AGE IS 28,5,  COMPULSORY EDUCATION IS 8 YEARS  NUMBER OF THE UNIVERSITY IS 139 (94 STATE, 45 PRIVATE )  AVERAGE UNEMPLOYMENT RATE IS 10 %.  49 TYPES OF MINES RESERVE AND WORLD ’ S 51% OF BORON RESERVE ARE IN TURKEY Source: tuik-2008

7. 7 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION Source: www.tuik.gov.tr ANNUAL DISTRIBUTION OF LABOUR FORCE (%) (2008) 23,7 21 5,9 49,5 AGRICULTURE INDUSTRY CONSTRUCTION SERVICES

8. 88 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION BASIC ECONOMIC FIGURES (BILLION USD ) FIGURES200720082009 EXPORT107.2132102 IMPORT170202126 EXPORT COVERAGE IMPORT 63%65%73% TOTAL FOREIGN TRADE VOLUME 277.2334218 FOREIGN TRADE BALANCE -62,8-70-33.5 Source: www.dtm.gov.tr

9. 99 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION ANNUAL EXPORT DATA THROUGH LEADING EXPORT COUNTRIES IN TURKEY (Million USD) COUNTRIES200720082009 USA4.1714.3003225 GERMANY11.993(1)12.958(1)9.800(1) U.A.E3.2417.975(3)2.899 FRANCE5.9756.6186.212(2) IRAQ2.8453.9175.126 ENGLAND8.627(2)8.159(2)5.923(3) SPAIN4.5804.0472.826 SWITZERLAND9352.8573.932 ITALY7.480(3)7.81905.893 RUSSIAN FEDERATION4.7276.4833.203 Source: www.tuik.gov.tr

10. 10 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION TURKEY IS RANKED AS THE; 16th BIGGEST ECONOMYIN THE WORLD, 16th BIGGEST ECONOMY IN THE WORLD, 6th BIGGEST ECONOMYIN EUROPE 6th BIGGEST ECONOMY IN EUROPE

11. 11 SMEs IN TURKEY KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION

12. 12 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION ECONOMIC DEVELOPMENT Large share in total number of enterprises Large share in total number of employment DRIVING FORCE SMEs

13. 13 SME DEFINITION KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION ANNUAL FINANCIAL BALANCE SHEET ANNUAL NET SALES REVENUE NUMBER OF EMPLOYEES DEFINITION CRITERIA (Scale) ≤25 million TL <16,2 million $ ≤25 million TL <16,2 million $50-250MEDIUM ≤5 million TL <3,25 million $ ≤5 million TL <3,25 million $ 10-49SMALL ≤1 million TL <0,65 million $ ≤1 million TL <0,65 million $ 1-9MICRO

14. 14 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION DISTRIBUTION OF SMEs IN TURKEY SMEs CONSTITUTE; 99.9 OF TOTAL ENTERPRISES INCLUDING THOSE IN THE SERVICE SECTOR 81 OF TOTAL EMPLOYMENT 62 OF TOTAL INVESTMENTS 59 OF TOTAL VALUE ADDED 56 OF TOTAL EXPORT

15. 15 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION DISTRIBUTION OF SMEs (%) Source:Tuik 2008 95,54% 4,03% 0,35% 0,08% MICROSMALLMEDIUMLARGE

16. 16 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION * Other: Energy, MInIng, ConstructIon Source: T ü ik 2007 Other 4.4 Manufacturing Service 82,3 0 12,3 Trade 45. 2 Other services 37.1 SECTORAL DISTRIBUTIONS OF SMEs (%)

17. 17 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION SECTORAL DISTRIBUTION OF ENTERPRISES Source: TUIK 2007 SectorsNumber of Enterprise s %Number of Employees % Manufacturing316 58412.32 777 24728.3 Transportation, Storing, Telecommunication443 20317.26996 17410.16 Hotel and Restaurants209 2318.15607 3456.19 Other Community, Social and Personal Service Activities 122 2064.76228 6982.33 Real Estate, Renting and Business Activities154 6326.02834 1448.50 Construction107 1664.17720 3257.34 Health and Social Work40 6731.581.58177 5491.81 Education Services8 2700.32154 2991.57 Mining and Quarrying2 2450.0997 9061.00 Electricity, Gas and Water Distribution2 8420.110.1199 3021.011.01 Wholesale and retail trade; repair of motor vehicles, household goods. 1 160 59245.203 114 71831.76 Total2 567 6441009 807 707100

18. 18 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION PROBLEMS OF TURKISH SMEs  FINANCING  HIGH QUALIFIED HUMON RESOURCE  INFORMATION AND COMMUNICATION TECHNOLOGIES  TECHNOLOGY, R&D AND INNOVATION  MARKETING AND EXPORT  ENTREPRENEURSHIP  QUALITY AND STANDARDIZATION  ENVIRONMENT

19. 19 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION INSTITUTIONAL STRUCTURE INSTITUTIONSACTIVITIES PUBLIC ORGANISATIONS MINISTRY OF INDUSTRY AND TRADE (MOIT) FACILITATES DETERMINATION OF INDUSTRIAL POLICIES, PROVIDES AND ENCOURAGES RAPID AND SUSTAINABLE DEVELOPMENT OF INDUSTRY,PROMOTES OF COMPETITIVENESS OF SMEs,HOLDS RECORDS OF THE INDUSTRIAL ENTERPRISES UNDERSECRETARIAT OF STATE PLANNING PREPARES LONG TERM DEVELOPMENT PLANS AND ANNUAL PROGRAMMES,DEVELOPES FUTURE ORIENTED STRATEGIES AND POLICIES IN COOPERATION WITH RELETED INSTITUTIONS SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ORGANISATION SUPPORT MECHANISMS FOR INCREASING COMPETIVENESS OF SMES, ENCOURAGING ENTERPRENEURSHIP AND INNOVATIVE START-UPS THE UNDERSECRETARIAT OF TREASURYSTATE AID FOR INVESTMENTS, FINANCIAL TRANSFERS TO PUBLIC ENTERPRISES THE UNDERSECRETARIAT OF FOREIGN TRADE SUPPORT MECHANISMS FOR IMPROVING EXPORT CAPACITY MINISTRY OF LABOUR AND SOCIAL SECURITY RULES FOR EMPLOYMENT, REGISTRATION MINISTRY OF FINANCETAXATION, FINANCE MATTERS FOR ENTERPRISES TURKEY SCIENTIFIC AND TECHNOLOGIC RESEARCH INSTITUTE SUPPORT AND POLICY MAKING FOR R&D, SCIENTIFIC RESEARCH INNOVATION ACTIVITIES

20. 20 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION INSTITUTIONAL STRUCTURE INSTITUTIONSACTIVITIES NGOs TURKISH UNION OF CHAMBERS AND COMMODITY EXCHANGES REPRESENTATION OF PRIVATE SECTOR, PROVIDING SOLIDARITY AND UNION BETWEEN CHAMBERS AND STOCK EXCHANGES THE CONFEDERATION OF TURKISH TRADESMEN AND CRAFTSMEN COORDINATION AND REPRESENTATION OF THE TRADESMEN AND ARTISANS, VOCATIONAL EVALUATION OF THE MEMBERS ACCORDING TO NATIONAL AND ECONOMIC DEVELOPMENTS, PROVIDING VOCATIONAL TRAINING. FOUNDATION FOR THE PROMOTION OF VOCATIONAL TRAINING AND SMALL INDUSTRY ENSURING ENHANCEMENT OF SME EMPLOYEES’ QUALITIES AT NATIONAL LEVEL FOR VOCATIONAL TRAINING. TECHNOLOGY DEVELOPMENT FOUNDATION OF TURKEY SUPPORTING TECHNOLOGY DEVELOPMENT PROJECTS. TOSYOV DECLARING OPINIONS ON VARIOUS SME PLATFORMS. FINANCIAL INSTITUTIONS BANKSCREDIT ISSUES ISTANBUL RISK,VAKIF RISK,SME A.ŞVENTURE CAPITAL ISSUES CREDIT QUARANTEE FUND, TESKOMBGUARANTEE ISSUES SME STOCK EXCHANGE

21. 21 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION SME POLICY MAKING INSTRUMENTS  5 YEARS DEVELOPMENT PROGRAMME  ANNUAL PROGRAMME AND 3 YEARS MEDIUM TERM PROGRAMME  PROMOTING A BETTER INVESTMENT ENVIRONMENT COMMITTEE  WITHIN EU MEMBERSHIP- ENTERPRISE AND INDUSTRY POLICIES- SME STRATEGY AND ACTION PLAN  WITHIN EU MEMBERSHIP- ENTERPRISE AND INDUSTRY POLICIES- SME STRATEGY AND ACTION PLAN  WITHIN EU MEMBERSHIP- ENTERPRISE AND INDUSTRY POLICIES- KOSGEB STRATEGIC PLAN  WITHIN EU MEMBERSHIP- ENTERPRISE AND INDUSTRY POLICIES- KOSGEB STRATEGIC PLAN

22. 22 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION SMESTRATEGY AND ACTION PLAN SME STRATEGY AND ACTION PLAN (2007-2009) MAIN STRATEGY AREAS IMPROVEMENT OF ENTREPRENEURSHIP ENTERPRISE DEVELOPMENT INTEGRATION OF SMES INTO INTERNATIONAL MARKET IMPROVEMENT OF BUSINESS ENVIRONMENT DEVELOPING TECHNOLOGICAL AND INNOVATIVE CAPACITY ( 27 OBJECTIVES + 78 ACTIONS/PROJECTS )

23. 23 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION 2008-2012 KOSGEB STRATEGIC PLAN MAIN STRATEGY AREAS  INCREASING COMPETITIVE POWERS OF SMEs  INCREASING QUALITY AND PERFORMANCE OF KOSGEB SERVICES AND SUPPORTS TARGETS  TO FACILITATE SMEs TO ACCESS TO FINANCIAL SOURCES  TO SUPPORT R&D, INNOVATION, QUALITY DEVELOPMENT, STANDARDIZATION AND TO SPREAD THE USAGE OF INFORMATION AND COMMUNICATION TECHNOLOGIES.  TO INCREASE SMEs ’ INTERNATIONAL MARKET SHARE  TO INCREASE SMEs ’ MANAGEMENT CAPABILITIES AND QUALIFIED EMPLOYMENT CAPACITY  TO SPREAD OF ENTREPRENEURSHIP  TO SUPPORT REGIONAL DEVELOPMENT  TO CARRY ON KOSGEB SUPPORT MECHANISMS FOCUSED ON INCREASING THE EXPORT POTENTIAL AND COMPETITIVE POWERS OF SMEs.  TO STRENGTHEN KOSGEB ’ S INSTITUTIONAL CAPACITY, TO MAKE AMENDMENTS ( 10 OBJECTIVES + 182 ACTIONS/PROJECTS )

24. 24 KOSGEB’S ORGANIZATIONAL STRUCTURE AND ITS SERVICES KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION

25. 25 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANISATION  THE ONLY PUBLIC AGENCY FOUNDED TO PROVIDE SUPPORTS TO SMEs.  ESTABLISHED IN 1990.  IN 2009, WITH A LEGAL ARRANGEMENT, AS WELL AS MANUFACTURING SECTORS, SERVICE AND TRADE SECTORS WERE INCLUDED TO THE KOSGEB TARGET AUDIENCE AND THE COUNCIL OF MINISTERS HAS GIVEN THE AUTHORITY TO DETERMINE THE SECTOR AND REGIONAL PRIORITIES OF SUPPORTS GIVEN BY KOSGEB FOR SMES

26. 26 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION GOAL OF KOSGEB  TO INCREASE SME ’ S SHARE AND EFFECTIVENESS,  TO RAISE THEIR COMPETITIVENESS,  TO REALIZE INTEGRATION WITHIN SECTORS IN LINE WITH THE ECONOMIC DEVELOPMENTS,  TO INCREASE SME ’ S TECHNOLOGY LEVELS.

27. 27 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION GENERAL ACTIVITIES  TO DEVELOP SUPPORT MECHANISMS FOR TURKISH SMES  TO ENCOURAGE ENTREPRENEURSHIP REGARDING TO NEW TECHNOLOGY AND INNOVATION  TO FOSTER R&D FOCUSED JOB CREATION  TO DISSEMINATE RELEVANT INFORMATION TO SMES  TO IMPROVE CAPACITY OF SMES  TO STRENGTHEN UNIVERSITY/INDUSTRY COOPERATION

28. 28 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION MANAGEMENT BODIES GENERAL ASSEMBLY EXECUTIVE COMMITTEE PRESIDENCY

29. 29 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION BUDGET SOURCES  BUSINESS CONCERN AND PROPERTY INCOMES  PRIVATE INCOMES WITH DONATIONS AND AIDS  OTHER INCOMES - SECURITY, PAYMENTS IN ARREAR AND OTHER INTERESTS - SHARES OF THE PERSONS AND ORGANIZATIONS (STATE BANKS, KIT, ORGANIZED INDUSTRIAL REGIONS, THE UNION OF CHAMBERS AND COMMODITY EXCHANGES OF TURKEY,, TURKISH ARTISANS AND ARTISTS ’ CONFEDERATION, CURE SHARE FROM THE EMPLOYEES)  CAPITAL INCOMES  REVENUES FROM THE CLAIMS

30. 30 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION 2009 BUDGET KOSGEB BUDGET270.540.000,53 $ KOSGEB SUPPORT BUDGET212.953.000,44 $ SUPPORT BUDGET/ GENERAL BUDGET%79

31. 31 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION DEPARTMENTS WHICH DEVELOPE POLICIES AND MODELS  TO CONSTITUTE REGIONAL AND LOCAL ECONOMIC DEVELOPMENT MODELS  TO PREPARE REPORTS TO DEVELOP KOSGEB SUPPORT MECHANISMS, DEVELOPING OFFERS AND PREPARING LEGISLATION  TO ESTABLISH NEW FINANCIAL MODELS AND TO IMPROVE FINANCIAL SUPPORT TOOLS  TO COVER SMEs ’ EDUCATION AND CONSULTING NEEDS  TO MAKE RESEARCHS ON FOREIGN MARKETS AND LEGISLATIONS

32. 32 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION SERVICE CENTERS  TO STRENGTH THE RELATIONSHIPS BETWEEN INDUSTRY AND STATE  TO PROVIDE KOSGEB SUPPORT MECHANISMS  TO IMPLEMENT PROJECTS  SEVERAL TEST AND ANALYSIS SERVICES REGARDING TO SMEs  COORDINATION TO BUILD LABORATORIES FOR SMEs IN INDUSTRIAL ZONES INDUSTRY DEPARTMENTS WHICH IMPLEMENT THE MODELS

33. 33 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION  TO SUPPORT R&D PROJECTS OF MICRO SIZED ENTERPRISES  TO SUPPORT SMEs WHICH AIM TO DEVELOP PRODUCTS WITH HIGH ADDED VALUE AND TECHNOLOGICAL PRODUCTION SYSTEMS  TRANSFERING HE RESULTS OF R&D STUDIES INTO ECONOMICAL VALUE  TO DEVELOP COOPERATION BETWEEN UNIVERSITIES AND INDUSTRY UNIVERSITY TECHNOLOGY DEVELOPMENT CENTERS

34. 34 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION SYNERGY FOCAL POINTS MICRO SERVICE POINTS LOCATED IN CHAMBERS OF COMMERCE & INDUSTRY AND OTHER ORGANIZATIONS TO DELIVER KOSGEB SUPPORT MECHANISMS

35. 35 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION SERVICE CENTERS (1990-2009) 55 SERVICE CENTERS ( 20 TECHNOLOGY DEVELOPMENT CENTERS ) 90 SYNERGY FOCAL POINTS

36. 36 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION SUPPORTS WITHIN THE FRAMEWORK OF KOSGEB SUPPORT MECHANISMS (feimbursable and non reimbursable support payment) SUPPORTS WITHIN THE FRAMEWORK OF KOSGEB SUPPORT MECHANISMS (feimbursable and non reimbursable support payment) CREDIT SUPPORTS (non reimbursable support payment) CREDIT SUPPORTS (non reimbursable support payment) KOSGEB SUPPORTS

37. 37 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION GENEL KREDI PROGRAMLARI KAPSAMINDA SAĞLANAN DESTEKLER SME PROJECT SUPPORT PROGRAMME THEMATIC PROJECT SUPPORT PROGRAMME COOPERATİON- COLLABORATION SUPPORT PROGRAMME R&D, INNOVATION AND INDUSTRIAL PRACTICE SUPPORT PROGRAMME ENTREPRENEURSHIP SUPPORT PROGRAMME GENERAL SUPPORT PROGRAMME SUPPORTS UNDER KOSGEB REGULATION

38. 38 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION GENEL KREDI PROGRAMLARI KAPSAMINDA SAĞLANAN DESTEKLER SME SUPPORT CREDIT EMPLOYMENT CREDIT EXPORT CREDIT INFORMATICS CREDIT EQUIPMENT SECTOR AND EQUIPMENT CREDIT MANUFACTURER ARTISAN BUSINESS CREDIT EMERGENCY STATE SUPPORT CREDIT SUPPORTS PROVIDED UNDER CREDIT PROGRAMMES

39. 39 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION SME DATABASE SUPPORT MODEL NUMBER OF ENTERPRISES REGISTERED SME DATABASE 52.000 423.000 1990-2002 2003-2004 2005-2008 2005-2008 2009- 2009- SYSTEM BASED ON DEMAND SME ANALYSIS SCANNING + STRATEGIC ROAD MAP + CREDIT SUPPORTS 4000 10.000 SCANNING + STRATEGIC ROAD MAP + CREDIT SUPPORTS + SERVICE SECTOR 10.000 123.800

40. 40 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION KOSGEB SUPPORTS (2003- 2010) 41.956 EMPLOYMENT 2,3 Billion $ EXPORT 2,3 Billion $ EXPORT 467,5 Million $ SUPPORT ( 4,2 Billion $) ALLOCATED CREDIT VOLUME 467,5 Million $ SUPPORT ( 4,2 Billion $) ALLOCATED CREDIT VOLUME 157.771 SMEs

41. 41 KOSGEB SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ORGANIZATION www.kosgeb.gov.tr THANK YOU