How to Address the Turkish Paradox of Innovation to Build a Competitive Economy?

Abstract

The ability to innovate has become a crucial prerequisite of strong organizations as well as economies. Theoretical and empirical evidence demonstrates that developing countries with effective innovation policies and well-functioning national innovation systems are better positioned to close the development gap and improve their competitiveness. Turkey started discussing the innovation subject from the policy perspective in the mid-1990s, during the same time as the EU, where—at that time—a wide-ranging debate was stimulated by the “Green Paper on Innovation,” and the government defined its main objective in this topic as “the establishment of the National Innovation System that would enable systematic operation of the whole institutions and mechanisms required to carry out scientific and technological research and development activities and to transform the results of those activities into economic and social benefit.” However, until today, this goal has not been fully achieved and the innovation performance remained below the desired level. Although innovation performance is low, demand for innovative products/services, one of the prime drivers of innovation, is very high in Turkey. Departing from this paradox, this chapter discusses how to increase the innovative capabilities of the Turkish firms in favor of a competitive economy.