R&D and Innovation Ecosystem of Turkey Your next destination for excelling in R&D and innovation

 

The R&D, innovation, and entrepreneurship ecosystem of Turkey is currently on track to meet two key targets for the year 2023. These targets are to raise gross expenditure on R&D (GERD) to 3% of GDP, up from its current level of 1%, and increase the number of researchers to 300,000 full-time equivalents (FTE), up from 115,000 of today. The private sector is expected to lead the way in satisfying these targets by raising its GERD to 2% of GDP and number of researchers to 180,000 FTE. The dynamism of the R&D and innovation ecosystem has propelled Turkey to becoming a hotspot of bright and flourishing ideas and promising technologies.
 
The R&D centers of the private sector are accelerating at an unprecedented rate and are excelling based on the synergy between generous grant programs and R&D tax deduction schemes for engaging in leading edge R&D projects.
Aiming for a structural transformation to become a tech-driven economy, Turkey continuously amends and improves the incentives related to the design and development of high-added value products and services.
The latest step towards this goal is a new R&D Reform Package that was first unveiled by Prime Minister Ahmet Davutoğlu on January 14. This package aims to increase the competitiveness of vital industries, strengthen university-industry cooperation, and increase overall R&D spending.

Among the key elements of the package are:

- The establishment of design centers that will benefit from the same level of incentives as R&D centers. Design-related activities conducted in technology development zones (TDZs) are also to be supported.

- Tax deductions for companies engaged in R&D and design, including small and medium-sized enterprises (SMEs) that contract such services to outside parties.

- A reduced staff requirement to establish an R&D center - 15 persons, down from 30.

- The state will underwrite a portion – equivalent to the gross total of the minimum wage in Turkey – of researchers' wages for a duration of two years, provided they are employed by an R&D center and are graduates of basic sciences.

- Tax deduction and grants for pre-competition cooperation projects in order to encourage joint projects.

- Customs duty exemptions for materials obtained from abroad within the scope of R&D, innovation, and design projects.

- The establishment of specialized TDZs for priority and strategic sectors (ICT, healthcare, biotech, nanotech, defense and aerospace, etc.) in order to form focused R&D organizations.

- Researchers employed in TDZs, R&D centers, and design centers will benefit from exemptions during site studies and postgraduate educational activities abroad.

- Tax deductions for companies that provide venture capital for start-ups established using the Techno-Initiative Capital Support Program in TDZs.

- Increasing the sum of techno-initiative capital support to TRY 500,000 from TRY 100,000, depending on the project, while extending the application period to 10 years from the date of the founder's graduation.

- Creating a system of standardization and authorization for software projects.
 
- Exemption from income tax cuts for faculty members who take part in university-industry cooperation projects. The income tax cut from the university's floating capital is limited to 15 percent, with the remaining 85 percent payable to the faculty member.