S TRENGT European Union and the Republic of Turkey Boosting Regional Competitiveness in Turkey H ENIN G TH E SPA TIA L DIM STRENGTHENING THE SPATIAL DIMENSION ENSI IN THE SECTOR STRATEGIES OF TURKEY ON IN Strengthening the Spatial Regions play an increasingly important role in OECD economies. They are responsible TH Dimension in the Sector E SE With wide disparities in the economic development of its regions Turkey is among the CTO Strategies of Turkey OECD countries now taking an active interest in regional development policies and R regional competitiveness. STRA TEGIE The OECD conducted its project, Boosting Regional Competitiveness in Turkey, to help improve regional and sectoral competitiveness policies in Turkey and to make S OF co-ordination between newly created development agencies, the Ministry of TURK project was implemented by the OECD in close collaboration with the Ministry of EY proposes ways of incorporating the spatial dimension more fully in national sector strategies. European Union and the Republic of Turkey Turkey project covers [12].indd 4 25/08/2016 16:49 Boosting Regional Competitiveness in Turkey Strengthening the Spatial Dimension in the Sector Strategies of Turkey September 2016 NP This paper is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and the arguments employed herein do not necessarily reflect the official views of OECD member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. This document has been produced with the financial assistance of the European Union. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the European Union. 2 Foreword Regions play an increasingly important role in OECD economies. They are responsible for delivering policies that directly affect citizens’ lives and the business environment. Accordingly, it is essential that policy makers and practitioners understand their economies and benchmark them with the most appropriate tools. The growing importance of regional and local policy makers also makes it ever more important to efficiently co-ordinate national and regional policies. With wide disparities in the economic development of its regions, Turkey is among the OECD countries now taking an active interest in regional development policies and regional competitiveness. In 2006, its Ministry of Development put in place 26 development agencies (DAs). Four years later they were fully operational. They carry out research, analysis and economic planning at the regional level, administer grant programmes directed at enterprises and educational institutions, and promote local investment through investment support offices (ISOs). The recently created DAs are expected to deliver all-important regional economic development policies, while finding their place in the Turkish policy and institutional environment. Against that background, the OECD conducted its project, Boosting Regional Competitiveness in Turkey, to improve regional and sectoral competitiveness policies and to make co-ordination between development agencies, the Ministry of Development and other relevant institutions more effective. The OECD implemented the 22-month project (from November 2014 to September 2016), cofinanced by the European Union and Turkey, in close collaboration with the Ministry of Development. Project activities included primary and secondary data collection and analysis, together with numerous missions, workshops and training courses covering all 26 regions of Turkey and in Ankara. In total, the project team was able to collect input from more than 600 participants. Project activities comprised four thematic components, plus a crucial capacity-building component that cut across all four. The four substantive components were: • Component 1. Measuring, benchmarking and monitoring competitiveness in the regions through a tailored set of indicators. • Component 2. Identifying dominant and dynamic sectors in the country’s 26 NUTS II regions through a standardised framework. • Component 3. Enhancing co-ordination between central institutions and development agencies. • Component 4. Strengthening the spatial dimension in national sector competitiveness strategies. In line with the project’s four-component structure, its findings are examined in four thematic reports. This publication is the final report on Project Component 4, which aims to develop an approach that better incorporates the spatial dimension in national sector strategies. It is hoped that further analyses and policy discussions can build on the findings of this report and explore other facets of the complex interaction between national and regional institutions and agencies in Turkey. 2 STRENGTHENING THE SPATIAL DIMENSION IN THE SECTOR STRATEGIES OF TURKEY © OECD 2016 3 Acknowledgements This publication was prepared by the South East Europe Division of the OECD Global Relations Secretariat as a result of work conducted in close collaboration with the Ministry of Development of Turkey. The drafting of the report was led by Umur Gökçe and overseen by the OECD Global Relations Editorial Board. Project work was conducted under the guidance of Marcos Bonturi, Director of Global Relations, and Marzena Kisielewska, Head of the South East Europe Division, and under the management of Clément Brenot. Merve Küçük and Haris Avdic Pejicic substantially contributed to data analysis and the drafting of the report. The project benefitted from the early guidance of Anthony O’Sullivan and Grégory Lecomte. The team is also obliged to Eda Bayrak, Véronique Quénehen, Ken Kincaid and other colleagues who provided administrative and editorial assistance. For their support and collaboration on the project, the South East Europe Division wishes to express warm thanks to numerous officials, experts, and policy-makers in Turkey who provided help and guidance throughout the project. They include: Serkan Valandova, Mustafa Işık, Adnan Saygılı, Nuri Barış Tartıcı, Mustafa Erdem Kazaz, Selcan Zorlu (Ministry of Development of Turkey), Emine Döğer, Gülseren Şeyda Cebe, Halime Aslı Yıldırım, Yasemin Karabaş (CFCU), Mustafa Fazlıoğlu (EU Delegation to Turkey). The team also extends its gratitude to Elif Tuğçe Çınar and Mehmet Oğuzhan Üstün from the Ministry of Science, Industry and Technology for their support in data collection, as well as to other experts from the Investment Support and Promotion Agency of Turkey, the Union of Chambers and Commodity Exchange of Turkey and the Economic Policy Research Foundation of Turkey for their valuable contributions. The team is also grateful to all experts and practitioners who participated in the events, meetings, workshops and training courses and actively engaged in discussions. We especially would like to thank the General Secretaries, Planning Department experts and Investment Support Office experts from the 26 Development Agencies. Special thanks go to William Tompson, Head of the Eurasia Division, OECD Global Relations, Antonio Fanelli, Senior Advisor, OECD Global Relations, Irène Hors, Head of the SPNI Division, OECD Global Relations, and Asees Ahuja, OECD Global Relations for their comments and guidance. Colleagues from the OECD Regional Development Policy Division of the Public Governance and Territorial Development Directorate also provided their comments and guidance. The report benefitted from the financial support of the European Union and the Republic of Turkey. 4 STRENGTHENING THE SPATIAL DIMENSION IN THE SECTOR STRATEGIES OF TURKEY © OECD 2016 Table of contents Acronyms and abbreviations ....................................................................................................................................................... 6 Executive summary ............................................................................................................................................................................ 7 Introduction ............................................................................................................................................................................................. 8 Chapter 1. Project methodology and data sources .......................................................................................................... 9 1.1. Pilot sector identification ..............................................................................................................................................10 1.2. Data sources ..........................................................................................................................................................................10 1.3. Relevant OECD work ........................................................................................................................................................11 Chapter 2. The machinery sector in Turkey .....................................................................................................................15 2.1. Sector scope ...........................................................................................................................................................................16 2.2. The machinery sector in Turkey ..............................................................................................................................17