ANALYSIS OF THE RELATIONSHIP BETWEEN DEFENCE AND CIVIL INDUSTRIES: POLICY RECOMMENDATIONS FOR TURKEY A THESIS SUBMITTED TO THE GRADUATE SCHOOL OF SOCIAL SCIENCES OF MIDDLE EAST TECHNICAL UNIVERSITY BY FERİDÜDDİN EMRE ERDOĞAN IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN THE DEPARTMENT OF SCIENCE AND TECHNOLOGY POLICY STUDIES NOVEMBER 2020 Approval of the thesis: ANALYSIS OF THE RELATIONSHIP BETWEEN DEFENCE AND CIVIL INDUSTRIES: POLICY RECOMMENDATIONS FOR TURKEY submitted by FERİDÜDDİN EMRE ERDOĞAN in partial fulfillment of the requirements for the degree of Master of Science in Science and Technology Policy Studies, the Graduate School of Social Sciences of Middle East Technical University by, Prof. Dr. Yaşar KONDAKÇI Dean Graduate School of Social Sciences Prof. Dr. M. Teoman PAMUKÇU Head of Department Science and Technology Policy Studies Prof. Dr. Erkan ERDİL Supervisor Department of Economics Dr. E. Serdar GÖKPINAR Co-Supervisor Technology Development Foundation of Turkey (TTGV) Examining Committee Members: Prof. Dr. M. Teoman PAMUKÇU (Head of the Examining Committee) Middle East Technical University Science and Technology Policy Studies Prof. Dr. Erkan ERDİL (Supervisor) Middle East Technical University Department of Economics Assist. Prof. Dr. Emek Barış KEPENEK Başkent University Department of Sociology PLAGIARISM I hereby declare that all information in this document has been obtained and presented in accordance with academic rules and ethical conduct. I also declare that, as required by these rules and conduct, I have fully cited and referenced all material and results that are not original to this work. Name, Last name : Feridüddin Emre ERDOĞAN Signature : iii ABSTRACT ANALYSIS OF THE RELATIONSHIP BETWEEN DEFENCE AND CIVIL INDUSTRIES: POLICY RECOMMENDATIONS FOR TURKEY ERDOĞAN, Feridüddin Emre M.S., The Department of Science and Technology Policy Studies Supervisor : Prof. Dr. Erkan ERDİL Co-Supervisor : Dr. E. Serdar GÖKPINAR November 2020, 186 pages Nations have been putting great efforts in developing their defence industry, and it is usually located in the centre of their internal and international policies. Increase in defence expenditures necessitate to create rational, durable and sustainable connections between defence and civil industries. Defence industry contributes to the development of absorptive capacity of a nation by promoting the high-end and unique discoveries and facilitating the process of learning. Today the current technological diffusion between defence and civil industries is two-sided and civil industries are increasing their share in knowledge generation compared to the past. Thus, dual-use applications become crucial for commercialization and utilization to achieve mutual growth. Main objective of this study is to bring light on three points: determination of the relations between defence and civil industries, the evaluation of defence industry’s effect on civil industries and the revealing of best practices for beneficial inter-industry collaboration. Methodology of this study is based on the qualitative approach. The research data is collected via qualitative semi-structured interviews that is conducted iv with twenty-one participants from three domestic target groups selected by quota sampling method. The data gathered from interviews are analysed through the data- driven coding process in three stages. This study includes up-to-date policy recommendations for strengthening the relationship between defence and civil industries based on rational analyses and best practice examinations for policymakers in Turkey. As a result, this study suggests five ways for establishing valuable relation mechanisms between industries and seven methods for updating defence industrial and technological base of Turkey. Keywords: Defence Industry, Dual-Use, Inter-Industry Relations, Effects of Defence Industry, Turkish Defence Industry v ÖZ SAVUNMA SANAYİİNİN SİVİL SANAYİLERLE İLİŞKİSİNİN ANALİZİ: TÜRKİYE İÇİN POLİTİKA ÖNERİLERİ ERDOĞAN, Feridüddin Emre Yüksek Lisans, Bilim ve Teknoloji Politikası Çalışmaları Bölümü Tez Yöneticisi: Prof. Dr. Erkan ERDİL Ortak Tez Yöneticisi: Dr. E. Serdar GÖKPINAR Kasım 2020, 186 sayfa Ülkeler, genellikle dahili ve harici politikalarının merkezine koydukları savunma sanayiinin gelişimi için büyük çaba içerisine girmektedirler. Savunma bütçe ve harcamalarındaki artış, savunma sanayii ile sivil sanayiler arasında rasyonel, sağlam ve sürdürülebilir ilişkiler kurulmasını zorunlu hale getirmektedir. Savunma sanayii, en ileri ve özgün buluşları teşvik ederek ve öğrenme süreçlerini hızlandırarak ülkelerin özümseme kapasitesinin gelişimine katkıda bulunmaktadır. Teknolojik yayılım günümüzde savunma ve sivil sanayiler arasında çift yönlü gerçekleşmekte olup, sivil sanayiler bilgi üretimindeki paylarını eski döneme oranla önemli ölçüde arttırmaktadır. Bu sebeple çift kullanım uygulamaları ticarileşme ve faydalanma imkanları açısından ve iki tarafın ortak gelişimi için kritik önemdedir. Bu çalışmanın üç ana hedefi; savunma ve sivil sanayilerin ilişkileri ile savunma sanayiinin sivil sanayiler üzerindeki etkilerini değerlendirmek ve sanayiler arası işbirliğinde en iyi uygulamaları ortaya koymaktır. Bu çalışma, metodolojisi itibariyle nitel/kalitatif vi yaklaşımı benimsemektedir. Araştırma verileri, üç hedef gruptan kota örneklemesi metoduyla belirlenmiş toplam yirmi bir kişiyle ve yarı yapılandırılmış nitel mülakatlardan derlenmiştir. Mülakatlardan toplanan veriler üç aşamalı veri güdümlü kodlama sürecine tabi tutularak analiz edilmiştir. Bu çalışma, Türkiye’deki karar alıcılar için iyi uygulama örneklerine ve rasyonel analizlere dayanan ve savunma ve sivil sanayilerin ilişkilerini güçlendirmeyi amaçlayan en güncel politika tavsiyelerini içermektedir. Sonuç itibariyle, bu çalışma sanayiler arası ilişki mekanizmalarına yönelik beş farklı, Türkiye’nin savunma sanayi ve teknoloji altyapısını güçlendirmeye dair yedi farklı politika önerisi sunmaktadır. Anahtar Kelimeler: Savunma Sanayii, Çift Kullanım, Endüstriler Arası İlişkiler, Savunma Sanayiinin Etkileri, Türk Savunma Sanayii vii DEDICATION cation To my beloved wife and my great family viii ACKNOWLEDGMENTS It is impossible to know every detail of a particular subject, even if it is your primary field of working. To acknowledge this fact in the first place is what motivates us to keep learning. Every thesis is a learning process, and I have deeply experienced such a process in this study. First, I want to express my deepest gratitude to my supervisor Prof. Dr. Erkan Erdil and co-supervisor Dr. E. Serdar Gökpınar for their generous guidance, criticism and encouragement over the course of this study. The beginning point of the study and the novel descriptions for inter-industry relations emerged upon suggestions of Dr. Gökpınar. Upon the advice of Professor Erdil, a significant amount of time was spent on the methodology in particular. His recommendations for resources, like Bryman’s “Social Research Methods” for methodology, contributed to this study remarkably. Invaluable contributions have been made via other communication methods when we were unable to schedule face to face meetings with advisors due to the COVID-19 pandemic. In addition, I am grateful to all my friends and colleagues who lend help by proofreading, and to all interviewees who shared their precious time with me. I would like to extend my appreciation to the examining committee members; Prof. Dr. M. Teoman Pamukçu and Assist. Prof. Dr. E. Barış Kepenek for their substantial comments. Last, I thank to my father, who is also an academic, for his essential recommendations upon his academic experience and to my mother for encouraging me for further academic steps. My sister deserves thanks for suggesting word by word corrections. Above all, I owe my beloved wife a debt of gratitude for making an unprecedented effort to keep me motivated, showing great patience and providing her full support throughout this study. ix TABLE OF CONTENTS PLAGIARISM ........................................................................................................ iii ABSTRACT ............................................................................................................ iv ÖZ........................................................................................................................... vi DEDICATION ...................................................................................................... viii ACKNOWLEDGMENTS ....................................................................................... ix TABLE OF CONTENTS ......................................................................................... x LIST OF TABLES ................................................................................................ xiv LIST OF FIGURES ................................................................................................ xv LIST OF ABBREVIATIONS ................................................................................ xvi CHAPTERS 1. INTRODUCTION ................................................................................................ 1 1.1 Principles and Purpose of the Thesis ............................................................. 2 1.1.1 Statement of Topic .................................................................................... 2 1.1.2 Aim of the Study ....................................................................................... 3 1.1.3 Significance of the Study