You need more than creative spelling for !nnovation

When I was in primary school, we used to celebrate “domestic goods week” every December. Introduced right after World War II, the spirit of the week was to encourage consumption of home products. For some reason, we all brought nuts to school.

When I found out that last week was !nnovation Week (no typo), I wondered if the government was trying a similar approach. After all, despite a myriad of incentives from different agencies, Turkey is not innovating. There have been just over 400 patents since 2001 that have come from the country’s technology development zones.

Turkey ranks 68th out of 142 countries in Cornell, INSEAD and the World Intellectual Property Organization’s Global Innovation Index (GII). Interestingly, the report accompanying the index praises the increase in R&D expenditures. As always, the devil is in the details.

GII looks at both inputs and outputs, creating a sub-index for each, which are built around key pillars: The five input pillars capturing the factors that enable innovative activities are institutions, human capital & research, infrastructure, market sophistication and business sophistication. The two output pillars that capture actual innovation are knowledge & technology and creative outputs. Each pillar is divided into sub-pillars, and each sub-pillar is composed of individual indicators.

Turkey is ranked 53rd and 81st in the output and input sub-indices respectively. Regulatory environment, business environment and education are its weakest input sub-pillars. These deficiencies are well-known, but others that are less so may be equally important: Turkey is also weak in knowledge diffusion, which could, according to recent research conducted at Harvard University, have a huge impact on long-term growth.

Then, there are factors that are not captured in this extensive index. For example, while one of the indicators under the education sub-pillar is performance in PISA exams for 15-year-olds, the study does not consider the inequality in Turkish students’ scores, or their dismal performance in questions requiring thinking.

Moreover, businessmen can get more returns with less risk in construction rather than backing up start-ups. All they would have to do is partner with TOKİ, the state-run housing development administration, or change zoning laws. Hyundai started out as a construction company before moving into high-tech products, whereas Turkish electronics manufacturer Zorlu has just opened up a huge mall-cum-office-cum-residential complex in Istanbul.

Last but definitely not the least, the latest research has shown, empirically as well as theoretically, that stifling individualism hinders innovation and growth. Prime Minister’s Recep Tayyip Erdoğan’s attempts at becoming Turkey’s Big Brother may be doing more damage than we think.

Domestic goods week is still being celebrated. In fact, kids still bring nuts to school. Government officials who think that innovation will just happen by splashing funds around, without creating an environment conducive to it, must be nuts.