Youth Entrepreneurship: A Needed Trend in Turkey

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The 16th International Business Forum took place this past October in Istanbul. It hosted many guests from emerging economies, a number of whom, naturally, were from Turkey. In terms of business, the best thing the republic can do for itself is ensure that its sizable youth population gets greater access to entrepreneurship.

In a crowded global marketplace, Turkey is not often viewed as an attractive place to start or grow a business. The Mediterranean nation is tired of falling behind, and so it must turn to its ballooning population of young people for answers.

flickr / Eric Kim under Creative Commons

In a crowded global marketplace, Turkey is not often viewed as an attractive place to start or grow a business. The Mediterranean nation is tired of falling behind, and so it must turn to its ballooning population of young people for answers.

ISTANBUL, Turkey – As with other areas in the surrounding region, entrepreneurship has become a coal-hot issue for the Turkish government. In its eyes, it stands as the opportune nation for conducting business, as it boasts a modest corporate tax rate, low entry barriers, sky-high levels of tourism, a premium location, a close to double-digit growth rate and, most important, a very large, tech-inclined youth populace. Seventy percent of its 80 million inhabitants are under 35. But Turkey is still pegged by the global community as a nation with only great heaps of potential.

As it tries to become an entrepreneurial society, much of that potential will rest in the able hands of its residents aged 15-24, who make up almost 17 percent of the nation. (They’re also a big reason why global investment firms like Tiger Global are bankrolling Turkish e-commerce, and more.)

The entrepreneurship ecosystem in Turkey is nothing new, as it started developing in the late 1990s. Many initial investments at the time did not succeed. However, there were some success stories, largely in the e-commerce, mobile and gaming sectors. Today, there are many opportunities, especially in low-risk business areas such as Web and mobile companies, which are cheaper and relatively easier to pursue.

But “most…investment is still going to real estate, importing and exporting goods, and service businesses,” says Kutlu Kazanci, a Stanford engineering graduate who has worked in finance in New York and for the World Bank in Indonesia. In Turkey, he was active in the entrepreneurship center Endeavor Turkey for two years and has helped start a Turkish angel investment network as well as the Founder Institute, an organization that “empowers founders to launch 1,000 companies per year worldwide.”

Recently, Kazanci has been coordinating SU-COOL, an entrepreneurship pre-incubation center at Sabanci University in Istanbul. The center plans to provide training for young entrepreneurs, so forecasting the future of youth entrepreneurship in Turkey is an important part of his job. He estimates that in the next 10 to 20 years more money will be available for nontraditional entrepreneurial startups.

“From the cultural point of view, family and the education system in Turkey is largely hierarchical and does not support creativity and much deviation,” Kazanci explains. “However, with the new generation there is already less conformity and compliance, and in that sense more space for entrepreneurship.”

It’s largely in the education sphere where Turkey has failed its people. Though entrepreneurs are generally well-respected in Turkish society, the educational framework needed to construct an entrepreneurial nation is severely wanting. In innovation-driven economies, which is what Turkey is aiming to become, 11.9 percent of the population aged 18 to 64 has received some business development education during formal schooling. As of 2010, in Turkey only 2.5 percent has received such training across the same demographic. Even more glaring is that 23.3 percent of innovation-driven populations received that formal training at some point in that age time span. By contrast, only 6.3 percent of Turks did so between those working years.

The government has sought to make up for lost ground by doubling bank lending to entrepreneurial businesses; providing tax incentives to any Turkish companies working in high-tech sectors; and setting up programs, like the Emerging Enterprises Market SME Support Program, that help entrepreneurs access funds and capital.

Although EY’s G20 Entrepreneurship Barometer 2013 for Turkey points out that 47 percent of native entrepreneurs feel that the government’s role in providing startup programs has improved in the past three years, only 30 percent thought university incubators saw improvements and a measly 14 percent thought teaming/mentor programs did. This comes during a time when the burgeoning youth populace feels inextricably tied to the direction its birthplace is moving in. “People were impressed by the creativity and the energy of the [Arab Spring] protests,” Kazanci says. “There is a general sentiment that the new generation is lazy and indifferent, but the protest showed the opposite behavior, so people were surprised.”

Tara Chantal Hopkins is intimately familiar with the region’s energy and the Turkish entrepreneurship ecosystem, being an American entrepreneur who has lived in Turkey for many years. Contrary to common expectations, entrepreneurship in Turkey is not necessarily more difficult than in the United States—the countries simply offer different challenges, she says.

“In the United States, business entrepreneurship, which creates a new need, is much easier, while in Turkey social entrepreneurship, which satisfies an already existing need, is easier. Also, in Turkey social rules somewhat limit excess innovation,” Hopkins explains. She is the founder and director of Çöp(m)adam, a company that takes garbage and turns it into fashion and lifestyle products such as bags and other accessories. With her mostly Turkish team, she has managed to avoid many struggles that entrepreneurs with a foreign team face, such as obtaining work permits and difficulty in tapping into native connections and networks. According to Hopkins, the business culture in Turkey can be suspicious of foreigners.

So while her experience doesn’t directly speak to entrepreneurial Turkish young people trying to establish their foothold in the marketplace, it offers a perspective on what is achievable in the country, even when its business climate is compared with America’s. If Hopkins has turned to Turkey (with the help of her Turkish associates) to build her enterprise, so can the country’s growing youth population, if it is provided with the right support systems.

Turkish youth networks that provide information and communications technology skills are a support system that can help bridge the country’s entrepreneurial education gap.

flickr / Joe Sullivan under Creative Commons

Turkish youth networks that provide information and communications technology skills are a support system that can help bridge the country’s entrepreneurial education gap.

As Turkey looks to court international attention from a business standpoint, an important challenge will be to make sure the largest chunk of its people are involved in its rise as an entrepreneurial power. In that sense, investing in youth entrepreneurship will become a matter of sustainability for the fast-emerging economy.

“The culture is…short-term-focused and impatient,” Kazanci says. “There should be more long-term planning and setting stretched goals, going after them and cooperating—in other words, more awareness and holistic thinking.”

That impatience might benefit the young entrepreneurs of “right now” but may also help stunt the work of youth entrepreneurship over the long term—something Turkey can ill afford to do if it’s serious about establishing itself as a business hub. Hopefully, by strengthening institutional support for young entrepreneurs, some of whom will receive better formal education and training in the coming years, Turkey can enhance its standing in the world. As Alex Kubo aptly states in his article “Youth Entrepreneurship in Turkey: Freeing Unprecedented Potential for Economic Growth”:

“From conceptualization to realization, entrepreneurship is young and vibrant by nature and is often conceived in youthful, creative minds. Therefore, in developing the opportunities for, and the viability of, entrepreneurship in Turkey as a means to invigorate the nation’s economic growth, an emphasis must be placed on its promotion and support at a youth level.”

In other words, youth is wasted on the young in countries that do not value its stake as an economic driver.

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