What to Research, for Whom to Develop?
The Case of Turkish Defence Industry Firms
Motivation / Objectives
Approach
This study aims to analyze the relationship between the R&D
activities and the economic performance of enterprises within
the Turkish Defence Industry. Taking into consideration the
peculiar case of the military research and development, the
main discussion question may be stated as follows: Can
“Defence Industry Sector” be a model for sectors seeking
evocative innovation and R&D for the firms?
Main data were gathered from TurkStat, OECD and The
Undersecratariat for Defence Industries (SSM), which meets the
systems requirements of Turkish Armed Forces (TAF) and is
accomplishing the main part of the procurement process. The
study also covers data from the survey on the 105 firms
registered by the Defence Industry Manufacturers Association
(SASAD) in the year 2007. 93 private sector firms and 4 military
enterprises had responded the survey.
2009-2016 Strategy Document for Defence Industry
Turkey’s R&D Performance
The main R&D concept appears to be; gaining the national
capabilities on developing the critical subsystems, components,
and technologies, which fulfill the needs of TAF.
• According to theTurkStat data, in terms of PPP, GERD was
7.034 million USD in 2008 and was 6.578 million USD in 2007.
• In 2008, 43.8% of R&D expenditure was performed by higher
education sector, 44.2% by business enterprises (state owned
and private sector), and 12.0% by government.
• Analyzing the sectors financing R&D expenditure in 2008,
47.3% financed by business enterprises, 31.6% by
government sector, 16.2% by higher education sector, 3.6%
by other national sectors and 1.3% by foreign funds.
• OECD data for Turkish R&D in 2008 are as follows:
The National Defence R&D Road Map
R&D Performed By
R&D Financed By
75.0
75.0
50.0
50.0
25.0
25.0
0.0
0.0
TURKEY
Industry
EU27
Higher Education
TURKEY
TOTAL OECD
EU27
Industry
Government
TOTAL OECD
Government
Source: http://stats.oecd.org
SASAD Firms R&D Performance
SSM Procurement Projects
• SSM coordinates and engages 111 procurement projects
currently, with a Total Amount of Contract (TAC) of 16 billion
USD .
• Within these developments there are several R&D projects
with a TAC of 147 million USD.
• The procurement of the TAF’s needs are implemented via
domestic development, foreign purchase, joint production or
consortia.
• Although the domestic development seems to be the most
preferred way of procurement, the larger scale projects are
developed by joint production.
• The total gross revenue of the 4 military enterprises and 93
firms was 5.86 million USD in 2007.
• The ratio of R&D expenditure from equity capital (EC) to total
GERD for defence sector firms is 33%.
• The ratio of total GERD to total revenue of the firms is 16%.
Sector Revenue Gross Revenue
(million USD)
(million USD)
SASAD MEMBERS
1,532.96
7,149.95
MILITARY
426.36
470.18
TOTAL
1,959.32
7,620.13
R&D from EC
(million USD)
99.96
4.20
104.17
Funded R&D
(million USD)
213.90
0.11
214.01
GERD
(million USD)
313.86
4.31
318.17
Source: SASAD, 2007 Turkish Defence Industry Firms Survey
Conclusion
Procurement Projects by TAC
Procurement Projects by Number
Domestic Development, %51
R&D, %18
Domestic Development, %24
Joint Production, %55
Joint Production, %18
Consortia, %1
Foreign Pruchase, %11
Foreign Pruchase, %9
Consortia, %12
Source: www.ssm.gov.tr
The Turkish Defence Industry firms which have intense R&D
activity are also the ones which have better overall
performance. This is true both for the R&D activities based on
the equity capital of the firms and the funded projects. The
national R&D policies appear to be the main determinants of the
distribution of the R&D funds for most of the sectors, and the
density of the R&D activities mainly depends on these funds.
In the Defence Sector however, the needs of TAF and the R&D
strategies specific to the sector are more dominant, making the
sector atypical for the Turkish market.
Contact
Dr. Burçak ÖZOĞLU POÇAN
TUBITAK- SAGE/ METU STPS
TURKEY
Tel. +90 312 5909344
E-mail: [email protected]