5.9. SDG 9. BUILD RESILIENT INFRASTRUCTURE, PROMOTE INCLUSIVE AND SUSTAINABLE INDUSTRIALIZATION AND FOSTER INNOVATION Important steps have been taken on physical infrastructure and innovation to increase international competitiveness of Turkey, achieve transformation in the manufacturing industry and switch to a high value-added structure. POLICIES In addition to NDPs and strategic plans of relevant public institutions, key policy documents on SDG 9 include 2023 Turkey Export Strategy and Action Plan, Information Society Strategy and Action Plan, National Broadband Strategy and Action Plan, Energy Efficiency Strategy, SME Strategy and Action Plans, Combined Transportation Strategy, Turkey Public-University-Industry Collaboration (PUIC) Strategy and Action Plan, Turkey Industry Strategy, Transportation and Communication Strategy, National Energy R&D and Innovation Strategy, Efficiency Strategy and Action Plan, Turkey Nanotechnology Strategy and Action Plan, Turkey Biotechnology Strategy and Action Plan and Digital Turkey Roadmap (2018). The key components of the policy framework in line with SDG 9 are as follows: • Ensuring balance between transport modes; switching from road transport to rail and sea transport particularly in freight transport and ensuring integration among different transport modes, • Strengthening railway and maritime infrastructure, enhancing the effectiveness of airway infrastructure, • Ensuring integration with international transportation networks, • Developing high value-added domestic production based on information and technology, • Ensuring transformation into a greener and more competitive industry structure where resources are used effectively, • Developing the industry in a way that contributes to social and regional development and contains qualified labour force, • Increasing the share of medium and high technology products in the manufacturing industry, • Enhancing efficiency, corporate competence, innovation and the share in the industrial value-added of SMEs, • Facilitating the easy access of SMEs and entrepreneurs to funding, • Improving and supporting entrepreneurship, • Ensuring an increase in Total Factor Productivity (TFP), • Increasing energy efficiency, • Popularising eco-friendly technologies, • Increasing the share of R&D expenses in GDP, • Increasing R&D activities and employment of R&D personnel in the private sector, • Improving the quality and quantity of the labour force in the field of research, • Creating an ecosystem based approach on innovation, commercialising R&D activities, producing competitive and high value-added products and brands, • Ensuring cooperation among the public sector, universities and private sector in R&D and innovation, • Increasing the number and effectiveness of structures such as Technology Development Centres, Technopolises and OIZs to support firms in the field of R&D and technology development, • Enhancing the service quality by popularising the use of information and communication technologies, • Strengthening the competitive environment in the telecommunication services sector, • Increasing the prevalence of broadband internet access and service quality. LEGISLATION Enhancement infrastructures’ resilience to disasters, effective, efficient and proper management of practices and construction of infrastructures that promote rural development are all overseen by legislation and laws. The objective is to support the construction and industrial zones’; institutionalise the cooperation between universities and the industry and; provide the industry with an export-oriented structure by enhancing its competitiveness. To this end, there are regulations in place to produce technological information, develop innovation in products and production methods, enhance product quality or standard, increase efficiency, reduce production costs, commercialise technological information and provide the necessary technological infrastructure. Regulations have been developed to easily access funding including alternative non-bank financing solutions for SMEs. 90 TURKEY’s 2nd VNR 2019 SUSTAINABLE DEVELOPMENT GOALS “Strong Ground towards Common Goals”
There are many items of legislation that aim to mitigate, prevent and counteract the possible negative impact of production facilities on the environment such as the Law on Environment, Law on Energy Efficiency and Regulation on the Control of Industrial Air Pollution in particular. There are regulations for more effective use of research infrastructures and ensuring sustainability in different sectors, namely the Law on Supporting Research and Development and Design Activities and Law on Technology Development Zones (TDZ) in particular. There are also laws and regulations governing the access to internet services and technological infrastructure and electronic communications sector broadly. IMPORTANT DEVELOPMENTS AND IMPROVEMENT AREAS SDG 9 is assessed under three focus areas: i. Reliable, sustainable and resilient infrastructure; ii. Inclusive and sustainable industrialisation; and, iii. Innovation. In terms of reliable, sustainable and resilient infrastructure; it is important to improve social and physical infrastructure to increase the quality of life, enhance competitiveness and ensure sustainable growth. In our country, between 2009-2018, the share of fixed capital investments made by the central government accounted for nearly 4% of GDP whereas the fixed capital investments undertaken by local administrations was around 1.3%. While these rates are similar to those observed in many developed countries, considering the size of our country’s GDP as well as its level of development, surface area, population and existing infrastructure, it is evaluated that there is still a need to continue the investments. In the Public Investment Programme of 2019, transportation and communications sector was ranked 1st with a 31.1% share followed by education with 16.5%, energy with 11.8%, healthcare with 7.6% and agriculture with 7.5%. Table 11. Sectoral Distribution of GDP at Current Prices (2000-2017), with 2009 Reference Year SECTORS 2000 2005 2010 2015 2016 2017 Agriculture 10.1 9.3 9.0 6.9 6.2 6.1 Mining 0.9 1.0 1.1 0.8 0.8 Manufacturing 18.8 16.9 15.1 16.7 16.6 17.5 Construction 5.3 5.6 6.1 8.2 8.6 8.6 Wholesale and Retail Trade 12.1 12.2 11.1 11.5 11.4 Transportation and Storage 8.8 9.5 7.9 7.9 7.6 Finance and Insurance 5.0 2.5 2.9 3.0 3.3 3.2 Real Estate 8.4 8.5 9.9 7.7 7.7 7.2 Public Administration and Defence, Mandatory Social Security 5.2 4.7 4.8 4.3 4.6 Education 2.7 3.2 3.9 4.1 4.4 Tax-Subsidy 10.5 12.7 12.1 11.9 11.9 11.4 There was significant progress in the transportation infrastructure and public access to services in 2000-2018 and a large amount of resources were allocated for the transportation infrastructure. In this context, considerable investments were made for road transport in particular, as well as air, sea and rail transport. 2019 Public Investment Program 0 10 20 30 40 2019 7.5% 7.6% 11.8% 16.5% 31.1% Transportation-Communication Education Energy Health Agriculture 2000-2017 Mode-share of transportation 2000 2017 0.6% 0.1% 1.0% 2.2% 9.6% 1.0% 89.3% 95.9% Road transportation Air transportation Rail transportation Sea transportation 91 TURKEY’s 2nd VNR 2019 SUSTAINABLE DEVELOPMENT GOALS “Strong Ground towards Common Goals”
The majority of passenger transport is carried by road
transport in Turkey. In 2000-2017, the share of road transport
decreased from 95.9% to 89.3% due to the increase in
the share of air transport. Deregulation in the sector was
effective in increasing the share of air transport from nearly
1% to 9.46% in the same period. The share of rail transport
decreased from 2.2% to 1% whereas the share of sea
transport increased from negligible levels to 0.6%. Freight
transport consisted of 4.3% by rail, 89.2% by road, 6.4% by
sea and inland water transport in 2017.
The railway network length in EU-28 countries is 44 km per
100,000 people and 51 km per 1,000 km2 whereas it is 13
km for both in Turkey. Approximately 8 million passengers
were transported in 2018 on the operationalised high-speed
train routes. Works for improving the railway network
are underway to eliminate the bottlenecks in freight and
passenger transport. Increase in the high-speed train
passenger transportation is expected to be accelerated after
the completion of ongoing infrastructure and superstructure
production. In addition to the works on increasing the
capacities and length of high-speed trains on railways, the
Baku-Tbilisi-Kars railway was completed in the context of
regional integration.
In parallel with the privatisation policies, ports have mostly
been privatised and port investments of the private sector
have increased.
Green Port Project aims to enhance the business standards
of port facilities operating in Turkey and maximise the
environmental consciousness and in this context, the
Green Port/Eco Port Certificate is issued.
There are 56 airports in Turkey which are open to civil air
traffic and operated by public and private sectors. The four-
stage construction of Istanbul Airport with a capacity of 90
million passengers to contribute to our country’s efforts to
become an important interchange centre, was completed
and fully commissioned in April 2019. When all stages are
completed, it will be the largest airport in the world with a
yearly capacity of 150 to 200 million passengers.
The balanced distribution of transport modes in terms of
transportation structure, increased effectiveness of freight
and passenger transport and achieving a balance that will
contribute to international competitiveness are our priority.
Of the 21 planned logistics centres, which were launched in
2006 with the aim to advance combined transportation and
logistics and reduce the density in urban centres by relocating
cargo and storage centres located in town centres, 11 were
commissioned. This project will contribute to the integration of
transport modes.
In terms of inclusive and sustainable industrialisation, there
were insignificant changes in the share of industrial value-
added in GDP between 2000-2017, where it was 21.6% in 2000
and 20.6% in 2017, with the share in employment increasing
from 18% to 19.1%.
In 2000-2017, the share of manufacturing industry’s value-
added in GDP accounted for 16.6% and share in employment
for 18%. These figures were 16.6% and 17.6% respectively in
2017.
One of the key factors that limit the share of manufacturing
industry’s value-added in GDP is the level of technology
utilised in manufacturing. To increase the share of medium and
high technology products in value creation, it is important to
ensure manufacturing industry’s technological transformation
and implement policies accordingly.
A new investment support system, which took into account
regional disparities in levels of development and prioritises
medium-high and high technology sectors was introduced
with the investment incentive system which had its scope
substantially modified in 2009. This support system was
comprehensively renewed in 2012 and implemented with
updates in line with the economic developments. Further, the
Law on Supporting Research and Development and Design
Activities, the Production Reform Package and the Decision to
Support the Investments on a Project-Basis have contributed
to the industrial advancement, technological transformation
and inclusive development.
In the industrial sector, projects mostly aim to increase
industrial production, improve the level of technology, promote
Freight Transportation 2017
2017
89.2%
6.4%
4.3%
Rail transportation
Sea transportation
Road transportation
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SUSTAINABLE DEVELOPMENT GOALS
“Strong Ground towards Common Goals”
innovative practices and enhance competitiveness. In this regard, works and pilot applications which aim to increase the total factor efficiency are very important. Box.3 Support to Develop a Policy Framework for Total Factor Productivity (TFP) in Turkey This project aims to find solutions by identifying barriers to the efficiency of the manufacturing industry in Turkey and draft a policy framework for increasing TFP. Under the project which focuses on the sectors that will contribute the most in an TFP increase such as automotive, food, apparel and electrical equipment sectors, public policies were systematically reviewed with the support of reviewing 100 large scale manufacturers, 400 (mostly) medium scale suppliers and approximately 2500 final supplier SMEs. Policy framework was designed to stimulate efficiency. Under four separate implemented pilot works, Conceptual Design of Digital Supply Chain, Prototyping a Digital Apparel Value Chain, Road mapping Carbon Fibres and Assessing the Impact of Quality Awards on SME Institutionalisation works were undertaken and reports were published. The White Book with situation diagnosis conducted to increase the TFP’s contribution to growth in Turkey as well as policy recommendations was published. In 2014, SMEs accounted for 99.8% of all enterprises and 73.5% of employment, as well as 54.1% of wages and salaries, 62% of turnover, 53.5% of value-added at factor cost and 55% of gross investment in tangible goods. In 2015, 55.1% of all exports were undertaken by SMEs as well as 37.7% of imports. SMEs have a share of 17.7% in R&D expenditure in Turkey, whereas 27.5% of R&D personnel in Full-Time Equivalent (FTE) is employed by SMEs. In terms of technology density, 59.7% of SMEs among manufacturing industry enterprises operate in low technology sectors while the percentage of those operating in medium-high and high technology sectors is 9.4%. There is a need to analyse the SMEs’ position in the value chain in detail on a sectoral basis, develop policies and means of implementation for innovative SMEs to increase SMEs’ efficiency and share in the value creation in the manufacturing industry. SECTORAL SUSTAINABILITY RESEARCH SDG Targets 9.4 – 9.5 – 9b – 8.2 – 8.5 – 8.7 – 8.8 – 12.2 – 12.4 – 12.5 – 12.6 – 17.7 – 17.9 Executing Entity Özyeğin University, TÜSIAD Start & End Dates 2008 – 2017 This project aims to collect firm level sustainability information, and based on the aggregated sectoral level analysis to determine the best policies for Turkey’s sustainable development. Environmental, corporate social responsibility, corporate governance, employee rights, human rights, and product and supply chain management practices were identified as the components of the sustainability scale to produce a sustainability score. The publicly available reports of manufacturing firms listed at BIST index were compiled and assessed against the index. Using the data envelopment analysis on good practices, areas for improvement were identified by individual firms and roadmaps drawn. The study found that profitability increased in sectors which allocated resources in a balanced manner to various areas of sustainability; and that sustainability practices should be diversified. The analysis of all sub-sectors indicated that corporate governance practices, enabling social and environmental sustainability efforts are key for sustainability. The study also examined firms by forced labour, child labour, and discrimination by gender, disability and age. The findings were shared with sectors’ representatives, and the intention is to re-conduct the study annually covering all sectors. Thereby, the firm and sectoral levels data gap on sustainability will be remedied and more firms will be encouraged to report on sustainability, and therefore contribute to achieve SDG 12.6. Under the Treasury-Supported Surety System, which is one of the most important instruments in terms of facilitating the access of SMEs to financing, the amount of loans increased from 882.3 million TL (464 million USD) in 2013 to 218.8 billion TL (appr. 60 billion USD) in 2017; and stood at 83.5 billion TL (17.3 billion USD) in 2018. Of the total surety granted in 2018, 74.1% were made available to SMEs, and 32.5% used in the manufacturing industry. As of October 2018, total amount of SME loans reached 640.4 billion TL (133 billion USD). The share of SME loans in all loans increased from 23.1% in 2010 to 26%. The number of customers which qualified as SMEs increased from 1.4 million in 2010 to 3.2 million. The manufacturing industry accounts for 19% of the size of all loans. As for industrial sustainability, clean technologies and energy efficiency are essential. For instance, energy efficient electric motors usage in industrial production have been gradually increasing in the past years. 93 TURKEY’s 2nd VNR 2019 SUSTAINABLE DEVELOPMENT GOALS “Strong Ground towards Common Goals”