A comparative assessment of Turkey for its status and ...

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ScienceDirect Procedia - Social and Behavioral Sciences 00 (2015) 000–000 www.elsevier.com/locate/procedia

World Conference on Technology, Innovation and Entrepreneurship

A comparative assessment of Turkey for its status and readiness for knowledge society from human capital perspective Muammer Koç*a a

Sustainability Divison, HBKU, Qatar Foundation, Education City, Doha, Qatar

Abstract In this study, assessment of existing science, technology, higher education and innovation capacity building approaches in Turkey are presented and critically reviewed towards transitioning into a knowledge society. Particular emphasis was placed on discussions related to higher education administration, science and technology management and innovation clusters considering the socio-cultural contexts. Based on qualitative research approach and one-on-one interviews with several stakeholders in the human capital development system, specific recommendations to establish a framework for transformation into a sustainable knowledge society are presented. © 2015 The Authors. Published by Elsevier Ltd. Peer-review under responsibility of Istanbul University. Keywords: Type your keywords here, separated by semicolons ;

1. Introduction In this study, the role of human capital as an important basis and driver of economic and social development is examined through a critical literature review and analysis. This manuscript is outlined based on the main objectives of this study, which are to: (1) examine the knowledge economy and society as a major factor of economic growth, human and social development with recent examples; (2) understand the building blocks of human and social capital, and their impacts on knowledge society, sustainable development and public welfare; (3) identify the roles, mechanisms and policy framework for education, science, technology and innovation systems towards the development of human and social capital in the context of Turkey. In the following sections, after a brief

* Corresponding author. Tel.: +974-4454-7483. E-mail address: [email protected] 1877-0428 © 2015 The Authors. Published by Elsevier Ltd. Peer-review under responsibility of Istanbul Univeristy.

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Muammer Koc/ Procedia - Social and Behavioral Sciences 00 (2015) 000–000

description of research methodology adopted, a recommended framework of policies and practices are discussed for Turkey’s transformation into a sustainable knowledge society under the circumstances dictated by its geopolitics, history, culture and societal dynamics. 2. Literature Review And Hypotheses As the nations or regions have evolved from agricultural to industrial and to knowledge societies, competitiveness models and concepts also evolved from classical factors of productivity (land, labour and capital) towards the knowledge-based factors (creation, acquisition and utilization of knowledge) in the past few decades, during which the role of the national or regional values (such as human and social capitals, culture, history, economic, legal and legislative institutions) has attracted significant attention since both knowledge-based and productivity factors are greatly affected, if not dictated, by local processes. Today, even under the strong influential winds of globalization felt in the daily lives of ordinary people, competitive advantage and core competences of nations, regions or firms are surely known to be created, shaped, developed and maintained by local processes, organizations and values (Prahalad, et al, 1990; Garelli, 2006, Fukuyama, 1995, Furman, et al, 2000). In short, nations or regions cannot gain and maintain competitiveness only with different, good or better products, technologies and services, but they need continuously improving quality education, skills and value systems to establish strong base for knowledge creation and utilization. Examples from few success stories of transformation into knowledge economy (KE), such as South Korea, Singapore and Finland, demonstrate that specific recipes may be different for each, but what is certain and common is that transformation to knowledge economy needs to be (1) gradual and continuous; (2) initiated from both topdown (policy making, legal, legislative, governmental and institutional) and bottom-up (trust, civic society, equality, education); (3) well-communicated within all stakeholders including citizens, employees, employers; private and public sectors; judiciary, legislation, security and safety agencies; neighbours, allies and partners (WorldBank, 2007; Suh, et al, 2007). World Bank Institute (WBI) studies suggest that transformation of a country into a KE has four main streams of actions (WorldBank, 2007): (1) Education and training system in a country (effectiveness, efficiency, and reproduction with continuous improvement) (2) Innovation system (existence and efficiency of science, technology & higher education institutions, policies and tax regime for R&D incentives), (3) Business and governance frameworks and institutions (legal, legislative as well as social system; rule of law, efficient allocation of resources, stimuli for innovation and entrepreneurship, trade, banking and financial regulations, labour market regulations, judicial system, etc.), and (4) Internet, communication and transportation (ICT) infrastructure (their broad existence, efficiency, accessibility and renewal rate). Of these pillars, education and innovation system can be considered as both the consequences as well as drivers of human capital while the third is mainly driven by social capital of a nation. Nations with goals to achieve successful KE transformation must adopt tailored development strategies based on their cultural, political and resource contexts. Such Knowledge Economy and Society (KE/S) development strategies have been prepared World Bank (WB)’s K4D Program, and had found successful use in some countries such as South Korea (WorldBank, 2007). K4D strategies include improvements in (Suh and Chen, 2007): (1) institutional, legal and legislative framework: legal, judicial and political reforms; (2) human and social capital: education and innovation system: K-12, vocational schools, higher education, R&D, private research and technology clusters, (3) physical infrastructure for communication and transportation (ICT): software, hardware, network, railway, highway, airway; (4) Improvement of domestic demand for high-tech products and services: policies and incentive mechanisms to enhance quality demands of domestic products; domestic and public acquisition policies; (5) efficiency: e-government programs to facilitate, enhance and expand public service; reduce waste and bureaucracy in energy, resources, transactions, daily operations, etc. With the faster pace of technological changes and increasing demands of customers in a global world of competition, operational model of innovation need to be more dynamic, coherent and agile (Wessner, 2007). A typical innovation system consists of five major components: (1) advanced, modern, and responsive education system including technical/vocational and higher education, (2) innovation ecosystem to foster creativity, entrepreneurship, learning from failure, and resilience, which are mainly shaped by culture, (3) conducive business environment where industrialism, earning from production rather than rent-seeking approaches, destructive creativity, fair competition and collaboration based on and trust are governing the field, (4) advanced, transparent, accountable and responsible governance; dynamic and adaptive administrative, legal and legislative powers with a


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common purpose of serving and betterment the lives of its people; (5) advanced information and communication technology (ICT) infrastructure with broad and equal accessibility throughout the country (Wessner, 2007; Rischard, 2010). Among various forms of human capital definition, it can be defined as “the knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being” (OECD, 1998; WorldBank, 2007). Human capital is developed within the formal and informal contexts such as: (a) Families, (b) Schools, (c) Communities (d) Workplaces, (e) Other cultural settings where humans interact, learn and gain different individual and group attributes and values. Since human capital is mainly embodied in individuals, but developed with social interactions, it also tends to degrade if not used and/or used improperly. As a result, the human capital constitutes a major role in supporting both economic and social development in a society and country. In order to achieve and sustain high-level social cohesion, human capital must have good qualities, attributes and values (OECD, 1998). Education, therefore, is not only a necessity for high productivity and quality products or services, but also the keystone for civics, cultural values, aesthetics, arts, music, etc. to establish social cohesion and to enrich lives of people as citizens of goodness. 3. Methodology 3.1. Research Goal The main objective of this study is develop a framework for sustainable policies and strategies for the education, science, technology, and innovation system in Turkey to establish a foundation for transformation to knowledgebased society/economy and improve national competitiveness for Turkey. 3.2. Sample and Data Collection Qualitative research approach is followed in this study based on (1) critical review and analysis of literature on human and social capital development, innovation systems, education, higher education, science and technology policies, research and development strategies and their evolution and implementation in few select countries and regions such as S. Korea, Finland and Singapore, (2) one-on-one interviews with selected stakeholders in the above areas including faculty members, scientists, teachers, parents, students, employers, consultants, policy makers. In interviews, after informing them about the research goals, scope and limitations, few questions were used to direct and stimulate the discussions. But, in general, interviewees were provided with a discussion environment free to offer their own opinions, experiences and comparative analyses, which made it quite productive. 3.3. Analyses and Results Since 2002, Turkey has been going though rapid growth and development with the help of long-term political stability. In a summary, by 2014, it has a population of around 75 million, is the 16th largest economy in the World with a GDP of around USD800 billions, and its GDP per capita is around USD18000 (WorldBank, 2014). Turkey has been enjoying a window of opportunity with a large percentage of young and working population over a smaller portion of old and non-working population during the past few decades, which is estimated to last for another two decades or so. During this period, Turkey was and is supposed to invest in human capital to further improve its long-term economic and social developments in addition to structural changes in its constitution, legal, judicial, financial and economic institutions (WEF, 2014; WorldBank, 2014; Tekeli, 2011). When it is compared to S. Korea and Finland, countries that achieved a successful transformation into Knowledge Societies during the past few decades, Turkey is still behind almost in all economic, social or technological comparison parameters (Figure 1). Major issues that hampers Turkey’s competitiveness can be summarized as follows: (a) human capital must be upgraded by radical reforms in its education system (59th), (b) science and technology capacity must be enhanced through reforms in higher education, R&D clusters and policies (65th), (c) inefficiency in its labour markets (130th) must be improved by re-trained workforce who can be flexible and adaptive to changing needs of developing economies, and (d) inefficiency and lack of transparency in its public, legal, administrative and judicial institutions (58th) must be improved radically through a strong political will (Kelleci, 2003; WEF, 2014; KB, 2013; WorldBank,

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2004, 2012; TUBA, 2011; Musiad, 2012; Koc, 2014, 2015a, 2015b; EC-EU, 2012). Following Turkeys’ economic growth since 2002, its indicators for science, technology and education (STE) have also improved, but not to the comparable levels to with developed countries such as S. Korea, which demonstrated a successful transition to KE/S (Suh, et al, 2007; WorldBank, 2012; Musiad, 2012; WorldBank, 2014; WEF, 2014; Koc, 2015a). As Turkey aims to be in top 10 global economy in the World by 2023, there are tremendous challenges to overcome overall innovation system improvements, and to significantly increase its science, technology and education (STE) indicators particularly when the size of student population in the K-12 and higher education is estimated to be around 20+ million (MEB, 2012; Gur et al, 2011; Tubitak, 2011; TOBB, 2012; Cetinsaya, 2014; TED, 2013; Tekin, 2014). The importance of STE stems from the fact that it establishes and represents the quantity and quality of human capital of a country, and it is one of the fundamental resources needed for a healthy economy (Eades, et al., 2010b; Avcı, 2014; Erdem, 2014; Tekeli, 2011; Koc, 2015a-b). An important and composite index for STE is the ratio of research and development (R&D) expenditures to the GDP. On average, developed nations set aside 2-5% of their GDP for R&D expenditures every year to establish a sustainable technological production infrastructure and maintain a critical number and quality of human capital in R&D (OECD, 1998, 2001, 2004, 2013a, 2013b; WorldBank, 2007; UNDP, 2014; WEF, 2014; Wessner, 2007; EUEC, 2012). Along with an improved economy, R&D expenditure of Turkey increased from 0.52% in 2002 to 0.9% in 2012 (WorldBank, 2014; Tubitak, 2011; Erdem, 2014; Tekin, 2014; Koc, 2015a). But, when compared to Finland and S. Korea (around 4% for both), Turkey’s R&D expenditures are 3-5 times lower. As a result of insufficient spending on education, low levels of R&D expenditures, and lagging number of researchers, Turkey’s scientific outputs (scientific papers and patents) and high tech exports and royalty fees quite lower when compared to Finland and S. Korea although remarkable improvements for made since 2002.

Key$Indicators$2012$$$$$$$$$$$$$$$$$$$$TR$$$$$$$$$Fin$$$$$$$$$$KR$ Popula9on$(m):$$$$$$$$$$$$$$$$$$$$$$$$$$$$74#########5.4##########50# GDP$(USD,$b):$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$800######250#########1155# GDP/cap$(USD,$k):$$$$$$$$$$$$$$$$$$$$$$$11########46###########23# GDP$share,$%$of$World$total:$$$1.35#####0.24########1.94#

WEF$Global$Comp$Report$201352014$

Figure 1: Comparison of key indicators for competitiveness for Turkey (44th), S Korea (25th) and Finland (3rd) (WEF, 2014).


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In summary, Turkey’s human capital capacity for domestic and locally developed high technology production and high productivity lags significantly behind the developed nations that it aims to reach by 2023 (Gur, et al, 2012; Musiad, 2012; Polat, 2009; Koc, 2015a-b, EC-EU, 2012; WEF, 2014). If STE and human capital indicators cannot be improved by radically transforming the education, higher education, science & technology and innovation system, Turkey’s economy with low level exports (agriculture, textiles, and some mundane machinery) and high amount of imports (energy and high-tech products and systems such as automobile, aircraft, phones, turbines, etc.) will be vulnerable to the changes in the global economy and go through cyclical booms and busts, which may lead to irreversible social and political problems in the coming decades. What is worse is within a decade or so, Turkey will no longer have an opportunity window stemming from its high young population ratio. Specific issues and problems of STE and Innovation system can be summarized, but not limited to, as follows: 1) Lack of well-trained, skilled, flexible and sustainable human capital and human capital growing mechanisms. 2) Lack of long-term designing, planning thinking particularly for human capital development, and consequently in all strategic areas of development including energy, water and food security. 3) Lack of efficient social, policy, and legal framework to promote, sustain, and grow an atmosphere of freethinking, innovation, and entrepreneurship instead of easy grow and money making based on rentier economics. 4) Lack of lean institutions, necessary legalities, and coordination to develop long-term policies to incentive and protect intellectual property, hard-work and innovations of different kinds and levels; but rather a vacuum taken over by an increasing amount and variety of opportunists, rent-seekers and easy gains. 5) Lack of coordination among the existing unnecessarily large and inefficient number of governmental and semi-governmental agencies and institutions dealing with different aspects and fields of STE and Innovation (STE-I). 6) Lack of efficient, competitive administrative traditions and administrators to manage diverse and extreme thinkers, innovators, entrepreneurs and their challenging needs to drive STE and Innovation production and indicators. 7) Misallocation of already insufficient and inefficient human and physical assets of STE-I with wrong or no vision and mission charges and challenges. As of 2015, there are around 200+ public (state) and semi-private (foundation-based) universities in Turkey. Number of universities has been increasing remarkably since 2007 as the number of students in the higher education also increased to around 5 million (including night-shifts and open university system) (Celik, 2014; Cetinsaya, 2014; Tekin, 2014, Koc, 2015b). But, problems of ineffectiveness and inefficiency accumulated throughout the past century continue preventing higher education system of Turkey to spearhead the innovation, economic and social development (YOK, 2007; YOK, 2014; Gur, 2011; Tekeli, 2011; Koc, 2012, 2014, 2015a; Celik, 2014; Kısla, 2014; Tekin, 2014). Root cause of these century-old problems mainly stem from following underlying issues as identified by (Koc, 2015a): 1) Management and leadership issues: higher education leaders in Turkey are generally political appointees usually based on their loyalty, not on merits. (Koc, 2014; Koc, 2015a; Gunay, 2014; Tuba, 2011; Kavranoglu, 2014). 2) Strategic planning and governance issues: The higher education system lacks clear institutional goals, purposes, and directions that are compatible with development of goals of the country in comparison with technological, social and political changes in the World. Lack of long-term plans with clear metrics lead to wasteful operations in all fronts and only harm the ultimate goals of the country (YOK, 2007; Celik, 2014; Cetinsaya, 2014; Koc, 2014, 2015a). 3) Implementation and quality control issues: Lack of consistent policies and determination in implementation of periodical performance assessment of people (students, faculty, leaders), institutions, and operations prevent design and implementation of countermeasures or corrective actions. Thus, the entire system is not progressive, and cannot reproduce itself with continuous improvement. 4) Organizational structuring issues: Under the centralized management of higher education council of Turkey (YOK), universities lack of academic, administrative, and financial autonomy and responsibility. As a consequence, current higher education system lacks accountability, transparency, and relevance to the needs,

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issues, and aspirations of the society as well as the constantly changing World. (Celik, 2014; Cetinsaya, 2014; Koc, 2014, Koc, 2015a). 5) Total quality management and quality assurance system: There is a lack of quality assurance, performance assessment, and selection systems in all aspects of higher education starting with its own institutional assessment, universities, and faculty members in terms of their recruitment and promotion, as well as students (Tuba, 2011; Cetinsaya, 2014; Tekeli, 2011). 6) Performance assessment system issues: The current higher education entrance and selection system forces students to get into the HE system right after their graduation from high school, without giving them an opportunity to start a life as a middle man with a decent living in any sector or industry, to obtain real life experience, and get back into a university in their mid-life (Gur, et al, 2012b; Kısla, 2014; OECD, 2013a). 7) Faculty preparation and retention issues: Majority of existing faculty in the higher education system lacks competitive well-preparation, experience and challenging in research and teaching due to in-breeding, distorted selection methods mainly based on loyalty, not merit; lack of motivation, incentives and resources (Gumus, 2012; Tuba, 2011; Koc, 201, Koc, 2015a) 4. Conclusion First of all, in order to effectively devise and implement specific policies regarding all aspects of human and social capital, necessary reforms in legislative, judicial, and political arenas such as basic human rights, property protection, transparent justice system, inclusive and democratic political system, etc. must be designed and implemented carefully and rapidly. Such constitutional and legal framework must: (1) be civil and democratic, (2) recognize the social, cultural, and historical context and rights of people; (3) sustain healthy, transparent and clear relations between the people and the state, (4) be based on recognition, promotion, and protection of (a) basic human rights, (b) property rights, (c) intellectual property rights. Second, philosophical reforms (Topcu, 2014; Koc, 2015a) must be adapted and recognized towards civil, open, accountable, responsible but flexible institutions and government organs (including, but not limited to, judicial, educational, security/military, economical, financial, taxation, etc.). An understanding that the state is by the people and for the people must be reiterated and enhanced in the following specific aspects and institutions: a) Education must be civil, owned and controlled by the family, not the state or any of its organs. State must only assume a supportive role to facilitate and ensure efficiency and effectiveness of educational objectives and operations for long-term goals of the country. b) Higher education and innovation system must be decentralized, autonomous, dynamically responsive to the predicted changes in the body of knowledge, science, technology; economy, trade and finance; global, regional and domestic policies; and demography; etc. in all fronts. c) Administrative reforms in all civil services and public offices must be in place so that all public employees must be selected merely based on merits, and responsible for serving the people at their utmost capacity without any discrimination of any kind. d) Economic and financial institutions must be based on fair competition in the market, but must possess socially responsibility to ensure just sharing of resources and gains. e) Judicial system must be independent, but responsible to the welfare of the nation and elected bodies only, such as congress or parliament. f) e-Government programs must be adopted to improve efficiency; to facilitate, enhance and expand public service; to reduce waste in energy, resources, transactions, daily operations, etc. Thirdly, high level and effective coordination among various stakeholders of human and social capital development must be ensured through careful and intelligent allocation of responsibilities, tasks and charges among government and civil institutions to enhance human and social capital development. Establishment of Vice Presidential (or vice Prime Ministerial) in charge of Human Capital and Innovation would be a major step to plan, oversee and coordinate education, science, technology and innovation vision, issues, strategy, stakeholders and organizations such as Ministries of Education, Higher education, Science and technology, etc. Additionally, radical reforms must put in place to change and redirect the performance assessment system in different levels of education. It may not sound as important as and as comprehensive as the above elements of the framework, but in Turkey, particularly the entire education system, needs to change the way the students and service providers of any kind and level (teachers, faculty, administrators, etc.) are assessed for their performance. Since


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1970s, multiple-choice tests for everything starting with selection and entrance exams into High Schools, Universities, Graduate Studies, and any kind of public offices including teachers, judges, doctors, graduate studies, security services, foreign services, etc. have been in use (Cengel, 2014; Kurt et al, 2011; ERG, 2011, 2013; OECD, 2013b; Tekeli, 2010). In fact, there is a stand-alone government organization (i.e., OSYM, student selection and placement centre) arranging and conducting all these tests throughout the year since 1980s. As opposed to what has been going on for decades, selection, placement, retaining, and promotion must be conducted through performancebased assessment methods that are specially designed not only to accurately measure the performance, but also to improve the required aspects eventually. For instance, in order to develop and improve higher-order skills such as critical thinking, analysis, synthesis, creativity, etc. of students and future generations, performance-based assessment methods must stay away of multiple-choice tests that purely attempt measuring the information, not knowledge, stored in brain (Darling-Hammond, 2010; Stetcher, 2010). In addition to the above recommendations, Turkey needs to upgrade and expand its physical infrastructure for communication and transportation. Broad and accessible ICT and transportation infrastructure (software, hardware, network, railway, highway, airway) must be developed and enhanced (DPT, 2006). Furthermore, domestic demand for domestic high-tech products and services must be promoted and supported through carefully designed and implemented financial incentives. Policies and incentive mechanisms must be developed to enhance quality demands of domestic products. Domestic and public acquisition policies and legislations must be developed with certain sunset clauses to promote domestic high-tech innovations and productions. In summary, a set of issues and problems related to science, technology, higher education and innovation capacity in Turkey has been identified. In order to accomplish the 2023 Vision of Turkey that aims for becoming one of the top 10 economies in the World, which requires a GDP of around 2 trillion USD compared to that of around 820 billion USD as of 2013, Turkey must devise careful and smart plans, and implement them diligently with dynamic tailoring along the way for a successful transformation into a Knowledge Society/Economy.

Acknowledgements Author would like to acknowledge that this manuscript is partially derived from his eMBA thesis titled “Development of Human and Social Capital Towards Knowledge Society - A Framework for Education, Science, Technology and Innovation (ESTI) Policies for 21st Century Turkey” and that partial support of TUBA (National Academies of Turkey). References Avcı, N., (2014), ‘What is school to us‘’ (in Turkish), J of Yeni Turkiye, June, v. 10, n.58, pp.15-17. Celik, H., (2014), ‘’ New Turkey, New Education‘’ (in Turkish), J of Yeni Turkiye, June, v. 10, n.58, pp.33-41. Cengel, Y., (2011), ‘’Reform on university entrance system based on skills’’, (in Turkish), Int’l Higher Education Congress: New Trends and Issues, v.3, n.12, pp.1710-1714, May 27-29, 2011, Istanbul, Turkey. Cetinsaya, G., (2014), ‘’Growth, Quality, Internationalization: Roadmap for Turkish Higher Education) (in Turkish), YOK (Higher Ed Council) Publications, n.2014/2, Eskisehir, Turkey. Darling-Hammond, L and Wentworth, L., (2010), ‘’Benchmarking learning systems: Student performance assessment in international context’’, Stanford, CA: Stanford University, Stanford Center for Opportunity Policy in Education. DPT, (2006), ‘’Information Society Strategy for Turkey 2006-2010’’, State Planning Organization (DPT, currently Ministry of Development) Report, July, 2006, Ankara, Turkey. Eades, K.M., Isabella, L.A., Laseter, T.M., Rodriguez, P.L., Simko, P.J., Skurnik, I., (2010a), “The Portable MBA”, John Wiley and Sons, 5th Ed., New Jersey, USA, pp. 244-256. EC-EU, (2012), ‘’EU Innovation Scoreboard 2012’’, http://ec.europa.eu/news/science/120208_en.htm. Erdem, O., (2014), ‘’ Transformation and changes in the Turkish education system‘’ (in Turkish), J of Yeni Turkiye, June, v. 10, n.58, pp.18-30. ERG, (2011), ‘’Student performance in math and science in Turkey and determinant of success: TIMSS 2011 analysis’’, Education Reform Initiative, Istanbul, Turkey. ERG, (2013), ‘’Do private tutoring centers provide equality of opportunity and quality in education’’, Policy Note, Nov. 2013, Education Reform Initiative, Istanbul, Turkey. Fukuyama, F., (1995), Trust: The Social Virtues and the Creation of Prosperity, The Free Press, New York. Furman, J.L., Stern, S., (2000). “Understanding the drivers of national innovative capacity – implications for central European economies”, Wirtschaftspolitische Blatter v.47, n.2. Garelli, S. (2006), Competitiveness of nations: the fundamentals, IMD Report, World Competitiveness Yearbook, 2006.

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