In Turkey, a Strange Dance Between Government and Entrepreneurs
In transitioning economies around the world, the private sector alone cannot develop dynamic and sustainable entrepreneurial ecosystems. Governments can act as partners in this process and go a long way to help new businesses.
As a professor at Case Western Reserve University's Weatherhead School of Management, I have seen this first hand in my home state of Ohio. The $2.3 billion Ohio Third Frontier program has provided entrepreneurs an opportunity to commercialize and finance their company's growth. But this is not unique to Ohio or the United States.
This summer I was invited to teach an entrepreneurial management course in Ankara, Turkey at Bilkent University, one of the top universities in Turkey. When I arrived, I set about meeting with local entrepreneurs to get a better sense of the community here. I quickly learned that Turkey is the envy of many with several programs to help new businesses including tax credits to angel investors and grants to technology-based entrepreneurs to support their first year of operation.
I also discovered something unexpected during my initial meetings with entrepreneurs in Ankara. I noted that they seemed extraordinarily tired, even more so than the normal overworked state of typical startup founders. They explained to me that they had been up late at night, participating in protests against the government. The protests started in late May in Istanbul initially as a reaction to the planned demolition of Gezi Park, but they rapidly grew into complaints about a broader set of issues including freedom of religion, press and expression.
Within days, protests started in cities outside of Istanbul, including Ankara, which is Turkey's second largest city and its seat of government. It should not have surprised me that Turkey's young entrepreneurs were so deeply involved in the protests. They are inherent risk takers that are not afraid to challenge the status quo. They are young people, educated and raised in a country that has embraced democracy and personal freedom since its inception as a republic in 1923.
Many of the young Turkish entrepreneurs I spoke with felt as though it was their societal duty to support the protests. They spent their days at their desks, in their offices, tracking the protests by means of social media. In the evenings they left work, joining other young Turkish people protesting in the streets, which have been led mainly by university students.
Getting involved in protests isn't so straightforward for a Turkish entrepreneur, however. There is a growing concern among a number of them that there could be potential repercussions if they apply for government grants or try to do business with companies who have deep relationships with the government. For this reason, some are limiting or curtailing altogether their active involvement in the protests to protect their business prospects. Or rather than demonstrating publicly on the street, some have found alternative ways to support their cause. For example, one person (who, like the others I spoke with, preferred not to share his name for this article) told me he offered to help protesters get out their message in English by providing translation services.
The Prime Minister of Turkey is viewed as largely pro-business and receives high marks for the economic growth attained under his leadership. Entrepreneurs have taken issue not with his economic policies but rather the rise in social restrictions that make Turkey, in their view, a less attractive place to live and do business. One man I spoke with said he would consider leaving Turkey to chase his startup dreams in the US or Europe if the environment continues to grow restrictive.
As enthusiastic as people are about the growth of new businesses in Turkey, it will be interesting to watch over the coming months the dance between the government and entrepreneurs in Turkey. The Turkish government remains committed to continue supporting entrepreneurship as evidenced by their plans to form a new venture-capital fund of funds to provide additional capital to early-stage companies. It remains to be seen, though, if the current political dynamic will impact the commitment of foreign donors to work as partners (and funders) to support the growth of the entrepreneurial ecosystem in Turkey. Ultimately, individual Turkish entrepreneurs will determine over time whether to continue to collaborate with state-sponsored programs to support their businesses, in spite of whatever issues they may have with government policies.
Michael Goldberg is a visiting assistant professor at Case Western Reserve University’s Weatherhead School of Management, in the department of Design and Innovation. He was awarded a Fulbright fellowship in 2012 to teach entrepreneurship at the National Economics University in Hanoi, Vietnam. Goldberg is also a Managing Partner of the Bridge Investment Fund, a venture capital fund investing in early stage Israeli medical device companies.