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Peer Review visit Report

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Peer review of Advanced

Technology Projects Support

Programme (ITEP) of TTGV

(TU)

Peer Review Report

Final version (13 February 2012)

Document ID: IPF12-002 VINNOVA Dno: 2009-04589


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This report was prepared by:

Christiaan Holland, Dialogic

Contact details:

Dialogic Innovation and Interaction

Hooghiemstraplein 33-36, 3514 AX Utrecht - Netherlands

Phone: +31 30 2150580 / +31 6 55172238

e-mail: [email protected]

Disclaimer:

The views expressed in this report are those of the author and the Peer Review Team. They do not necessarily reflect

the opinion or position of the European Commission and in no way commit the organisations involved.


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TABLE OF CONTENTS

TABLE OF CONTENTS ............................................................................................................ 3

1. Introduction ........................................................................................................................... 5

2. Institutional context: Turkish STI System and Position of TTGV ........................................... 7

3. Overview of the ITEP programme ....................................................................................... 10

4. ITEP Process ...................................................................................................................... 12

5. Results of the review .......................................................................................................... 14

Annexes ................................................................................................................................. 17

I) Participants to the Peer review visit ..................................................................................... 17

II) Agenda ............................................................................................................................... 18

III) Self Assessment Questionnaire ......................................................................................... 20


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1. INTRODUCTION

The objective of the INNO-Partnering Forum (IPF) is to improve the quality, efficiency and effectiveness of SME innovation support in Europe and it has the ambition to become a sustainable learning platform for European cooperation on public innovation support for innovative SMEs. More specifically, the proposed INNO-Partnering Forum aims to:

Identify, develop and exploit synergies between public innovation agencies and other public organisations responsible at national and regional level for the development and implementation of innovation support in Europe;

Propose and test new ways of service delivery as well as new approaches to support innovation in SMEs more efficiently and effectively across Europe;

Deliver concrete policy recommendations on how innovation agencies, by acting together, can accelerate the take-up of the most advanced support systems for innovative SMEs across Europe.

As part of the work programme IPF identifies best practices in SME innovation support measures of European public innovation organisations

Thus far, seven reviews have been conducted. Review nr.8 took place at the Technology Development Foundation of Turkey (TTGV) and was focused on the Advanced Technology Projects Support Programme (ITEP). The visit took place the 7th and 8th of December 2011 in Ankara, Turkey, at the premises of the TTGV.

The Review Team consisted of the following experts from three European innovation agencies: – Eelco Denekamp, team leader - NL Agency – Jari Eklund - Tekes, Finland – John Smith - Enterprise Ireland

The Review Team also included: – Christiaan Holland - Dialogic, Netherlands, as external consultant.

Our discussion and conversation partners from TTGV were:

– Yücel Telçeken – Coordinator Technology Development Projects Department – Evren Bükülmez – Expert & ITEP Programme Responsible – Ferda Ulutaş – Coordinator Environmental Projects Department – Emrah Alkaya – Expert – Deniz Bayhan – Senior Expert and co-ordinator of the review visit – Mahmut Kiper – Senior Expert

The review team also discussed the ITEP programme with:

- Prof. Goksel Demirer, Middle East Technical University, stakeholder perspective - Alp Eren Sinan, Aselsan (military electronics industry), beneficiary perspective.


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The review team wishes to express its thanks and appreciation for the open exchanges of information with the TTGV staff involved. In addition, the great hospitality allowed for many informal discussions which completed the team’s understanding and insights.


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2. INSTITUTIONAL CONTEXT: TURKISH STI SYSTEM AND POSITION OF TTGV

Mahmut Kiper introduced the Turkish system on Science, Technology and Innovation policy using the following slide in his presentation:

The supreme Council for Science and Technology (SCST) is the highest ranking decision making body, chaired by the Prime Minister. SCST is further composed of the following permanent council members:

Ministers of State, Min. National Defense, Min. Finance, Min. National Education, Min. Health, Min. Forestry and Rural Affairs, Min. Industry and Trade, Min. Energy and Natural Resources, Min. Environment and Forest, Chairman of Council of Higher Education, Undersecretary of State Planning Organization, Undersecretaries of Treasury and Foreign Trade, Chairman of Turkish Atomic Energy Authority,


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President of TÜBİTAK and a Vice President, General Director of Turkish Radio and Television, Chairman of Union of Chambers and Commodity Exchanges of Turkey, and a member to be appointed by a university to be designated by the Council of Higher

Education. The SCST meets two times a year and is mainly for decision making on proposals which are prepared by Tubitak. Tubitak serves as the secretariat of SCST and is responsible for disseminating and the follow up of the implementation of the decisions made by SCST. As of August 2011 there has been a change in the system. The Ministry of Industry and Trade has been transformed into Ministry of Science, Industry and Technology and Tubitak has been linked to this newly formed Ministry. TTGV was established in 1991 as a non-profit, non-governmental foundation bringing together government agencies, industrial companies and other interested individuals. There is (in part) financing from one of the ministries, which is now the Ministry of Economy (formerly this was Undersecretariat of Foreign Trade – as indicated in the slide), but TTGV is independent of this ministry. The main goals in terms of the overall S&T strategy in Turkey are:

Increase R&D (aim is 2% GERD (gross domestic expenditure on R&D) in 2013); R&D personnel increase (150.000 Fte in 2013); Develop new knowledge for the benefit of the country.

The following slide from the presentation by Mahmut Kiper provides an overview of the dominant policy areas (including dominant economic/industrial sectors) in the Turkish STI system, the so-called STI Strategy Vision:

The STI Strategy Vision is developed for the period 2011-2016.


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Position of TTGV The Technology Development Foundation of Turkey is a foundation that combines 24 private sector members, 5 public institutions, 10 umbrella organizations and 15 individuals into one institution. Therefore, TTGV is an example of public-private partnership. The aim is to support technological innovation towards increasing the competitiveness of Turkish industry in global markets. Since it was founded (June 1st, 1991), the TTGV is a foundation established by law. TTGV manages a rotating fund which was established through the signing of an international loan agreement between the Republic of Turkey and the World Bank, programmatic funding provided from Government sources and other income. The private sector and the public sector come together in TTGV with the purpose of increasing the

competitiveness of the Turkish private sector in international markets by supporting R&D activities. It is the first and only "Public-Private Sector Partnership" that has been established to support R&D and innovation in Turkey. TTGV is a not for profit organization. Any gains that TTGV receives from its activities are used to meet TTGV’s expenses and for the development of current support programs (rotating fund). TTGV operates as a public-private joint policy implementation body, advising ministries on new programmes and mechanisms and using rotating funds to set up new schemes and mechanisms (program development). Their vision is for TTGV to pursue an effective role in the establishment and development of the national innovation system and the protection of the ecological system, and also to be a primary player and to be seen as a model organization on the international platform. The officially formulated mission of TTGV is to enhance the competitiveness of Turkish producers, in international markets, by supporting technological innovation activities in Turkey.

Support mechanisms of TTGV TTGV is of course doing a lot more than just the ITEP programme. There are 45 people working at TTGV within 4 coordinating units. The various support mechanisms are divided in two categories: support for institutions and support for specific projects: Institutional Support: —Technology Development Zones (Technoparks) —Establishment of Research Centres, Labs in Universities and in Public Research Organizations Project Based Support: - Technological Entrepreneurship Supports including Pre-Incubation and Start-Up - Technological Development Projects Support and Commercialisation Project Support - Venture Capital Support and participation in a Fund of Funds Programme - Environmental Project Supports


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3. OVERVIEW OF THE ITEP PROGRAMME

Origin In 2006 an impact assessment study was conducted in which clients of TTGV indicated the need for a complementary instrument after the completion of their R&D projects. This new instrument was to address the so-called Commercialisation Gap. The funding seeks to address the costs a company incurs between the completion of the R&D development process and the start of significant revenues from the project. TTGV started with a pilot for commercialisation support, but in 2009 it was stopped. In 2010 a new programme was set up (ITEP), using a new model in the financing of the R&D process through to commercialisation. This new programme was also aimed at national development priorities. The whole Programme Design Process lasted six months including the Operational Design process. (Jan.-Jun. 2010). The aim of ITEP is to help companies and networks in bridging the aforementioned gap and to push them in the direction of national priorities (mix with sustainability goals) and more added value. Six high technology priority areas Six areas were identified by TTGV with potential for Turkey:

Production of bio-products from agricultural waste with high added value, and the technology related to it;

Advanced materials technology and precision manufacturing techniques; Technologies intended for the generation, storage and distribution of renewable

energy; Food Technologies; Biomedical Technologies, and; Advanced Technologies for Adaptation to Climate Change.

These are the high technology areas in which there is a potential for Turkey and on which ITEP focuses. In this context, potential is taken to mean that there already is a certain capacity upon which to build and thus a starting position for Turkish firms. Scope of the programme: ITEP is a soft loan type financial support, with the condition that it will be paid-back. Maximum support by TTGV is 50% of the cost of the project.

The duration of project support is at least 1.5 years and is at most 3 years. The upper and lower limits for the amount of support to be provided are 3 million and 1

million US Dollars, respectively. Financing is provided 50% by TTGV and 50% by the project coordinating company’s

contribution.


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Eligible types of expenses/activities within the project:

National or international licensing expenses; Concept development studies, technological and economic feasibility studies, and market

research studies; Laboratory and design studies during the transition phase from concept development to

design; Prototype Production/Establishment of pilot facilities/Trial production; Studies for the correction of design, the improvement of industrial design etc. before the

product is put into mass production; Investment studies on mass production; Work on the patents and licensing of the generated work and technology knowledge, Activities related to the promotion and sales of product, studies for promotion and

marketing. So the scope of ITEP is broad: a combination of R&D, IPR and commercialisation (including optimizing commercialization success rate of the new product, evaluating market share, market entry time and market potential and also promoting the new product quality level) . The costs for promotion and marketing items within the commercialisation (or rather valorisation) part of the project cannot exceed 20% of the total budget of the project. The aim of ITEP is not merely to support individual projects, but to raise awareness of the high technology areas and to stimulate collaboration, networking programmes, and clustering on specific technological areas. In order to encourage networking and collaboration, workshops and consensus building activities are part of the preparatory phase of ITEP.


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4. ITEP PROCESS

The ITEP selection process is built on a close collaboration between TTGV personnel and the companies that apply for support and consists of three stages: pre-screening, pre-evaluation (visit to the company, evaluation report) and evaluation by referees. Process in more detail Communication of ITEP: Communication is conducted through website announcements, sector events and leaflets and brochures. Also, there is a lot of effort put in the ‘mining’ of potential companies and projects. Expression of Interest: Companies that want to apply for support can make themselves known to TTGV. 1. Pre-Screening: Meeting with each company that wants to apply for support; via telephone and/or e-mail and also face-to-face interviews. A three page plan that describes the project and the company is requested from the companies. Potentially eligible companies are informed on the procedures of the application process and assistance for preparation for application documentation can be provided. 2. Pre-Evaluation: After receiving the official application, a visit to the company facilities is arranged by at least two TTGV experts for assessing their infrastructure, capabilities, current production/design facilities and of course their proposal. After the visit, a short evaluation report is prepared. The proposal and the company are evaluated in accordance with the programme criteria and TTGV’s Support Principles. One of the TTGV experts who is involved in the pre-evaluation stage is assigned as the TTGV responsible expert for that specific project. 3. Evaluation: Eligible companies passing the 1st evaluation stage are subjected to referee evaluation with respect to the projects’ technological, market-oriented features and challenges. This evaluation is done by a Field Committee (these are the referees) which is composed of two academics/researchers from universities and/or research institutions and one from the relevant sector/industry. Referees are expected to also conduct site visits and to fill in an evaluation form. Since ITEP support takes the form of a soft-loan, financial evaluation of the company is also conducted by TTGV financial experts. An overall and final appraisal report is prepared by the TTGV responsible expert based on TTGV’s and Field Committee’s reports on the proposal.. Final Decision making: After all these stages, the TTGV Board takes the decision on support for the project proposals based on the final appraisal report. The discussion on the proposals is on a Secretary General level. (as of phase 2 of the selection process).


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Selection Criteria The final decision making and actual selection of proposals depend on the following five selection criteria:

A. Technological innovation value 40%

B. Capacity of the project owner company/companies 15%

C. Project work plan and budget 15%

D. Financial aspects and impacts 30%

E. General Aspects (company current market status, financial commitment status, co-operation involvement, dissemination principles, environmental impacts)

The percentages indicate the relative weight of the (first four) criteria. Technological innovation value is considered a threshold criterion. Number of ITEP projects Up to now there have been a total of 7 project proposals which have entered the evaluation stage, of which 3 are approved and ‘underway’. In 2012 the aim is to commence at least 5 additional ITEP projects. Other supports available to applicant companies Companies are not restricted to seeking TTGV support for projects. Grant schemes are offered by (inter alia) Tubitak, the Government agency responsible for providing grant supports for R&D in Turkey. Companies can also avail of R&D Tax Credits and tax-based incentives for rewarding R&D employees. Certain companies may be accommodated in Technology Development Zones where particular financial incentives apply. Companies may make application to TUBITAK for an R&D grant for the same project at the same time as applying to TTGV for ITEP support. Whereas TTGV will be able to advise on ITEP support in just over two months, the decision on the TUBITAK grant may take a considerable time to process before a grant is offered.


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5. RESULTS OF THE REVIEW

In the feedback session of the peer review, an analysis of the ITEP instrument was presented to TTGV by the peer review team. First of all, since the ITEP instrument is still in its infancy (at present there are just three approved ITEP projects that have recently started), there are, as yet, no insights into the effectiveness of ITEP. In the words of coordinator Yücel Telçeken: ITEP is at present a baby programme. Therefore, the remarks are primarily based on and focused on the aim, scope and process of ITEP. The main concerns of the peer review team are with the target group of ITEP (is it actually aimed at SME’s or does it favour big firms?) and with the aspect of additionality (are the projects and companies selected the kind of projects/companies that otherwise – without the support provided by ITEP – would not have been realised?). Apart from these concerns there were many (positive) aspects highlighted that may be considered elements of best practice and may be transferable to other situations. Strengths: 1. Not just financial support in the form of soft loans, but also considerable ‘soft support’ by collaboration with TTGV and their experts: - validation of R&D projects; - better proposals because of expertise provided; - setting up and strengthening networks. - expertise applied during project implementation. 2. Fast process provides reassurance to companies embarking on projects: - 2,5 months until decision by Board; - money available at an early stage as a prepayment with staged further payments; 3. Program has strategic aims and serves to align the private sector with national priorities; 4. Carefully designed process aimed at selecting priority areas (workshop, consensus building, network building); 5. Public-private character of the program is seen to be favourable from the perspective of the firms; Weaknesses: 1. The ITEP programme is considered to be very human resource intensive; which implies a possible constraint with regard to upscaling of the program in the future; 2. Concerns with additionality: - addressing best in class firms (the risk is that they can do and will do these projects possibly without outside help)


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- does the program also reach tier-2 firms who are currently not significant R&D performers but need encouragement to do much more? 3. Risk aversion may arise because of the requirement for repayment. The applicant company retains the vast bulk of the risk attaching to the R&D project. Since the TTGV advance is repayable, even where the project has failed to meet technical and/or financial objectives, the exposure of TTGV to risk is modest (essentially TTGV will be repaid unless the company becomes insolvent) 4. Close collaboration between firms and TTGV poses some risk of a lack of detachment. Recommendations: 1. Payback time/regime could become more flexible – depending on the industry (for example ICT

projects typically will get to market sooner than other sectors, e.g. life science industry); 2. There are at present many objectives presented for ITEP. It would be useful to develop a formalized presentation of these objectives, distinguishing between goals to be achieved for the companies involved and broader, strategic governmental (internal) goals. A stricter formulation will not only add clarity but will also provide a better tool for evaluating project proposals. 3. More flexibility with regard to the target group/beneficiaries: - more SME’s; - more tier-2 firms. 4. More flexible approach in funding may result in a bigger multiplier effect: - smaller percentage funding rate for big firms? - providing smaller funding amounts per project could make room in the budget for more projects; - funding for smaller projects (for many SME’s it is difficult to start a R&D project which has a budget of 2 million US Dollars) - etc. 5. To reach the bigger societal goals/challenges, the program will need a bigger budget. (it is recognised that ITEP is currently a pilot, but to deliver outputs which will justify further funding a larger scale of activity may be necessary). 6. Separation between the roles and functions in evaluating and monitoring of projects: make sure that important decisions (on commitments and payments) are not dependent on the TTGV experts that are involved in the projects. [Note by TTGV: We can state that independent evaluators and supervisors are appointed in

evaluating and monitoring of projects. Therefore, technically, the decisions on commitments and payments are highly dependent on these outside experts.]

7. If additional finance can be acquired to supplement the rotating fund, TTGV could give consideration to not pursuing companies for repayment where the project has failed to deliver significant financial returns to the company.

Additional suggestions, made by the representative from Aselsan (beneficiary perspective):

i. improving awareness

ii. proposal support for small companies


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iii. independent selection of technology field. Independent from industry pressure.

iv. encourage cooperative applications with universities. Joint application?

v. technology field should be defined precisely.

Points for (further) discussion

In the final discussion between the Review team and the representatives of TTGV the risk was discussed that there might be too much emphasis on technological quality of the proposals and not enough on its commercial feasibility. The aim of ITEP is to provide a hybrid instrument for both R&D and commercialisation/valorisation activities. With the weight of the criteria (and with technological innovation value as a threshold criterion) the tendency can be - and this might be noted in the first three projects selected - to go for the most innovative projects, and not

necessarily the combination of innovative (technologically advanced) and commercially feasible. This balance is seen as crucial for the further development and eventually for the success of ITEP.

The possible tension was addressed between the public and private aspect of the work within TTGV. This is indeed seen (also by TTGV) as a serious issue. TTGV needs public funds to realise its ambitions, especially when ITEP (the number of projects) will be upscaled. In order to achieve this, TTGV needs successful projects undertaken by successful (this means usually: bigger) firms. Without additional public funds TTGV relies heavily on repayment of their loans to firms. Maintenance of the rotating fund though loan repayments is obviously of keen interest to TTGV, but might move the programme away from more promising, but also more risky ideas.

Conclusions on Good Practice Lessons

The ITEP was designed on the basis of a broad consultative exercise involving extensive consultation with potential users and infrastructural partners. This has lead to a scheme which incorporates national strategic and commercial agenda into a scheme which sets out to meet the need of individual companies. If successful, the scheme can help to address national priorities through encouraging and facilitating R&D which also serves the commercial interests of companies. The scheme has recognised the importance of the commercialisation stage for companies undertaking effective R&D. This may be expected to further encourage companies to engage in R&D whilst also emphasising their need to identify potential commercialisation challenges at the outset. However, there may be difficulties in drawing a limit to the eligible funding and the costs in regulated industries may be very high. TTGV recognise the importance of facilitating and encouraging companies to collaborate and cooperate in their R&D projects. The linkages they assist companies to develop were seen by the beneficiary interviewee as being of particular value. The continued guidance from TTGV may also improve the prospects of successful outcomes for projects. Finally, the review team considers ITEP an interesting programme with considerable promise, if the current pilot phase does not expose new problems, if additional finance to expand the programme will be found and if TTGV takes due account of comments and recommendations provided in this report.


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ANNEXES

I) PARTICIPANTS TO THE PEER REVIEW VISIT

The Review Team:

– Eelco Denekamp, team leader - NL Agency, Netherlands – Jari Eklund - Tekes, Finland – John Smith - Enterprise Ireland – Christiaan Holland - Dialogic, Netherlands, as external consultant.

Our discussion and conversation partners from TTGV were: Yücel Telçeken – Coordinator Technology Development Projects Department Evren Bükülmez – Expert & ITEP Programme Responsible Ferda Ulutaş – Coordinator Environmental Projects Department Emrah Alkaya – Expert Deniz Bayhan – Senior Expert and co-ordinator of the review visit Mahmut Kiper – Senior Expert And as external experts: Prof. Goksel Demirer, Middle East Technical University, stakeholder perspective Alp Eren Sinan, Aselsan (military electronics industry), beneficiary perspective.


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II) AGENDA

7 december 2011

09:00 Pick-up at hotel

09:30 – 09:45 Arrival & Welcome TTGV & Peer Review Team

09:45 - 10:15 Internal Preparatory Discussion Peer Review Team

10:15 – 10:45 Introduction of the IPF & Objectives of the Peer Review Eelco DENEKAMP

10:45 - 11:15 The Turkish Science, Technology and Innovation Policy Mahmut KİPER

11:15 - 11:45 Introduction of TTGV Deniz BAYHAN & Ferda ULUTAS

11:45 - 12:00 Coffee Break

12:00 - 13:00 The Context and Design of ITEP The policy context for the programme The policy rationale for the programme The programme design process Evren BUKULMEZ Stakeholder Perspective for Contextual Design Prof. Göksel Demirer, Middle East Technical University

13:00 - 14:00 Lunch

14:00 - 15:30 Overview & Operation of ITEP General approach & objective ITEP offerings & instrument Financial aspects Target group/beneficiaries The process of marketing Programme application process Project selection & contracting process Project monitoring Evren BUKULMEZ

15:30 – 16:15 Beneficiary Perspective Alp Eren Sinan ÖZHAN, ASELSAN – Military Electronics Industry


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16:15 – 16:30 Coffee Break

16:30 – 17:30 Internal work session Peer Review Team (TTGV Team will be available if needed)

19:30 Dinner

8 december 2011

09:00 Pick-up at hotel

09:30 - 09:45 Internal Session Peer Review Team

09:45 – 10:30 Interview Session & Meeting with TTGV Technology Development Projects Coordinator TTGV & Peer Review Team

10:30 - 11:30 Analysis & Drafting the Review Report Peer Review Team

11:30 - 12:00 Feedback to TTGV & Closing Session

12:00 - 13:00 Lunch


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III) SELF ASSESSMENT QUESTIONNAIRE

Filled in by : Evren BÜKÜLMEZ Name of Measure : Advanced Technology Projects Support Programme (ITEP)

A) Measure: general information

A1 - Overview of the measure

For particular technology fields which are evaluated to be represented inadequately/disproportionately in the project portfolio supported by TTGV, compared to the predicted/true value for our country, TTGV has decided to design a more flexible programme in terms of size and scope with respect to that of current Technology Development Project support mechanism.

A2 - Rationale and objectives

TTGV developed the programme with several objectives by using logic model. Main objective is to improve technological capability and competitiveness of national industry at selected generic technology areas through demand-led and flexible support mechanisms. Selected high technology areas are; “high value-added bio-product manufacturing from agricultural waste”, “advanced materials technologies and precision-manufacturing techniques”, “renewable energy production, storage and transmission technologies”. On the other hand, by mid June 2011, three more high technology areas have been reviewed and selected to widen the support portfolio of TTGV in the niche technology markets. These subsequently covered areas in 2011 are; food technologies, biomedical technologies and advanced technologies for adaptation to climate change.

These generic technology areas are also classified as priority areas and they are selected based on high national capacity potential and competitiveness challenges. The interdisciplinary feature of these areas is also an advantage to improve the collaborative activities. Aim of TTGV is to achieve increased impact on sustainable growth in Turkey through thematic focused support programmes.

Other objectives are defined as:

To raise national awareness for the selected technology areas and to promote international market challenges,

To increase the quality of TTGV project portfolio,

To support and improve collaboration and knowledge sharing between stakeholders,

To develop cooperation with other finance agencies in order to cover the whole company valorisation life cycle needs, from research to business growth.


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B) Description of the measure

B1 - Who are the targeted beneficiaries?

The targeted beneficiaries are all manufacturing companies which have high technology product/process development capacity working in the field of selected technological areas. These companies are usually represented by medium-sized SMEs (with high-tech potential), large companies or spin-offs.

B2 - How are the beneficiaries/participants selected?

Companies communicate with TTGV after receiving/reaching the Call for the Programme. Three-staged selection process is applied:

1-Pre-Screening: Meeting with the companies that want to apply for support; via telephone and/or e-mail and also face-to-face interviews can be also applied. 3-paged info notes that describe the project and the company in summary are requested from the companies. Potential eligible companies are informed on the procedures of application process and assistance for preparation for application documentation can be provided.

2-Pre-Evaluation: After receiving official application, a visit to company facilities is arranged by at least two TTGV experts for evaluating their infrastructure, capabilities, current production/design facilities and also their proposal. After the visit, a short evaluation report is prepared. The proposal and the company are evaluated in accordance with the programme criteria and TTGV’s Support Principles. One of the TTGV experts who involve in pre-evaluation stage is assigned as the TTGV responsible expert for that specific project.

3-Evaluation: Eligible companies passing the 1st evaluation stage are subjected to referee evaluation with respect to projects’ technological, market-oriented features and challenges. This evaluation is done by a Field Committee (referees) which is composed of 2 academicians/researchers from universities and/or research institutions and one from the sector/industry who may know the use of the final product-process and/or commercialisation level in the market. Referees are expected to conduct site visits and to fill in an evaluation form. An appraisal report is prepared by the TTGV responsible expert based on TTGV’s and Field Committee’s views on the proposal based on all information gathered during the evaluation process. Since the support mechanism is based on a soft-loan, financial evaluation of the company is also conducted by TTGV financial experts.

After all these stages, TTGV Board takes the decision of support for the project proposals based on the final appraisal report.

B3 - How is the measure funded?

This programme is funded by TTGV’s own funds. This limits the number of annual support provided by TTGV as a non-governmental organisation.

B4 - What are the supported activities?

Concept development, technological and economical feasibility studies and market research studies,

Laboratory studies during transition from concept to design, and drawing studies,

Prototype production, establishment of a pilot plant, trial production, patent and licence studies.

Design verification before mass production, industrial design and improvement, manufacturing optimisation,

Post-selling troubleshooting activities and adaptation and competitiveness studies,

Investment studies for mass production,


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Promotion and marketing activities for the targeted product

B5 - How do you perceive the results and impact of the measure?

Currently, there is no any completed project. However, we perceive that several companies that have strong technological capability are interested in the programme and the applications in this regard are continuously increasing. Since there was no such a measure in Turkey, combining R&D and commercialisation activities together for manufacturing a niche product in a certain sector, the feedback from the target group is very well.

B6 - Which are the performance indicators for assessment of the measure's results?

Within the programme development process TTGV determined the following performance indicators which are turning into effects for assessment of measure’s results. Programme effects were defined for three levels; system, organisation and project levels. System Effects: These are aggregated effects that are not confined to a single actor, rather, this comprises effects that involve and are common to several actors in the system. Two types of system effects are included: (i) Resource allocation: Covering all economic, human capital, technology, and etc. allocations/acquisitions which are influenced by the activities of TTGV and involve several actors in Turkey’s innovation system.

Indicator: - Fostering and increasing the capacity of project development and implementation activities among

the high-tech companies in the advanced and niche technology areas in Turkey. (ii) Networks: Covering the networks or relations created by TTGV activities (e.g. new (international) relations/networks, new collaborations, joint commitments by organisations to a certain technology area)

Indicators: - Improvement of cooperation strategies and experiences of the companies by bringing together

new and alternative co-operation partners within the process of project development. - Stimulate the cooperation between companies and universities, and among companies on

technological issues.

Organisational Effects: These are effects that are confined to a single organisation. The organisation could be the funding agency (TTGV), a funded client, a rejected client or any organisation that is influenced by the activities of TTGV. Two types of organisational effects are included in the programme:

(i) Capabilities: Covering access to new competences, strengthened internal networks, improved human resources, management skills (TTGV activities may have a direct influence on capabilities, TTGV does not have a direct impact on competitiveness and productivity)

Indicators:

- In the designated technology areas, persistent capacity and capability development of supported

firms by low-cost and quick financing the activities on product/process development phases

- Gaining experience and capacity of TTGV through programme management (including design,

implementation/project selection, monitoring and impact assessment),


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(ii) Range of Activities: Covering the kind of RDTI activities (more risky, new market, new technological

domain, increase in scale and/or scope of projects) of the organisation as a whole

Indicators:

- Expanding portfolio of TTGV support models,

- Increasing brand value of TTGV by launching an innovative model of support to niche areas of

technology for Turkey.

- Fostering the firms to intend towards more risky but more value adding projects, markets and

products.

Project Effects: These are effects that are confined to the projects within the nominated programme

funded by TTGV. Project based effects include four effect categories:

(i) Acceleration: Covering the effect that the project is able to finish faster and/or with fewer resources than

if no support had been received.

Indicator:

- Faster execution of the project (which can result in faster and earlier market entry and positioning)

(ii) Scale: Meaning more resources (capital, people), higher risk and higher return.

Indicators:

- Decreasing the risk of funded companies

- Increasing the R&D intensity of the companies

(iii) Scope: Meaning more diversity, broader objectives/undertakings, higher risk

Indicators:

- Incorporate new opportunities, new technological options and partnership collaborations with

universities and/or other companies

- Beyond the project profiles implying product and process improvement, encouraging the design

and development of new and genuine products with more sophisticated process applications.

(iv) New/Additional Results: Meaning that the project produces new or additional resources due to the support by the agency

Indicators:

- New patent applications

- New and better product, services and processes (The project support enables companies to gain

potential for developing/improving new products, services and processes.)

- Reaching results beyond targets determined at the beginning of the project.

C) Implementation of the measure

C1 - What is the overall budget? Evolution from year to year?

According to the yearly updated Work Plan, TTGV decided to disburse 3 million USD $ to 4 supported projects. The budget is updated on a yearly basis.


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If this support model implemented by TTGV is appropriated as a support mechanism by a government institution (for example by the Ministry of Economy), the overall budget and yearly disbursement projection would be revised accordingly.

C2 - What is the maximum and average budget per project?

Maximum budget is limited to 6 million USD$ per project. Maximum TTGV support can be 50% of the total project budget which amounts to 3 million USD$ maximum per project.

Average budget is around 2 million USD$ per project (according to the budgets of 4 selected project proposals to be supported).

C3 - Who do you report to and how? Number of people involved in running the system?

We are reporting to Board of TTGV. Every two months, Board meeting is held for the projects in the channel. There are 5 technical and 2 financial inside experts involved in running the system except the managers in TTGV’s General Secretariat. Besides there is a pool of external referees who participate at project evaluation and monitoring stages.

C4 - What is the size of the measure in terms of number of projects/activities supported, number of actors involved?

There have been 7 official applications (after pre-screening) in 2011. Four of them are selected to be supported. One of them was suspended to the next evaluation period to complete some necessary documentation, and two of them were rejected.

Totally 15 Field Committee members were involved in the evaluation stage from different organisations.

C5 - State aid and market disturbance. What kind of market failure is addressed by the measure? Is there any market disturbance induced?

After the last impact assessment study implemented for R&D support mechanism of TTGV (for Technology Development Projects Support), one of the main results is about the gap between R&D and commercialisation periods. In 2007 TTGV has launched and implemented a new pilot program concerning commercialisation of R&D results for the supported companies. But the impact of this program was seen as too limited, and the model that is used in that mechanism was interrogated.

Lastly, in 2010, TTGV has launched a new support programme ITEP for particular technology fields which are evaluated to be represented disproportionately in the project portfolio supported by TTGV, compared to the predicted/true value for our country, in order to maximize the impact of TTGV’s interventions. This new pilot programme follows a deep technical and market-oriented evaluation to minimize the challenges of R&D and commercialisation.

C6 - From the start, have there been any changes in the design or implementation?

There have been no changes in the design and implementation of the programme. Just, the scope of the high technology fields to be supported within the programme has been expanded by mid 2011. Three additional technology areas have been selected based on the current situation and needs of the national market and industry. The review and preparation of reports on the framework of these markets and technologies were prepared by TTGV experts. In this regard, face-to-face interviews and workshops were organised with the authorities/experts from different organisations on the designated topics. Finally, the verification of the framework reports was done via these external experts.


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D) Monitoring, evaluation and assessment of the measure

D1 - Who did or will do the monitoring and evaluation?

Since ITEP is planned to be a pilot programme, TTGV, with its limited annual budget of 3-5 million $ a year, proposed to select the best projects in its field to demonstrate the effectiveness of such a measure to be appropriated by government institutions in near future, as well as by technology focused companies. Monitoring and evaluation (M&E) activity had been thought to be the part of ITEP programme at the first draft of the operational design document. Then, it’s been conceived that, the cumulative impact in the selected technology areas will be limited with TTGV’s annual support. On the contrary, the impact of the project and selected company itself is expected to be high. But currently there hasn’t been any designed M&E procedure.

However, we think that “behavioural additionality” concept could be taken as basis for evaluation activities after the pilot programme ends.

If a government organization would like to apply such a measure with allocation of a certain budget sufficient to affect a sector’s situation, monitoring and evaluation activity would be designed or incorporated.

D2 - What are the results and impacts of the measure (outcomes, relation with ex ante situation and the original objectives)?

This programme has newly started. Impact assessment hasn’t occurred yet.

D3 - Which indicators are used?

The indicators mentioned in B6 of this questionnaire will be applied with some revisions.

D4 - Main results and conclusions of evaluations / assessments.

N.A.

D5 – Which elements have been recognized as the strong and weak features of the measure?

This measure, at the beginning, may be perceived as different when compared to other measures of the innovation system in Turkey. This programme has high-technology focus covering only some specific sectors (technology areas) which are though to be strategic sectors for Turkey. There is no other programme that has sector / specific technology focus. The programme only aimed to give loans to niche technologies to maximize the usefulness of the R&D results. Another difference is the support for commercialisation activities. Moreover, there is no other support mechanism for commercialisation activities combining with the R&D results in Turkey.

These features told above may be perceived as strong characteristics of the measure.

Weak features of the measure will probably arise after some period as the programme implementation progresses.

D6 – If you could recommend one (practice) element of your programme to other agencies, what would it be?


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In the project selection phase, the use of product and market analysis is done by a Field Committee member, who is/may be the potential user of the product that is to be developed after the project, and/or, who has deep experience in the market and commercialisation stages of the products.

E) Regional/local environment

E1 – Are there any regional aspects or implications of the measure?

The programme has no regional focus.

F) Policy context

F1 - Are there similar actions overlapping, duplicating or competing with the measure?

TUBITAK (The Scientific and Technological Research Council of Turkey) has been implementing different and large scaled R&D grant programmes. But there is not any commercialisation support features in any of the measure that’s been implemented in Turkey other than ITEP of TTGV. All grant/soft loan measure relating to R&D activities of the companies are complementary to ITEP.

F2 - Are there other related policies or measures which are complementary (or conflicting) at the same policy level?

Mentioned in F1.

G) Any additional comments: ITEP Programme has newly launched. Only the Board has taken support decision for 4 projects in 2011. The projects will end after 2013. Impact assessment study would be better to be implemented after 3 years the programme ends, or mid-term evaluation could be held for analysing the programme effects in system and organisational level in the years 2014-2015.

peer review of advanced technology projects support … peer... · 2015-11-24 · mahmut kiper...

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