Publication: Turkey - Improving Conditions for SME Growth Finance and Innovation
Date
2011-08
ISSN
Published
2011-08
Author(s)
World Bank
Abstract
Facilitating the growth of Small- and
Medium-sized Enterprises (SMEs) is central to creating jobs
for an underutilized and growing labor force in Turkey as
SMEs account for 79 percent of jobs in Turkey. Creating jobs
for Turkey's unemployed and for the rapidly growing
labor force, though partly a social challenge, is an
important economic opportunity. Turkish SME growth
performance and productivity is currently poor, and these
related challenges must be simultaneously addressed. First,
Turkish SMEs grow slower than both large enterprises in
Turkey and SMEs in comparator countries. Second, not only
are SMEs in Turkey less productive than larger firms, but
the gap across firm size is larger in Turkey than in other
countries. Although growth and productivity may be affected
by different aspects of the business environment,
productivity is needed for firms to be competitive and thus
be able to sustain growth in the long term. Therefore,
growth and productivity must be simultaneously addressed to
enable the sustainable creation of well paying jobs. The two
main priorities for SMEs are: a) access to finance, and b)
the ability to adopt and use technology and to innovate, and
this report addresses these topics. The main constraint for
the growth of SMEs is access to finance, and new
microeconomic evidence shows that the development of medium
term finance contributes significantly to SME performance in
terms of employment, sales, and investment. Specific
interventions in the form of credit guarantees and credit
line financing of financial institutions dedicated to
support SME financial products have been used to speed up
the development of the SME medium term credit market, and
they may continue to play a role.
Citation
“World Bank. 2011. Turkey - Improving Conditions for SME Growth Finance and Innovation. © Washington, DC. http://openknowledge.worldbank.org/handle/10986/12211 License: CC BY 3.0 IGO.”