- Turkey became the 10th country to attract the most investment among European countries over two years and hosts six unicorns.
- A network of entrepreneurs, start-ups, academics and researchers meet each year for the world’s biggest aviation, space and technology festival, Teknofest.
- Four unicorns in the space say that unicorns must embrace digital transformation and governments must support the ecosystem and nurture small-medium sized businesses through policy but they must refrain from regulation or favouring traditional offline enterprises.
The 2020s mark an important period for Turkey with its entrepreneurial ecosystem advancing fast.
While global venture investment last year totalled $643 billion, compared to $335 billion in 2020 – marking 92 % growth year over year – a similar success story took place in Turkey, even though not a single unicorn was present in the country until 2020. Today, Turkey hosts six unicorns: Peak Games, Getir, Dream Games, Hepsiburada, Trendyol and Insider. In such a fast-developing investment ecosystem, Turkey became the 10th country to attract the most investment among European countries.
Its national target is to host 10 unicorns by 2023 when Turkey celebrates the 100th anniversary of its establishment as a Republic.
This development of the entrepreneurship ecosystem has happened with intent rather than luck, as Turkey vowed to develop an innovative ecosystem of emerging technologies through its Industry and Technology Strategy Plan for 2023. The country has established a mega technology corridor starting from Istanbul, Kocaeli to Izmir where there is a nationwide network for entrepreneurs, start-ups, academic research centres and development institutes.
The Turkish Technology Team Foundation and the Ministry of Industry and Technology also set up Teknofest. The event holds technology competitions covering 99 different categories, attracting more than 1 million visitors each year, including 150,000 teams and 600,000 participants from high schools, universities and entrepreneurs from 108 different countries.
We asked four prominent unicorns to share their views on the biggest digital transformation for the rest of the decade and how governments can provide support. Here’s what they had to say.
The effect of groundbreaking technologies such as the metaverse, decentralized finance and quantum computing will soon become a more profound part of our lives. Traditional companies aside, today’s unicorns are doomed to be disrupted if they fail to adapt to these emerging technologies. Unicorns must spend the rest of the decade not resisting but embracing the change.
By their nature, unicorns could significantly help tackle the world’s challenges, such as climate change, poverty and inequality. Being part of the way forward will define the rest of the decade for them. Trendyol is Turkey’s leading and one of Europe’s top five e-commerce marketplaces, with more than 30 million shoppers and 230,000 sellers. While creating value for our sellers and customers, we’ll channel our resources to contribute more to sustainable development in Turkey and other countries we operate.
Regarding governmental support, education and labour market policies should be at the centre of the policy roadmap to increase the number of successful start-ups. Formal education structures should be redesigned in line with the human resource needs of technology companies with high-growth potential. Labour market policies should involve introducing flexible work arrangements to labour codes.
Secondly, an effective financing structure to fund innovative companies is essential to spur innovation. Start-ups focusing on basic research such as biotechnology should see funding come predominantly from government research organizations. Tax incentives for angel investors and implementing state-backed venture capital funding programmes are some of the policies governments can implement.
The main transformation that will define the rest of the decade will stand on creating outstanding customer experiences through digitalization. The number of technology companies outside of the United States and China are rising fast, which is creating new startup ecosystems with a lot of potential and opportunities. The increasing number of startups will make B2B companies more prominent. That was the case for Insider.
Insider recently became the first Software Unicorn from Turkey and 9th B2B SaaS in the world. I believe that the main transformation that will define the rest of the decade will stand on creating outstanding customer experiences through digitalization. From all of the case studies and research we’ve seen, the ability to deliver frictionless, consistent customer experiences will define the next decade, because customers are demanding seamless journeys more than ever.
Moreover, the governments need to increase the community support for startups by encouraging investments, creating more job opportunities and fostering a more lucrative environment for entrepreneurs. Embracing the startup culture from the high school level will have a huge impact on boosting the ecosystem.
By the end of the decade, I think more than 90% of the world’s population will be using digital products. Almost everything currently not sold or serviced digitally will be available online, at the touch of a button or through our smart devices.
To nurture these businesses, governments should consider tax incentives, such as waiving most indirect taxes on start-ups until they are profitable or for a specified time. There can also be tax incentives on start-up employees’ income for several years. In the long run, if more start-ups become big businesses, there will be more taxes to collect.
Regulation is also an area I’d consider revisiting. Unless a specific sector needs regulation for environmental or health reasons, it should not be regulated so that new ideas and companies can emerge. Freedom of creativity is essential for progress and too much regulation slows or kills progress.
As start-ups grow and begin to compete with existing established businesses, governments should refrain from siding with existing offline industries.
As we emerge from the COVID-19 pandemic, the rest of the decade will be defined by the long-term economic recovery. Digitalization and the wider adoption of technologies by consumers and businesses in everyday life will be a huge part of that recovery path.
The digital economy will transform businesses by powering economic growth across a wide range of sectors. The growth of the e-commerce sector, accelerated after 2020, is a clear indication that this transformation is already underway. As a household brand in Turkey, Hepsiburada aims to be at the forefront of the digitalization of the Turkish economy, from addressing customers’ everyday needs to empowering the merchants on our platform with the necessary capabilities they need in an increasingly digital future.
Start-ups and small-medium enterprises (SMEs) will be the biggest drivers of growth and innovation in the coming years and governments should continuously prioritize creating the infrastructure and environment for them to flourish. In the e-commerce sector, for instance, it is important to implement policies that nurture SMEs, allowing merchants and entrepreneurs to continue to innovate and drive competition. For growth to be sustainable, opportunities need to be as widely available as possible and governments have a vital role to play in maintaining level playing fields, ensuring fair competition in the industry and making it open to new players and innovations.