Technology Development Zones:

Tools for Enhancing University Industry Relations

Prof. Dr. Canan CilingirVice Rector

METU

Turkey

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s Turkish science and technology policy:

‘Establishment of the National Innovation System that would enable systematic operation of the whole institutions and mechanisms required to carry out scientific and technological research and development activities and to transform the results of those activities into economic and social benefit.’

TECHNOLOGY DEVELOPMENT ZONES (TDZ)TDZ Law (July 2001) promotes the establishment of science and technology parks under the guidance and lead of universities.The Law aims:•to create technological information in order to

give the industry a structure fit for international competition and exportation,• to introduce innovations in products and production methods, • to raise the quality or standard of products, to

increase productivity,

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• to decrease the costs of production, • to commercialize technological knowledge,• to support production and entrepreneurship,• to enable small and medium-sized enterprises

to adapt to new and advanced technologies,• to create opportunities of investment in technology intensive areas by taking into account the decisions of Science and Technology Higher Council,• to create job opportunities for researchers and

qualified persons,

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• to help the transfer of technology and • to provide the technological infrastructure which will quicken the entry of the foreign capital which, in turn, will provide high/advanced technology.

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•After the enactment of the Law, twelve new science and technology parks were approved by the Ministry of Trade and Industry.•The Law enforces involvement of universities for establishment of TDZ•All science and technology parks are situated within the lands of universities, in order to create close relationship with university community. •The increasing demand of companies and entrepreneurs encourage universities to invest in establishment of TDZ.

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METU

Cyberpark

MAM

ARI

Hacettepe

GOBS

Six TDZ are operational while the remaining is still at initial construction phase.

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TDZ IN TURKEYName of TDZ Years of

OperationSize

of Land

Number of Companies

Fields of Operation

Info

ARI Teknokent 1 180 he

7 ICT, www.teknokent.itu.edu.tr

Cyberpark 1 30 he 42 ICT, software, electronics,

www.cyberpark.com.tr

GOBS 1

Hacettepe Teknokent

1 120 he

12 ICT, medical www.hacettepeteknokent.com.tr

MAM 3(7)

METUTECH 3(7) 80 he 120 ICT, software development,

electronics

www.metutech.metu.edu.tr

a brief summary of the statistics for operational TDZ.

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The Law provides two types of tax incentives to the companies. 1- the income tax exemption of the research personnel including academicians. With this incentive companies are able to pay higher salaries to their staff. 2- the corporate tax exemption provided for the portion of profit generated through research and software development activities.

(With these incentives, companies are convinced to spend and to invest more in research projects.)

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METU-Technopolis is the first and the biggest science and technology park of Turkey. History:1987-89 The research on the METU-Technopolis Project started. 1990 The METU-SMIDO Technology Development Center was founded. Until today, 68 companies are graduated from the incubation center and over 95% are surviving

1995    The preparation for the Ankara Business and Science Park Feasibility Study’ was done by an international consulting firm. A contract with the first tenant firm was signed.

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1997    The METU-Technopolis Design Project and Business Plan was completed. 1998    The application for the METU-Technopolis was approved by the Ministry of Industry. The first tenant firm began to work in the temporary buildings of Technopolis2001   Two buildings were put into complete service with no vacancies. The law of Technology Development Regions was accepted.2002 -2003  The construction of the two new buildings started.

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METU-TECH Some Figures

•800.000 square meter land•40.000 square meter closed area•10 milyon USD investment•432 R&D projects•151 Faculty members participate in projects•35 companies are involved in joint projects with the university•hosts around 120 companies •employing over 1000 researchers,•majority of the companies are technology based SMEs dealing with ICT and software products and services.

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# of Company Staff

<10 73%

11-2516%

26-507%

>504%

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•2003 exports of METUTECH companies 7,5 Million USD •The export markets of the companies are countries like US, Singapore, Hong Kong, Dubai, Holland, Russia, Germany England, etc.•In the last two years the collaboration of companies with the university community has increased •The main ways of collaboration are consultancy services and joint projects.•Companies have submitted research projects together with academic personnel and university departments to 6th Framework Program.T

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•The management of the science park is approved for the IRC-Network of the EU. Being the coordinator of the new IRC (Innovation Relay Center) the management company will assist SMEs to enhance their technological development level.•The management company has applied for the InfoDev program of the World Bank together with the incubation center.

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LESSONS LEARNED

The importance of awareness building•The success of METUTECH and the TDZ in general has increased the awareness of public and industry, towards research and technology development, innovation and entrepreneurship. •More and more companies are paying attention to collaboration with universities:• Technological level of products and services, the level of ICT involvement in production processes improved • Most managers have now realized that research and innovation is the key to compete in global markets. .

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Sensitization policy makers and key constituencies

The reservations and hesitations from the policy makers with regard to tax incentives faded away. Proper incentives given for the development of the knowledge economy will pay off immediately by increasing the technological competitiveness of the country.

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Encouraged by these results the policy makers are planning to expand the level of incentives provided for innovation and research activities.

The successful results are also triggered the attention given to strategic planning for the knowledge economy.

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Changes in university community• level of university community involvement within industrial based research projects has drastically increased after METUTECH. • attitude in favor of basic research has shifted toward the applied research and technology development leading to innovation.• IPRs (Intellectual Property Rights) have become a major concern of the researchers in the university.•More researchers are scrutinizing the possibility of establishing their own companies and the number of spin off companies is increasing.T

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•Changes in educational system with regard to knowledge economy environment. Curriculums are being modified in accordance with the requirements of the companies.

Role of incentives

The cash savings stemming from tax incentives are canalized to new research and innovation projects.

The desire of companies to move into TDZ significantly increased.

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Methods of financing

During the preparation of TDZ Law, grant allocations to the management companies from the national budget was allowed. So far no resources allocated by the Government. That is a major obstacle for new TDZ to overcome the financial difficulty of initial phase development capital requirements.

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METUTECH used fund raising models:• eligible companies have encouraged leasing the land and constructing their own buildings. • advance payment schemes with promotional conditions proposed to companies. • income sharing build-operate-transfer model was implemented.

The results were successful. Over 10 million USD upstream investments are completed.

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Importance of management

• At he beginning, METUTECH managed by the university. • Later is transferred to professional managers. An executive comity, chaired by Rector is formed, being in charge of development of strategic planning and long term objectives day by day management assigned to professionals.

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The university-industry collaboration

The main goal of the TDZ Law is to increase university industry cooperation with regard to research and technology development activities, The existing 35 project collaborations between academicians and companies are important but not sufficient compare to the number of projects running.

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•university needs to change its attitude towards joint projects and must develop innovative alternatives. Example: Integrated National and International Projects, where several universities, private companies and public bodies are encouraged to form project groups.

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