1. Case Study
Turkey
Manufacturing Success
Intel World Ahead Program
Turkish Program Removes ICT Roadblocks for Small and
Medium-Sized Manufacturers
The Turkish government’s Target: ICT for SME initiative, with support from the
Intel World Ahead Program, is helping smaller manufacturers use information and
communications technology (ICT) to build capacity, compete more effectively,
and address national policy objectives such as improving labor productivity.
What is an SME? Introduction: Overcoming Obstacles to ICT Adoption
What is a small or medium- Small and medium-sized enterprises (SMEs) are the backbone of any nation’s economy, and helping them
sized enterprise? While adopt ICT can expand their success and enhance economic vitality. But SMEs face numerous barriers to
the definition varies, one technology adoption:
of the most commonly
• Lack of funding to invest in ICT
accepted frameworks is
that of the European • Incomplete understanding of the value and benefits of ICT
Union, which defines a
small enterprise as one • Complex technology choices and a lack of in-house ICT resources
with fewer than 50
• Limited time to learn about and support ICT
employees, and a medium-
sized enterprise as one • Limited access to training and support
with 250 or fewer.1 In the
US and Canada, an SME is Turkey’s government leaders are taking steps to overcome these obstacles. The Ministry of Industry
a company with fewer and Trade and the SME Development Organization (Küçük ve Orta Ölçekli Sanayi Gelistirme ve
than 500 employees. Destekleme Idaresi Baskanligi or KOSGEB) have established Target: ICT for SME, a practical initiative
that helps small and medium-sized manufacturers acquire and use effective technologies. This two-
year program, with hands-on assistance from the Intel World Ahead Program, is being welcomed by
Turkish SMEs and is already having an impact. Since the program began in January 2007:
1. See SME Definition, http://ec.europa.eu/enterprise/enterprise_policy/sme_definition/index_en.htm

2. • In the manufacturing sector, which has approximately 20,000 Raising productivity. The government is eager to increase labor
SMEs, over 1,021 companies have already participated through force productivity, which in 2004 was about 40 percent
project stakeholders. of the EU-25 average.5 Since SMEs form such a large part of
the economy, helping them use ICT to improve business processes
• Program participants have gained access to over 30,000 servers,
is an important way to raise the nation’s overall
business-class PCs, and laptops, which are enabling them to
labor force productivity.
expand their business capabilities by running business-critical
applications and becoming part of the Internet economy. Spurring growth throughout the nation. Turkey’s wealth is
Applications acquired through program stakeholders range from clustered in its urban regions. In the four poorest provinces, GDP
enterprise resource planning (ERP) software to fleet tracking and per person is less than one-third of the national average, while
logistics applications. It is believed that with this program, per capita in the wealthiest province it is triple the average.6 By
Turkey’s SMEs achieved 4 percent ERP penetration as of the end increasing SMEs’ use of ICT across the country, the government
of 2007, starting basically from .5 percent. can help address the income disparities between urban and
rural provinces and enable SMEs to compete beyond their
• Turkey’s local IT industry has been strengthened—approximately local geographies.
60 percent of systems delivered through the program are
manufactured by Turkish companies.
“We have called all small businesses and entrepreneurs
While many factors drive demand, PC purchases by Turkish SMEs
to action on the subject of using the latest technology
increased approximately 45 percent during 2007. That was more
in their business,” Zafer Caglayan, Turkey’s Minister of
than double the previous year’s growth rate of 20 percent, and the
Trade and Industry, has said. “This is an important way
2007 average growth rate for Europe, the Middle East, and Africa,
for them to increase operational efficiency, and it is a
which was also 20 percent.2
necessity if they are going to become competitive or
remain competitive in the world arena.”
Addressing Policy Objectives by
Enabling SMEs
Turkey has 1.9 million SMEs that together constitute 99 The Turkish Planning Organization’s SME Strategy calls for achieving
percent of the nation’s businesses and generate 70 percent the following goals for the nation’s SMEs by 2010:
of its industrial jobs.3 In an increasingly global and knowledge- • Increase PC penetration to 95 percent
based economy, KOSGEB and the Ministry say ICT can enable
SMEs to streamline business operations, collaborate with • Raise ADSL penetration to 75 percent
larger businesses, and reach broader markets for their
• Conduct 15 percent of overall commerce via e-Commerce
products. Increased use of ICT can also help the government
address important national policy objectives: • Expand the use of ERP software to 15 percent
Evolving the economy. Turkey has had great success in shifting
• Increase the use of customer-relationship management software
from a primarily agricultural base to a more diversified economy.
and other modern applications
Now, the government wants to move from the current reliance on
labor-intensive jobs to one based more on knowledge, technology, The Turkish Parliament is considering legislation that would require
and innovation. Helping SMEs adopt ICT and use it effectively can SMEs to establish a Web presence identifying products and services
be crucial to achieving this objective and enabling SMEs to compete and providing financial information. This requirement, if passed, is
more effectively in a global economy. Turkish SMEs’ contribution to intended to promote the expansion of Turkey’s SMEs, increase their
GDP is limited to 38 percent, whereas in the EU it is over 50 use of ICT, and enhance transparency.
percent.4
2. IDC EMEA PC Market Regional & Country Analysis – Q1 2008.
3. OECD Centre for Private Sector Development, Istanbul: A Framework for the Development and Financing of Dynamic Small and Medium Sized Enterprises in Turkey, July 2005.
4. KOSGEB 2007 Datasheet
5. International Organization for Knowledge Economy and Enterprise Development, Strengthening Innovation and Technology Policies for SME Development in Turkey, Dec. 2004.
6. Strengthening Innovation and Technology Policies for SME Development.

3. Removing Roadblocks • Helped IT companies create pre-validated solutions that are easy
With the Target: ICT for SME program, KOSGEB and the for SMEs to set up and run
Ministry are collaborating with private-sector leaders, such
• Assisted retailers and resellers in developing new approaches to
as the Intel World Ahead Program, on comprehensive efforts
delivering effective post-sales service and support
to remove roadblocks to ICT adoption. KOSGEB is a public
agency that provides a broad range of training and • Aided in developing webcasts and live training sessions for SMEs
consultancy services for SMEs. throughout Turkey
Affordability Program complexity
Lack of available financing is a significant hindrance to Complex bureaucratic procedures can reduce SME participation.
technological improvement for Turkey’s SMEs.7 With the Target Intel helped design straightforward procedures that are
program, VakifBank offers SMEs a zero-interest, 24-month convenient for SMEs and meet the needs of government
loan for purchasing ICT equipment and software. VakifBank workers and IT companies. Intel also supported development of
is Turkey’s fifth largest bank. Loans are available for up an easy-to-use online portal where SMEs can learn about the
to approximately USD 40,000. KOSGEB has budgeted program and take advantage of its services.
approximately USD 6.5 million to pay the interest on
those loans. Distance
The government wanted the program’s benefits to reach SMEs
Comprehensive solutions across the country. Intel worked with Turkish retailers, original
KOSGEB wanted to ensure that SMEs obtained useful and equipment manufacturers (OEMs), software leaders, and
relevant technologies, as well as help them with the task of KOSGEB to design educational sessions that were conducted in
sorting through the huge universe of potential technology eight Turkish cities.
choices. The Target program worked with the private sector to
develop comprehensive solutions that combined business- Program awareness
critical applications with relevant hardware platforms. Software The government needed cost-effective ways to make SMEs
covered under the program ranges from basic word processing aware of the program and encourage them to participate. In
and e-mail programs, to sophisticated ERP and CRM applications. addition to the traveling educational sessions, Intel provided
SMEs can also use their credit to purchase or upgrade their PCs, marketing support to help the government design a logo and
laptops, servers, network equipment, and peripherals. produce other materials that created an “identity” for the
program. A press event announcing the program was attended
Connectivity by more than 60 representatives of national newspapers,
PCs, servers, and software deliver more value when they are magazines, and media outlets.
paired with high-speed Internet access. As part of the Target
program, Turk Telecom, Turkey’s leading telecommunications
provider, offers two months of free ADSL connectivity and a Turkey at a Glance
free modem to SMEs who subscribe to a 24-month service. Turkey is a constitutional republic whose strengths include
a diverse and growing economy, a location at the
Training, service, and support
crossroads of Europe and Asia, and a labor force of over 25
SMEs are focused on running their businesses, not mastering
million people. The world’s 15th largest economy, Turkey’s
new technologies, and they generally lack dedicated ICT staff.
gross domestic product (GDP) rose 6.9 percent annually for
Intel offered training and expertise to Turkish IT companies so
2003-2007, reaching USD 665 billion for 2007 (purchasing
they could more effectively assist their SME customers in
power parity).8 & 9 Turkey has applied for full membership in
adopting or upgrading ICT. For example, Intel:
the European Union (EU), and is working to satisfy EU
requirements by 2013.
7. Growth Plans of Small Businesses in Turkey: Individual and Environmental Influences, Journal of Small Business Management, January 2006.
8. www.invest.gov.tr
9. Economist Intelligence Unit, Country Profile: Turkey, April 10, 2008.

4. Having an Impact
The Target: ICT for SME program is a relatively small initiative with a Intel World Ahead Program
potentially large impact on Turkey’s economy and society. By Designed to improve lives, economies, and societies, the
empowering small and mid-sized manufacturers to expand their use Intel World Ahead Program collaborates with governments,
of ICT, the Ministry of Industry and Trade and KOSGEB are nongovernmental organizations (NGOs), and other private
empowering them with tools that can improve productivity and leaders to drive advances in:
increase operational efficiency. These changes in turn can help
• Access to appropriate technologies
advance Turkey’s economy toward higher-value manufacturing,
enable Turkey to play a larger role in the global economy, and • Broadband networking
generate further economic growth.
• 21st century education
Equipped with relevant technologies, SMEs can conduct
e-Commerce and reach broader markets for their products within • Locally relevant content and services
Turkey and around the world. In addition, manufactured products
• Healthcare
are often components of larger systems. With their new or
upgraded technologies, SMEs can communicate and coordinate In Turkey, the Intel World Ahead Program has provided
with their supply chain partners, including multinational expertise and resources, and shared best practices derived
corporations. They can work together more effectively to from hundreds of digital inclusion and WiMAX* initiatives
streamline business processes, enhance innovation, and improve around the world. Intel’s work with the Target: ICT for
logistics. SME program has helped KOSGEB develop a practical,
“Our goal is to start a transformation that will create SMEs who can sustainable initiative that targets important national
compete effectively in today’s new era,” said Bayram Mecit, policy goals.
KOSGEB general manager.
With the Target program, Turkey’s government, and its small and
medium-sized manufacturers, are taking an important step toward
that goal.
Achieve Your Vision
What is your vision of the world ahead? How can Intel help you make it a reality? Talk to us and see. Contact
your local Intel representative, or learn more at: www.intel.com/intel/worldahead/.
Programs of the Intel ® Education Initiative are funded by the Intel Foundation and Intel Corporation.
© 2008, Intel Corporation. All rights reserved. Intel, the Intel logo, Intel Education Initiative, and
the Intel Teach Program are trademarks of Intel Corporation in the U.S. and other countries.
*Other names and brands may be claimed as the property of others.
0608/JT/CMD/XX/PDF 320139-001 US