Entrepreneurship Provides Opportunities for Talented Young Turks

Turkey is in the midst of an uprising. Young people, united and empowered by technology, are pounding at the gates of the old order and demanding that their country's elites make room for their new ideas.

No, they are not taking to the streets like their Arab and Persian neighbors, despite sharing some of the same young demographics that many believe are driving the revolts in places like Egypt, Tunisia, Libya and Bahrain. In Turkey, a stable democracy with a distinct history and close ties to Europe, policymakers are looking to the power of entrepreneurship—not only to create prosperity, but to provide a creative outlet and employment opportunities to a burgeoning young population. And with the support of government, NGOs, big businesses and indigenous role models, Turkish entrepreneurs are rising to the top.

Turkey is Rising. In the midst of the current troubles in the Middle East, Turkey is often held up as the model: an Islamic country that successfully made the transition to a modern, secular, democratic state. Today Turkey's reputation for stability is burnished by economic prosperity. The Turkish economy grew almost 8% last year. Turkey is at the head of a class of post-BRIC emerging economies favored by investors. Istanbul, the glittering and cosmopolitan commercial center, is awash in new money. Among its more than 19 million residents, the city counts 28 billionaires, 4th most in the world behind Moscow, New York and Shanghai.

Turkey is Part of the Young World. What Turkey has in common with the turbulent nations of the Middle East and Central Asia is youth. The median age in Turkey is 29: closer to that of its neighbors in the south and east (Egypt is 24, Saudi Arabia 25, Syria 21.5) than graying old Europe (EU average 41.5; higher in Mediterranean nations like Greece and Italy). These numbers bode well for economic growth, but a youthful population is a two-edged scimitar that can cut deeply if expectations are not met.

Trouble Lurks Under the Surface. Turkey's youth unemployment remains troublingly high. According to the UN Human Development Index 2008/2009, over 12 million Turkish youth aged 15-24 are poised to enter the workforce over the next five years. Historical annual new job creation is only 750K (net) at best, including agriculture. Those numbers indicate that Turkey needs an entrepreneurial revolution today to avoid a social and political revolution later in the decade.

Entrepreneurship is Key. Policy-makers and thought-leaders in Turkey understand the importance of new business creation to future growth and stability. Consequently, a lot of resources are being devoted to encouraging entrepreneurship, including conferences, contests, new curricula in secondary and higher education, and cultural outreach.

I just spent a week in Istanbul and was honored to be the keynote speaker at the Global Business Trends Summit (iyiGirisim), where dozens of the country's most promising startups got to share insights and network with the country's best-known business leaders. The event was co-sponsored by TÜSİAD, Turkey's most powerful business lobbying association, and Endeavor Turkey, the regional branch of a New York-based NGO that promotes entrepreneurship for social and economic development, plus other media and business groups.

A Shift in Culture. It seems like a win-win, but this kind of thinking is a departure from business as usual. In the past, the highly-centralized Turkish government made it easier to get rich by taking advantage of government-issued monopolies and rigged trade policies than through innovation and labor productivity. These policies ended up creating concentrated wealth rather than broad-based opportunity. A lot of talented professionals and hard-working laborers left the country for better prospects in Europe, the U.S. or the Persian Gulf.

Now the economy has come roaring back. Expatriates have returned to join in the renaissance, bringing with them their skills, their capital, and, perhaps most importantly, their knowledge of global business culture. Their goal is to help Turkish business break some of the bad habits formed during 70 years of centralized rule, including an aversion to risk. Financial infrastructure in the form of private equity, angel networks and venture capital is falling into place, but first the broader society needs to make room for the idea of entrepreneurship.

From Startup to Impact. That's where a group like Endeavor comes in. The Turkey office opened in 2006 and helps recruit, train and build entrepreneurial startups into high-impact businesses. They then showcase the success stories as role-models and mentors, fostering the development of an ecosystem that can sustain itself.

Two recent Endeavor entrepreneurs from Turkey are PI Works, provides automated optimization services for GSM operators, and Pozitron, which develops mobile apps for business, lifestyle and entertainment. Both companies (along with 20 others) qualified in Endeavor's rigorous global certification process and are currently receiving intensive business development guidance from a network of seasoned experts.

Advocates hope that companies like this will create innovations that Turkey could not only peddle to the nearby wealthy markets of Europe, but also assume a leadership role among new, possibly more democratic, regimes in the Arab Middle East and Turkic Central Asia.

Rewards and Risks. These are big goals. However, the boom carries some downside risk. New business schools are popping up all over Istanbul with programs focused on entrepreneurship training, perhaps raising hope to unrealistic levels. Financing is still tough. And some government and corporate leaders lavish praise on entrepreneurs merely as a way to create a veneer of meritocracy around a system that is still highly dependent on pre-existing wealth and political connections.

The most interesting possibility, however, is that the young upstarts succeed in disrupting the old order, building organizations that challenge the incumbents for economic and political influence. As we've seen so vividly in recent weeks, once the expectations of Young World populations are awakened, they are not easily subdued by hollow promises.

Rob Salkowitz is author of Young World Rising: How Youth, Technology and Entrepreneurship are Changing the World from the Bottom Up (Wiley, 2010) and writes about business and innovation in emerging economies. Follow him on Twitter @robsalk.

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