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
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
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
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.