What is the project about?

The project is developed to stimulate job creation through providing capability development services focusing on productivity and competitiveness to SMEs. These services will address productivity challenges of the manufacturing industry through replicating the Government led policy tool of Applied SME Capability Centers. Productivity gains of the SME’s will enable them to be able to absorb higher levels of labour force as a results of expanded manufacturing base.

UNDP Turkey has an ongoing partnership with the Ministry of Industry and Technology for design, establishment and operationalization of the SME Capability Center in Ankara and this partnership will continue through the implementation of this component. Support from KfW will be utilized to scale up the services of Ankara SME Capability Center and to replicate this policy tool in Kayseri and Konya. In addition, the Government will provide additional resources for replication of the Center in Bursa.

What has been the situation?

Turkey is currently the country with the highest number of refugees in the world; hosting more than 3.5 million registered Syrians under temporary protection and inevitably this has a significant impact on the local labour market. Although 37,000 work permits have been granted to Syrians (under temporary protection or having residency) to date, challenges remain in terms of job creation.

On the other hand, productivity level of the manufacturing industry and SMEs- in particular- is one of the widely accepted structural problems of Turkish economy. Contribution of productivity to the economic growth is significantly low in Turkey compared to developed countries. Considering this, the Government has prepared several strategies in recent years and this project will be a part of these efforts to increase productivity, stimulate growth and create new jobs.     

What is our mission?

Our mission through the project is to contribute to enhancement of the productivity and competitiveness level of the localities through establishment and operationalisation of a widely known and proven policy tool called Applied SME Capability Centers.

How are we doing this?

In Ankara part of the project, we have been working with the Ministry of Industry and Technology (MoIT) General Directorate of Industry and Productivity as the main implementing partner and Ankara Chamber of Industry and the ASO 1st Organised Industry Zone Management also joined as implementing partners; agreed to invest considerable amount of time and resources for this private public partnership model. This strong ownership and commitment also serve as a critical basis for KfW’s investments in component 2.

Similar to the Ankara phase, in component two, the centers will provide high quality training programmes to SME’s in a real didactic manufacturing environment to improve their lean production capacity. Within a transformation context, the training programmes will include experiential learning, on the job training, one on one consultancy and awareness raising activities. In addition, the centers will have a dynamic structure to respond to the changing needs of the industries. For example, the center in Ankara will expand its service capacity including digital transformation in the short term. The progress achieved in Ankara so far will pave the way for a smooth implementation during replication of the centers in other locations.

The current project is being implemented with strong support of both government and private sector representatives which makes it possible to reach wider ecosystem stakeholders. The Component 2 of KfW funded Project will also establish and maintain formal cooperation models (protocols) with the local partners (i.e. Organized Industrial Zones, Chambers of Industry etc.) for maintaining financial, institutional and operational sustainability of the Centres. Local partners will also be provided with dedicated institutional capacity development programs (i.e. trainings, networking activities, business models etc.) throughout the project. The project also includes conditional agreements to make sure that Syrians are reached and benefit from newly created job opportunities.

How will Turkey benefit?

Low level of productivity of the manufacturing sector in Turkey is one of the key structural problems of the economy which is widely accepted and takes place in strategy documents of the Government.   The SME Capability Centres will increase the productivity levels of SMEs, including export potential. It is expected that this will led to growth of production and employment capacity of SMEs. Another key priority of the project is to channel these new employment opportunities to Syrians and host community members which will contribute integration policies of the government. Target is to create at least 2,000 jobs in Ankara, Kayseri and Konya with the help of KfW funding. In doing so, the Project will strengthen the resilience and self-reliance of Syrians and host communities. A reliable income through employment will reduce reliance on external support and provide resources for health, housing, education and other basic needs.

What has been achieved until today?

It is assumed that the Component 2 will start in the last quarter of 2018, parallel to the process of SME Capability Center in Ankara, and based on the request from the Government to further extend the budget and time to enlarge the scope.. The scope of services is planned to be enhanced with the additional support from KfW contributing to already agreed priorities of the Government.