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Finance of the software industry in Turkey

Sakınç, Mustafa Erdem
This thesis aims to explore the challenges of ICT industries to have access to financial sources in Turkey. The specific subject of analysis is the Turkish software industry. First, it is identified that the global course of the science and technology policies and economic developments are intertwined and they are the major determinants of the current situation of high-tech sectors and their finance all over the world. The importance of finance is based on its association with the innovativeness of high-tech firms. The financial commitment is crucial for firms to sustain innovative activities before revenue generation. Today there is a widely used mainstream model of financial growth cycle defining the sources of finance and the specific needs of high-tech firms along their growth paths. Second, the historical course of finance in Turkey are analyzed and milestones of science and technology policies as well as the development of ICT industries are briefly discussed in order to exhibit the underlying structure of the present issues of high-tech sectors’ finance in Turkey. Later, the growth cycle model is implemented for Turkey to analyze the potential of financial sources for Turkish software firms with relevant quantitative data. It is seen that the interest of available financial sources towards high-tech sectors is limited and unconcerned. In addition, an inquiry for the finance of the software industry is also done through the analysis of interviews performed with managers of software firms and several funding organizations. Instabilities and uncertainties of the Turkish economy, underdevelopment of a national strategy on software and the lack of interest of available financial sources towards software industry are the major handicaps for the growth of software firms and the industry as a whole. A selective national industrial strategy on software is crucial for the true allocation of financial resources towards software firms.