I spent part of last week visiting with angel investors and entrepreneurs in Istanbul, Turkey. It was fascinating (not least because there was some active shelling going on between Syria and Turkey, albeit a thousand kilometers away in the south of the country).
In my presentation there, here are some of the things I argued Turkey has going for it:
In 2010 Turkey's median age was 28.1 vs an OECD average of 40, and a U.S. median age of 37. Entrepreneurship isn't entirely a young person's game, but it definitely helps to be young, energetic, and still have the capacity to take very risky bets with one's career. Turkey has that going for it with its young median age, and it is a hugely important attribute.
Granted, other countries in MENA (Middle East and North Africa) have even younger median ages -- almost all of the youngest countries in the world are in that general region -- but most lack some of the other factors that Turkey has below.
The education system is improving rapidly in Turkey, but still has a long way to go. Having said that, the country currently has the fastest growth in the OECD of people continuing on from high school to university or college, at around 8% per year, a remarkable statistic. Similarly, it has strong and improving universities, especially in sciences and engineering, which is hugely important to growing technical entrepreneurs. Relatedly, there is a great deal of flow back and forth at the graduate level, with top Turkish students attending the best schools elsewhere in the world, but increasingly coming back to Turkey afterward to work and create companies.
With a population of 74m and English widely taught in the school system, Turkey has among the larger populations in MENA of young people capable of carrying on a conversation in English. This improves considerably, of course, among students who spend time overseas, but it is noteworthy that English has widespread support as a second language in the Turkish curriculum. Given the importance of English in commerce, and in fund-raising and entrepreneurship in general, this is a significant advantage.
The situation is complex, but Turkey has progressed to being a stable, democratic society, albeit one that still shows signs of the ancient ethnic and religious components that make up this society. The country carries on peaceful elections, however, and continues to make reforms as it seeks to become a full EU member state. These are all, of course, hugely important in any attempt to become a modern economy with an entrepreneurial core, as entrepreneurs take on enough risk themselves without wanting to deal with political and religious complexities that make their lives even more difficult.
A quick check of the DoingBusiness indicators shows that Turkey ranks well in MENA, with only Israel and Saudi Arabia much easier countries in which to do business. Having said that, there are major issues doing business in Turkey, especially with respect to permissions and dealing with insolvency, and the latter is particularly important to entrepreneurs who face insolvency all too regularly.
Access to risk capital is improving rapidly in Turkey. There is increasing awareness among investors, large and small, of the entrepreneurial talent in the region, and recent financings have helped reinforce that realization. We have seen a number of major private equity and venture capital firms make investments in the country in the last year, and there are now a half dozen venture capital firms that either have offices in Istanbul or visit regularly. Similarly, an increasing number of angel investors are becoming more sophisticated about sharing deal flow, structuring deals, and comparing best practices as they seek out the best local entrepreneurs.
Finally, and entirely anecdotally, I was impressed with the many entrepreneurs I met in Istanbul. They were smart, plugged in, and they just plain got it with respect to what they were trying to do. The pitch session I attended could have happened anywhere in the world -- it just so happened to be at an Istanbul hotel. (I wished more of those pitches were aimed at global markets, rather than regional ones, but it's only a matter of time before that is the case.)