GE Global Innovation Barometer 2018 TURKEY Report

GE Global Innovation Barometer 2018 TURKEY Report

GE Global Innovation Barometer 2018 TURKEY Report

Edelman Intelligence / general electric GE GlobalInnovationBarometer2018 TURKEYReport February2018 1

GE Global Innovation Barometer 2018 TURKEY Report

Edelman Intelligence / general electric ONE: Methodology TWO: Global Summary From Chaos to Confidence THREE: Turkey Executive Summary FOUR: Narratives in Detail Contents 2

GE Global Innovation Barometer 2018 TURKEY Report

Methodology 3

GE Global Innovation Barometer 2018 TURKEY Report

This year’s method and scope 4 Innovation BusinessExecutives 2,090 Business Executives in total across 20 markets Each respondent’s line of work involves taking part in their company’s innovation process/policies Responsible for making decisions related to innovation, product development or researchand development (R&D) activities in their company In Turkey, we talked to 80 Innovation Business Executives All answered a 30 minute interview Fieldworkdates: 12th of October – 1st of December 2017

Edelman Intelligence / general electric FromChaostoConfidence: EmergingPlayers, EmergingTechnologies, EmergingChallenges 5 Global Summary

2018 Key Findings From Chaos to Confidence: Emerging Players, Emerging Technologies, Emerging Challenges Emerging Confidence: While theUnited States (-8) and Germany (-7) see a drop in championship status from 2014, Japan (+8) and China (+4) take more share. Asia (34+ since 2014) and emerging markets are gaining confidence, viewing themselves as more innovative than they did in 2014. NewActors Driving Innovation: Multinationals are now leading theinnovation pack (+4 since 2014), while SMEs (-11 since 2014) and entrepreneurs (-2 since 2014) seem to have lost some of their innovation drive. In the Middle East and Asia especially, the private sector is becoming a more important driver of innovation while there is a decrease in governmentsdriving innovation. Working in a Protectionist World: Global executives want the best of both worlds: on one hand they want the benefits of protectionist policies on domestic businesses and jobs, and on the other hand, they want the benefits of globalization and open markets. A small majority of global executives (55%) believe protectionist policies benefit businesses within their country and 73% believe it is good for theworkforce. However, 68% globally believe their governmentcannot keep up with the pace of change and 22% (of those that prefer protectionism) see multinationals as the drivers of innovation.

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The Potential of Additive: Global executives are excited about thepotential of 3D printing, saying it will have a positive impact (63%), increase creativity (91%) and get goods to market faster (89%). At thesame time, 53% believe 3D printing has yet to reach its full potential, requiring more education and reassurance. Maximizing the Return on Innovation: Globally, 40% of innovations are having a positive impact on the bottom line. What’s thesecret to success for these “innovation achievers”? They’re taking a more measured approach. Businesses are waiting to perfect and test their innovation before launch rather than getting to market quickly—a 10-point jump since 2016 (now 65%). Innovation achievers also are more willing to wait for long- term ROI for breakthrough innovation (84%) and have a clear structure and process in place to measure that return (50% vs. 43%).

Hype vs Reality of Impact:Hype around certain technologies does not always equate to transformative impact. In fact, global executives believe thatmany under-hyped technologies will have a transformative impact, including energy grids (74% say it will bring transformative changeto their country), virtual healthcare (68%) and smart cities (71%). 4 5 6 Future of Work: The workforce is considered themost crucial element to innovation success in most markets, yet skills gaps continue to be a top concern among businesses. Nearly 3 in 4 (74%) global executives believe a lack of skills is an issue facing their industry—a challenge thathas increased over time (64% say a lack of talent/inadequate skills is a key challenge today, up from 56% in 2014).

7 2018 Key Findings From Chaos to Confidence: Emerging Players, Emerging Technologies, Emerging Challenges More Challenging Environment: Thechallenges confronting innovative businesses are tough – and getting tougher – both externally and internally. There is a 13-point increase (now 67%) since 2014 in lack of sufficient funding, a 6-point increase (now 65%) in theinability to scale innovations to a wider market, an 8-point increase (now 64%) in lack of adequate talent/ skillsets, and a 14- point increase (now 64%) in the inability of businesses to take risks. Emerging markets such as Poland, South Africa, Malaysia and Saudi Arabia are experiencing thegreatest increase in challenges. 8

Edelman Intelligence / general electric TurkeyExecutive Summary 8

Key findings Business executivesin Turkey are more confident when it comes to their innovation conduciveness, with 44%stating thattheircountry has an innovation conducive environment. This is a 23 percentagepoint increase since 2014 (21%), and an increase of 13 percentagepoints since 2016 (31%). Multinationals continue to take the lead in driving innovation, which confirms the global narrative; 39%of businessexecutives say multinationalsdrive innovation compared to the global average of 23%. Multinationalcompanies have also made substantialgains, improvingby 22 percentage pointssince 2014,whenthey were at 17%. More than one in two businessexecutives(56%) agree with the ideathat protectionism is beneficialfor businesses,while 44%of businessexecutives thinkthat protectionistpolicies would have a negative impact on businessinnovation in Turkey.

Among Turkish business executives,there is a great dealof excitement around the potentialof 3Dprinting, withmore than threein four statingthat it willhave a positive impact on businesses (79%), over-indexing against the global average of 63%. For Turkish business executives,the lack of talent / inadequate skillsetsis not perceivedas a challenge as strongly as it is globally. Compared to the global average of 64%,only 33%of Turkishbusinessexecutives say this is a challenge. 9

10 - Turkey confirms the global narrative, with39%saying thatmultinationalsare driving innovation, which over-indexes against theglobal average of 23%.Multinational companies have made substantialgains, improvingby 22 percentagepoints from 2014 (17%). - Government and publicauthoritiesat a national level have seen a decline year over year. They were the leadingdriverof innovation amongst 24%of businessexecutives in 2014,as well as 31%in 2016.Yet, for GE GIB 2018,justover one in ten Turkish businessexecutives see the government and publicauthoritiesas a driverof innovation (11%).

New Actors Driving Innovation: Multinationalsare now leadingthe innovation pack (+4 since 2014), while small and medium-sized enterprisesor SMEs (-11 since 2014)and entrepreneurs(-2 since 2014) seem to have lost some of theirinnovation drive. In the Middle East and Asia especially, the private sector is becoming a more importantdriver of innovation while thereis a decrease ingovernments driving innovation.

11 - Turkey is not seen as a global innovation champion. Since the GE GIB 2016,the country is again viewed by only 1%of business executives across the world as the champion. - Business executives in Turkey are more confidentwhen it comes to their innovation conduciveness, with44%statingthat theircountry has an innovation conducive environment. This is an increase of 23 percentagepoints since 2014 (21%), and an increase of 13 percentagepoints since 2016 (31%). Emerging Confidence: While the United States (-8) and Germany (-7) see a drop in championship status from 2014, Japan (+8) and China(+4) take more share. Asia (34+ since 2014) and emergingmarkets are gaining confidence, viewing themselves as more innovative than they did in 2014.

12 - In Turkey, more than one in two businessexecutives (56%) agree withthe idea that protectionismis beneficialfor businesses; while 44%of businessexecutives thinkthatprotectionistpolicies would have a negative impact on businesses in Turkey. - When asked about the reasons why protectionistpolicies would have a negative impact on businesses, 63%of Turkishbusinessexecutives say it would make the country less appealingto foreign investment, whichover-indexes against the global average of 45%. - Turkey supportsthe global narrative,with 68%of businessexecutives believing theirgovernment cannot keep up withthe pace of innovation, the same percentageas the global average.

Working in a ProtectionistWorld: Global executives wantthe best of both worlds: on one hand they want the benefitsof protectionist policies on domestic businesses and jobs, and on the other hand, they want the benefitsof globalizationand open markets. A small majority of global executives (55%) believe protectionist policies benefitbusinesses withintheir country and 73%believe it is good for the workforce. However, 68% globally believe their government cannot keep up withthe pace of change and 22%(of those that preferprotectionism) see multinationalsas the drivers of innovation.

13 - Among Turkishbusiness executives, thereis a great deal of excitement around the potentialof 3D printing,withmore thanthree in fourstating thatit willhave a positive impact on businesses(79%), whichover-indexes against the global average of 63%. - 3D printingis viewed positively by Turkishbusiness executives, with96%of business executives saying that 3D printingwould reducethe cost of goods, makingthem more affordable, whichover indexes against the global average of 83%. - With 89%,Turkishbusinessexecutives also believe that those businesses who invest in 3D printingwould leave other businessesbehind,over-indexing against the global average of 81%.

The Potentialof Additive: Global executives are excited about the potentialof 3D printing, saying it will have a positive impact (63%), increase creativity (91%) and get goods to market faster (89%). At the same time, 53%believe 3D printinghasyet to reach its full potential,requiring more education and reassurance.

14 Maximizing the Return on Innovation: Globally, 40%of innovations are having a positive impact on the bottom line. What’s the secret to success for these “innovation achievers”? They’re takinga more measured approach. Businesses are waitingto perfectand test their innovation before launch ratherthan gettingto market quickly—a10-point jump since 2016 (now 65%). Innovation achievers also are more willingto wait for long-term ROI for breakthroughinnovation(84%) and have a clear structureand process in place to measure that return(50% vs. 43%).

- Turkey supportsthe global narrative,with businessexecutives statinga mean score of 39%of theirinnovations beinga success that positively impacted theirbottom lineand improved theirposition in the market, compared to 40% globally. - Compared to the global results, Turkishbusinessexecutives over-index on the choice to ‘wait to perfectand test the innovation before launch,in order to make sure the customer is completely satisfied from the start’, (78% compared to the global average of 65%). This is also a 10 percentage pointincrease from 2016 (68%).

- Turkishbusinessexecutives are more likely to ‘create innovations outsideof the current ‘innovation hype’ and trends, inorder to disruptthemarket’, which over-indexes against the global average (66%in Turkey, compared to 41% globally). - However, when it comes to measuringthe returnon investment of innovation, Turkish businessexecutives under-indexagainst theglobal average in having measurement frameworks in place to keep investors happy (29%compared to 39% globally).

15 - The average hype of all innovations in Turkey is higherthan the globalaverage. All but two innovations over-index against global hype. The two thatdo not over-index compared to the global average are (Big Data and analytics (74%), and IoT (73%). - Turkishbusinessexecutives feel Smart Citiesare hyped in theircountry, these innovations over-index against the globalaverage by 27 percentagepoints (89% compared to 62%globally), as well as ArtificialIntelligence,(88% compared to 71% globally). - When it comes to the transformative impact, Nanotechnology is the only hype which over-indexes against the global average (81% compared to 72%globally), withBig Data and Analytics(63%) and IoT (63%) rankinglast amongst all transformative impact innovations.

Hype vs. Reality of Impact: Hype around certaintechnologies does not always equateto transformative impact. In fact, global executives believe that many under-hyped technologies will have a transformative impact, includingenergygrids(74% say it will bringtransformativechange to theircountry), virtualhealthcare (68%) and smart cities (71%).

16 - More than six in ten business executives in Turkey say there is a skillsgap in their industry(64%), this is however 10 percentage pointslower than the global average of 74%. - Similarly, Turkishbusinessexecutives are less likelyto state a lack of talent/ inadequateskillsetsas a key challenge, withone in threebusiness executives affirmingthis (33%), whichunder-indexesagainst the global average by 31 percentage points (64%). Future of Work: The workforce is considered the most crucial element to innovation success in most markets, yet skills gaps continue to be a top concern among businesses. Nearly 3 in 4 (74%) global executives believe a lack of skills is an issue facing their industry—achallengethat has increased over time (64% say a lack of talent/inadequateskillsisa key challengetoday, up from 56% in 2014).

17 More Challenging Environment: The challenges confronting innovative businesses are tough – and gettingtougher– both externally and internally.There is a 13-pointincrease (now 67%) since 2014 inlack of sufficientfunding,a 6-pointincrease (now 65%) in the inabilityto scale innovations to a widermarket, an 8-pointincrease (now 64%) inlack of adequate talent/skillsets, and a 14-point increase (now 64%) in the inability of businessesto take risks. Emerging markets such as Poland, South Africa, Malaysia and Saudi Arabiaare experiencingthe greatest increase in challenges. - In the currentGE GIB, Turkey under-indexesfor every singlechallenge statement compared to the global average, withno issue beingperceived as a challenge by a majority.

- The top two challenges reported by Turkishbusinessexecutives are the lack of sufficient investment and financialsupport(48%compared to 67% globally) and the incapacity of businesses to take risk (48% compared to 64%globally). - The biggestdisconnect between the globalaverage and businessexecutives in Turkey is the challenge concerningthe overwhelming amount of information. Compared to the global average of 57%, Turkey scores 34 percentagepoints lower, withonly 23%of businessexecutives perceiving it as a challenge.

Narratives in Detail 18

19 Section One: Emerging Players • New Actors Driving Innovation • Emerging Confidence • Working in a Protectionist World Section Two: Emerging Technologies • The Potential of Additive • Maximizing the Return on Innovation (ROI) • Hype vs. Reality of Impact Section Three: Emerging Challenges • Future of Work • More Challenging Environment Contents

Edelman Intelligence / © 2017 20 sectionone: Emerging Players

Edelman Intelligence / general electric NewActorsDriving Innovation 21 Executive Summary • Multinationals are now leading the innovation pack (+4 since 2014), while SMEs (-11 since 2014) and entrepreneurs (-2 since 2014) seem to have lost some oftheir innovation drive. In the Middle East and Asia especially, the private sector is becoming a more important driver of innovation while there is a decrease in governments driving innovation.

22% 20% 19% 14% 11% 9% 3% 1% 11% 18% 23% 18% 12% 9% 2% 5% Small and medium companies (10 to 250 employees) Individual entrepreneurs and start-ups Multinational companies investing in your country Large enterprises (more than 250 employees) headquartered in your country Universities and research labs Government and public authorities at national level Public authorities at local level (region / city) State owned enterprises in your country (SoE) 2014 2018 Q3. Who do you think is driving innovation the most today in your country? Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] Who is themain driver for innovation in your country? (Historical tracking data at a global level) Multinational companies are indeed back in the driving seat for innovation, while SMEs seem to lose some of their innovation drive.

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24% 20% 17% 17% 14% 6% 2% 0% 11% 5% 39% 13% 20% 3% 5% 4% Government and public authorities at national level Universities and research labs Multinational companies investing in your country Individual entrepreneurs and start-ups Large enterprises (more than 250 employees) headquartered in your country Small and medium companies (10 to 250 employees) Public authorities at local level (region / city) State owned enterprises in your country (SoE) 2014 2018 Q3. Who do you think is driving innovation the most today in your country? Base business executives in Turkey 2014: 100, Turkey business executives 2018: 80 [Full base sizes listed in the appendix] Who is themain driver for innovation in your country? (Historical tracking data at a global level) In Turkey, multinationals are driving innovation, while large enterprises are also gaining momentum since 2014. 23

Q3. Who do you think is driving innovation the most today in your country? Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] Multinationals are themain driver for innovation in your country (Historical tracking data at a global level) Rankedby largest increase from 2014 to 2018 Multinationals’ growing reputation as the driver of innovation is seen across the majority of countries. 17% 16% 23% 20% 8% 30% 25% 7% 7% 22% 12% 27% 16% 17% 16% 11% 33% 33% 19% 26% 39% 29% 30% 27% 15% 36% 30% 12% 12% 26% 14% 29% 17% 19% 20% 13% 32% 31% 13% 21% 2014 2018 Emerging economies, notably Turkey and South Africa have seen the largest rise in business executives believing multinationals are the main driver of innovation in their country.

24 Increase Decrease

Q3. Who do you think is driving innovation the most today in your country? Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] SMEs are the main driver for innovation in your country (Historical tracking data at a global level) Rankedby largest decrease from 2014 to 2018 SMEs are losing their reputation as a driver of innovation in developed economies – particularly in Europe. 18% 9% 27% 10% 4% 6% 7% 14% 22% 14% 20% 24% 30% 24% 30% 37% 26% 35% 36% 49% 23% 10% 29% 8% 1% 3% 1% 6% 13% 5% 10% 12% 15% 8% 13% 20% 7% 11% 9% 18% 2014 2018 25 Increase Decrease

In emerging economies, governments are now not seen to be driving innovation as much as they were in 2014. Decrease 21% 33% 23% 24% 25% 13% 26% 12% 11% 9% Malaysia UAE China Turkey Saudi Arabia 2014 2018 Q3. Who do you think is driving innovation the most today in your country? Base Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] -7 -8 -11 -13 -16 26 Governments are the main driver for innovation in your country (Historical tracking data at a global level) Rankedby 2014 – 2018 growth

In parallel, in some economies where government traditionally dominated innovation, such as Turkey and South Africa, business executives now see increasing value driven by the private sector. Increase Q3. Who do you think is driving innovation the most today in your country? Base Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] Multinationals are themain driver for innovation in your country (Historical tracking data at a global level) Rankedby 2014 – 2018 growth 17% 16% 23% 20% 8% 30% 25% 39% 29% 30% 27% 15% 36% 30% Turkey South Africa Indonesia Poland France Nigeria Mexico 2014 2018 +22 +13 +7 +7 +7 +6 +5 27

Edelman Intelligence / © 2017 Emerging Confidence 28 Executive Summary • While the United States (-8) and Germany (-7) see a drop in championship status from 2014, Japan (+8) and China (+4) take more share. Asia (34+ since 2014) and emerging markets are gaining confidence, viewing themselves as more innovative than they did in 2014.

Countries that traditionally dominated global innovation leadership, notably the U.S. and Germany, are stalling, ceding ground to emerging and developed Asia. Emerging markets catch up aggressively, and China and Japan have become an alternative hotspot for global Innovation—confirming that innovation is disrupting the global competitive landscape at the regional as well as industry level. Previous GE Global Innovation Barometers had already highlightedstronger innovation momentum in emerging markets.

What is the country that you consider to be the leading innovation champion? Rankedby 2018 data 38% 12% 13% 15% 1% 4% 3% 1% 3% 1% 36% 13% 10% 16% 1% 4% 3% 0% 2% 1% 33% 17% 10% 10% 2% 4% 4% 1% 3% 3% 28% 21% 14% 9% 3% 3% 3% 2% 2% 2% USA Japan China Germany Sweden South Korea UK Canada India UAE 2013 2014 2016 2018 Q1. What is THE country that you consider to be the leading innovation champion? Base business executives 2013: 3,100, business executives 2014: 3,309, business executives 2016: 2,748, business executives 2018: 2,090, [Full base sizes listed in the appendix] 29 1% in 2016 1% in 2018

This shift in innovation is also felt internally, with many countries recognizing their own market as being a more innovation conducive environment than it was in 2014. 30 For your own market, how far would you say thatyou have developed an Innovation conducive environment? Percentage that feel they have a strong innovation conduciveenvironment (top 3 box) Q2. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 3 Box 8-10] Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] 24% 28% 14% 7% 32% 23% 18% 7% 21% 73% 67% 43% 35% 58% 49% 44% 30% 44% China India Brazil Malaysia Canada Mexico Indonesia Poland Turkey 2014 2018 40% 40% 36% 30% 11% 72% 53% 20% 26% 7% 41% 77% 61% 61% 56% 48% 28% 85% 59% 24% 27% 8% 38% 65% UAE UK France Global Total Saudi Arabia USA Sweden South Africa South Korea Nigeria Japan Germany

Asian markets have seen the biggest increase in the way they evaluate how innovation conducive their country is. For your own market, how far would you say thatyou have developed as an innovation conducive environment? Percentage that have a strong innovationconduciveenvironment (top 3 box) Q2. For each of the following markets, how far would you say that they have developed as an Innovation conducive environment? [Top 3 Box 8-10] Base business executives 2014: 3,309, business executives 2016: 2,748, business executives 2018: 2,090 [Full base sizes listed in the appendix] 49% 39% 29% 28% 26% China India Brazil Malaysia Indonesia Top 5 increases 2014 to 2018 On average Asian countries see a 34%increase in how they evaluate theirability to foster innovation 31

The innovation influence has become multipolar; China and Japan have become aspirational. 32 Asia LATAM Africa Q1. What is THE country that you consider to be the leading innovation champion? Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA: 150 Base business executives: 2,090 Africa to China A relationship of trade and investment 41% of business leaders in Africa see China as the innovation champion. Chinese companies are investing inAfrica and China is now the country’s biggest economic partner. Europe (Inward Looking) North America (Inward Looking) LATAM to Japan A relationship of trade and investment 33% of business executives believe Japan is the innovation champion as Japan invests heavily in the region. Asia & the U.S. An aspirational relationship Asia looks to the U.S., with 34% of business executives viewing them as the innovation champion (64% in China).

Europea self-serving relationship Europe sees countries within the continent as being key innovation champions (Germany 12%, Sweden 10%, U.K. 6%). However 22% of business executives in Europe look to the U.S. as champions and 19% of executives look to Japan. TheU.S. a confident view The U.S. believesthe U.S. is the innovation champion (61%). Turkeyto the US: Turkish business executives are more likely to look towards the US, with 31% choosing them as the innovation champion.

Working in a Protectionist World 33 Executive Summary • Global executives want the best ofboth worlds: on one hand they want the benefits ofprotectionist policies on domestic businesses and jobs, and on the other hand, they want the benefits ofglobalization and open markets. • A small majority of global executives (55%) believe protectionist policies benefit businesses within their country and 73% believe it is good forthe workforce. However, 68% globally believe their government cannotkeep up with the pace of change and 22% (ofthose that prefer protectionism) see multinationals as the drivers of innovation.

A slightly more defensive approach to innovating (defending against international competition) is reflected in the contrasted views that global business leaders have of protectionist policies. A small majority of them depict protectionism as potentially conducive for innovation success. 55% of business executives think that if their governmenthad protectionist policies towards innovation it would benefit the business sector. 55% 45% Pro-protectionism Anti-protectionism Q6. There have recently been discussions about the potential impact of protectionist politics and policy on innovation and businesses. Out of the statements below related to protectionism, which do you agree with the most? Base business executives: 2,090, Business executive in Turkey: 80 If thegovernment had a political protectionist stance on innovation in my country it would be beneficial to businesses.

71% 65% 63% 63% 63% 61% 60% 58% 57% 56% 56% 55% 53% 53% 51% 51% 51% 49% 47% 43% 39% Only 4 countries had a majority that felta protectionist stance to innovation would not be beneficial to business. 34 44% 56%

The majority of business executives agree that regulations around privacy and data are stifling innovation. 69% 29% 2% Regulations around privacy and data protection are preventingbusinessesfrom adopting more radical/transformative innovations Q5. How much do you agree or disagree with the following statements? Regulations around privacy and data protection are preventing businesses from adopting more radical / transformative innovations. Base business executives: 2,090, Business executives in Turkey; 80, Pro-protectionism: 1,153, Anti-protectionism: 937, Protectionism base sizes too small to report on in Turkey Agree Disagree Pro-protectionism Anti-protectionism 70% 28% 2% 68% 30% 2% Agree Disagree Don’t know Don’t know Agree Disagree 35 34% 60% 6%

And business leaders feel regulations around privacy and data protection are stifling innovation more so than two years ago. 49% 55% 65% 60% 61% 63% 61% 65% 55% 66% 74% 61% 69% 65% 73% 76% 79% 85% 69% 79% 70% 60% 80% 73% 73% 75% 67% 74% 61% 69% 75% 75% 60% 70% 66% 69% 71% 72% 77% 56% 65% 2016 2018 Q5. How much do you agree or disagree with the following statements? Base business executives 2016: 2,748, business executives 2017: 2,090 [Full base sizes listed in the appendix] Regulations around privacy and data protection are preventing businesses from adopting more radical / transformative innovations NET: Agree 2016 data not available Increase Decrease

Private sector is seen as driving innovation as governments can’t cope with the pace of innovation. 37 68% 31% 2% In my country, the government is not able to regulateinnovation as the system cannot keep up with the pace of innovation Q5.4 How much do you agree or disagree with the following statements? In my country the government is not able to regulate innovation as the system cannot keep up with the pace of innovation. Base business executives: 2,090, Business executives in Turkey: 80, Pro-protectionism: 1,153, Anti-protectionism: 937 // Protectionism base sizes too small to report on in Turkey Agree Disagree Don’t know Pro-protectionism Anti-protectionism 64% 34% 2% 72% 26% 2% Agree Disagree Don’t know Don’t know Agree Disagree 30% 68% 2%

The majority of business executives across 20 markets feel that the government cannot keep up with the pace of innovation. Q5. How much do you agree or disagree with the following statements? Q5_D. In my country the government is not able to regulate innovation as the system cannot keep up with the pace of innovation. Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA: 150 91% 86% 80% 78% 77% 76% 74% 71% 71% 68% 68% 67% 66% 66% 65% 59% 55% 55% 55% 51% 41% Brazil Mexico South Korea Poland Japan UK Nigeria France South Africa Global Average Turkey Germany Sweden USA India Indonesia China Malaysia Saudi Arabia Canada UAE In my country, the government is not able to regulateinnovation as thesystem cannot keep up withthe pace of innovation, 38

Edelman Intelligence / © 2017 39 sectiontwo: Emerging Technologies

Edelman Intelligence / general electric The Potential of Additive 40 Executive Summary: The Potential of Additive • There is excitement from global executives around the potential of 3D printing with 63% believing it will have a positive impact (91% saying it increases creativity and 89% saying it lets goods get to market faster), but more education and reassurance is needed. • While there is real excitement, 53% believe 3D printing has yet to realize its full potential.

The majority of business executives believe 3D printing’s impact will be mostly positive for businesses in their country. 41 Q13. We would now like to ask you about 3D (3-dimensional) printing and the impact you think this might have on businesses in your country. Do you think 3D (3- dimensional) printing is beneficial or could have a negative impact on businesses? Base Business Executives: 2,090, Business Executives in Turkey: 80 63% 31% 4%3% I think3D printingwillhave a positive impact on businesses inmy country I think3D printingwillhave both a positive and negative impact on businesses in my country I think3D printingwillhave a negative impacton businesses inmy country Don't know 79% 16% 1% 4%

Benefits include increased creativity, speed to market, lower costs, competitive advantage and improved CO2 footprint. 42 Q14. Imagine 3D printing has become a reality in your country with business and industries adopting it. How far do you agree or disagree with the following statements? Base Business Executives: 2,090, Business Executives in Turkey: 80 = 80% 81% 83% 89% 91% Beneficial for theenvironment and reduce CO2 in manufacturing Businesses that invest in 3D printing will leave other businesses behind Reduce the costs of goods making them more affordable Enable goods to getto marketfaster Allow businesses to be more creative in theproducts and goods they can create 93% 94% 96% 89% 80%

South Africa (73%), Sweden (70%) However, the benefits of 3D printing vary at a country level. 43 Reduce the costs ofgoods making them more affordable (83%) Turkey (96%), Brazil (95%), India (90%) Beneficial for the environment and reduce CO2 in manufacturing (80%) Indonesia (95%), China (93%), Malaysia (93%), Brazil (89%), India (89%) Germany (68%), South Korea (67%), Japan (66%) Businesses that invest in 3D printing will leave other businesses behind (81%) Saudi Arabia (94%), China (91%), Malaysia (89%), Turkey (89%) Germany (72%), Sweden (71%), Indonesia (71%), Canada (69%) Q14. Imagine 3D printing has become a reality in your country with business and industries adopting it. How far do you agree or disagree with the following statements? [Net: Agree] Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA: 150

Only 4 in 10 business executives are very familiar with 3D printing. 44 Q11. Are you familiar with 3D (3-dimensional) printing and what it is? Base Business Executives: 2,090 41% Are very familiar with 3D printing Yes, I am very familiar with 3D printing (41%) Yes, but I am only somewhat familiar with 3D printing (52%) No, I am not familiar with 3D printing (6%) Don’t know (1%) With only 4 in 10 business executives being very familiar with 3D printing, thereis work to be done to encourage the majority of business executives to become more familiar and therefore adopt 3D printing.

1% 0% 39% 60%

However, a majority of business executives believe 3D printing has yet to realize its full potential. 45 Q12. How mature would you say the 3D (3-dimensional) printing industry is in your country. Base Business Executives: 2,090, Business Executives in Turkey: 80 5% 14% 3D printing has already had an impact on businesses 21% 3D printing is talked about, but isn't a realityyet 3D printing isn't being talked about 27% 32% 3D printing is starting to become a reality but won't impact businesses for several years 3D printing has become a reality that is impacting businesses 53% say3D printing hasn’treached its full potential yet 11% 30% 38% 16% 5% 54%

Outside of larger countries with strong manufacturing industries, most do not believe 3D printing has made an impact yet in their country. 69% 68% 66% 61% 60% 58% 57% 55% 54% 54% 53% 52% 52% 50% 50% 49% 46% 45% 44% 40% 31% 27% 29% 33% 34% 31% 31% 41% 34% 41% 37% 41% 44% 42% 46% 34% 48% 48% 55% 48% 53% 61% South Africa South Korea Poland Indonesia Saudi Arabia Canada Brazil Japan Turkey UK Global Total Germany France Malaysia Nigeria Mexico UAE China Sweden USA India Being talked about Having an impact Q12. How mature would you say the 3D (3-dimensional) printing industry is in your country? Base Business Executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA: 150 How mature would you say the3D (3-dimensional) printing industry is in your country? 46

Globally, the high-tech /IT and manufacturing sectors are most likely to see the impact of 3D printing. 47 52% 43% 43% 42% 41% 40% 40% 39% 36% 35% 34% High-tech / IT Manufacturing (Other) Fast Moving Consumer Goods Electronics Total Industrial Products Energy related Health related Professional services / Business services Telecoms / Internet Automotive / transport / logistics 3D Printing is having an impact in my country Sectors above average Sectors below average Q12. How mature would you say the 3D (3-dimensional) printing industry is in your country. Base Business Executives: 2,090

Edelman Intelligence / general electric Maximizing the ReturnonInnovation 48 Executive Summary • Globally, 40% of innovations are having a positive impact on the bottom line. What’s the secret to success for these “innovation achievers”? They’re taking a more measured approach. • Businesses are waiting to perfect and test their innovation before launch rather than getting to market quickly—a 10-pointjump since 2016 (now 65%). Innovation achievers also are more willing to wait for long-term ROI for breakthrough innovation (84%) and have a clear structure and process in place to measure that return (50% vs. 43%).

We measured a decrease in the appetite for bullish risk taking. Q23. What percentage of your company’s innovations over the past 5 years do you think have fallen into the following categories? (MEAN SCORE – including 0) Base business executives 2018: 2,090, business executives in Turkey 2018: 80 40% 25% 20% 15% 60% of innovations over the last five years have not resulted in a positiveimpact on the bottom line (Mean Score) A success that positivelyimpacted the bottom line and improved ourposition in the market A success thatimproved our position in the market but did not positively impact our bottom line A failure that provided useful learnings for future innovations A failure that did not provide any useful learnings for future innovations Businesses are placing further emphasis on protecting their bottom line and maximizing the “Return on Innovation” (ROI). 49 39% 61% 24% 21% 16%

Already challenged in their ability to disrupt themselves and keep up with the innovation race, business executives re- emphasize the basic and fundamental recipes for success. Know how key digitalizationisto innovation success Focus on measurement Thinkabout long-term strategies Be more cautious in theirapproach to innovation Business executives who say 51-100%of theircompany’s innovations have positively impacted theirbottom line over the last 5 years are more likely to… Businesses are choosing their battles, with an emphasis on digital transformation; focusing on a properly measured ROI and being more measured in their go-to-marketstrategy.

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Innovation achievers are using data effectively and integrating digital capabilities into the business model. They know how key digitalization is to innovation success 78% 78% 77% 37% 88% 86% 84% 54% To harness and use dataineffectivewaysto make informed business decisions (% perform well) To have a datasecurity program in placeto mitigate against any risks of losing data, data breachesor being hacked(% perform well) To put digitalcapability atthecoreof their business model (%perform well) Digitalization has madeitmucheasierand efficient for us to measureour return on investment (% agree) Non-Achievers Achievers Q23 – Mean (Including Zero) Summary - What percentage of your company’s innovations over the past 5 years do youthink have falleninto the following categories?Base business executives 2018: 2,090. Base 0-25% 693, 26-49% 688, 50-100% 709.Table Q17How does your company currently perform against these successcriteria? Q22 - Which ofthe below statements represent your attitudes to measuring the return on investment of innovation at your company? Base business executives 2018: 2,090// Innovation Achievers and Non-Achievers too small to report on at a country level 51

Achievers are more likely to focus on demonstrating the value to investors, clients and users, and measure the successes of their innovations. They know how key measurement is to innovation success 80% 40% 35% 88% 46% 41% To demonstrate the value of their innovations to clients and users (% perform well) We have to measure the impact of innovation on business performance to get further investment and funding (% agree) We have measurement frameworks inplace to keep our investors happy (% agree) Non-Achievers Achievers Q23 – Mean (Including Zero) Summary - What percentage of your company’s innovations over the past 5 years do youthink have falleninto the following categories?Base business executives 2018: 2,090. Base 0-25% 693, 26-49% 688, 50-100% 709.Q17 How does your company currently perform against these success criteria? Q22- Which of the below statements represent your attitudes to measuring the return on investment of innovation at your company? Base business executives 2018: 2,090 // Innovation Achievers andNon-Achievers toosmall to report onat a country level 52

Achievers are more cautious and measured in their approach to innovation. They know how key being cautious is to innovation success 63% 58% 74% 72% To protect the core business as much as possible, so it continues to generate the profitability needed to support Research & Innovation efforts (% agree) To waitto perfect and test the innovation before launch, in order to make sure the customer is completely satisfied from the start (% agree) Non-Achievers Achievers Q23 – Mean (Including Zero) Summary - What percentage of your company’s innovations over the past 5 years do youthink have falleninto the following categories?Base business executives 2018: 2,090. Base 0-25% 693, 26-49% 688, 50-100% 709.Q16. On a scale from 1 to 10, how crucial do youthink the following elements are for a company to be able toinnovate successfully? Q24A - Now we are going to present different views onthe ideal innovation process.For each you will be showntwo options. We would like youto pick the one you feel is the truest or the most relevant in driving successful innovation. Base business executives 2018: 2,090c // Innovation Achievers and Non-Achievers toosmall to report on at a country level When innovating, it is best… When innovating, it is best… 53

With decreased emphasis on speed and more emphasis on protecting their core business, executives are undergoing a reality check. 54 Q24. Now we are going to present different views on the ideal innovation process. For each you will be shown two options. We would like you to pick the one you feel is the truest or the most relevant in driving successful innovation. Sometimes you may feel your opinion sits in the middle, but please try to select the one which you believe is the most critical. [Top 3 Box 8 - 10] Base business executives 2016: 2,748, business executives 2018 2,090 When innovating, itisbest...

(19 markets no UK) 65% 35% 69% 31% To protect the core business asmuch as possible, so it continues to generate the profitability needed to support Research & Innovation efforts To bringinnovative products and/or services to market as fast as possible without worrying about the short-term impact it can have on the core business 2016 2018 2016 2018 -4 +4

Turkey mirrors the global narrative and sees a positive shift in business executives protecting the core business from 2014. 55 Q24. Now we are going to present different views on the ideal innovation process. For each you will be shown two options. We would like you to pick the one you feel is the truest or the most relevant in driving successful innovation. Sometimes you may feel your opinion sits in the middle, but please try to select the one which you believe is the most critical. [Top 3 Box 8 - 10] Base business executives 2016: 2,748, business executives in Turkey 2018: 80 When innovating, itisbest...

(19 markets no UK) 57% 43% 66% 34% To protect the core business asmuch as possible, so it continues to generate the profitability needed to support Research & Innovation efforts To bringinnovative products and/or services to market as fast as possible without worrying about the short-term impact it can have on the core business 2016 2018 2016 2018 +9 -9

And this reality check is being felt in the majority of countries – notably in China and Germany among others. Q24. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 3 Box 8-10] Base business executives 2016: 2,748, business executives 2018: 2,090 [Full base sizes listed in the appendix] 67% 56% 64% 52% 62% 66% 57% 65% 72% 77% 76% 65% 63% 61% 72% 76% 59% 65% 65% 63% 85% 72% 78% 64% 72% 75% 66% 69% 89% 80% 79% 68% 66% 60% 70% 73% 55% 58% 55% 49% 67% 2016 2018 When innovating, it is best... To protect the core business as much as possible, so it continues to generate the profitability needed to support Research & Innovation efforts Rankedby 2016 to 2018 difference Increase Decrease 2016 data not available 56

In 2018, fully testing new products and solutions before bringing them to market emerges as a preferred strategy, rather than charging ahead with minimum viable products. Q24.Now we are going to present different views on the ideal innovation process. For each you will be shown two options. We would like you to pick the one you feel is the truest or the most relevant in driving successful innovation. Sometimes you may feel your opinion sits in the middle, but please try to select the one which you believe is the most critical. [Top 3 Box 8 - 10] Base business executives 2016: 2,748, business executives 2018 2,090 When innovating, it is best...

(19 markets no UK) 45% 55% 35% 65% To get to market as quickly as possible to keep an edge on competition, even if this means having an imperfect productor service and improving it along the way To wait to perfect and test the innovation before launch, in orderto make sure thecustomer is completely satisfied from the start 2016 2018 2016 2018 -10 +10 57

At the same time, Turkey continues to favor a more cautious approach to innovation. Q24.Now we are going to present different views on the ideal innovation process. For each you will be shown two options. We would like you to pick the one you feel is the truest or the most relevant in driving successful innovation. Sometimes you may feel your opinion sits in the middle, but please try to select the one which you believe is the most critical. [Top 3 Box 8 - 10] Base business executives in Turkey 2016: 100, business executives in Turkey 2018: 80 When innovating, it is best...

(19 markets no UK) 32% 68% 22% 78% To get to market as quickly as possible to keep an edge on competition, even if this means having an imperfect productor service and improving it along the way To wait to perfect and test the innovation before launch, in orderto make sure thecustomer is completely satisfied from the start 2016 2018 2016 2018 -10 58 +10

Edelman Intelligence / general electric Hype vs. Reality of Impact 59 Executive Summary • Hype around certain technologies does notalways equate to transformative impact. In fact, global executives believe that many under-hyped technologies will have a transformative impact, including energy grids (74% say it will bring transformative change to their country), virtual healthcare (68%) and smart cities (71%).

The latest wave of innovation hype is comprehensive, spanning a number of disruptive forces, from Artificial Intelligence (AI) to robotics to advanced manufacturing. Q9.When we talk about innovation “hype”, we mean hot topics or trends that are being widely discussed but aren’t necessarily having an impact yet. Out of the innovations listed below, please rate each based on how much “hype” they are creating in your country today. Base Business Executives: 2,090 71% 70% 69% 68% 67% 66% 65% 64% 62% 62% 61% 57% Artificial and machine intelligence Internet of Things Financial technology and currency 3D printing Augmented Reality/ Virtual reality Big data and analytics Smart energy grids Nanotechnology Driverless transport Smart cities Electrification of the transport system Virtual healthcare diagnosis How much “hype”arethey arecreating in your country today? (NET hype) 65% average hype 60

The average hype of all innovations in Turkey is higher than the global average, with Smart Cities and Artificial Intelligence coming out on top. Q9.When we talk about innovation “hype”, we mean hot topics or trends that are being widely discussed but aren’t necessarily having an impact yet. Out of the innovations listed below, please rate each based on how much “hype” they are creating in your country today. Base Business Executives: 2,090. Base Business Executives in Turkey: 80 89% 88% 85% 84% 83% 83% 81% 79% 79% 74% 73% 69% Smart cities Artificial and machine intelligence Nanotechnology Augmented Reality/ Virtual reality 3D printing Electrification of the transport system Financial technology and currency Smart energy grids Driverless transport Big data and analytics Internet of Things Virtual healthcare diagnosis How much “hype”arethey arecreating in your coun today? (NET hype) 80% average hype 61

The transformative impact of macro innovation still generates excitement from business executives around the world. Q9.When we talk about innovation “hype”, we mean hot topics or trends that are being widely discussed but aren’t necessarily having an impact yet. Out of the innovations listed below, please rate each based on how much “hype” they are creating in your country today. Base Business Executives: 2,090. Q10. Next, please rate each of these innovations in terms of how much impact and transformative change they will bring to your country. Base Business Executives: 2,090 How much “hype”arethey arecreating in your country today? (NET hype) How much impact and transformative change will they bring to your county? (NET impact) 71% 70% 69% 68% 67% 66% 65% 64% 62% 62% 62% 57% 74% 71% 70% 69% 68% 71% 74% 72% 68% 71% 72% 68% Artificial and machine intelligence Internet of Things Financial technology and currency 3D printing Augmented Reality/ Virtual reality Big data and analytics Smart energy grids Nanotechnology Driverless transport Smart cities Electrification of the transport system Virtual healthcare diagnosis In particular,innovations such as AI, IoT and thedevelopment of Fintech, produceinterest bothin terms of hype (being talked about) and actually having impact on their industriesand theireconomies.

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Driverless transport and Nanotechnology see the greatest hype to impact discrepancy in Turkey. Q9.When we talk about innovation “hype”, we mean hot topics or trends that are being widely discussed but aren’t necessarily having an impact yet. Out of the innovations listed below, please rate each based on how much “hype” they are creating in your country today. Base Business Executives in Turkey: 80. Q10. Next, please rate each of these innovations in terms of how much impact and transformative change they will bring to your country. Base Business Executives in Turkey: 80 How much “hype”arethey creating inyourcountry today? (NET hype) How much impact and transformative change will they bring to your county? (NET impact) 89% 88% 85% 84% 83% 83% 81% 79% 79% 74% 73% 69% 79% 71% 81% 69% 70% 69% 65% 79% 76% 63% 63% 64% Smart cities Artificial and machine intelligence Nanotechnology Augmented Reality/ Virtual reality 3D printing Electrification of the transport system Financial technology and currency Smart energy grids Driverless transport Big data and analytics Internet of Things Virtual healthcare diagnosis 63

3D printing Artificial and machine intelligence Augmented Reality/Virtual reality Big data and analytics Driverless transport Electrification of the transport system Financial technology and currency Internet of Things Nanotechnology Smart cities Smart energy grids Virtual healthcare diagnosis This being said, business executives report that transformation in transport, city-planning and infrastructure are “under-hyped” considering the benefits they could bring to their countries. LessHype, Stronger Impact INNOVATION IMPACT INNOVATION HYPE Q9. When we talk about innovation “hype”, we mean hot topics or trends that are being widely discussed but aren’t necessarily having an impact yet. Out of the innovations listed below, please rate each based on how much “hype” they are creating in your country today. Base Business Executives: 2,090. Q10. Next, please rate each of these innovations in terms of how much impact and transformative change they will bring to your country. Base Business Executives: 2,090 LessHype, Weaker Impact More Hype, Stronger Impact More Hype, Weaker Impact 64

Edelman Intelligence / © 2017 65 sectionthree: Emerging Challenges

Edelman Intelligence / general electric Future ofWork 66 Executive Summary • The workforce is considered the most crucial element to innovation success in most markets, yet skills gaps continue to be a top concern among businesses. Nearly 3 in 4 (74%) global executives believe a lack of skills is an issue facing their industry—a challenge that has increased over time (64% say a lack oftalent/inadequate skills is a key challenge today, up from 56% in 2014).

67 5% 19% 43% 31% Strongly disagree Somewhat disagree Somewhat agree Strongly agree 2018 Q5B. How much do you agree or disagree with the following statements? There is currently a skills gap in my industry. Base business executives: 2,090, business executives in Turkey: 80 There is currently a skills gap in my industry Level of agreement is consistent across sectors (74%) 10% 24% 43% 21% 64% In Turkey, the skills gap is felt but not as strong as globally.

68 Q25.Do you consider any of the following as key challenges to be restricting your business’s ability to innovate efficiently? Base business executives 2014: 3,309, business executives 2016: 2,748, business executives 2018: 2,090 56% 60% 64% Do you considerthe following akey challengerestricting your business’s abilityto innovate efficiently? A lackof talent/ inadequate skillset 2016 2018 2014 NET: A challenge +8 ppt This challenge only seems to be growing for business executives - finding the right talent and skillsets is apparently restricting business’s ability to innovate efficiently.

Turkey is not in line with the global trend and the lack of talent is not seen as a challenge compared to the global average. 69 Q25.Do you consider any of the following as key challenges to be restricting your business’s ability to innovate efficiently? Base business executives in Turkey 2014: 100, business executives in Turkey 2016: 103, business executives Turkey 2018: 80 34% 49% 33% Do you considerthe following akey challengerestricting your business’s abilityto innovate efficiently? A lackof talent/ inadequate skillset 2016 2018 2014 NET: A challenge

Edelman Intelligence / general electric More Challenging Environment 70 Executive Summary • The challenges confronting innovative businesses are tough – and getting tougher– both externally and internally. There is a 13-pointincrease (now 67%) since 2014 in lack ofsufficient funding, a 6-pointincrease (now 65%) in the inability to scale innovations to a wider market, an 8-pointincrease (now 64%) in lack of adequate talent/ skillsets, and a 14-pointincrease (now 64%) in the inability of businesses to take risks. Emerging markets such as Poland, South Africa, Malaysia and Saudi Arabia are experiencing the greatest increase in challenges.

Businesses are struggling to scale up, investment is not available and it is a challenge to convert ideas into action. 71 67% 65% 64% 64% 64% 64% 64% 62% 60% 57% The lack of sufficient investment and financial support The incapacity to scale up successful innovations, to a wider or international market A lack of talent / inadequate skillset The difficulty to define an effective business model to support new ideas and make them profitable The incapacity of the business to take risks The increased pressure to conform to ‘innovation hype’ and trends around certain innovations The difficulty to come up with radical and disruptive ideas The internal inertia and the incapacity to be nimble, failing at rapidly converting ideas into actions The lack of internal support from the leadership team/top management The overwhelming amount of information 2018 Q25.Do you consider any of the following as key challenges to be restricting your business’s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives 2018: 2,090 Do you consider any of thefollowing as key challenges restricting your business’s ability to innovate efficiently? NET: Top 2 / A Challenge

In Turkey, lack of sufficient investment and incapacity of the business to take risks are the top two challenges, yet under-index against the global average. 72 48% 48% 46% 41% 41% 39% 34% 33% 31% 23% The lack of sufficient investment and financial support The incapacity of the business to take risks The lack of internal support from the leadership team/top management The internal inertia and the incapacity to be nimble, failing at rapidly converting ideas into actions The difficulty to come up with radical and disruptive ideas The incapacity to scale up successful innovations, to a wider or international market The increased pressure to conform to ‘innovation hype’ and trends around certain innovations A lack of talent / inadequate skillset The difficulty to define an effective business model to support new ideas and make them profitable The overwhelming amount of information 2018 Q25.Do you consider any of the following as key challenges to be restricting your business’s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives in Turkey 2018: 80 Do you consider any of thefollowing as key challenges restricting your business’s ability to innovate efficiently? NET: Top 2 / A Challenge

And these key issues have become even bigger challenges than they were four years ago. 73 Q25.Do you consider any of the following as key challenges to be restricting your business’s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives 2014: 3,309, business executives 2018: 2,090 Do you consider any of thefollowing as key challenges restricting your business’s ability to innovate efficiently? NET: Top 2 / A Challenge 50% 54% 59% 56% 59% 64% 67% 65% 62% 64% The incapacity of the business to take risks The lack of sufficient investment and financial support The incapacity to scale up successful innovations, to a wider or international market The internal inertia and the incapacity to be nimble, failing at rapidly converting ideas into actions The difficulty to define an effective business model to support new ideas and make them profitable 2014 2018 +14 +13 +6 +6 +5

52% 47% 45% 45% 41% 48% 48% 39% 41% 31% The incapacity of the business to take risks The lack of sufficient investment and financial support The incapacity to scale up successful innovations, to a wider or international market The internal inertia and the incapacity to be nimble, failing at rapidly converting ideas into actions The difficulty to define an effective business model to support new ideas and make them profitable 2014 2018 This is not a trend that is observed in Turkey, with Turkish business executives seeing a decline in key challenges. 74 Q25.Do you consider any of the following as key challenges to be restricting your business’s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives in 2014: 3,309, business executives in Turkey 2018: 80 Do you consider any of thefollowing as key challenges restricting your business’s ability to innovate efficiently? NET: Top 2 / A Challenge -4 +1 -6 -4 -10

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Historical data has been used from 2013, 2014, 2016 and this year’s 2018 data. The only question that is comparable across all fouryears is Q1 - Innovation Champions. • To compare scoring from previous years we have reweighted the previous total scores, so that countries that are notincluded in this year’s GE GIB are removed, so only including the 20 countries that we have this year. This ensures all data is directly comparable. • The UK was not included inGE GIB 2016 so an average score from 2018 dataand from 2014 was created at act as a proxy.

• In 2013 France was not included so a proxy from looking at 2014 and 2016 datahas beenused. • In 2016 Nigeriawas not included so an average score from 2018 dataand from 2014 was created to act as a proxy. This method (of reweighting the total scores and creating proxies) has been used consistently across all questions where we have compared historical data. Where tracking questions have been used for only 2016 and 2018 (because these questions were not tracked in 2013 or2014), data for these questions is based on a 19 market total only as no proxy could be created for the UK in 2016.

Historical data tracking 76

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