Productivity problems are mostly originated from finance and international markets, say firms

Important data are obtained from the field studies within the scope of the Total Factor Productivity (TFP) Project, which is being implemented to define the obstacles in front of economic efficiency and to determine the solutions. According to the results received from the surveyed 3000 firms, they see the external factors such as financing problems, unusual contractions and fluctuations in external markets, and the quality of the workforce as the most important factors preventing productivity growth.

Finance and international markets rank first

Striking results came up from the survey conducted to 3000 firms within the context of the “Support to Development of a Policy Framework for Total Factor Productivity in Turkey Project”, which is financed by the EU and the Republic of Turkey, implemented by the UNDP and with the Ministry of Development as the final beneficiary. According to that, the firms the see external factors such as financing problems, unusual contractions and fluctuations in external markets, and the quality of the workforce as the most important factors preventing productivity growth. The quality of machinery and equipment and the inadequacy of suppliers come after these factors.

Need to establish incentive mechanisms

Data obtained from the field studies point out some other important findings too. According to that, a significant portion of firms in Turkey try to gain competitiveness through cost-reducing passive strategies such as workforce flexibility and suppression of supplier’s prices. The more productive ones are following active strategies such as long-term relations, joint R&D and design and technological innovation. For this reason, establishing regulations and incentive mechanisms to urge and steer the companies to adopt active strategies, and creating the environment to implement those strategies emerges as a requirement.

Synthesis Report to come in January

The Synthesis Report, which will include results from field work carried out within the scope of the Project, is scheduled to be completed in January.

About the Project

Support to Development of a Policy Framework on Total Factor Productivity is a technical assistance project financed by the European Union (EU) and the Republic of Turkey, and executed by the United Nations Development Programme (UNDP). The beneficiary of the Project is the Ministry of Development and the contracting authority of the Project is the Central Finance and Contracts Unit (CFCU).