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 Republic of Turkey and it is 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).

With the Support to Development of a Policy Framework on Total Factor Productivity Project, it is aimed to determine the obstacles before the increase of the Total Factor Productivity at a desired level, to develop the policy framework for the elimination of these obstacles and to test this policy framework with pilot applications.

Turkey is not able to use the potential of Total Factor Productivity compared to developing countries. Studies in this area indicate that productivity problem in Turkey is mainly due to SMEs.

With this project, it is aimed to increase the Total Factor Productivity in the manufacturing industry, especially by creating a scale economy by enabling the SMEs to be attached especially to the international and local value chains or the enterprises included in these chains to start producing high value added goods.

The project also aims to increase the impact of the Total Factor Productivity to growth in the manufacturing industry while increasing the institutional capacity of the related departments of the public sector in the formulation and implementation of sector strategies in order to contribute to national competitiveness.

During the project, inputs from the related literature, similar works at local and global scales, and field studies will be synthesized and a policy framework will be designed to trigger the productivity. Also; based on the results of negotiations with 100 large-scale manufacturers, 400 (mostly) medium-sized suppliers and up to 2.500 end-to-end SMEs and benchmarking results, a synthesis study will be conducted for public policies.

Within the scope of the project, four major manufacturing industry sectors, which are thought to be the biggest contributors to the increase in Total Factor Productivity, were identified. These sectors are; automotive, food, garment and electrical equipment sectors.

What Will the Project Bring?

The policy framework, which will emerge as a result of the work to be carried out within the scope of the project, will provide the main beneficiary Turkish Ministry of Development and other relevant stakeholders with viable policy tools that will enable them to resolve short- and medium-term solutions to the key issues that hamper productivity, and thus sustainable growth.

In addition, the decision-support software to be developed under the project will provide meaningful contributions to both central institutions and local public institutions for productivity-oriented policy preferences.

Increasing Total Factor Productivity will also bring economic effects such as acceleration of growth, development of competitiveness, reduction of current deficit, reduction of inflation by decreasing costs and creation of higher-quality employment.