Improving the small-business role in Turkish defense acquisitions: recommendations from U.S. best practices

Abstract

Small businesses play very important roles in the U.S. and Turkish economies because they are a major source of entrepreneurship, innovation, and employment and promote competition. Because of their limited resources and the market imperfections, they often face difficulties getting capital and accessing new technologies. They also face unique barriers to accessing government contracts, especially defense procurement and RandD. Therefore, both governments have assisted small businesses to accelerate economic growth and job creation and to ensure economic and social cohesion. In the United States, the efforts to support small businesses date back to 1930s. The creation of the Small Business Administration in 1953 has accelerated these efforts. Turkey witnessed this support acceleration after 1980s. Despite intensive efforts, Turkish small businesses have many disadvantages in competition with large firms. The purpose of this study is to investigate the general differences of small businesses in both countries. This will include comparing their small-business challenges, support systems, and their public procurement share in both countries. This will also include recommending, based on U.S. best practices, possible policy solutions to the small-business support system of Turkey. The goal is to provide the Turkish Ministry of National Defense with a well-developed supplier base of competitive, innovative, and cost effective small firms.