The number of active business enterprises in Turkey consistently rose from 2009 to 2022. As of 2023, the number of active enterprises declined slightly and totaled about 3.7 million.

Abstract

The project on "Promoting Competitiveness in Micro and Small Enterprises" (MSE) was initiated in 2000 by the Economic Research Forum, with the main objective has been to expand the knowledge on this sector in the Middle East and North Africa region, with the ultimate aim of designing relevant policies and specific programs to help this sector fulfill its enormous growth potentials. Constituting an average of 95% of the number of enterprises in the region, it is presumed that promoting this sector will have a positive spill-over effect on the economies of the region.

Discussions on the results of the project have pointed to an emerging consensus that it will be filling a knowledge gap related to the micro and small enterprises sector in the MENA region. Policies and strategies designed to promote this sector have not been adequately targeting their needs, and thus this project is considered to be of great relevance to the policy making process. Specifically, the main contributions may be summarized as follows:

1) The database gathered through the project based on field surveys is considered unique, as to the number of enterprises covered (18,000), and the information produced, including information on the enterprise, the entrepreneur and the household. A special focus on women entrepreneurs have been made throughout the survey. This mine of data will undoubtedly provide background information that enables policy makers to design relevant policies.

2) The "Policy Briefs" gives a concise summary of the outcome of each country study and highlights the recommendations reached based on the analysis.

3) The current Country reports series is prepared based on the findings of the surveys, detailed information about the performance of the enterprises, determinants of success and prospects for the future are given. Special focus on the status of women entrepreneurs is also made.

4) The Synthesis report will have a comparative analytical approach of the case studies of the four countries. This report will asses the MSE sector in the four countries and will draw relevant policy recommendations for the region.

It has been evidently shown that promoting this sector could contribute to the solution of the increasing unemployment problem in the region, and a means to alleviate poverty through income generation. The spillover effects that this sector if properly developed will positively affect the development of the countries concerned. However, the real level of knowledge about the MSEs is surprisingly low.

The Micro and Small Enterprises survey (MSEs) study in Turkey attempts to make an essential contribution to the knowledge of MSEs in Turkey by investigating both the internal conditions and the dynamics of MSEs as well as examining the external economic and social conditions pertaining to their performance and development. For the most part, studies of small enterprises in Turkey focus on the SMEs operating in the manufacturing sector. Furthermore, they lay emphasis on larger SMEs. The present study, by contrast, focuses on a neglected group of enterprises in the Turkish economy, namely, the portion of the SMEs which contain smaller enterprises. This portion is significant; it constitutes 99.4% of the total nonagricultural enterprises in Turkey (TURKSTAT, 2002). Moreover, this study does not only cover the manufacturing sector, but all sectors of the economy except the agricultural sector. It is also distinguished by its scope of investigation as it provides an assessment of MSEs in the economy as a whole within a dynamic context.

The present study attempts to identify the following:

i. the importance of MSEs in the economy vis-à-vis their contribution to the national value-added and employment in the main sectors of the economy; ii. the characteristics of MSEs and their entrepreneurs, with particular emphasize on their similarities, differences, and the ways in which they affect the performance of the MSEs; iii. the dynamics of success and failure of MSEs; iv. the role played by the economic and social environment in enabling or hindering the performance of MSEs, thus focusing on the legal, bureaucratic, economic, financial and social conditions that constrain or facilitate the operation of MSEs; and v. the policy recommendations that would enable MSEs to perform their activities in a more efficient way, and at the same time contributing to their growth and generation of decent and productive work.

Geographic coverage

National coverage

Analysis unit

1- Enterprises. 2- Households. 3- Individuals.

Universe

The survey covered all enterprises engaging up to 50 people including the working proprietors and unpaid family workers. A number of activities have been excluded from the investigations because they were of lower priority in relation to the focus of the research project. This means that the definition of MSEs refers to enterprises consisting of a person producing accessories for sale in the market, as well as factories with 30 or 40 workers. Both formal and informal enterprises falling within the MSE universe were the subject of investigations.

Kind of data

Sample survey data [ssd]

Sampling procedure

The sampling was national in coverage and is chosen by stratified, multi-stage systematic sampling method by the TURKSTAT. In Stage 1, 19 provinces were selected from 5 strata11 that were stratified in terms of socio-economic development level of the provinces compiled by the State Planning Organization (SPO). The selection of provinces from each stratum was carried out by weighted probability regarding the number of enterprises in each province. In stage 2, 432 PSUs with a minimum of 45 enterprises in urban areas of the 19 provinces were selected based on census of buildings for the year 2000 by the SIS, and 100 villages were selected in the rural area.

Urban areas: Settlements with population over 20,000. These settlements include the central city of the province and district centers (ilce) with a population over 20,000. Rural areas: Villages with a population between 500 and 2,000.

Some of the sample villages visited during the survey selected by the TURKSTAT, were more or less deserted and usually had only one grocery shop as an enterprise. But this was not always clearly reflected in the Population Census. This is because the municipalities receive their budget from the central administration in proportion to their population. Thus in order to compensate for the dearth of population in the villages, most of the municipalities arrange bus trips for migrants living in the big cities like Istanbul, taking them to their home towns and villages during the national census in order to increase their allowances from the public sources. The persistence of this practice means that the population of some villages is not reflected accurately in the population census. They are usually inflated.

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A more detailed description of the different sampling stages and allocation of sample across governorates is provided in Appendix 5 in the full report available among external resources.

Sampling deviation

Due to the lack of a nation-wide survey of establishments for both rural and urban areas, the selection of villages was carried out without a reliable stratification process. It was decided to exclude the rural enterprises from the sample before the weighting and extrapolating process. The rural MSEs interviewed could be evaluated separately from the urban MSEs that constitute a representative sample of MSEs for the urban areas.

Mode of data collection

Face-to-face [f2f]

Research instrument

The questionnaire used in the main survey included four different forms:

Form I. The enterprise list, used for listing all the enterprises within the PSU9 to identify the enterprise, entrepreneur, and associated household. All members of the enterprise universe were included in the first listing (identifying nature of enterprise), but those in excluded activities were not given the Form II used in the main survey.

Exclusion rules concern agricultural and non-market activities, illegal activities, production for own personal use, mobile vendors, domestic services, professional services (except ICT) and enterprises with 50 and more persons engaged.

Sampling rule designed to under-sample smaller sizes and men entrepreneurs Entrepreneur women: (size 1=>1/5; size 2-9 =>1/1; size 10-49=>1/1) Entrepreneur men: (size 1=>1/10; size 2-9 =>1/2; size 10-49=>1/1)

The size 1 enterprises were deliberately under-sampled to avoid dominating the sample by enterprises size 1, and therefore have statistically significant number of enterprises in the sample for the larger size. The over sampling of enterprises with women entrepreneurs was necessary in order to ensure that the sample included sufficient number of women entrepreneurs to obtain statistically significant results.

Form II. Household roster-enterprise identification. This type of questionnaire included identification variables for the members of the household and possible MSEs at home.

Form III. Enterprise-entrepreneur questionnaire focused on characteristics of the entrepreneur and enterprise. Form III contained 322 questions related to the characteristics of the entrepreneur and the enterprise, growth performance, access to credit, financial and business services, relations with business associations, status of registration, level of technology, value of

Almost all Finnish small and medium-sized businesses had a website in 2022. The country leads the OECD ranking of share of SMEs with a web page. In contrast, less than half of small enterprises in Turkey had a website or home page as of 2022, one of the lowest percentages among the 38 nations included in this chart. Other countries with a relatively low percentage of small businesses with a web presence include Brazil, Israel, and Portugal.

Snapshot img

Turkey ERP Market Size 2024-2028

The Turkey ERP market size is forecast to increase by USD 99.65 billion at a CAGR of 7% between 2023 and 2028.

The ERP market in Turkey is experiencing steady growth, driven by a focus on improving operational efficiency and advancements in cloud-based technology. Key factors include the increasing demand for integrated business solutions among SMEs, spurred by the need to streamline operations, and the adoption of digital tools and artificial intelligence that enhance visibility and traceability across supply chains. 
This report provides a practical resource for businesses, detailing market size, growth forecasts through 2028, and key segments like cloud ERP, which leads due to its flexibility and cost-effectiveness for Turkish enterprises. It explores trends such as the rising use of ERP systems among financial institutions to manage complex workflows and addresses challenges like economic instability, which can impact investment in technology upgrades. The analysis is designed to support strategic planning, operational improvements, and market positioning.
For companies aiming to stay competitive in the ERP market in Turkey, this report offers clear, data-driven insights into leveraging digital transformation trends and navigating economic uncertainties, ensuring they can adapt to a dynamic business landscape.

What will be the Size of the Market During the Forecast Period?

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Moreover, ERP solutions enable large enterprises to make informed decisions based on real-time data, fostering a competitive edge in the market. By integrating various business functions, ERP solutions improve operational efficiency, reduce costs, and increase productivity. In conclusion, the market is an essential tool for large enterprises seeking to enhance their business operations. ERP solutions offer integrated, data-driven solutions for various business functions, enabling organizations to make informed decisions, streamline processes, and gain a competitive edge in their respective industries.

Market Segmentation

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

Component

  Software
  Service


End-user

  Large enterprises
  SMEs


Deployment

  Cloud ERP
  On-premise ERP


Geography

  Turkey

By Component Insights

The Software segment is estimated to witness significant growth during the forecast period. The market is projected to experience substantial growth in the coming years. Enterprise Resource Planning (ERP) software serves as a unified business management solution, encompassing essential functions such as human resources, supply chain management, manufacturing, finance, accounting, and project management. Additionally, it supports industry-specific processes like asset management and product lifecycle management.

ERP software facilitates the definition and integration of business processes, ensuring optimal utilization of resources - human, financial, and operational. It offers a centralized repository for data, enabling better decision-making by providing a comprehensive view of business metrics. ERP software is available in various deployment models, including Software as a Service (SaaS) and on-premise. Further, companies can choose between purchasing software licenses or opting for subscriptions to access these solutions and services. Support and maintenance are crucial aspects of ERP software, ensuring seamless operations and continuous improvement.

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The software segment was valued at USD 135.48 million in 2018 and showed a gradual increase during the forecast period.

Market Dynamics

The market has been gaining significant traction among large enterprises in various industries. ERP solutions and services play a crucial role in streamlining business operations, enabling data-driven decisions, and improving operational efficiency. ERP systems offer standalone and embedded solutions to cater to the unique requirements of Turkish businesses. These solutions encompass supply chain management, distribution process management, business planning, HR functions, finance, marketing, and more. In the realm of supply chain management, ERP solutions optimize inventory levels, manage orders, and streamline logistics.

Furthermore, distribution process management ensures seamless flow of goods from manufacturers to end-users, reducing lead times and enhancing customer satisfaction. Business planning modules enable organizations to forecast demand, set targets, and allocate resources effectively. HR functions are automated, reducing manual processes and ensuring compliance with local regulations. IT technologies such as mobile applica

As of 2023, the issue which most SMEs in the European Union cited as the biggest challenge they faced in hiring skilled staff was that applicants did not have the right qualifications, skills, and experience, with 32.1 percent of respondents citing this issue. For the United Kingdom and Switzerland, this issue was also cited by a large number of SMEs, while for Turkish SMEs it was less prevalent. Skills shortages have become a commonly cited complaint by businesses in Europe during the 2020s, as unemployment rates have reached record lows, while job vacancy rates have risen.