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BLOG Istanbul: A high-tech hub of innovation

20 January 2018 / Lifestyle

Istanbul is a thriving hub for Start-Up businesses

Turkey's biggest city has emerged in recent years as a favoured hub for start-up businesses and cutting-edge industry. Here in Istanbul, with a city of 30 million, you can still make a name and your fortune.

Many start-up businesses are being bankrolled by savvy investors domestically or from foreign funds whose backers are genuinely excited by the potential the tech-minded generation holds.

The ambition to put Istanbul in the front seat for global innovation is driven by several factors:

Young Turks

Indeed, Turkey is a country definitely on the up despite recent terrorist outrages that have sought but failed to bring the nation to its knees.

Considering that of its 79 million civilians, Turkey's median average age is just over 30, it means that new ideas and creativity are increasingly coming forward from the country's bright young things.

By 2050, it is estimated Turkey will have one of the youngest generations compared to ageing populations across the rest of Europe. Istanbul is increasing becoming a hip hub of innovation as it draws like-minded inventors to the city which straddles Europe and Asia.

Entrepreneurial spirit

Some of the best 'branded' technology companies from Sinemia to Scorp are emerging from Istanbul and becoming major 'influencers' on the domestic scene.

Naturally, the infrastructure for investment and IT in and around Istanbul is already established. Istanbul accounts for 40 percent of the country's total industrial output and is an international trading post, with nearly 60 percent of the country's goods exported from here.

Thriving start-up eco-system

The diversity of the start-up portfolio in Istanbul is as diverse as anywhere on the planet with e-commerce sectors including e-fashion stores, online payment, entertainment and video platforms all thriving. So up-and-coming entrepreneurs are naturally heading towards the city where the experiences of other IT professionals and entrepreneurs can be shared, and partnerships developed.

Lower living costs

Istanbul is experiencing a mega-boom in building projects, but compared to the rest of Europe living costs remain firmly within people's grasps. With Istanbul's universities pumping out well-educated, innovative individuals, the desire to remain at the centre of things is achieved.

Upwardly and socially mobile

Istanbul, along with the rest of Turkey, has a high percentage of the population who are comfortable with mobile technologies and social media-savvy. In fact, there is a 90 percent penetration of mobile technologies, and the tech-friendly generation is active in mobile banking, e-shopping and mobile wallet technology.

Equally, the generation has adopted social media very quickly, from Facebook to Twitter and YouTube much to the chagrin of the government that has sought to control social media access in recent years.

Tax impact

Although not confined to Istanbul, there are tax incentives benefits, techno parks and a general willing attitude of the government to host R&D activities of companies in the big metropolitan areas to the point that Istanbul, Ankara and Izmir are big winners in attracting IT entrepreneurs.

Seed investment

Istanbul's fund managers have helped to get initiatives off the ground, including the likes of E-commerce platform Gittigidiyor, Yemeksepeti and entertainment service Mars. Istanbul is said to be the home of 15 business angel networks, 14 pre-seed and seed investors and 12 early-stage investors.

This community is also underpinned by cloud-based services, co-working areas and incubators that are helping to finesse cutting-edge businesses for the 21st century.

It is reported that 500 Start-ups has invested in 25 companies since its 2015 foundation, pledging $15m to the local market, while Turkey's largest private bank Isbank is developing young entrepreneurial talent.

Turkey’s Union of Chambers and Commodity Exchanges said more than 63,700 start-ups had been launched since 2016.

Heading for the skies

The growth potential for the e-commerce market is a case of pluck a figure and times by 10. In 2015, the e-commerce marker in Turkey was said to be worth 24.7 billion TL, less than two percent of total retail revenue.

However, the potential to bolster this figure is extremely high given Turkey's young generation to adopt technologies further. The e-commerce sector has grown 22 percent in the last five years, and industry experts believe this is just the tip of the iceberg.

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