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Interview

SAHA Istanbul Cluster – Championing Integration of Existing Regional Potential to Produce Cutting-Edge Technology

SAHA Istanbul Defense and Aerospace Cluster is the leader of its regional industry focusing on the goal to eliminate foreign dependency in the Defense Industry and in civil aviation. In an effort to get to know SAHA Istanbul better and to catch up with their activities, focus and future targets, Defence Turkey Magazine conducted the following interview with Mr. İlhami Keleş, the General Secretary of SAHA Istanbul Defense and Aerospace Cluster

Defence Turkey: Could you please tell us how SAHA Istanbul originated? What was your starting point?

The very first movement of this formation was our Dear President Recep Tayyip Erdoğan’s call at TÜSIAD’s 40th Assembly General held on 21 January 2010 where he was then the Prime Minister as he uttered the words “I am looking for a brave fellow to manufacture a unique automobile”. Upon these words, the ITO Industry Expertise Committee concluded that “aircraft production” which contains high added value is a crucial issue and a primary area in which to focus.

Defence Turkey: Why “Aircraft Production” when speaking of a unique automobile?

The most distinctive features of this industry are its ability to benefit from the latest novelties of science.  Technology and its products are examples of the most advanced product and production technologies. Therefore, this industry is amongst the leading sectors that play a driving role in the development of the countries’ technological infrastructure.

Besides, the countries successful in aviation and space industries are capable of generating full-scale system solutions as a result of their competencies in these branches of industry.  The wide range of their products and their domination in the design technologies of these products are observed as well.

From this point of view, at the end of 2011, the ITO Industry Expertise Committee initiated a study where one hundred and fifty people from the leading companies of the industry, THY Technic primarily, participated in “Indigenous Civil Aircraft Production” that last for 1.5 years, and over 20 meetings and workshops were held to this end. Finally, in January 2013, the report on “The Strategic Analysis and Road Map on the Civil Indigenous Aircraft Production in Turkey” was completed and submitted to the Executive Board of ITO.

A significant amount of resources have been allocated for the import of spare parts by over three hundred companies such as THY Technic, the rising company Turkish Airlines and HABOM which provides maintenance services for the airline companies.  When these factors were considered, the motivation for this study increased.

Where the initial idea was to build the aerospace industry cluster and thus manufacture the parts of our indigenous aircraft through this initiation, former General Manager of Turkish Technic, our Undersecretary for Defense Industries Prof. İsmail Demir who is the former CEO of Turkish Technic and is quite familiar with the production capacity of the North Marmara Industry emphasized that the Naval Forces Command’s projects were being conducted in Istanbul and its hinterland and stressed on Istanbul’s superiority in metal, chemicals and composite technologies and advised that Defense should be added to the scope of the activities, SAHA Istanbul Defense and Aerospace Cluster was formed on 17 March 2015 by 27 founding members with the great support of the Undersecretariat for Defense Industries (SSM), Istanbul Chamber of Commerce (ITO), Istanbul Chamber of Industry (ISO) and Teknopark Istanbul management in order to function within the North Marmara hinterland starting from Sakarya spreading towards Edirne, including Yalova and to activate this grand potential we own through common synergy.

Defence Turkey: Which factors required the establishment of SAHA Istanbul?

Spanning a 150,000,000 m2 Industrial Area of which 100,000,000 m2 fall within the city limits of Istanbul, 51 Industry Regions and 55 shipyards within the region of SAHA Istanbul out of 72 existing shipyards in Turkey, North Marmara Region produces over 50% of Turkey’s economy and tax revenues. There are over 100,000 industrial facilities located within North Marmara hinterland that contains 65,000 companies registered to ITO, 18,000 companies registered to ISO and 8,000 companies registered to DTO. There are approximately 2,000,000 people employed by this industry in this region and 1,500,000 of them are located in Istanbul.

A passenger capacity of one hundred and fifty million will be added to the existing capacity of seventy million passengers when the third airport is completed, and the overall capacity will reach two hundred million. As a natural consequence of this development, Istanbul will become the civil aviation center of Asia, Africa and Europe when the ground services, air cargo capacity and maintenance services capacity are provided to over 300 domestic and foreign airline companies by companies such as Turkish Technic, THY HABOM and My Technic. 

When the Project is completed in this region, Teknopark Istanbul will extend to an indoor area of 980,000 m2 within a 2.5 million m2 area.  The Valley of Informatics, which will be completed in four stages, will be established over an area of 3 million m2, technology sites owned by fifty-four universities and certain major universities and an installed capacity of an eco-system will exist. 

The producer companies within the SAHA Istanbul region are outward oriented, exporting companies competing with other companies around the world. Their technological infrastructure, know-how and encouragement indicate that there is nothing our companies cannot achieve if the willpower, resources and markets are put forth. Then again, they remain quite distant to utilize their technological and infrastructural accumulations in the defense and aerospace industries. The lack of information on these industries and requirements is one of the reasons of their avoidance while not being familiar with the capital city Ankara and its bureaucracy and not daring to struggle with the potential obstacles and bureaucratic barriers are among other reasons. Informing and motivating these companies while removing these grey areas and rendering them available to manufacture products and systems required by the defense, aviation and space industries by contributing to their battle against bureaucratic obstacles remain as our primary tasks. Therefore, this geography that produces 54% of Turkey’s industrial production should assume more active roles in the effort to abolish foreign dependency in critical technologies.

Defence Turkey: Which activities are being conducted in line with the establishment purposes of SAHA Istanbul?

By benefiting from the existing potential in its region, we aim to create synergy by building cooperation between the regional companies for the development and manufacturing of cutting-edge technological products. As a result, we will be increasing the rate of domestic participation in national defense industry projects and aerospace. We have to achieve 100% of indigenousness in certain critical projects.

Moreover, releasing global brands by developing special products that require high technology, therefore creating a global competitive advantage and achieving an alliance in governmental, private or international tenders remain as the main functions of SAHA Istanbul.

Establishing and developing cooperation between our members and governmental institutions, universities, research institutes, NGOs, development agencies and international support centers, contributing to the establishment of the Test and Certification Centers with international accreditation, and execution of the common legal and industrial property rights services are also among our activities.

The lack of a capability inventory is the greatest deficiency of the industry located in the Istanbul hinterland. In order to fulfil this requirement, we will launch the EYDEP Project with the SSM in the Marmara Region. We assess that with the help of this Project, our companies will be better recognized, assignment of certain companies to certain projects will be enabled and governmental incentives will also form an essential element of support.

With the EYDEP Project, we wish to render our companies either the supplier of one another or the solution partners of each other by directing them towards each other. Their familiarity of each other’s capabilities and thus their establishment of cooperation will provide them with significant advantages. We, as the SAHA Istanbul cluster, continue to successfully conduct activities that will enable companies to become more integrated with defense industry projects and affiliate more with each other.

By gathering the companies that are the main contractors in the defense industry with our members and enabling bilateral negotiations, we contribute to the process by creating alternatives to procurements that they make from foreign countries or their domestic purchases and thus increase the rate of domestic participation at the same time. For instance, we arranged for Roketsan to conduct negotiations with 253 companies. We held bilateral negotiations by gathering our members together with our companies such as Aselsan, TAI, THYSSENKRUPP, Boeing, BMC, Otokar and FNSS as well. Soon, we will hold a similar activity with our companies at Gölcük Shipyard where our submarine projects are being carried out.

The SAHA Istanbul fair which we will hold for the first time at IFM on 12 – 15 September 2018 will be a vital  opportunity for us in this respect. The major foreign platform manufacturers will be at the event and we will be able to meet them.

Moreover, we are striving to create awareness in the areas of defense, aviation and space by attending seminars, symposiums and discussions. We also strive to conduct joint activities through national and international foundations or institutions that conduct similar activities with us by becoming their members to carry these efforts into the international arena, realizing technology transfers and drawing direct investments to our country.

Defence Turkey: What is SAHA Istanbul’s target regarding domestic industry? 

The way to achieve sustainable welfare, stability, a strong economy and deterrent armed forces for a country is through owning technology and the eco-system to develop it constantly. At this point, the wealthy country and developed country concepts are separated. When you have oil drilled underground and you sell it then you will have lots of money. This will make you a rich country. You may build luxurious buildings with this money and live in wealth. Furthermore, you may purchase the most modern weapon systems in the world. None of these turn you into a great country. They would only make your country a huge market. In order to become a major country, you need to own companies generating global brand technologies, dominate this technology and therefore dominating the future. Today, oil is a determinative and precious source of energy, yet when the technological developments reach more affordable and effective sources of energy, then the oil rich countries will have to face the ugly truth. For this reason, instead of a country buying and using technology, we have to be the country that produces it, at least we have to build upon the worldwide trends in certain areas.

We believe that, our government’s responsibility at this point should be defining the areas in which we are capable of catching global technology trends and identifying the competent companies, even adopting positive discrimination in support of these companies just like South Korea and elevating them with globally competitive technological and financial infrastructure and therefore creating global brands. 

The task falling upon the government is to identify the areas in which to focus and with whom to collaborate by taking technological accumulation, potential and the existing level of the country into consideration while regarding the progress of the world’s technology.

The defense and aerospace industries that utilize the most advanced technologies are relatively luckier than other industries in making these types of decisions. When we examine the world, we see that the countries that reached certain points in the defense industry are also capable of making use of these competencies in other industries as well. Because these industries include a wide variety and are composed of electronics, composite, food, metals, chemicals and automotive that require high technology in almost all areas. The case is quite similar in aviation. Therefore, these industries have always been the favorite of these countries that achieved a certain level of success in technology or countries aiming to reach that point.

If we wish to exist as a major country in the future, we also have to focus on these issues and avoid wasting our energy and limited resources by building proper industrial strategies. We have great examples of achievements ahead, so we do not need to ‘reinvent the wheel.’

As SAHA Istanbul, we wish to develop our country’s component, sub-component and system development capabilities and its product range in this area. To this end, we have to minimize the foreign dependency of our platform building companies in respect to the sub-systems and systems that they import. Finding a spot in the global markets for the developed sub-systems and systems will be much easier than parts production during further stages. We are grouping the companies to develop such capability. The air-conditioning group that we built with TAI is a great example of this. A sub-system will be revealed resulting from a consortium composed of six companies, under the leadership of one company. As the required know-how is owned, this consortium will be part of all future design of domestic manned air vehicles as well.

In this way, while we develop our companies’ culture of collaboration, we will also free our main contractor companies from the need to run after parts and conduct logistics activities with hundreds of companies to this end.

Defence Turkey: The necessity of effective cooperation between University and Industry is being uttered with every platform. Yet we observe that this cooperation fails to achieve the desired level in practical terms. We know that you have activities within this scope. Which activities will SAHA Istanbul carry out in order to fulfil this mission?

Our universities should have three main functions. The first of these tasks is the most neglected task and perhaps the most critical one; it is training scientists. Our talented youth capable of becoming scientists are being educated with an average curriculum and become employed in businesses struggling to earn their keep. The lucky ones seize the opportunity to even receive Nobel awards with the title of an American scientist of Turkish origin and we could only be proud of them from a distance. There are 16 million young people in Germany with a population of 82 million whereas Turkey with a population of 78 million has 33 million young people. In theory, our potential to raise scientists should be approximately double of Germany’s. Yet the reality speaks for itself. We fail to provide our children with great capabilities in an atmosphere where they can focus only in science, free from the curriculum, exams, and free themselves from the worries of receiving a diploma and the wage to afford their lives. We only give those receiving degrees in mathematics and physics Olympics in high schools a few more points in the university entrance exams. We unfortunately fail to sufficiently benefit from the most basic resource feeding the universities. Therefore, we only get the chance to transfer the science developed by others to Turkey only by the rate they allow and merely when they allow this transfer. This is utilized by a limited number of people. 

The Basic Sciences Research Foundation was established to eliminate this problem. From SAHA Istanbul, I, our Accountant Member of the Board Mr. Hakan Altınay and our Founding 1st Term Board Member Prof. Metin Yerebakan remain at the Board of Trustees of this Foundation. We will endeavor to turn our children with superior scientific talents into scientists. If achieved, this will be turned into a University of Basic Applied Sciences supported with special legislation.

The second main function of the universities is to generate technology with private industry. Yet, the technology is built over the basic sciences I mentioned previously. We already lag-behind due to the insufficiency in basic sciences. Still, our universities lack the mechanisms capable of developing technology through open science. Unfortunately, the academician’s activities in such areas are perceived as their utilization of the academy for their individual benefit and therefore are banned. The best academician is regarded as the one avoiding industry, who utters fancy sentences in articles and books and at seminars and symposiums while attending classes on occasion. While the academicians keen on cooperating with industry, those who intend to produce are marginalized from this mechanism. To this end, we are initiating an implementation to overcome this perception and to gather our academicians together with industry. We will match our academicians with relevant industries with our universities such as Istanbul Technical University and Gebze University and make this effort official. In order to assure the university’s generation of technology with industry and launch our companies’ projects into life at the universities we made a protocol enabling our universities to operate as R&D centers. Taking your projects or ideas, we will be realizing them with you together with the facilities of universities by building a legal infrastructure with intellectual property rights. We aim for the evolution into a technology development process from the product development process, in time. 

Within this scope, our industrialists need to adopt the culture of collaboration with universities as well. Our main concern in this respect are intellectual property rights. Perhaps, certain improvements should be made in the legal infrastructure to this end, eliminating grey areas and ambiguity. This will reinforce the trust and promote relations. 

Additionally, the financial gains received through such activities would motivate our academicians further. The required legislative regulations in this area have been launched and some of them are already effective.

The third task of our universities in respect to industry is the development of professional, technical and academic training and certification training to support the human resources required by the industry. As SAHA Istanbul, we signed a protocol with Istanbul Technical University, Marmara University and Gebze Technical University. Thereafter, protocols will be signed with our universities having their own companies within our cluster such as Sabancı University, Özyeğin University, Gedik University, from Anatolia Akdeniz University and Fırat University that are close to the industry in areas where they are competent. The availability of graduate and PhD programs linked with the projects conducted by our companies, certification training, enabling internship opportunities for the students at our companies and activities such as joint career days will be conducted. Our companies will benefit from the laboratories of these universities under more convenient conditions. We promote training researchers with entrepreneurial spirits equipped with information, technology and innovative perspectives, supporting the Device/ Equipment and Technology Manufacturers of Defense, Aviation and Space Industries in all their activities including the promotion, marketing and branding as our tasks as well.

We assigned a project to the Istanbul Development Agency to build a Design and Analysis Center for our SMEs at Teknopark Istanbul with our Marmara University and we expect positive results.

Defence Turkey: Finally, what are your views and comments on Defense and Aerospace industries?

The defense Industry has become directly linked to the independence of a country. It is one of the dominant parameters of foreign policy. Being a technology producing country is now among the prerequisites of being active in this area. We must build the defense of the country through the defense systems we develop with the technology that we produce and equip our armed forces with national weapons. To achieving this, both our bureaucracy and our platform manufacturing companies must be sensitive to this case, it is of vital importance. Politics, national industry and the press are quite interested in indigenous systems. We expect the same level of motivation from our government and the decision makers of our foundation companies as well. Even in this atmosphere where the Third World War is in question, our industrialists’ struggle to develop or sell indigenous products to our armed forces, yet their failure to overcome certain barriers is a critical issue we need to focus on