Innovation in mixed market economies: the case of METU technopolis in Turkey

This dissertation examines the conditions under which innovation would be possible in a Mixed Market Economy, also known as the Mediterranean Market Economy, (MME) at the sub-national level through covering a case study which was conducted in METU Technopolis of Turkey. The Varieties of Capitalism (VoC) literature identifies two ideal-typical market economies which are Liberal Market Economies (LMEs) and Coordinated Market Economies (CMEs), yet MMEs are regarded as the third category. Due to a lack of strong institutional complementarities and macro-level coordination, this market type is regarded as disadvantageous to have high innovation performance. However, Systems of Innovation (SI) literature suggests that independent of macro-level coordination and institutional complementarities, owing to local and place-specific factors, high innovation performance would still be possible in an MME. In this context, within the framework of this dissertation, seventeen semi-structured interviews were conducted with the firms in METU Technopolis to understand the conditions which would lead to the innovation outcome in an MME. This study demonstrates that in a sub-national innovation system of an MME, both macro-level and sub-national level factors have an impact on the innovation outcome, at various levels. Despite the fact that macro-level institutions have a complementary role in innovation performance when it comes to particular competencies to overcome the coordination problems in the market, firms have difficulties. However, as findings demonstrate, thanks to place-specific factors, local resources, and a high level of interaction with stakeholders at the sub-national level, firms in this ecosystem produce innovation.