283 10 3494 https://omeka.ibu.edu.ba/files/original/81b732983dd9d58dba6770d09351e731.pdf c92c508d3b32725d325a58a22a76f41c PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Role and Importance of CRM in Global Competitive Environment M. Nurettin ALABAY Turgut Özal University Economics and Business Administrative Science Faculty Business Department, Ankara, Turkey nalabay@gmail.com Abstract: Information and communication technologies (ICT) which has flourished due to spread of microchip technologies during 1970s, created internet which interconnects entire world and eliminates the classical understanding during 1990s. The fact that electronic trade and several other transactions could be performed through internet which developed as a result of widespread use of internet, created a global economy. The knowledge in the global economy, left behind the production factors which are known as labor, capital, natural resources and entrepreneurship, has become a standalone production factor. The developed information technologies caused human-oriented approaches to flourish and production processes to restructure. With the emergence of customer-oriented approaches, the production process has become "discovering what the customer wants and produce that thus makes profit by satisfying the customer in this fashion". Marketing function within the enterprise became a leading factor even more than the production process and marketing position has become the function of all employees of the enterprise. The enterprises which fail to satisfy their customers, have become weaker economically and cannot survive. As a result, while developed information and communication technologies enabled globalization, the customer has become the most important element in the global economy and those enterprises which can sell whatever they produce, have been replaced by those enterprises who produce and sell whatever the customer wants and competition has been increased leading to global competition which influence entire world. The enterprises which have been deprived of competitive power through the classical marketing mix (product, price, distribution, promotion) now have a tendency towards customer relationship management (CRM). CRM is now used as a new name of the marketing. Introduction Rapid advancement and development in knowledge and communication technologies (ICT) are the most distinctive characteristics of the significant development, which has been fulfilled during the last decade of the 20th century, in the civilization history. This rapid advancement and development, being experienced, have changed the construction methods of commerce and businesses, affected the economical and social life profoundly and caused some concepts and templates to be questioned. The developments in ICT are also one of the most significant factors, lying behind the spread of the phenomenon of globalization. Today, not the fullest extent of the effects that would be created by the innovations in the knowledge and communication technologies and by the usage of these technologies, has been revealed. As Drucker (1995) states, the age we live in is an age of transition in every field. Knowledge and communication technologies shall be able to provide incredibly significant economic and social benefits. New technologies help increase the effectiveness of the economy, create new business opportunities, spread the technical advancements and ideas more easily, establish the simultaneous communication between the people and institutions in different countries and regions. Together with globalization, technological developments have found a usage area in every area and some definite effects occured in every sector. Definite effects and advantages of information technologies are available in all sectors, which use customer satisfaction as base (Drucker, 1995). By this way, the role which is imposed on the mass medium is being included in new development-reconstruction theories as the innovations, which constitute the source of the basic element and growth that determine the change of technology, by being given to the technology (BaĢaran, 2005). 412 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo In the light of these developments, the statement of information society, which is entitled by population scientists like A. Toffler, is based on the effects to be made by ICT on the whole social structure, as well. Developments in technology have contributed to the development of globalization. The apprehension of quality products and increasing customer satisfaction, which emerged as a result of the development of technology by the businesses of the whole world, thrusted the inter-enterprise competition to the forefront. The accomodation of the businesses to the new global conditions is called global competition (Elibol, 2005:155). Since the whole world has become a market for the customer together with the increase of both technology and globalization, the expectations of the customers increased and concordantly, customer-based concept became dominant in marketing. At the end of this process, on the other hand, marketing emerged as a new conception under the name of the customer relations management. This new conception is the new name of marketing now. Factors that Play a Role in Change Beginning with the development of technology and continuing with globalization, the factors of the change could be organized as follows:  Developing Knowledge and Communication Technologies  Developing Global Economy  Increasing Global Competition  Developing Conception of Marketing  Developing Human-Based Processes  Developing Customer-Based Approaches and New Conception of Marketing: Customer Relations Management (CRM) Developing Knowledge and Communication Technologies The development of human capital (intellectual capital), which is described as qualified (intellectual) labor force, together with the increase of the knowledge in terms of economy, established the ground for the rise of new concepts and values like “knowledge economy”, “new economy”, “digital economy”. Rapid and extensive development in information technologies affected the economic and social life profoundly. Gathering the potential producers, suppliers, users and consumers together on the web carried the economic communication and activities into the electronical environment. Knowledge economy and B2B, which emerged as a new e-business method in this economy, also known as from company to company e-commerce model, are among the most significant factors.. In this context, they enabled the integration into the global economy and the rise of the obligations to make changes in the strategies, directed at having a share from the extending global commerce size, from the aspect of the affects, that would be actualised by BIT on the whole global economy due to its general features that affect the structures outside of their own areas and also from the aspect of the developing and underdeveloped countries together with the new operation style of the global economy (Kıyan, 2008). Knowledge shall become much more important in the future. Some evaluations related to the future economy are already being made. Rottberg and Erickson (2005) state that in transition from the current economy to the future economy; intelligence, which is acquired through processing the knowledge, shall come into prominence instead of knowledge. Because knowledge is a value. Intelligence, on the other hand, has power. Through benefitting from the opportunities of knowledge and communication technology, preventing the elimination of the information which often repeat in conventional documents and preventing the bureaucracy / officialism, simplifying the distribution of goods, it is seen that competition and employment move towards new goods with high value added tax and continuous service types and the employment, which increases by this way, enables economic prosperity and growth. Compiling, analysing the knowledge at the right time and through right methods and using the human and capital sources by leaning on these knowledge without wasting, providing the chance of ―enlightenment on the instant‖ for the individual / organization with an increasing quality and effectiveness on the face of new developments, increase the efficiency in sourcing. Rapid developments in information technologies have caused our age to be described as the information age. Rapid technological advancements cause significant changes in the micro and macro economic basis. The basic characteristics of this knowledge and communication-based new economy could be organized as follows (Tan and Uijttenbroek, 1997): 413 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo 1) Continuously accelerating technological developments, 2) Intense activities of increasing information and knowledge, 3) Entering into the shortening market and shortening of the periods of product/service life cycle, 4) Globalization of the markets, 5) Dimming of the differences between the industry branches. In the publication, prepared by the New Zealand government, which is called Knowledge Economy, the most impressive characteristic of the knowledge technologies (knowledge and communication technologies) is that their technological abilities continuously increase, whereas their expenditures continuously decrease. Three rules, expressing this relation, have been set forth. 1) Moore Rule: The speed of a microchip doubles in every 18 months without a price increase. 2) Gilder Rule: The total tape extensity of communication systems rises threefold in every 12 months without the change of the unit price. 3) Metcalfe Rule: The value of a communication network is proportional with the number of nodes in the network. Therefore, while the value of being connected to a network increases exponentially, the price per user remains constant; it even decreases. In a study, which takes place in one of the most prominent B2B sites of the world, alibaba.com, the advantages to be acquired by enterprises through B2B model could be organized as follows: An increase in the sale and profit proportions,  Competition superiority in the internal market,  Taking share from the global markets,  Increase in the market diversity,  Decrease in per-piece costs,  Removal of time limit in terms of requirements,  Opportunity in terms of company growth,  Chance of acquiring new knowledge and experience. In this structure, which developed in a more different way than conventional commerce, some remarkable declines are observed in the expenditures of some goods and services; while new jobs are constituted, some of them loses their significance; customer satisfaction is brought to the forefront and transparency of the market, on the other hand, strenghtens the constitution of the open market for now. In parallel with these developments, globalization of the competition forces the enterprises to make more investments in knowledge, intellectual staff and knowledge technologies. Because, the most important conditions of competing are constituted in the basis of the knowledge. Spread of electronic commerce affects areas like international commerce, employment, education, culture and social life; rapid innovations, which are almost impossible to estimate, emerge. Development and fall of information technologies provide the enterprises the opportunity to be able to do business on global level. Today, where the computer technologies and internet usage increase, electronic commerce can address to the global market more easily, therefore, market potential could be greater compared to conventional commerce. The basic parameter of the condition that knowledge and knowledge technology terms the era we live in, is the fact that knowledge is the source of prosperity. The investments, which are made in knowledge and knowledge technologies provide positive effects for the growth of the countries in the long term. Spread and fall of the internet bring a significant time and expenditure possession in providing the valuable information, which are difficult to acquire. The fact that internet is more rapid and cheap compared to other mass medium, increases the opportunities for the enterprises of developing countries to acquire competitive environments more easily. The increase of the strength and efficiency in the resource distribution by electronic commerce could also be provided through the decline of production costs. It is observed that electronic commerce has a cost- diminishing effect in the commercial relationships of the enterprises with customers and other enterprises. Developments in knowledge and communication technologies increase the significance of services sector in the economic structure and they reveal structural changes in labour-markets. As a result of this change, some developments in favor of knowledge and communication technologies and services sector occur, while reductions in other employment areas may arise. On the other hand, the development of electronic commerce causes the increase of the need for qualified labour force with a higher education in the field of knowledge and communication technologies. The enterprises, which perform operations such as introduction, distribution and inventory tracking in the electronic environment, can easily meet the consumer requirements thanks to the flexibility of the virtual environment. 414 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Developing Global Economy The correlative connection between knowledge and communication technologies is frequently emphasized. Knowledge and communication technologies have enabled globalization by increasing the communication speed and decreasing the expenditure, providing a much more rapid and cheap integration, facilitating the distribution through territorialising many products and activities with the help of integrated networks. Through establishing direct and rapid communication connections, knowledge and communication technologies decreased the economic distances, acquired possession from the time which is required for the coordination of the activities of the business world, declined the conversion expenditures and made the financial markets active for 24 hours in the size of countries and continents. In brief, knowledge and communication technologies is a strong factor that functions in favor of the integration of the world economy. The increase of the technological developments made the whole world a single market. Today, the globalization, which establishes strong and correlative connections between individual economies and societies and consequently, which makes psychological and economical distances and differences between the societies meaningless, is a concept, which describes the new tendencies, that emerged during the last quarter of the twentieth century within the world economy. In a much more special context, it is a concept, required for international dependence and international cooperation. Knowledge and communication technologies depict its effect on the growth through different channels because of its multi-dimensional nature: 1. Total production increases through producing new products and services (such as computer equipment, digital equipment, magnetic card machines and applications, fax machines, mobile phones, satellite broadcastings and new financial services). New business opportunities occur rapidly in these sectors. 2. Efficiency increases through new methods, that find field of application in the production processes such as electronic commerce and computer-aided robots. Within this context, knowledge and communication technologies could be accepted as a significant production factor, which contributes to the growth of the total production factors together with unqualified labour force, physical capital, human capital and land. 3. Economic efficiency increases through internet sales, digital advertisement, crossborder production, new marketing, organization and management techniques. The number of the new products and services, which is executed in connection with knowledge and communication technologies, geometrically increased in the last decade. Increasing Global Competition Together with the increase of the market size, the elements of competition change and enterprises have to recheck their competition strategies. Sometimes, a cooperation with opponent companies may be compulsory and sometimes the companies, which carry on their activities in different sectors could become opponents in the virtual environment. The fact that entering into electronic commerce market has a low cost, strengthens the possibility of coming across with new opponents at any moment. As the competition increases, marketing CEOs continue to reveal new human requirements through developing more aggressive methods. There is no way of competing with product, price, distribution and promotion tools, known as marketing composite, any more. Therefore, the rate of meeting the human requirements by new pursuits and products in a better way, the quality of products, customer-based approaches shall gradually increase. Competition has increased the numbers of market segments, as well, and nich marketing, which addresses to very attentive features, is developing since classical market segment methods could no longer respond. Increasing competition changed the marketing process, as well as the organizational structure. Beginning with the determination of the customer necessities, marketing changed as producing the most convenient product for the customer requirements and presenting them to the customer and by this way, acquiring profit. On the other hand, together with embedded marketing understanding, marketing became the task of everyone in the enterprise. Kotler stated as, ―marketing is a too large subject to be left only to the marketing department‖ (Kotler, 2000). 415 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Since enterprises go into a cutthroat competition in the whole world market in order to find demand for the increasing amount of production and supply of product variety, global competition emerged. Today, where expanding into international markets have become easy, and even the direct investments have come to the levels of convenience in the home country, the global competition has increased. While country borders are not considered as a problem in production and marketing, it is seen that in which country the product is produced is no longer considered to be significant. Because on condition that what the future scientists have already stated comes out right, China, where 25% of today‘s production is made, shall become a country on which 50% of the economy of the world countries would be dependent, in 2025. Concerning this subject, the following information are included in Global Trends 2025:A Transformed World (2008): Economy giants of Asia – China and India – are going back to their positions prior to two centuries, when they produced respectively 30% and 15% of the world prosperity. For the first time since the 18th century, China and India have been determined as the countries, providing the greatest contribution to the economic growth worldwide. It is possible that these two countries overpass the GSMH of other economies, except of USA and Japan, until 2025, however they shall keep dropping behind for years, from the aspect of the income per capita. Changing Marketing concept As a result of the development of technology and global developments, enterprises had to change their organizational structures and marketing became the most important function through getting ahead of production. By this way, production systems started to begin with marketing, rather than production. Some changes occurred in the marketing concept through the development of the consumer market, which changes with the increase on the educational levels of the consumers, technology and globalization. This new marketing concept has more different characteristics than that of ―Conventional Marketing‖. Changes in the marketing developed depending upon the development of technology, globalization and the increase of the educational level of the consumer. Depending on this change, the description, composite and role of marketing and the organizational structure of the enterprise changed, as well. In the period of change, relation marketing developed, the customer was placed in the centre of the enterprise, the concepts of value-producing and value-transmitting developed and market-directedness became the basis (Varinli, 2006). The changes could be organized as follows:  Supply became much greater than demand,  Very significant developments occured in marketing, particularly during the period after 1990s,  Determining the customer requirements and necessities in the target market, providing satisfaction started through manufacturing in a convenient way for it and presenting it to them,  Every unit of the enterprise started to function coordinately (embedded marketing), marketing became the task of all employees of the enterprise,  Profitability, directed at the consumer in the long term, became the target,  Since the competition was too intense, the search for innovation increased each day,  Value-based marketing concept developed,  Market-oriented management and the marketing concept started to dominate. According to this change, some significant changes in the marketing composite occured, as well, and the marketing composite, which is known as 4Ps, started to be described as Customer, Cost, Convenience, Communication –known as 4Cs- instead of Product, Price, Place and Promotion (Kotler, 1998:92). Marketing concept changed after the conventional marketing and many new marketing techniques were developed. Modern marketing, social marketing, green marketing, guerilla marketing, post-modern marketing, oneto-one marketing, customer-oriented marketing, value-based marketing, etc. could be given as examples to them. Developing Human-Oriented Processes Human-oriented approaches, that place humans at the centre and dignify them, affect all the enterprises increasingly day by day. Human-oriented approaches have become even stronger together with the development of globalization and technology, increase of the educational levels of the people, fall of transportation and communication and the spread of the total quality management processes. Today, the performances of the people are constantly becoming easy through the sense of ―everything is for humans‖ in the human-oriented approaches. 416 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Human-oriented approaches provide a brand new ground, that would gain the advantage of a sustainable competition in the enterprises. Human-oriented approaches replace the product or process technologies, marketing or advertisement strategies, which have the authorities of conventional competition, and the advantages, dependent on the capital power. Comparing with the conventional factors that constitute a competition advantage, it is much harder to be able to imitate or copy the human-oriented competition elements. For instance, every enterprise imitates the products or business secrets of a famous enterprise. However, it is very difficult to imitate the culture of an organization, which is based on human-oriented approaches (Schneider and Benjamin; 1993; p. 42). While human-oriented approaches in the enterprises primarily aim to constitute an organization culture with employees, who are considered as internal customers, a customer-oriented approach is adopted for the external customers. Customer-oriented approaches constituted an alliance of systems, such as customer-oriented marketing, relation marketing and Customer Relations Management, which gradually develops. Developing Customer-Oriented Approaches and the New Sense of Marketing: Customer Relations Management (CRM) Knowing the requirements and necessities and even the expectations of the customers is very significant in terms of the path to be followed during the acquirement of the customer satisfaction. Today, the enterprises support the standards, such as ISO 9000:2000, ISO 9000:2001 and ISO 10002, aimed at developing the quality, in order to provide customer satisfaction. In this case, good practice of enterprises by concentrating on the issue of customerorientation becomes compulsory (Kağnıcıoğlu, 2002). The concept of customer relations management is a result of today‘s sense of marketing. The competition power of enterprises has always required being different. Since differentiations, acquired through technological innovations are not long standing today, it shall not be possible to go to the customers of the enterprises with a unique sale proposal in the long term. Therefore, customer relations are depicted as one of the most important ways of differentiation. The continuing relations, devotions and gradually increasing purchase behaviors of the customers are the values to protect the enterprises under strong competition conditions (Demir and Kırdar, 2006). Customer Relations Management could be accepted as an application of one-to-one and relational marketing, which takes the knowledge about what customers state about their expectations from the product and knowledge, collected by the enterprises concerning their customers as base and which responds to the customer personally (Ryals and Pane, 2001: 4). Although the main reason that requires the materialization of Customer Relations Management applications is competition, it also is a need of the respect and importance, given to the human, together with the increase it provides in the service quality of the customer relations management (TaĢpınar, 2005: 19). Customer is the most important information source in the Customer Relations Management. It is compulsory for the business process, which includes producing and presenting product or service, to concentrate on the values, perceived by the customer in today‘s competition environment (Goldman, et al., 1996). Customer Relations Management (CRM) is the life prescription of enterprises today, where competition with the elements of marketing composite have become difficult, global competition has increased, technology and internet have spread, human values have come into prominence and expectations have increased. Conclusion Due to mass production, which started with industrial revolution, and the fact that sale became harder than production and the increase of global competition during the 21st century, marketing started to be forced. While things to be produced can not be found since everything is already produced now, marketing has started to be forced although the movements are made in accordance with considering every way as lawful. Why did this happen this way? What has changed since the 19th century until today?  ICT, knowledge and communication technologies developed, became cheaper and spread,  Internet technologies developed, became cheaper and spread,  Web systems developed and became cheaper, systems like B2B spread,  Other end of the world became accessible through e-commerce,  Global enterprises, functioning for 24 hours, were established,  Total knowledge in the world increased, and access to the knowledge (communication) became easy,  Knowledge became strategic, 417 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo                      The importance of knowledge and knowledge-concentrated sectors increased, Global economy developed, The number of products became greater than before, supply was much greater than demand, Competition increased excessively, Fields of competition decreased, Competition case of the enterprises was removed together with marketing composite, Search for competition continues in new fields, Market segments increased, very attentive Market segments were constituted, Human-oriented processes started to come into prominence, everything started to be made for humans, Transportation and communication increased and became cheaper, Automatic Recognition and Data Collection (ARDC) systems developed and spread, Customers became traceable at any moment, Data mining developed, spread and became cheaper, Marketing systems developed, New marketing techniques were developed, Organizational structures of the enterprises changed, Marketing became the most significant function in enterprise, through getting ahead of even the production, Production systems started to begin with marketing, rather than production, Customer-oriented production and marketing approaches developed, Customer Relations Management (CRM) was developed, Marketing became=CRM References Alabay, M.N., (2008), Crm Rekabet Stratejisi Olarak MüĢteri ĠliĢkileri Yönetimi, Ġlke Yayınevi, Ankara. 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Krepapa (2000), ―An Exploration Of The Eaning And Outcomes Of A Customer-Defined Market Orientation‖ Journal Of Business Research ,48, Pp.101–112. 420 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Zeıthalm, V.A., (1988), ―Consumer Perceptions Of Price, Quality And Value: A Means-End Model And Synthesis Of Evidence‖ Journal Of Marketing, 52, July, Pp.2-22. Zıneldın, M., (2000), ―Beyond Relationship Marketing: Technolojicalship Marketing.‖, Marketing Intelligence And Planning, 18/1. 421 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 222 Title A name given to the resource Role and Importance of CRM in Global Competitive Environment Author Author ALABAY, M. Nurettin Abstract A summary of the resource. Information and communication technologies (ICT) which has flourished due to spread of microchip technologies during 1970s, created internet which interconnects entire world and eliminates the classical understanding during 1990s. The fact that electronic trade and several other transactions could be performed through internet which developed as a result of widespread use of internet, created a global economy. The knowledge in the global economy, left behind the production factors which are known as labor, capital, natural resources and entrepreneurship, has become a standalone production factor. The developed information technologies caused human-oriented approaches to flourish and production processes to restructure. With the emergence of customer-oriented approaches, the production process has become "discovering what the customer wants and produce that thus makes profit by satisfying the customer in this fashion". Marketing function within the enterprise became a leading factor even more than the production process and marketing position has become the function of all employees of the enterprise. The enterprises which fail to satisfy their customers, have become weaker economically and cannot survive. As a result, while developed information and communication technologies enabled globalization, the customer has become the most important element in the global economy and those enterprises which can sell whatever they produce, have been replaced by those enterprises who produce and sell whatever the customer wants and competition has been increased leading to global competition which influence entire world. The enterprises which have been deprived of competitive power through the classical marketing mix (product, price, distribution, promotion) now have a tendency towards customer relationship management (CRM). CRM is now used as a new name of the marketing. Introduction Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/898d365000b601bc0f5540d85e4c70f6.pdf 3051a02a4bdfcbe840c0eddc39041098 PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Universities That Bring About Change In A Changing World: A Model Suggestion M. Nurettin ALABAY Turgut Özal University Economics and Business Administrative Science Faculty Business Department Ankara, Turkey nalabay@gmail.com Yavuz KAHRAMAN Fatih University Ankara Vocational School Business Management Department Ankara, Turkey kahramanyavuz@yahoo.com Abstract:A closer examination of history reveals that humanity has been undergoing a constant development, particularly after the discovery of writing, numerals and zero. Alvin Toffler in his book ―The Third Wave‖, describes three great revolutions that occurred since the creation of the world: the agricultural revolution, the industrial revolution, and the information revolution. Education/training, particularly higher education, has come to be regarded as the most important factor that changes, improves, and shapes the society. It is also known that with this fact in mind, governments may tend to establish universities in the regions which they want to change and improve. Why would students and parents still choose the universities that are far away from their hometowns or located in other regions? It may be suggested that qualities of universities play an important role in their decisions. But are people motivated solely based on the qualities of universities? Are there other factors involved? Also, can the high preferableness of a university be considered as the only criterion for its success? Which factors are more effective in students‘ university preferences?Do such factors as qualification of university lecturers, the number of students per lecturer, the employment opportunities after graduation, and prestige play a role in students‘ choosing a particular university? If yes, to what extent? What should be the measurement metrics for a university? Are ―quality of education,‖ ―internationalization,‖ ―research,‖ and ―prestige‖ sufficient metrics in this regard? Why does a specific country attract more international students than others? Why do other countries send students to that specific country? What are the numbers of universities of countries? What are the capacities of these universities and are these capacities adequate?In order to measure the performances of university lecturers, is it adequate to assign some scores to their academic works, particularly asking lecturers to publish works in a foreign language as well as encouraging them having works published in a way to get more citations. This study evaluates the strategic positions of the universities around the world and discusses their projections. It examines such issues as the qualities of a good university, criteria of performance measurement, qualities required for attracting international students. Introduction The important turning points such as industrial revolution and information society in the process which has come so far has turned universities into means of global change. While universities derives strength from the society which they are in and at the same time they are main factors which affect the capacity of change in the society However all universities are not the same. The efficiency degrees of universities are different from each other. Which sub values are these differences based on? In this context, main reasons of why students prefers universities located in other regions, the degree of importance of these, The qualities of academicians The number of students per academician 339 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo The possibilities or opportunities of finding a job after graduation, prestige of the university When efficient factors and measurement criterion for the preferableness of universities are considered, education quality, internationalisation, the number of universities, which internationally cooperated with, the number of research publications, prestige of university could be seen. Why does a country attract more international university student than others? Why do countries send students to universities in other countries? Two factors play main role in international student mobilisation. These are 1) the impulsive factors in students‘ country (difficulties) 2) the attractive factors of the specific country (facilities). What are the numbers of universities of those countries? What are the capacities of these universities and are these capacities adequate? In order to measure the performances of university lecturers, is it adequate to assign some scores to their academic works, particularly asking lecturers to publish works in a foreign language as well as encouraging them having works published in a way to get more citations? The main difference established by this model is that we use the term education to denote some different qualities, including occupational capabilities, moral modeling and behavioral modeling (AJZEN, I. 1988; TAJFEL, H. and Turner, J. C. 1986). When we approach universities as a system, it is seen that the system is a higher education system with its inputs, process and outputs. This study is based on results, which have come by looking at only outputs in order to evaluate an university university (ARWU, 2009; PENN State University, 2006; Webometrics Ranking of World Universities; THES - QS World University Rankings). As it is seen on figure 1, total quality of outputs for a system is related with the qualities of inputs and process (ENQA, 2005). According to this, when the output is measured, the quality of input and process will be understood. Many factors are developed in order to measure the efficiency and outputs of university (KETTUNEN, Juha and Mauri Kantola, 2007). Efficiency measurement in university is related to how much the level of inputs‘ quality increase. Therefore, as a methodology, the comparison between the levels of students when they were and the levels of final year and after graduation is adopted. External Environment INPUT PROCESS OUTPUT Internal Environment Feedback Figure 1: System and Components Teaching and Education in Universities To measure the level of education in universities, the parameters in Table 1 could be used. 340 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo A A A A B B B B C C C D D D D D D D D D D D D D D D D D Indicator-1: Education-Training 1. Total number of registered students 2. The average of scoring during the registration 3. The number of beneficiary students and their percentage 4. The percentage of international students 5. The Number of students‘ projects 6. The number of students who are awarded 7. Percentage of graduation on time 8. Percentage of students academic success 9. The percentage of placement of graduates 10. Average of Graduation Degree 11. The Level of wages that graduates earn 12. The percentage of student/academician 13. The length and duration of student-lecturers‘ meeting outside lectures 14. The percentage of student/academic adviser numbers 15. The percentage of student/computers 16. The duration of Internet access per lecturer 17. Duration of internet access per student 18. Percentage of international academician 19. Number of books in the library a. The number of books per lecturer b. The number of books per student 20. The number of electronic library membership 21. Indoor space (square meter) 22. Outdoor space (square meter) 23. Students‘ Income a. The rate of incomes from national students to budget b. The rate of incomes from international students to budget 24. The number of foreign languages in which education is carried on Table 2: Indicator-1: Education-Training The indicators, which show the potential of newly registered student, are shown in first chapter. In second chapter, the indicators of advantages students gain at the university are taken place. In third chapter contains the criteria for the measurements of success of the students during and after the graduation time In the four chapter includes factors which will discover the success of university‘s first, second and third sections. Research and Publication in Universities The criteria in selection and promotion of academic personnel that is the most important human resource for a university is shown Table 2. 341 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Indicator-2: Research-Publication 1. Number of Articles in National Refereed Journals 2. Number of Articles in Internationally Cited Journals 3. Number of National Paper a. Number of national papers per academic personnel 4. Number of International Papers a. Number of international papers per academic personnel 5. Number of Books a. Books with Editing b. Chapters in Book c. Books in Foreign Languages d. Books per lecturers 6. Number of Projects a. Number of National Projects b. Number of International Projects c. Number of Local Projects d. Projects per academic personnel 7. Total Number of Citations a. Number of Citation per academic personnel 8. Number of Copy Rights, Licences, Patent and Innovations a. Number of patents per academic person 9. Annual Income from Research and Publications a. The percentage of Annual Income from Research and Publications in the budget Table 3: Indicator-2: Research-Publciation In this chapter, the factors, which show scientific image of university, the successes in the post graduation level and the acceptance of higher-level students, are pointed out. The activities in this section could be classified as national, international activities and scientific publications and projects. These activities could be sum up as the studies, which academic personnel carry out in order to improve themselves and contribute the world of science (ELTON, Lewis ,2008). Consequently, these efforts contribute to universities. As a result, the scientific level and image of a university becomes apparent. This situation provides the applications of high-level undergraduate and postgraduate students and offers opportunities for students with potential to join the scientific studies and projects. Universities’ Services to Society The factors in this chapter are the ones that cause the integration of university with the society and embracement of university by the society. Components that provide universities sufficient possibilities to develop strong relations with partners and joint owners are examined in this chapter. In the widest meaning, whole humanity is universities‘ natural partners. Therefore, solution suggestions of academicians for every kind of problems, which are in regional, national or international level, are expected. It is possible to separate indicators, which are shown at Table 3, into three main sections for the purpose of service to society. These can be classified as A) to find solutions to problems, B) In cooperation with partners, improvement and development, C) the components of income. While generating solutions to problems is being fulfilled after problems emerged in the form of intervention, collaboration with partners with an empathetic approach means works with future projection before the problems arise. Final chapter also analyses the donations and services of university in return of income. 342 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo A A A B B B B B B B B C C C C Indicator-3: Service to Society 1. Number of Suggestions for Solutions of the Local and Regional Problems 2. Number of Suggestions for Solutions of National Problems 3. Number of Suggestions for Solutions of International Problems 4. Number of Projects for the Cooperation of University and Society a. Number of people who are served in the university hospitals b. Number of People who are benefited from the services towards disadvantages groups. 5. Number of Projects about cooperation of University and Industry 6. Numbers of Project for the Cooperation of university and NGO‘s 7. Number of Projects for the cooperation of University and State 8. Number of Hours for the Education open to Public 9. Number of Participants for the Education open to Public 10.Proportion of Incomes from the Social Service Projects in the University‘s Budget a. Proportion of Incomes from the State in the Budget b. Proportion of Incomes from the donations in the Budget c. Proportion of other incomes in the budget Table 4: Indicator-3: Service to Society The Moral (Ethical) Values in the Universities Indicators that are obtained by analysing moral and ethical values in universities in terms of students and staff are taken place in Table 4. The basic reason for measuring these values in terms of personnel is related to the necessity of setting example for students 37. A A A A A A A B B B B B B B Indicator-4: Moral Values 1. Staff number and ration of alcohol dependents 2. Staff number and ration of drug addicts 3. Intended disciplinary staff ratio 4. Staff number and ratio who committed an offence or crime 5. Staff number and ratio of smokers 6. Number and ration of personnel involved in an ideological event 7. Number and ration of personnel carrying cutting tools, and lethal weapons 8. Student number and ration of alcohol dependents 9. Student number and ration of drug addicts 10. Intended disciplinary student ratio 11. Student number and ratio who committed an offence or crime 12. Student number and ratio of smokers 13. Number and ration of students involved in an ideological event 14. Number and ration of students carrying cutting tools, and lethal weapons Table 5: Indicator-4: Moral modeling educational indicators Values that we wish to transmit to students via leading by example There are some values in universities that cannot be digitalised therefore cannot be measured. However according to Likert scale, it is possible to obtain some ideas about these values. These values can be seen in Table 5. These values contribute the enrolment of qualified students to universities. The values classified in three sections. These are A) Values related to university‘s name and brand which look at external environment, B) Values that develop university and productivity of staff and students are related with internal affairs. C) High values which separates university from others. Below mentioned list of values cannot be teached or quantized readily. They only can be transmitted by behavioral leading by example to students. These positive qualities cannot be dictated in any way but they can be embraced by the students solely due to their free will if the staff can establish an attractive and positive image. 37 Akademisyenin anlattıklarını kendisi yaĢayarak verdiğinde daha etkili olduğu bilinmektedir. 343 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo A A A B B C C C C Indicator-5: Values that cannot be digitalised 1. Institutional Culture (Values, Beliefs, attitudes, the way of thinking and moral sense) 2. Prestige 3. Brand recognition and awareness 4. The presence of Academic Freedom 5. The presence of Freedom of Thought 6. Existence of Ethical Values 7. The presence of universal humanist values 8. The presence of sense of solidarity 9. Presence of Confidence and Trust Table 6: Indicator-5: Values that we wish to transmit to students via leading by example Conclusion In this study, the proposition of university model that contains values, which are expected to be in a university could contribute positively to the changes in the world is developed. This proposed model is built on outputs since it would be too difficult and to wide to analyze whole university system. To measure outputs will give us important information about the inputs and the process since quality outputs depend on quality inputs and process. In this model the reasons of university preference have been analyzed from different dimensions such as the quality of education, research and publications, the popularity of the university and the culture of institution The question of why any university is more attractive than other universities for international students and why students do not prefere domestic universities but go to foreign universities was answered by the model as a result of international publications and projects, and academic freedom which are essentials for international popularity. Proficiency level of universities will be assessed with comperative analyses of the number and capacity level of both domestic and foreign universities Many methods have been developed so far to measure the efficiency of universities. These measures mostly depend on education and research-publication measures. Many times even education was out of measurement. 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UNIVERSITY OF NORTH TEXAS (2009), Residency Tuition for International Students, http://www.international.unt.edu/index.php?option=com_content&view=article&id=201:residency-tuiton-for-internationalstudents&catid=95:requirements&Itemid=148, EriĢim: 30 Haziran. 345 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo VILALTA, Josep (2001), ―University Policy and Coordination Systems Between Governments and Universities: The Experience of the Catalan University System‖, Tertiary Education and Management; 7:9-22; Kluwer Academic Publishers, Printed in the Netherlands. VISAKORPI, J., F. Stankovic, J. Pedrosa, C. Rozsnyai (2008), Türkiye'de Yükseköğretim: Eğilimler, Sorunlar ve Fırsatlar, Yayın No. TÜSĠAD-T/2008-10-473, Ekim, Ġstanbul. WEBOMETRICS RANKING OF WORLD UNIVERSITIES, http://www.webometrics.info/about_rank.html WORLD BANK, (2007) Turkey – Higher Education Policy Study, Volume I: Strategic Directions for Higher Education in Turkey. Report No. 39674 – TU. World Bank Human Development Sector Unit Europe and Central Asia Region (Türkiye – Yükseköğretim Politikaları ÇalıĢması, Cilt I: Türkiye‘de Yükseköğretim için Stratejik Yönler. 39674 – TU Sayılı Rapor. Dünya Bankası Ġnsan GeliĢimi Bölümü Avrupa ve Orta Asya Bölgesi), Haziran. http://siteresources.worldbank.org/EXTECAREGTOPEDUCATION/Resources/4446071192636551820/Turkey_Higher_Education_Paper_062907.pdf YILMAZ, Emine Merdim (Editör), Yükseköğretimde Bolonya Sürecine Uyum ÇalıĢmaları, Avrupa Birliği Ülkelerinde Yükseköğretim, YÖK, http://www.yok.gov.tr/egitim/ab/avrupa.doc, 21.10.2008 ve http://arkitera.com/g72-yuksek-lisansegitimi.html?year=2008&aID=947, 3.12.2008 YÖDEK, (2007), Yükseköğretim Kurumlarında Akademik Değerlendirme ve Kalite GeliĢtirme Rehberi, Sürüm:1.1. YÖK, (2005), Yükseköğretim Kurumlarında Akademik Değerlendirme Ve Kalite GeliĢtirme Yönetmeliği, Resmi Gazete Tarihi: 20.09.2005 Resmi Gazete Sayı: 25942. YÖK, (2007), Türkiyenin Yükseköğretim Stratejisi, Yayın No: 2007-1, Baskı ve Cilt: Meteksan A.ġ., Ankara. 346 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 192 Title A name given to the resource Universities That Bring About Change In A Changing World: A Model Suggestion Author Author ALABAY, M. Nurettin KAHRAMAN, Yavuz Abstract A summary of the resource. A closer examination of history reveals that humanity has been undergoing a constant development, particularly after the discovery of writing, numerals and zero. Alvin Toffler in his book ―The Third Wave‖, describes three great revolutions that occurred since the creation of the world: the agricultural revolution, the industrial revolution, and the information revolution. Education/training, particularly higher education, has come to be regarded as the most important factor that changes, improves, and shapes the society. It is also known that with this fact in mind, governments may tend to establish universities in the regions which they want to change and improve. Why would students and parents still choose the universities that are far away from their hometowns or located in other regions? It may be suggested that qualities of universities play an important role in their decisions. But are people motivated solely based on the qualities of universities? Are there other factors involved? Also, can the high preferableness of a university be considered as the only criterion for its success? Which factors are more effective in students‘ university preferences?Do such factors as qualification of university lecturers, the number of students per lecturer, the employment opportunities after graduation, and prestige play a role in students‘ choosing a particular university? If yes, to what extent? What should be the measurement metrics for a university? Are ―quality of education,‖ ―internationalization,‖ ―research,‖ and ―prestige‖ sufficient metrics in this regard? Why does a specific country attract more international students than others? Why do other countries send students to that specific country? What are the numbers of universities of countries? What are the capacities of these universities and are these capacities adequate?In order to measure the performances of university lecturers, is it adequate to assign some scores to their academic works, particularly asking lecturers to publish works in a foreign language as well as encouraging them having works published in a way to get more citations. This study evaluates the strategic positions of the universities around the world and discusses their projections. It examines such issues as the qualities of a good university, criteria of performance measurement, qualities required for attracting international students. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/357136780068f9bf25fbf91a4877d95a.pdf e1d310e3101c44f1581d48fc10cec07f PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Alternative Manufacturing Technique in Glass Industry for Devoloping Countries: Fused Glass , “Zumrut Art Of Glass Model” and Its Applicability in Bosnia Herzegovina Economy Mesut ALBENĠ Faculty of Economics and Administrative Sciences Suleyman Demirel University, Turkey mesut@iibf.sdu.edu.tr Muhlis CAN Faculty of Economics and Administrative Sciences Hakkâri University, Turkey muhliscan@hakkari.edu.tr Abstract: Tourism industry plays an important role in the sustainable devolopment process of the countries. Giftware (souvenir,craft) sector also forms one of the important elements of tourism revenues.. However, finding same types of the products in many countries around the world is the signal that the sale of goods loose their competitivines and so, some innovations are needed. In this study, the contributions of new production techniques in glass industry, to which increasement of the export by taking the advantage of niche market and reducement of the unemployement, are examined for tourism oriented souvenir industry. The "Glass Fusion Technique" is discussed in order to concretize the purpose of this study with ―Zumrut Art of Glass‖ model and the possibilty of application into Bosnia and Herzegovina economy. Keywords: Tourism, Souvenir, Gift, Craft, Fused Glass Introduction There are some sectors, playing important roles for not only devoloped countires but also devoloping ones; such as textile industry, glass industry, otomobile industry, tourism sector. However, for all, tourism is a common vehicle for all economies. Tourism is a rapidly developing global industry and has great economic significance for the economy (Gunce, 2003). It is increasing at annual growth rate between %4 - %7 (Turner & Reisinger, 2001). Table 1: International Tourist Arrivals and International Tourism Receipts Source between 1990-2008 Source: World Tourism Organization 661 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo International tourist arrivals have continued to grow steadily from 25 million in 1950 to 684 millon in 2000, and they have reached 922 millon in 2008. Tourism has been becoming one of the largest and fastest growing economic sectors in the world (World Tourism Organization, 2009). Tourism has been one of the major international trade categories. For example, the overall export income generated by international tourism including passengers transport reached US $ 1.1 trillion in 2008,or US $ 3 billion a day. World‘s Export of commericial services consist of 30% from tourism and overall export goods and services 6% consist of tourism. Globally, as an export category, after fuels, chemicals and automotive products tourism ranks fourth. For many developing countries, tourism is one of the main income source and the number one export category, providing much needed employment and opportunities for development(World Tourism Organization, 2009). Table-2: International Tourist Arrivals by ( Sub) region Source: World Tourism Organization As it can be seen from the figure, Europe has %53,1 share from all international arrivals with 489,4 million people in 2008. However, Bosnia has just 212.749 international tourist arrivals in the same year (Federation of Bosnia and Herzegovina Federal Office Of Statistics, 2009) which is equal to ‰4 from Europe tourist arrivals. According to UNWTO‘s Tourism 2020 Vision reports, international arrivals are expected to reach nearly 1.6 billion by the year 2020. The total tourist arrivals by regions shows that, tourism will grow and the top three receiving regions will be Europe (717million tourists), East Asia (397 million) and the Americas (282 million) (World Tourism Organization, 2009). 662 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Table 3: Forecasting of International Tourist Arrivals Between 2010-2020 Source : World Tourism Organization The Effect of Tourism on Economy Tourism does not only affect the countries in one way. It has also positive effects on the devolopment of the physical, social, cultural and economic environment of a country(Gunce, 2003). Tourism has positive effects on economy in different ways. According to the United Nations foreign exchange earnings, the contribution to government revenues, the generation of employment, the stimulation of infrastructure investment and the contribution to local economies are some of them (Torrent, 2008; United Nations Environment Programme). Tourism contributes to the worldwide gross domestic products nearly 5%, also it contributes to employment directlyindirectly and it is estimated 6-7% of the overall number of jobs which are provided by tourism ( World Tourism Organization, 2009). For developing countries, where tourism is a key economic sector, the importance of tourism tends to be higher for economy (World Tourism Organization, 2009). There are some activities which are relavant to the tourism and have impacts on the economy in positive way during the journey. One of them is shopping. The Importance of Shopping During a Journey Shopping might be the most universal activities, despite the fact that it is seldom considered as a primary reason for travel (Turner & Reisinger, 2001). Whether international or domestic tourism , for both, the second most important expenditure item is shopping after accommodation ( Turner & Reisinger, 2001). For a tourist, a tour can not be a complete traveling experience without shopping ( Hudman & Hawking,1989). Shopping is a common and preferred tourist activity in different locations, and for today‘s travelers, tourism and shopping are integrated to each other. Shopping activities include especially souvenir, because tourists need to bring home something tangible to concretize and preserve their memories for their trips (Gordon, 1986). Souvenirs are related to tourism as commercially produced and purchased object to remind the purchaser of the experience (Swanson & Horridge, 2006). Souvenir products also include craft products which are called craft souvenir. What effects tourists when they decide to buy souvenirs? Turner and Reisinger (2001) found three important product characteristics for tourists purchasing cultural products: value (range, quality), product display characteristics (color, display, packaging, size), and uniqueness (memory of the trip). The ease of cleaning, care, and packing were of particular importance for travelers to reach the decision of craft buying (Hair et al.,1998). Through crafts, tourists generally prefer the products which are valuable work of the hand. According to UNESCO report (2007), there is a wrong impression that tourists prefer industrialized goods rather than handmade products. Especially nowadays, mass-produced polyester products which seem very simple, are sold everywhere. Also textile crafts can be found in every destination. Finding same types of the products in many countries around the world signals that the sale of goods loose their competitivines and so, some innovations are needed. 663 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo In this study, we would like to emphasize on advantage of the craft sector for devoloping countries. As generally devoloping countries has labour intensive sectors. For production of craft, sector also needs cheap labour force. According to UNESCO report ( 2007) the economic characteristics of the craft sectors are: - The handicrafts sector requires minimum expenditure and infrastructure to establish as it is a home-based industry. Therefore it can create jobs with minimum cost. - In general this sector uses raw materials which are avaliable locally. - Product adaptation is less expensive than investing in energy, machinery or technology becasue inputs required can easily be provided. The Worldwide Situation of Craft Sector Handicrafts have been devoloping without specific political stratetegies and they directly depend on demand gererated by tourism industry ( UNESCO, 2007). According to report released by UNESCO (2007) the national accounts do not fully include handicraft activities. However, handicrafts are always parts of the culture of a nation and represent a key component of socio-economic life. Many countries face to some difficulties in collecting data about craft sector because there is an important lack of data on the craft sectors. In some industrialized countries, craft sector plays an important role in their economy. For example in Italy, 24% of national enterprises belong to the crafts sector in which 1/5 private sector workers are employed. In Italian total Gross Domestic Products (GDP) ,craft exports share is %17. Morever in devoloping countries craft sector has a great importance in economy. In Colombia, crafts production represents income of approximately US$ 400 million in a year and brings in a monthly income to the workers between US$ 140 to 510. Crafts exports (not include sales to tourists) approximately amount to US$ 40 million per year. Two-thousand shops and 400 bulk and export trading companies, where 800,000 people are employed, affected by this important tourism market. Tunisia is another example. Craft sector is employing 300.000 people (%11 of the active population) of whom are working 4 hours a day on a part time-time basis. Their production contribute to Gross Domestic Income an avarage of %3,8 and provide US$ 2,400 income per household (an average of 5 members). In Morocco, Ministry of Tourism measure the volume of the these sector at %19 of total GDP. Morocco export handcraft products approximately valued US$ 63 million. Nowadays, there is a problem in souvenir industry. Finding same types of the products ( for example: textile products: t-shirts, carpet, cheap polyeserin products) , in many countries around the world is the signal that the sale of goods loose their competitivines and so, some innovations are needed. In this study, we would like to introduce an innovation in craft, souvenir and giftware. Our main method is Fused Glass Tecnique that is used in Turkey for touristic craft and souvenir industry. Not only for just giftware, it can also be applicated in Tableware, Decoration, Kitchenware, Hotel Products, Electirical Equipments etc. So, this new tecnique affects different sectors in not only domestic markets but also export markets. Fused Glass and “Zumrut Art Of Glass” Model What is fused (fusing) glass? It is a process of joining pieces of glass by melting them together and the main aim of fusing is to produce a solid glass sheet from individual pieces of glass which are arrange beside or on the top of one another by melting together in a kiln (Eberle, 1997). History of Zumrut Art of Glass Zumrut Art of Glass was established in 1981. The company entered the glass sector with decorative items by using the tecniques which are popular during that time: stained glass and sand blasting. In 1997, the company decided to produce new products by using unique tecnique which was not avaliable in Turkey. It brought fused (fusing) glass tecnique to Turkey. The company also desired to enter the giftware, souvenir sector by means of this unique tecnique. After preparing the consept products and marketing, they got a lot of orders from touristic places. In 2002, the company participated giftware fair which was in Germany and this date was the starting of entrance to the foreign markets. In 2005, the company invested to the water jet CNC machine for putting the limits away for designs. After this investment, all the designs have been prepared in computers with benefiting from the technology. 664 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo In 2006, to satisfy the customers‘ request, the drop tecnique which gives opportunity to produce locational and promotional products was applied into the production. Product Consept Zumrut Art of Glass product consept consist of Giftware, Tableware, Souvenir, Tea and Coffee Sets, Sugar Plates, Candle Holders, Magnets, Key Rings, Clocks, Picture Frames, Glass Tables, Plate Sets, Fruit Bowls, Self Service plates, Tea-Coffee Trays, Vases, Ashtrays, Chandeliers, Door Glasses, Glass Sinks, Mirror Frames, Bowls, Dinner Sets. Employment Situation There are 900 sales points, which are located generally in touristic places, of the company and it has 10 own exhibition centers. Zumrut Art of Glass is employing directly 25 workers in manufacturing department, 20 persons in exhibition centers as salesperson position,10 staff in different departments. Also company is employing 150 persons indirectly. Production Process The production steps are made up: 1-) Flat glasses are provided firstly as plates in different thicknesses for products of which their production is carried out by utilizing fusion glass melting tecnology. 2-) The necessary glass cutting processes are performed according to design and pattern of the product that will be produced. While the glass patterns are cut manually in the cutting workshop, the design cutting is carried out in Water Jet CNC bench. The water jet machine is able to cut all kinds of materials as two dimentional by operating in the CNC machines‘ principle. The cutting carried out with water is able to see thinner details and carried out milimetric cuttings in comparison to other tecnologies. 3-) The pattern and design glasses that have been got together in the production department are then placed into molds in the fusion glass furnaces after the necessary staining are done and the furnaces are made ready in order to perform thermal processing. All the Works taht have been carried out in the production are hand made and all the staining is carried out between two glasses. After 800 C thermal processing is applied, since the fusion glass furnace is kept for cooling, tension of the glass product has been taken and it is more resisting in comparison to normal flat glass. 4-) For souvenir industry, plastic drop process is applied into the products . Plastic drop is poured on photographs by labeling the which are demanded with the drop label tecnique and the photographs has been protected between the label and the drop. All kind of design, figure and logo are able to be applied on the glass with this tecnique. Domestic and Foreign Market Situation Of Zumrut Art of Glass Domestic market has 60% share and foreign market has 40% in total. Many of products which are manufactured in fused (fusing) glass tecnique are sold in Antalya, Fethiye, Bodrum, Marmaris, Kusadasi, Izmir, Ankara, Ġstanbul in Turkey with different points. The companys‘ exports markets consists of 15% of USA, 75% of EU and %10 others. 2 million pieces of products are manufactured and sold in both foreign and domestic market every year. The most popular products are magnets which are very easy to pack and hold, sugar plates which reflect the culture of the location, tea sets with different figures, mini vase and wall decoration gifts. Discussion 665 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Devoloping countries, especially nowadays, try to continue their development process with different methods. Some of them are transfering capital from agricultural to industrial production, some of them are try to increase earnings from different industry. However, there is a hard competitiveness in all industry for all countries and this creates a hard situation for devoloping ones. That means developing countries should find new methods which can be a competitive to continue their development process by using their rich and cheap labour force. Tourism is very important tool for development. Some of governments advertise their countries with different methods to increase the number of tourist arrivals. Some of them organize festivals, some of them give advertisements to TV programs to introduce their countries nature, the places for sight-seeing etc. Bosnia should also use methods to introduce its unique nature, touristic opportunies and historical background. Whether there is a little increasement in tourist arrivals, Bosnia Herzegovina with the share ‰4 from total from Europe that has %53,1 share from all international arrivals with 489,4 million tourists, Bosnian government should implement some policies to increase the share in the Europe. According to forecasting reports shows that tourist arrivals will continue to grow in Europe. In the light of this information, Bosnia can increase and take advantage of tourism sector if the government apply important policies into tourism industry for sustainable devolopment. Account deficit, unemployment and low income level constitue important economic problems in Bosnia. 1.708.000 persons are in the working age population and 226.000 persons are unemployed ( Federation of Bosnia and Herzegovina Federal Office Of Statistics, 2009 ). Tourism oriented invesments to fusing glass tecniques in souvenir industry will not only help decrease of unemployement, but also contribute to increase of the export with its geographical advantages. Bosnia Herzegovina, which is located in the middle of Europe where the estimated tourist arrival number will be 717 million in 2020, can use the advantage of minumun cost investment into the craft industry, which will affect whole economy like a chain not only with retail shopping but also with export trade. References Eberle, B. (1997). Creative Glass Tecniques (pp. 15). Lark Books A division of Sterling Publishing Co. Federation of Bosnia and Herzegovina Federal Office Of Statistics, (2009), Statistical Yearbook 2009. Retrieved on April 6, 2010 from http://www.fzs.ba/Statisticki%20godisnjak%202009.pdf Gordon, B. (1986). The souvenir: messenger of the extraordinary. Journal of Popular Culture, 20, 135–146. Gunce, E. (2003). Tourism and local attitudes in Girne, Northern Cyprus. Cities, 20(3), 181-195 Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Multivariate data analysis (5th ed.). Upper Saddle River, NJ: Prentice-Hall. Hudman, L. E., & Hawkins, D. E. (1989). Tourism in contemporary society. Englewood Cliffs, NJ: Prentice Hall. Swanson, K. K., & Horridge, P.E. (2006). Travel motivations as souvenir purchase indicators. Tourism Management, 27, 671-683 Torrent, R. R.-I-., (2008). Sustainable development in tourism municipalities: The role of public goods. Tourism Management, 29, 883-897 Turner, L. W., & Reisinger, Y. (2001). Shopping satisfaction for domestic tourist. Journal of Retailing and Consumer Services, 8, 15-27 UNESCO, (2007). Handicrafts and Employment Generation for the Poorest Youth and Women (pp. 03-50) . Retrieved on April 6, 2010 from http://unesdoc.unesco.org/images/0015/001567/156772e.pdf United Nations Environment Programme, http:// www.unep.org World Tourism Organization. (2009). Tourism Highlights. Retrieved on April 6, 2010 from http://unwto.org/facts/eng/highlights.htm 666 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 258 Title A name given to the resource Alternative Manufacturing Technique in Glass Industry for Devoloping Countries: Fused Glass , “Zumrut Art Of Glass Model” and Its Applicability in Bosnia Herzegovina Economy Author Author ALBENİ, Mesut CAN, Muhlis Abstract A summary of the resource. Tourism industry plays an important role in the sustainable devolopment process of the countries. Giftware (souvenir,craft) sector also forms one of the important elements of tourism revenues.. However, finding same types of the products in many countries around the world is the signal that the sale of goods loose their competitivines and so, some innovations are needed. In this study, the contributions of new production techniques in glass industry, to which increasement of the export by taking the advantage of niche market and reducement of the unemployement, are examined for tourism oriented souvenir industry. The "Glass Fusion Technique" is discussed in order to concretize the purpose of this study with ―Zumrut Art of Glass‖ model and the possibilty of application into Bosnia and Herzegovina economy. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/c51a3ee43e40e2da92c234a1f36f73d0.pdf e1d310e3101c44f1581d48fc10cec07f PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Alternative Manufacturing Technique in Glass Industry for Devoloping Countries: Fused Glass , “Zumrut Art Of Glass Model” and Its Applicability in Bosnia Herzegovina Economy Mesut ALBENĠ Faculty of Economics and Administrative Sciences Suleyman Demirel University, Turkey mesut@iibf.sdu.edu.tr Muhlis CAN Faculty of Economics and Administrative Sciences Hakkâri University, Turkey muhliscan@hakkari.edu.tr Abstract: Tourism industry plays an important role in the sustainable devolopment process of the countries. Giftware (souvenir,craft) sector also forms one of the important elements of tourism revenues.. However, finding same types of the products in many countries around the world is the signal that the sale of goods loose their competitivines and so, some innovations are needed. In this study, the contributions of new production techniques in glass industry, to which increasement of the export by taking the advantage of niche market and reducement of the unemployement, are examined for tourism oriented souvenir industry. The "Glass Fusion Technique" is discussed in order to concretize the purpose of this study with ―Zumrut Art of Glass‖ model and the possibilty of application into Bosnia and Herzegovina economy. Keywords: Tourism, Souvenir, Gift, Craft, Fused Glass Introduction There are some sectors, playing important roles for not only devoloped countires but also devoloping ones; such as textile industry, glass industry, otomobile industry, tourism sector. However, for all, tourism is a common vehicle for all economies. Tourism is a rapidly developing global industry and has great economic significance for the economy (Gunce, 2003). It is increasing at annual growth rate between %4 - %7 (Turner & Reisinger, 2001). Table 1: International Tourist Arrivals and International Tourism Receipts Source between 1990-2008 Source: World Tourism Organization 661 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo International tourist arrivals have continued to grow steadily from 25 million in 1950 to 684 millon in 2000, and they have reached 922 millon in 2008. Tourism has been becoming one of the largest and fastest growing economic sectors in the world (World Tourism Organization, 2009). Tourism has been one of the major international trade categories. For example, the overall export income generated by international tourism including passengers transport reached US $ 1.1 trillion in 2008,or US $ 3 billion a day. World‘s Export of commericial services consist of 30% from tourism and overall export goods and services 6% consist of tourism. Globally, as an export category, after fuels, chemicals and automotive products tourism ranks fourth. For many developing countries, tourism is one of the main income source and the number one export category, providing much needed employment and opportunities for development(World Tourism Organization, 2009). Table-2: International Tourist Arrivals by ( Sub) region Source: World Tourism Organization As it can be seen from the figure, Europe has %53,1 share from all international arrivals with 489,4 million people in 2008. However, Bosnia has just 212.749 international tourist arrivals in the same year (Federation of Bosnia and Herzegovina Federal Office Of Statistics, 2009) which is equal to ‰4 from Europe tourist arrivals. According to UNWTO‘s Tourism 2020 Vision reports, international arrivals are expected to reach nearly 1.6 billion by the year 2020. The total tourist arrivals by regions shows that, tourism will grow and the top three receiving regions will be Europe (717million tourists), East Asia (397 million) and the Americas (282 million) (World Tourism Organization, 2009). 662 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Table 3: Forecasting of International Tourist Arrivals Between 2010-2020 Source : World Tourism Organization The Effect of Tourism on Economy Tourism does not only affect the countries in one way. It has also positive effects on the devolopment of the physical, social, cultural and economic environment of a country(Gunce, 2003). Tourism has positive effects on economy in different ways. According to the United Nations foreign exchange earnings, the contribution to government revenues, the generation of employment, the stimulation of infrastructure investment and the contribution to local economies are some of them (Torrent, 2008; United Nations Environment Programme). Tourism contributes to the worldwide gross domestic products nearly 5%, also it contributes to employment directlyindirectly and it is estimated 6-7% of the overall number of jobs which are provided by tourism ( World Tourism Organization, 2009). For developing countries, where tourism is a key economic sector, the importance of tourism tends to be higher for economy (World Tourism Organization, 2009). There are some activities which are relavant to the tourism and have impacts on the economy in positive way during the journey. One of them is shopping. The Importance of Shopping During a Journey Shopping might be the most universal activities, despite the fact that it is seldom considered as a primary reason for travel (Turner & Reisinger, 2001). Whether international or domestic tourism , for both, the second most important expenditure item is shopping after accommodation ( Turner & Reisinger, 2001). For a tourist, a tour can not be a complete traveling experience without shopping ( Hudman & Hawking,1989). Shopping is a common and preferred tourist activity in different locations, and for today‘s travelers, tourism and shopping are integrated to each other. Shopping activities include especially souvenir, because tourists need to bring home something tangible to concretize and preserve their memories for their trips (Gordon, 1986). Souvenirs are related to tourism as commercially produced and purchased object to remind the purchaser of the experience (Swanson & Horridge, 2006). Souvenir products also include craft products which are called craft souvenir. What effects tourists when they decide to buy souvenirs? Turner and Reisinger (2001) found three important product characteristics for tourists purchasing cultural products: value (range, quality), product display characteristics (color, display, packaging, size), and uniqueness (memory of the trip). The ease of cleaning, care, and packing were of particular importance for travelers to reach the decision of craft buying (Hair et al.,1998). Through crafts, tourists generally prefer the products which are valuable work of the hand. According to UNESCO report (2007), there is a wrong impression that tourists prefer industrialized goods rather than handmade products. Especially nowadays, mass-produced polyester products which seem very simple, are sold everywhere. Also textile crafts can be found in every destination. Finding same types of the products in many countries around the world signals that the sale of goods loose their competitivines and so, some innovations are needed. 663 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo In this study, we would like to emphasize on advantage of the craft sector for devoloping countries. As generally devoloping countries has labour intensive sectors. For production of craft, sector also needs cheap labour force. According to UNESCO report ( 2007) the economic characteristics of the craft sectors are: - The handicrafts sector requires minimum expenditure and infrastructure to establish as it is a home-based industry. Therefore it can create jobs with minimum cost. - In general this sector uses raw materials which are avaliable locally. - Product adaptation is less expensive than investing in energy, machinery or technology becasue inputs required can easily be provided. The Worldwide Situation of Craft Sector Handicrafts have been devoloping without specific political stratetegies and they directly depend on demand gererated by tourism industry ( UNESCO, 2007). According to report released by UNESCO (2007) the national accounts do not fully include handicraft activities. However, handicrafts are always parts of the culture of a nation and represent a key component of socio-economic life. Many countries face to some difficulties in collecting data about craft sector because there is an important lack of data on the craft sectors. In some industrialized countries, craft sector plays an important role in their economy. For example in Italy, 24% of national enterprises belong to the crafts sector in which 1/5 private sector workers are employed. In Italian total Gross Domestic Products (GDP) ,craft exports share is %17. Morever in devoloping countries craft sector has a great importance in economy. In Colombia, crafts production represents income of approximately US$ 400 million in a year and brings in a monthly income to the workers between US$ 140 to 510. Crafts exports (not include sales to tourists) approximately amount to US$ 40 million per year. Two-thousand shops and 400 bulk and export trading companies, where 800,000 people are employed, affected by this important tourism market. Tunisia is another example. Craft sector is employing 300.000 people (%11 of the active population) of whom are working 4 hours a day on a part time-time basis. Their production contribute to Gross Domestic Income an avarage of %3,8 and provide US$ 2,400 income per household (an average of 5 members). In Morocco, Ministry of Tourism measure the volume of the these sector at %19 of total GDP. Morocco export handcraft products approximately valued US$ 63 million. Nowadays, there is a problem in souvenir industry. Finding same types of the products ( for example: textile products: t-shirts, carpet, cheap polyeserin products) , in many countries around the world is the signal that the sale of goods loose their competitivines and so, some innovations are needed. In this study, we would like to introduce an innovation in craft, souvenir and giftware. Our main method is Fused Glass Tecnique that is used in Turkey for touristic craft and souvenir industry. Not only for just giftware, it can also be applicated in Tableware, Decoration, Kitchenware, Hotel Products, Electirical Equipments etc. So, this new tecnique affects different sectors in not only domestic markets but also export markets. Fused Glass and “Zumrut Art Of Glass” Model What is fused (fusing) glass? It is a process of joining pieces of glass by melting them together and the main aim of fusing is to produce a solid glass sheet from individual pieces of glass which are arrange beside or on the top of one another by melting together in a kiln (Eberle, 1997). History of Zumrut Art of Glass Zumrut Art of Glass was established in 1981. The company entered the glass sector with decorative items by using the tecniques which are popular during that time: stained glass and sand blasting. In 1997, the company decided to produce new products by using unique tecnique which was not avaliable in Turkey. It brought fused (fusing) glass tecnique to Turkey. The company also desired to enter the giftware, souvenir sector by means of this unique tecnique. After preparing the consept products and marketing, they got a lot of orders from touristic places. In 2002, the company participated giftware fair which was in Germany and this date was the starting of entrance to the foreign markets. In 2005, the company invested to the water jet CNC machine for putting the limits away for designs. After this investment, all the designs have been prepared in computers with benefiting from the technology. 664 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo In 2006, to satisfy the customers‘ request, the drop tecnique which gives opportunity to produce locational and promotional products was applied into the production. Product Consept Zumrut Art of Glass product consept consist of Giftware, Tableware, Souvenir, Tea and Coffee Sets, Sugar Plates, Candle Holders, Magnets, Key Rings, Clocks, Picture Frames, Glass Tables, Plate Sets, Fruit Bowls, Self Service plates, Tea-Coffee Trays, Vases, Ashtrays, Chandeliers, Door Glasses, Glass Sinks, Mirror Frames, Bowls, Dinner Sets. Employment Situation There are 900 sales points, which are located generally in touristic places, of the company and it has 10 own exhibition centers. Zumrut Art of Glass is employing directly 25 workers in manufacturing department, 20 persons in exhibition centers as salesperson position,10 staff in different departments. Also company is employing 150 persons indirectly. Production Process The production steps are made up: 1-) Flat glasses are provided firstly as plates in different thicknesses for products of which their production is carried out by utilizing fusion glass melting tecnology. 2-) The necessary glass cutting processes are performed according to design and pattern of the product that will be produced. While the glass patterns are cut manually in the cutting workshop, the design cutting is carried out in Water Jet CNC bench. The water jet machine is able to cut all kinds of materials as two dimentional by operating in the CNC machines‘ principle. The cutting carried out with water is able to see thinner details and carried out milimetric cuttings in comparison to other tecnologies. 3-) The pattern and design glasses that have been got together in the production department are then placed into molds in the fusion glass furnaces after the necessary staining are done and the furnaces are made ready in order to perform thermal processing. All the Works taht have been carried out in the production are hand made and all the staining is carried out between two glasses. After 800 C thermal processing is applied, since the fusion glass furnace is kept for cooling, tension of the glass product has been taken and it is more resisting in comparison to normal flat glass. 4-) For souvenir industry, plastic drop process is applied into the products . Plastic drop is poured on photographs by labeling the which are demanded with the drop label tecnique and the photographs has been protected between the label and the drop. All kind of design, figure and logo are able to be applied on the glass with this tecnique. Domestic and Foreign Market Situation Of Zumrut Art of Glass Domestic market has 60% share and foreign market has 40% in total. Many of products which are manufactured in fused (fusing) glass tecnique are sold in Antalya, Fethiye, Bodrum, Marmaris, Kusadasi, Izmir, Ankara, Ġstanbul in Turkey with different points. The companys‘ exports markets consists of 15% of USA, 75% of EU and %10 others. 2 million pieces of products are manufactured and sold in both foreign and domestic market every year. The most popular products are magnets which are very easy to pack and hold, sugar plates which reflect the culture of the location, tea sets with different figures, mini vase and wall decoration gifts. Discussion 665 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Devoloping countries, especially nowadays, try to continue their development process with different methods. Some of them are transfering capital from agricultural to industrial production, some of them are try to increase earnings from different industry. However, there is a hard competitiveness in all industry for all countries and this creates a hard situation for devoloping ones. That means developing countries should find new methods which can be a competitive to continue their development process by using their rich and cheap labour force. Tourism is very important tool for development. Some of governments advertise their countries with different methods to increase the number of tourist arrivals. Some of them organize festivals, some of them give advertisements to TV programs to introduce their countries nature, the places for sight-seeing etc. Bosnia should also use methods to introduce its unique nature, touristic opportunies and historical background. Whether there is a little increasement in tourist arrivals, Bosnia Herzegovina with the share ‰4 from total from Europe that has %53,1 share from all international arrivals with 489,4 million tourists, Bosnian government should implement some policies to increase the share in the Europe. According to forecasting reports shows that tourist arrivals will continue to grow in Europe. In the light of this information, Bosnia can increase and take advantage of tourism sector if the government apply important policies into tourism industry for sustainable devolopment. Account deficit, unemployment and low income level constitue important economic problems in Bosnia. 1.708.000 persons are in the working age population and 226.000 persons are unemployed ( Federation of Bosnia and Herzegovina Federal Office Of Statistics, 2009 ). Tourism oriented invesments to fusing glass tecniques in souvenir industry will not only help decrease of unemployement, but also contribute to increase of the export with its geographical advantages. Bosnia Herzegovina, which is located in the middle of Europe where the estimated tourist arrival number will be 717 million in 2020, can use the advantage of minumun cost investment into the craft industry, which will affect whole economy like a chain not only with retail shopping but also with export trade. References Eberle, B. (1997). Creative Glass Tecniques (pp. 15). Lark Books A division of Sterling Publishing Co. Federation of Bosnia and Herzegovina Federal Office Of Statistics, (2009), Statistical Yearbook 2009. Retrieved on April 6, 2010 from http://www.fzs.ba/Statisticki%20godisnjak%202009.pdf Gordon, B. (1986). The souvenir: messenger of the extraordinary. Journal of Popular Culture, 20, 135–146. Gunce, E. (2003). Tourism and local attitudes in Girne, Northern Cyprus. Cities, 20(3), 181-195 Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Multivariate data analysis (5th ed.). Upper Saddle River, NJ: Prentice-Hall. Hudman, L. E., & Hawkins, D. E. (1989). Tourism in contemporary society. Englewood Cliffs, NJ: Prentice Hall. Swanson, K. K., & Horridge, P.E. (2006). Travel motivations as souvenir purchase indicators. Tourism Management, 27, 671-683 Torrent, R. R.-I-., (2008). Sustainable development in tourism municipalities: The role of public goods. Tourism Management, 29, 883-897 Turner, L. W., & Reisinger, Y. (2001). Shopping satisfaction for domestic tourist. Journal of Retailing and Consumer Services, 8, 15-27 UNESCO, (2007). Handicrafts and Employment Generation for the Poorest Youth and Women (pp. 03-50) . Retrieved on April 6, 2010 from http://unesdoc.unesco.org/images/0015/001567/156772e.pdf United Nations Environment Programme, http:// www.unep.org World Tourism Organization. (2009). Tourism Highlights. Retrieved on April 6, 2010 from http://unwto.org/facts/eng/highlights.htm 666 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 306 Title A name given to the resource Alternative Manufacturing Technique in Glass Industry for Devoloping Countries: Fused Glass , “Zumrut Art Of Glass Model” and Its Applicability in Bosnia Herzegovina Economy Author Author ALBENİ, Mesut CAN, Muhlis Abstract A summary of the resource. Tourism industry plays an important role in the sustainable devolopment process of the countries. Giftware (souvenir,craft) sector also forms one of the important elements of tourism revenues.. However, finding same types of the products in many countries around the world is the signal that the sale of goods loose their competitivines and so, some innovations are needed. In this study, the contributions of new production techniques in glass industry, to which increasement of the export by taking the advantage of niche market and reducement of the unemployement, are examined for tourism oriented souvenir industry. The "Glass Fusion Technique" is discussed in order to concretize the purpose of this study with ―Zumrut Art of Glass‖ model and the possibilty of application into Bosnia and Herzegovina economy. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/bf923b9fd40bcdf388a6e52a68f04f73.pdf 24996345aff8bb328f86c88405bd45cb PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Analysis of Human Development in Balkan Countries: A Comparison of West and Middle Europe Countries Hüseyin ALTAY Assist. Prof. Dr., Bilecik University, Faculty of Economics and Administrative Sciences, Department of Economics, Bilecik, TURKEY, Phone: +90 228 212 42 96 (ext.120) huseyin.altay@bilecik.edu.tr Ali ġEN Assist. Prof. Dr., Dumlupinar University, Faculty of Economics and Administrative Sciences, Department of Economics, Kutahya, TURKEY, Phone: +90 274 265 20 31 (ext.2108) Fax: +90 274 265 21 97 alisen@dumlupinar.edu.tr Abstract: Since the beginning of 1990s, Balkan countries have significantly been changing as social, economic and politic structure. However, these countries have important differences in terms of human development indicators. Some countries in Balkans have low GDP levels. However, same countries replace between High Level Development countries in Human Development Index (prepared by UNDP). The aim of this paper is to investigate in terms of human development of Balkan countries that are not being member of EU countries. In scope of this aim, we will compare with three country groups related to human development. These groups are currently EU members countries (exclude Balkan countries), currently Balkan countries that are member of EU and other Balkan countries. As a result, this paper will have determined whether or not suitable for full membership to EU of Balkan countries. Key Words: Balkan Countries, Human Development Index, European Union Countries. Introduction For the first time, ―development‖ concept emerged after nation-states (Balanuye and Halıcı, 2006). It was based on a need for some structural and qualitative improvements in developing countries (ġan, 2005). The same concept as a branch of development economics, for the first time, was used after Great Depression. Especially, development economics took more of an interest in 1940s. Since World War II, development concept has usually been examined economically. In balanced and unbalanced development theories, neo-liberal approaches and dependence theories, development problem was seen as a part of production process. Thus, proposals concerning solution also have focused how production factors could be obtained and how they could be used in production process (Yavilioğlu, 2002). Because development and growth is examined together, in measurement of development is also used indicators related to economic growth. If a country has a positive growth rate in its GDP and its growth rate is stable, it is accepted as a development country. Raising per capita income is other development indicator (Mıhçı, 1996). Gross national product (GNP) or gross domestic product (GDP) were originally created as indicators of total economic output for macroeconomic stabilization policy and were therefore not meant to be indicators of well-being. On the other hand, it is certainly true that policy makers, the media and the public alike seem to equate GNP/GDP with well-being. In international comparison as well, it is thought of the countries with a high GNP/GDP as not only the rich, but also the well-off countries. However, because income is just one of the components of well-being, GNP/GDP have long since been criticized as misleading and deficient indicators of well-being (Neumayer 2004). Not only does development concept describe rising in GDP, but it has important effects on social and economic life, including education, health (Demiral, 2007). However, even if some countries are described as developed economically, they also have very problems. Thus, there is a need for a relationship between economic growth and human development (Demir, 2006). The fact that development is only described as an economic concept means that human factor is highly not considered. Development is based on fact of ―human development‖ (UNDP, 147 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo 2002). Most economics accept that GDP by itself is useful in measuring ―economic development‖ but it is inadequate to understand a nation‘s social and cultural level (Piana, 2001). Therefore, it is defined development as not only a rising in GDP and a diminishing in poverty but also a multidimensional process bringing about an important change in social behaviors and structures and national institutions (Açıkgöz, Kök, Ġspir, 2008). Development states improvement process of life quality of all people. Here, there are three facts in appearance of development that have equal importance. First is an improvement in life quality of people, so that their incomes increase, their education, health conditions improve. Second is an increase in self-confidence and merit of people with developing social, cultural, political and economic structure. Finally, changing in their preference opportunities of people increased their independences, and diversity of goods and services(Günsoy, 2005). What are factors that affect affirmatively human lifetime? How do people live on healthier? How do they prevent more efficient from illness? How do they enrich their thinking world? The kinds of questions are based on human life regarding development (Mıhçı, 1996). The first author is Amartya Sen, who has examined this subject on this base. According to Sen, there is human being in the base of all activities. Thus, development is to be based on their liberties, achievements and capabilities (Anand and Sen, 1994). People will be able to obtain a higher quality lifetime through better education and health system. Higher capacities create more liberty life standard. More liberty people are more productive. In other words, there are subjects regarding people‘s life quality in Sen‘s approach. Therefore, not being monetary issues have more priority than monetary ones do. Having higher growth rate is inadequate to be development for a country. Furthermore, there is a need for being known what development process are. Today, development is not about economic performance alone, but most importantly about people and their wellbeing (Jahan, 2005). Thus, in period that was discussed approaches regarding development, Human Development Report was published by UNDP, focusing Sen‘s capability and functioning approach (Baliamoune and Lutz, 2004). Aim of the reports, which was firstly prepared by Mahbub ul Haq‘s team in 1990, puts human being in national and global policies and attracts attention of international development environments to importance of life quality. Now, governments, non-governmental organizations, academicians and media for the purpose of comparison of countries‘ development levels (Gürses, 2009) use the reports. The concept of human development emphasized that (Jahan, 2005): • Development is about enlarging people‘s choices by enhancing their functionings and capabilities. • Development is of the people, for the people and by the people. The first refers to human capital formation and human resources development through nutrition, health and education. Development for the people stresses that the benefits of economic growth must be translated into lives of people. Development by the people means that people must be able to influence the process, which affects their lives. • Development must be woven around people, and not people around development Measure of Human Development Index The HDI is a summary measure of human development. It measures the average achievements in a country in three basic dimensions of human development (UNDP, 2005): • A long and healthy life, as measured by life expectancy at birth. • Knowledge, as measured by the adult literacy rate (with two-thirds weight) and the combined rimary, secondary and tertiary gross enrolment ratio (with one-third weight). • A decent standard of living, as measured by GDP per capita in purchasing power parity (PPP) terms in US dollars. 148 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo A long and Healthy life DIMENSION Knowledge Adult literacy rate Life expectancy At birth INDICATOR Adult literacy index Gross enrolment ratio (GER) GER index Education index Life expectancy index DIMENSION INDEX A decent standart of living GDP per capita PPP US GDP index HUMAN DEVELOPMENT INDEX (HDI) Figure 1: Formation of Human Development Report. Source: UNDP (2005) Human Development Report Before the HDI itself is calculated, an index needs to be created for each of these dimensions. To calculate these indices—the life expectancy, education and GDP indices—minimum and maximum values (goalposts) are chosen for each underlying indicator. Performance in each dimension is expressed as a value between 0 and 1 by applying the following general formula: Dimension Index= actualvalu e  min value max value  min value The HDI is then calculated as a simple average of the dimension indices. The box at right illustrates the calculation of the HDI for a sample country. Indicator Life expectancy at birth (years) Adult literacy rate (%) Combined gross enrolment ratio (%) GDP percapita (PPP US$) Maximum Minumum Value Value 85 25 100 0 100 0 40.000 100 Table 1: Goalposts for calculating the HDI Source: UNDP (2005) Human Development Report i) Life Expectancy Index: The life expectancy index measures the relative achievement of a country in life expectancy at birth. Life Ecpectancy Index= LE  25 85  25 149 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo ii) Education Index: The education index measures a country‘s relative achievement in both adult literacy and combined primary, secondary and tertiary gross enrolment. First, an index for adult literacy and one for combined gross enrolment are calculated. Then these two indices are combined to create the education index, with two-thirds weight given to adult literacy and one-third weight to combined gross enrolment. Education Index= 2 1 *ALI+ *GEI 3 3 Adult Literacy Index (ALI) = ALR  0 100  0 Gross Enrollment Index (GEI) = CGER  0 100  0 iii) GDP Index: The GDP index is calculated using adjusted GDP per capita (PPP US$). In the HDI income serves as a surrogate for all the dimensions of human development not reflected in a long and healthy life and in knowledge. Income is adjusted because achieving a respectable level of human development does not require unlimited income. Accordingly, the logarithm of income is used. GDP Index= log( GDPpc)  log(100) log( 40.000)  log(100) HDI Index=1/3(Life Expectancy Index) + 1/3 (Education Index) + 1/3 (GDP Index) Human Development Index (HDI) values ranges between 0 and 1. 0 value shows the lowest degree of HDI. 1 value shows the highest degree of HDI. HDI includes in three groups of countries regarding their development levels. If a country‘s HDI value is between 0 and 0.499, it has Low Human Development; if a country‘s HDI value is between 0.500 and 0.799, it has Medium Human Development; if a country‘s HDI value is between 0.800 and 1, it has High Human Development (Ünal, 2008). Human Development in Balkan Countries In the 20th century, Balkan countries had partly different processes of development. Since 1981, Greece has been a member of EU. In addition, it is an insider of Euro zone and Western European Union (WEU). Slovenia joined EU in 2004. Bulgaria and Romania were insiders of EU in 2007. Although Turkey applied for membership of EU, it was able to start membership negotiations in 2005. In 2005, Croatia and Macedonia were members of EU. On the other hand, Bosnia and Herzegovina, Montenegro and Serbia have applied to membership of EU. This paper intends to examine Balkan countries‘ human development levels in process of membership of EU. The countries are three groups that are EU members, Balkan countries in EU and Balkan countries in process of EU membership. Balkan countries will compare with EU (15), and other EU (10) members that were accepted membership in 200431. The paper analyzes sub-indexes in HDI and examines countries‘ HDI as a whole. It is used data from Human Development Reports (2000-2007) by published UNDP. 31 EU (15): Germany (1957), France (1957), Belgium (1957), Italy (1957), Luxemburg (1957), Netherland (1957), Denmark (1973), Ireland (1973), Ġngiltere (1973), Greece (1981), Spain (1986), Portugal (1986), Sweden (1995), Austria (1995), Finland (1995), EU (10): Cyprus, Czech Republic, Estonia, Hungary, Lithuania, Latvia, Malta, Poland, Slovak Republic, Slovenia: (2004) EU (2): Romania, Bulgaria: (2007) Balkan Countries: Greece, Slovenia, Bulgaria, Romania, Albania, Bosnia and Herzegovina, Montenegro, Serbia, Macedonia, Croatia, Turkey 150 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Figure 2: Life Expectancy Index 2000-2007 Greece has the highest Life Expectancy Index. Slovenia, Croatia and Albania follow Slovenia Bulgaria and Romania have rather low LIE values. Within Balkan countries, which are non-member EU, Croatia has the highest value. Turkey is at last rank regarding same value. Figure 3: Education Index 2000-2007 According to Education Index, the highest value belongs to Slovenia, whose value is above of average of EU‘s one. Greece Education Index follows Slovenia‘s one. Turkey has the lowest value of Education Index 151 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Figure 4: GDP Index 2000-2007 According to GDP Index, Greece has the highest value. Slovenia is in second rank. Both counties place above of average of EU (10) countries, whose value is o.844. Within non-member EU countries, Croatia has the highest GDP Index value. Albania has GDP Index value. Figure 5: Human Development Index 2000-2007 Greece has the highest Human Development Index value. Although Greece is above of average of EU‘s (10), it is below of average of EU‘s (15). Slovenia has second high value. Within non-member EU countries, Croatia is a country that has the highest HDI. Montenegro and Serbia follow Slovenia. Moreover, in 2007, levels of these countries‘ HDI were higher than Romania‘s and Bulgaria‘s ones. Turkey has lower value than Macedonia, Bosnia and Herzegovina and Albania do. 152 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Figure 6: Human Development Index 2000-2007, All Countries According to Human Development Index results for all countries, Sweden has the highest value regarding 2000-2007 averages. Respectively, Netherland, Ireland, Belgium, Luxemburg, Finland, France, Austria, Denmark, England, Spain and Germany (EU 15) follow Sweden. Within EU (15) Greece has only better HDI level than Portugal does. Within countries that have been member of EU since 2004, Slovenia has the highest HDI value so that its value is higher than Portugal‘s. Romania and Bulgaria, which have been EU member since 2007, have lower HDI degree than Croatia, Montenegro and Serbia, which have not been EU member yet. Macedonia, Bosnia and Herzegovina, Albania and Turkey are last ranks. Concluding Remarks From 2000 to 2007 in Human Development reports, respectively, Greece, Slovenia, Croatia, Montenegro, Serbia, Bulgaria, Romania and Macedonia have high HDI values. Bosnia and Herzegovina, Albania and Turkey have medium HDI values. Greece is below of EU (15) average HDI. Slovenia has a HDI value that is higher than EU (10) average. Romania and Bulgaria, which have been EU members since 2007, have lower HDI than Croatia, Montenegro and Serbia, which have not been EU members yet. Within non-member EU Balkan countries, Croatia is an outstanding country. Croatia has high values of three sub-indexes of HDI. Although Albania and Bosnia and Herzegovina have high values in Life Expectancy Index, their values of Education Index and GDP Index are rather low. Thus, the countries‘ HDI values are also low. There is a similar situation for Turkey, whose GDP Index value is quite high. However, because of low values of Education Index and Life Expectancy Index, Turkey is in last rank regarding HDI. According HDI values, Balkan countries are two groups: first group includes the countries that are Croatia, Montenegro, Serbia and Macedonia, which have high HDI; second group is Bosnia and Herzegovina, Albania and Turkey that have medium HDI. 153 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo References Açıkgöz, B.& Tarı, R. & Ġspir, S. (2008). Hypothesis Tests Aimed at Globalization Pre-assumption: Experience of Selected Countries on Poverty (1997-2003). Süleyman Demirel Üniversitesi Ġktisadi ve Ġdari Bilimler Fakültesi Dergisi, C:13, S:1, (pp. 351-376). Anand, S.& Sen, A. K. (1994). Human Development Index: Methodology and Measurement. Human development report office occasional papers. 26.04.2010 from Web site: http://hdr.undp.org/en/media/Anand_and_Sen_HDI.pdf . Balanuye, Ç. & Halıcı, E. (2006). Sürdürülebilir GeliĢme Beyin Göçü ve BiliĢim, Felsefi Bir Perspektif. Elektronik Sosyal Bilimler Dergisi. www.e-sosder.com. ISSN: 1304-278, C.5, S.18, (pp. 22-29). Baliamoune, M.L. (2004). On the Measurement of Human Well-being, Fuzzy Set Theory and Sen‘s Capability Approach. United Nation University, World Institute for Development Economic Research (WIDER). Research Paper No: 2004\16. Demir, S. (2006). BirleĢmiĢ Milletler Kalkınma Programı Ġnsani GeliĢme Endeksi ve Türkiye Açısından Değerlendirme. DPT. Ankara. Demiral, M. (2007). Türkiye‘de Sosyal Sermaye Kapsamında Sivil Toplum KuruluĢlarının Sürdürülebilir Sosyo-ekonomik Kalkınma Sürecindeki Rolü. Akademik BakıĢ E-Dergisi. ISSN: 1694-528X, S.13. Günsoy, G. (2005). Ġnsani GeliĢme Kavramı ve Sağlıklı YaĢam Hakkı. Zonguldak Karaelmas Üniversitesi Sosyal Bilimler Dergisi. Cilt 1, Sayı 2, (pp. 35-52). Gürses, D. (2009). Human Development and Turkey. Balıkesir Üniversitesi Sosyal Bilimler Dergisi, Cilt 12, Sayı 21, (pp.339350). Jahan, S. (2005). Measuring Human Development: Evolution of the Human Development Index. http://hdr.undp.org/en/media/Jahan_HDI.pdf. Mıhçı, H. (1996). Kalkınma: Bir Terim Neyi Anlatır? Ekonomik YaklaĢım. Cilt 7, Sayı 23, (pp.65-86). Neumayer, E. (2004). Sustainability and Well-being Indicator. United Nation University World Institute for Development Economic Research (WIDER), Research Paper No: 2004\23. Piana, V. (2001). Gross Domestıc Product Retrieved, 26.04.2010 from Web site: http://www.economicswebinstitute.org/glossary/gdp.htm. Sen, Amartya K. (2004). Özgürlükle Kalkınma. Ayrıntı Yayınları. Ġstanbul. ġan, M. (2005). Kalkınma Planlamasında Bilgi Yönetimi ve Devlet Planlama TeĢkilatı Ġçin Kurumsal Bilgi Politikası Modeli. DPT, 2687, Ankara. UNDP. (2002). Human Development Report. http://hdr.undp.org/en/statistics. UNDP. (2003). Human Development Report, http://hdr.undp.org/en/statistics UNDP. (2004). Human Development Report. http://hdr.undp.org/en/statistics UNDP. (2005). Human Development Report. http://hdr.undp.org/en/statistics UNDP. (2006). Human Development Report. http://hdr.undp.org/en/statistics UNDP. (2007-2008). Human Development Report. http://hdr.undp.org/en/statistics UNDP (2009), Human Development Report, http://hdr.undp.org/en/statistics Ünal, Ç. (2008). Regionall Differencess in Turkey by Human Development Index. Coğrafi Bilimler Dergisi. Cilt 6, Sayı:2, (pp.89-113). Yavilioğlu, C. (2002). The Semantic History of Consept of the Development an its Conceptual Origins. Cumhuriyet Üniversitesi Ġktisadi ve Ġdari Bilimler Dergisi. C.3, S.1, (pp.59-77). 154 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 201 Title A name given to the resource Analysis of Human Development in Balkan Countries: A Comparison of West and Middle Europe Countries Author Author ALTAY, Hüseyin ŞEN, Ali Abstract A summary of the resource. Since the beginning of 1990s, Balkan countries have significantly been changing as social, economic and politic structure. However, these countries have important differences in terms of human development indicators. Some countries in Balkans have low GDP levels. However, same countries replace between High Level Development countries in Human Development Index (prepared by UNDP). The aim of this paper is to investigate in terms of human development of Balkan countries that are not being member of EU countries. In scope of this aim, we will compare with three country groups related to human development. These groups are currently EU members countries (exclude Balkan countries), currently Balkan countries that are member of EU and other Balkan countries. As a result, this paper will have determined whether or not suitable for full membership to EU of Balkan countries. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/451386186acadadcf15bb0923b0a879d.pdf e6e28e648170dffe611b7de85011b010 PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Regionalism Reality And Convergence Analysis In The European Union AyĢen ALTUN Dumlupinar University, Department of Economics,Turkey aysenaltun@dumlupinar.edu.tr Abstract: The countries in the EU have entered into an essential localisation and reconstruction period. In this process, regions have come to the forefront as one of the most important actors of the EU and have acquired an ever-mounting impact area in the decisionmaking processes. There are two reasons for regional development model has been evaluated on the axis of EU. Differences among the regions have increased due to the enlargement of the Union and this subject has become an aspect that is emphasized after each enlargement process. First of all, European Commission has followed a policy that has a forward effect in order to decrease the instabilities since 1987 and has increased the size of its intervention force. Whether the form of change in the convergence model can be drawn or not, it gives a number of signs about the efficiency of regional policy. Secondly, some changes have occurred in the understanding of regional policy which is the common policy of the EU in the process after 1990s and the understanding of ―new regionalism‖ has come forward. In this understanding, the term of ―region‖ has become essential and acquired a new dimension. Introduction New regionalism in EU is being organized ideally by localizing of socio-economic resolution process and putting a common policy into practice for sub-national theoretical frame. Along with this phenomenon, the EU regional policies have passed through a turning point searching more efficient strategies in an atmosphere of economic uncertainty and political change. Interregional convergence has come into prominence in this process. This study is crucial in terms of EU‘s having a new regional understanding after 1990s and giving importance to the phenomenon of ―convergence‖; showing whether the regions are in the process of ―convergence‖ or ―divergence‖ in this process and this situation‘s affecting the decisions of the EU about future. In the study, first of all the concept, the significance and kind of ―region‖ in the EU is mentioned, then differences in development levels of Union‘s regions are emphasized. Afterwards, theoretical frame of new regionalism and convergence are drawn and their importance for the EU is mentioned. And then, it is carried into practice. Convergence analysis that is carried for the EU regions covers the period between 1995 and 2005. Though studies have been carried out for 268 NUTS II regions in the EU, analyses have been made for 246 regions due to lack of data on some regions. 246 NUTS II regions are grouped into four different groups considering the enlargement processes of countries. In this study, basic data about the EU have been obtained from the official website www.eurostat.com. Conditional and absolute convergence analyses have been made using cross-section approach which is carried out by Barro and Salai Martin. Definition and Importance of the Region in the EU Definition of a region in the EU is an extremely sensitive issue in terms of regional policy. As the regional policy of the Union is a policy respecting country borders and not intervening in the area of political system within the nation – state, it is carried out through the ―region‖ definitions of the Member States (Brasche, 2001, p.14). In this respect, the ―region‖ in the EU is defined as the pieces of land similar to each other in terms of geographical, ecological, economic, cultural, ethnical and administrative perspectives. Regions are becoming more and more significant during the economic and political process of the EU. In the Preamble of the Rome Treaty establishing the EU and even before the Rome Treaty in the European Coal and Steel Community Agreement, the concept of region was drawn attention by envisaging provisions related to the 754 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo development of less developed regions and the elimination of inter – regional development disparities (http://www.hri.org). Furthermore, the establishment of Committee of the Regions by the Maastricht Treaty is a crucial step forward for the regional authorities to gain right to say in the EU decision – making process officially. Regions have turned into more important units as the interregional development disparities in the EU are becoming more apparent. In the EU, the regional backwardness or the development of the underdeveloped regions has not been coming into prominence, yet decreasing the interregional development disparities has been gaining importance. The importance of the ―Region‖ for the EU has resulted in the involvement of the regional authorities into the integration process. Classification of the Regions in the EU In the EU, the concept of region is defined by taking into consideration several criteria such as the areas dominated by a specific sector within the scope of new economic structuring, the areas bordered by a neighbouring country and affected by the economic activities of that neighbouring country, transit regions, regions influenced by the economic structure of a common settlement (Karluk, 2007, pp. 362-363). The regions are classified as normative and analytical regions. Normative regions reflect political will; their boundaries are fixed in terms of the remit of local authorities. This regions, the size of the region's population regarded as corresponding to the economically optimal use of the necessary resources to accomplish their tasks. Analytical (functional) region; are defined in terms of particular analytical requirements. They categorise areas according to specific geographical criteria such as altitude or soil type, or by economic and social criteria such as the homogeneity, complementarity or polarisation of regional economies (European Commission, 2007, p. 9). The regions in the EU are seperated into categories on the basis of administrative structures of the Member States as well as their economic situation, geographical location, etc (Scott, 2002, p.2). The regional classification system which is important for the regional policy and the regional instruments of the EU is the classification which is based on the functions and the structures (Commission of the European Comminities, 1985, p.2). In the EU, the regions are classified as Homogeneous Regions, Polarized Regions, Administrative Regions, Front Regions, Cross Border Regions, and Planning Regions according to their functions and structures. Homogeneous regions or uniform regions describe a unity consisted of bilevel and successive segments according to the selected criteria (urban population, per capita income, socio-economic characteristics of the population, etc.) (Erkal, 1990, p.17 & Berry, 1961, p. 278). Although it has been tried to have homogeneous regions while grouping NUTS regions that will be examined in the scope of the planning regions in the EU, for instance while grouping 11 sub – NUTS II regions in Belgium, heterogeneity can be possible among the regions. The unemployment rate in Région de Bruxelles-Capitale, a region in Belgium, is 17.6 %; whereas it is 4.2 % in Prov. Vlaams Brabant and 4.2 % in Prov. West-Vlaanderen. This heterogeneity rate is a lot more among the regions of different countries. Yet, the cities forming the regions are fairly homogeneous. Polorized regions are the regions which are clustered around an administrative center city, graded according to their sizes and functions, and manage their fundamental relations via the center city (Taneri, 1986, p.24). The more these regions exercise influence over their surrounding areas, the larger polarized regions they form. For example, Munich region in Germany and Manchester region in the United Kingdom are polarized regions in the EU. Administrative regions, dependent on the political central authority in the hierarchical decision – making process, are mostly formed in an artificial way. The county councils and municipalities in Sweden and cities in France can be given as examples of administrative regions (Mengi, 2001, p. 23). Front regions are usually economically the least developed parts of the countries they are located in. For example, Aland region in Finland and Northern Ireland, etc. (Karlsson, 2007, p.42). Cross – border regions are formed through cross border cooperation. Border regions are tried to be developed and less developed infrastructure is struggled to be improved through these regions. The very first region in this respect is Regio Basiliensis. The mentioned region covers Oberrhein in Switzerland, Alsace in France, and Baden in Germany (Karlsson, 2007, pp.44-47). Planning regions are determined for EU regional policy, funds and development agencies. For this purpose, the EU designates underdeveloped regions and areas facing structural difficulties through a classification system throughout the Union in order to decrease inter-regional development disparities (Moussis, 2004, p.230). This classification is the NUTS (The Nomenclature of Territorial Units for Statistics) classification system which is a unique and complete system dividing the territory of the EU to produce regional statistics for the EU (Casellas ve 755 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Galley, 1999, p.553). Regions in the NUTS classification system are general administrative units reflecting the limitations of the mandates of local and regional authorities in a specific region (European Commission, 2008, p. 204). The regions in the EU are clustered under NUTS I, NUTS II and NUTS III levels in terms of planning and incentives. Each EU country classifies NUTS regions themselves taking into account development levels and assistance requirements (http://ec.europa.eu/). NUTS subdivides each Member State into a whole number of regions at NUTS 1 level. Each of these is then subdivided into regions at NUTS level 2, and these in turn into regions at NUTS level 3. (European Commission, 2005, p.5). This 3 – level classification in the NUTS system is a regional classification as it covers the field management. Besides, there are NUTS IV and NUTS V levels which are the local units (LAU – Local Administrative Units). These units include the settlement administrations (http://ec.europa.eu/). New Regionalism in the EU Supporting the regions in the EU has always been on the agenda as of the establishment of the Union. The aim of the EU regional policy, supporting the economic integration, has been to ensure coherence of the regional policies among the member states and decrease the existing disparities by using several tools. In the recent two decades, a series of changes of conception has been experienced with regard to overcoming the problem of eliminating inter – regional development disparities and ensuring convergence between the regions. These changes have been reflected to the regional policies of the EU. ―New regionalism‖ concept, which has been developed upon the criticisms of the policies projecting regional policy in the top-down government regimes, has influenced the EU as well as the regional policies of many countries. The ―region‖ has become the first focus of political economy in the policy called ―new regionalism‖. The regions have begun transferring their institutional capacities (Batchler ve Yuill, 2001, p.10). According to this policy, inter-regional disparities will be alleviated by encouraging inter-regional competition. In tandem with this understanding, the EU addresses the inter-regional inequality problem more widely as a problem of regional development. New regionalism concept aims at revealing internal dynamics and improving local economy through its own dynamics. A regional identity is created in economic, political and cultural fields. This approach anticipates an understanding of bottom-to-top management in contrary to the former regional policies (Gren, 2002, p.81). Administration and authority are transferred from central government to regions. New regionalism gains more power with the authority granted to it. This authorization is the increase in the power or capacity to progress to the regional agenda. Part of this authorization is used for the purpose of ensuring the region and people to participate in the regional decision-making process constructively (http://www.munimall.net). Taking into consideration NUTS classification at the level of local authorities, new service areas and units has been established so as to increase effectiveness and decrease inter-regional development disparities. Thus, it is aimed at maintaining convergence. Differences and Convergence of the Regions in the EU There are serious disparities of development among the regions in the EU in terms of certain indicators such as gross domestic product (GDP) per capita, unemployment rate, education and health, the level of research and development activities, and infrastructure facilities. These disparities increase in parallel with the enlargement of the Union. Moreover, important problems of regional disparities still continue even in the founding member states. It is important whether regional policy will effectively boost the growth of underdeveloped regions and will improve convergence or not. Even though the calibration exercises tend to argue that regional transfer may boost growth, there are still some suspicions concerning the effectiveness of regional policy according to the results of econometric studies and case analyses. The question of whether the socio-economic development disparities among the countries and the regions will decrease in the course of time or not has an essential place in the economic literature. Variables which put forward economic and social disparities and structural dispairites, especially including the GDP per capita figures and GDP variation coefficients, can be used while determining these disparities. Whether these disparities increase or decrease can be explained via the convergence or divergence of examined regions or countries to and from each other. Convergence is a catchy concept, but one that organizes serious thinking in diverse areas ranging from economic growth, theoretical econometrics, finance, European politics and monetary union, regional planning and geography, up through but not ending at entertainment and multi-media technology, and the software industry. And, in practically every instance the term convergence is used with a different meaning (Quah, 1996, p.1). The concept of convergence which can be described as the alleviation of international or national disparities in certain economic 756 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo variables can be shortly expressed as showing a tendency to a single point and approaching to a more similar situation gradually (Gaynor and Karakitsos, 1997, p.24).Neoclassical growth model asserts that per-capita output across countries or regions converges when they have similar preferences, technology levels and institutional and legal systems (Brasili ve Gutierrez, 2004, p.2). Whether the growth rates of relatively poor countries or regions will reach to those of richer ones in the course of time or not is the convergence approach (Barro ve Sala-i Martin, 1992, p.223). In this approach uses two concepts:  convergence and  convergence. There is  convergence if poor economies tend to grow faster than wealty ones.  concept of convergence is often confused with an alternative definition of convergence, where that the dispersion of real per capita income across groups of economies tend to fall over time (Sala-i Martin, 1996, p. 1327). Two types of  convergence are used in the literature : absolute and condinitional. The difference between the absolute and conditional convergence is related to the assumption that whether the economies are in the same condition or not in terms of some factors like technology, institutional infrastructure, and savings ratio. Whilst these kinds of disparities among the regions or countries are overlooked in the absolute convergence, variables that will create these kinds of disparities between the economies are added to the model in the conditional convergence. Interregional Convergence Analysis in the EU In the study, a convergence analysis was performed to be able to understand whether inter – regional disparities in the EU are approaching to each other in time or not. The concept of convergence for the EU means that economic disparities between the member states of the Union are to be decreased in accordance with the fundamental aim of the Maastricht criteria and the economic performance levels of the countries are drawn closer to each other as far as possible on a higher common ground rather than a lower one (Dinan, 2005, p.426). Thereby, similarity of the economic coherence and macroeconomic indicators of the regions in the EU within the process was examined through the convergence analysis. In the study, the method followed by Barro and Sala-i Martin was utilized for the convergence analysis. Convergence analysis was carried out with horizontal cross section approach. The analysis was initiated for 268 NUTS II regions. However, as data could not be found for some regions, the analysis was peformed for 246 regions. At this point, 246 regions, consisting of 27 countries, were classified under 4 groups. The aim in this grouping was to form homogeneous groups since adding too many regions in the convergence analysis could lead to wrong and meaningless conclusions. The membership dates of the countries to the EU and the enlargement process was taken into consideration while doing this grouping. There were totally 109 regions from France, Germany, Belgium, Italy, the Netherlands and Luxembourg in the 1st group. A total of 38 regions from England, Denmark and Ireland were found in the 2nd group. There were totally 58 regions from Greece, Portugal, Spain, Austria, Sweden and Finland in the 3rd group. In the 4th group, there were a total of 41 regions from Greek Cypriot Administration of Southern Cyprus, Malta, Hungary, Poland, Slovakia, Latvia, Estonia, Lithuania, Czech Republic, Slovenia, Romania, and Bulgaria. These regions are NUTS II regions of the countries. In the analysis, the data set covered the period from 1995 to 2005. Analyses were carried out for the whole data set, in other words for 1995 – 2005 period, and for 2 sub – periods; 1995 – 2000 period and 2000 – 2005 period respectively. In this way, the convergence analysis between the regions has provided clearer results throughout the years. Absolute  convergence and Conditional  convergence and  convergence were respectively measured for the regions in the groups. Variables were also added to the model in the Conditional  convergence in order to reflect structural characteristics of the regions. Due to the data supply difficulties on the basis of the regions, merely the share of R & D expenditures in the GDP and unemployment rates were utilized. Dummy variable was used for the unemployment rates. It has been determined through these analyses whether the interregional disparities in the EU have the tendency of convergence or divergence and whether the EU regions display similar economic performances in time or not. In the  convergence measurement, convergence/ divergence analysis was carried out by forming 3 different models for each analysis period and for 4 different groups. The models of the convergence analysis are as follows: Yi ,t 1  e  T  1 log( )a Model 1 :  log( Yi ,t T )  u i ,t T Yi ,t T  T  757 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Yi ,t 1  e  T 1 log( )a Model 2 : T Yi ,t T  T Model 3 : Yi,t : Yi,t-T : T : Di,t : Ri,t : ui,t : Yi ,t 1  e  T 1 log( )a T Yi ,t T  T   log( Yi ,t T )  cDi ,t  u i ,t    log( Yi ,t T )  cDi ,t  dRi ,t  u i ,t  GDP per capita in the year t GDP per capita in the starting year Years passed through as of the starting year till the current year Duppy variable which takes the value of 1 if the unemployment rate of the region in the concerned year is lower than the average unemployment rate of the group, and which takes the value of 0 in other cases. The rate of R & D ependitures in the GDP in the concerned year Error term in the regression model  coefficient was derived through the linear least – squares method and the coefficient was calculated 1  e   t  b   T  formula. (Note: t statistics in brackets). by using Period Model 1  1995-2005 1995-2000 2000-2005 0,005 (-1,646) -0,051 (1,58) 0,004 (-1,084) R2 0,025 0,023 0,011 Model 2  c 0,008 0,004 (-2,403) (2,317) -0,009 -0,003 (2,048) (-1,315) 0,003 -0,002 (-0,674) (-0,706) Model 3 R2 0,072 0,038 0,015  c d 0,009 0,004 0,001 (-2,55) (2,39) (0,937) -0,009 -0,003 -0,001 (2,205) (-1,315) (-1,072) 0,004 -0,001 0,001 (-1,027) (-0,539) (1,725) R2 0,079 0,049 0,043 Table 1: Regression Results of the Regions in the 1st Group Regression results of 109 observations in the 1 st group during 1995 - 2005 period according to 3 models have been demonstrated in Table 1. When the  coefficient is examined in each 3 models with regard to the convergence, it is seen that the values obtained are positive and are meaningful by 5% in the 2 nd and the 3rd models. In the 2nd and the 3rd models, approximately 1% of convergence has been experienced per year during one decade. This convergence is a conditional one.  coefficient is not different from zero in the 1 st model during 1995 – 2000 period and it is not possible to mention about the convergence nor the divergence.  coefficient is meaningful by 5% in the 2nd and the 3rd models and there is a divergence. A divergence of approximately 1% per year has been experienced during 5 – year period. Although the  coefficient is positive for 2000 – 2005 period as in the whole period, it is not meaningful statistically. This result means that there is not convergence or divergence in the regions in respect of second sub – period. Variables give more meaningful results in the regions of the 1 st group in the long – term analysis. Period Model 1  1995-2005 1995-2000 2000-2005 -0,006 (0,809) -0,029 (3,998) 0,003 (-0,469) R2 0,018 0,308 0,006 Model 2  -0,006 (0,828) -0,028 (3,783) 0,003 (-0,471) c 0,003 (0,802) 0,001 (0,32) 0,002 (0,533) Model 3 R2 0,036 0,310 0,014  -0,006 (0,919) -0,030 (4,164) 0,002 (-0,381) c 0,003 (0,822) 0,005 (1,0806) 0,002 (0,567) Table 2: Regression Results of the Regions in the 2st Group 758 d -0,004 (-0,976) -0,01 (-1,721) -0,005 (-1,495) R2 0,062 0,365 0,075 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo In the 2nd group regions, when the results of each 3 models are examined for 38 observations during 1995 – 2005 period, it is indicated in Table 2 that none of the variables have a meaningful contribution statistically.  coefficients are negative for each of the 3 models during 1995 – 2000 period, yet all the variables are meaningful statistically, which is an evidence for divergence.  coefficient is meaningful by 1 % and there is a divergence of around 3 % during 5 – year period. Although the duppy variable could not add explicity to the model, R & D expenditures could add explicity to the model. During 2000 – 2005 period,  coefficients for each 3 models are positive and not different from zero. Here, point estimation cannot be an evidence for conditional convergence by demonstrating that the value is small and meaningless and that convergence of each region to its own steady – state income level has not been realized in distinct way. Period Model 1  1995-2005 1995-2000 2000-2005 0,012 (-2,66) 0,012 (-2,15) 0,023 (-4,236) Model 2 2 R 0,112 0,076 0,243  0,016 (-3,02) 0,015 (-2,544) 0,019 (-2,991) c 0,004 (1,39) 0,004 (1,371) -0,004 (-1,042) Model 3 2 R 0,142 0,107 0,257  0,0151 (-2,564) 0,015 (-2,232) 0,013 (-1,892) c 0,004 (1,376) 0,004 (1,365) -0,004 (-1,145) d 0,0001 (-0,0119) -0,001 (-0,0355) -0,002 (-1,541) R2 0,143 0,109 0,289 Table 3: Regression Results of the Regions in the 3st Group Table 3 presents the results of each 3 models for 58 observations in the 3rd group regions during 1995 – 2005 period. For this period,  coefficient is different from zero and meaningful statistically in the 1 st model. Besides, the fact that  coefficient is positive shows that there is convergence. It is observed that a convergence of 1.2 %, 1.6 % and 1.5 % was experienced in these 3 models respectively during this decade. The same results have been obtained for absolute convergence and conditional convergence. During 1995 – 2000 period, it is seen that the estimated  coefficient is positive and meaningful by 5 % for all the models. Absolute convergence and conditional convergence has been experienced by 1.2 % of and 1.5 % respectively during this 5 – year period. Yet, the variables added to the model are not explanatory variables. The findings of 2000 – 2005 period are in the same direction with the findings of the first sub – period. In the 1st and the 2nd model,  coefficient is different from zero and is at 1 % level; and it is at 10 % level in the 3rd model. It is seen that a convergence of 2.3 % was experienced per year in the 1st model during the 5 – year period. This convergence is an absolute one. It is observed that there is a convergence of 1.9 % and 1.3 % per year in the 2nd and 3rd models respectively. This situation proves the existence of both absolute and conditional convergence. The variables added to the model in this period are not explanatory variables. Period Model 1  1995-2005 1995-2000 2000-2005 0,002 (-0,295) -0,021 (3,215) 0,016 (-2,15) R2 0,002 0,210 0,106 Model 2  0,003 (-0,494) -0,026 (3,908) 0,020 (-2,736) c 0,004 (0,861) -0,014 (-2,142) 0,016 (2,53) Model 3 R2 0,021 0,295 0,235  0,009 (-1,365) -0,026 (3,182) 0,026 (-2,832) c 0,002 (0,466) -0,014 (-2,118) 0,014 (2,163) d 0,009 (1,696) 0,001 (0,141) 0,008 (1,043) R2 0,092 0,295 0,257 Table 4: Regression Results of the Regions in the 4st Group When the results of each 3 models for 41 observations in the 4 th group regions during 1995 – 2005 period have been analysed, it has been found out that  coefficient is positive, but not different from zero. In the 1995 2000 period,  coefficients are meaningful by 1 % and have negative values. It is seen that a divergence of 2.1 % per year is experienced in the 1st model during this 5 - year period. The same result has been obtained again by adding the variables and a divergence of 2.6 % has been experienced per year. Here, while the duppy variable is explanatory, the variable of R & D expenditure rate can not add explicity to the model. During 2000 – 2005 period,  coefficient is meaningful by 1 % in the 2nd and the 3rd models and by 5 % in the 1st model. It is observed that a convergence of 1.6 % has been experienced per year and this convergence is an absolute convergence. It is seen that a convergence of 2 % and 2.6 % per year has been experienced respectively in the 2 nd and the 3rd models, which is a conditional convergence. It is observed that while the duppy variable is explanatory, there is not a clear conditional convergence even a control variable for the R & D expenditures is added. An explanation of this result is that R & D expenditures do not differ so much among the regions and the fact that the share of R & D expenditures in the GDP is high does not have a great influence on the convergence. The regions in the 4 th group consist of the countries recently participated in the EU. Though a very strong divergence was identified among these regions 759 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo during 1995 – 2000 period, a very strong convergence was identified during 2000 – 2005 period. This is mainly affected by the fact that the EU accession processes of these countries coincided with the second sub – period. Graph 1: Growth Rates and Starting Year Logarithmic GDP per capita levels of the Regions in the 1st Group (1995-2005) Graph 2: Growth Rates and Starting Year Logarithmic GDP per capita levels of the Regions in the 2 st Group (1995-2005) Graph 3: Growth Rates and Starting Year Logarithmic GDP per capita levels of the Regions in the 3 st Group (1995-2005) Graph 4: Growth Rates and Starting Year Logarithmic GDP per capita levels of the Regions in the 4st Group (1995-2005) 760 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Standard deviation of GDP per capita figures is calculated and its fluctuation over time is examined for the measurement of  convergence.  convergence has the tendency to reveal  convergence. Although  convergence is necessary for  convergence, it is not an adequate condition. If there is  convergence in a region, it means that the income inequity is decreasing in that region and it is an evidence for the existence of a tendency for the equalization of income per capita. Table 5 presents the averages and the standard deviations of logarithmic GDP per capita of each group on the basis of years. It is seen in the 1 st group regions that the standard deviation expansion was growing and divergence was experienced in time during 1995 – 2000 sub-period. Yet, while the standard deviation of GDP per capita was 0.26 in 1995; it is observed that the standard deviation expansion did not grow over time in 2005, in other words divergence was not experienced, which confirms the existence of convergence. It is seen in the 2nd group regions that the expansion grew over time even if just a bit. It is possible to mention about the existence of convergence throughout all the periods for the 3 rd group regions. It is observed in the 4th group regions that the standard deviation expansion grew as of 1995 – 2000 period and declined during 2000 – 2005 period. It is possible to mention about the existence of convergence during that decade. There is not any differentiation between the results of  convergence and those of  convergence. On the basis of the results of convergence analyses, it can be stated that a convergence process was generally experienced among the regions in the EU during the examined period and that process was rather a slow one. the Regions in the the Regions in the the Regions in the The Regions in the 1st Group 2st Group 3st Group 4st Group Average Standard Standard Standard Standard Average Average Average Deviation Deviation Deviation Deviation 1995 9,73 0,26 9,64 0,21 9,53 0,28 8,81 0,40 1996 9,77 0,26 9,70 0,21 9,58 0,28 8,86 0,43 1997 9,81 0,26 9,77 0,22 9,64 0,27 8,92 0,44 1998 9,85 0,25 9,81 0,23 9,69 0,27 8,97 0,43 1999 9,90 0,26 9,85 0,23 9,75 0,27 9,01 0,45 2000 9,95 0,26 9,93 0,24 9,80 0,28 9,08 0,44 2001 9,98 0,26 9,97 0,24 9,84 0,27 9,14 0,44 2002 10,01 0,25 10,01 0,24 9,89 0,26 9,20 0,44 2003 10,01 0,26 10,04 0,24 9,91 0,26 9,25 0,42 2004 10,04 0,26 10,10 0,24 9,95 0,27 9,32 0,42 2005 10,07 0,26 10,11 0,24 9,99 0,26 9,39 0,42 Table 5: Average and Standard Deviation of Logarithmic GDP per capita for each group in terms of years Conclusion Whether the socio - economic development disparities will decrease in the EU regions in the course of time or not is an important subject. Particularly GDP per capita figures and GDP variation coefficients, and variables revealing economic and social disparities and structural disparities may be utilised in order to determine this. Whether these disparities are increasing or decreasing can be explained through the convergence or divergence of the examined regions or countries to/from each other. The concept of convergence for the EU means that economic disparities between the member states and the regions of the Union is decreased and their economic performance levels are drawn closer to each other as far as possible on a higher common ground rather than a lower one. Along with the impact of new regionalism concept, it is becoming more important that inter – regional development disparities are eliminated by improving the growth rates of under-developed regions effectively and ensuring convergence. During 1995 – 2005 period, a convergence process, albeit a slow one, was experienced in the regions of the EU. After 1990s, the changes in the regional policies and the new formations in the EU have started to achieve the objectives. However, the convergence results have been evaluated separately for each group. For instance, in the 4 th group regions consisting of the very recent members of the EU, although it has been determined that there was a strong divergence during 1995 – 2000 period, it has been found out that there was a strong convergence during 2000 – 2005 period which coincides with their EU accession processes. On the basis of the results of convergence 761 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo analyses, it can be stated that a convergence process was generally experienced among the regions in the EU during the examined period and that process was rather a slow one. Whether the socio - economic development disparities will decrease in the EU regions in the course of time or not is an important subject. Particularly GDP per capita figures and GDP variation coefficients, and variables revealing economic and social disparities and structural disparities may be utilised in order to determine this. Whether these disparities are increasing or decreasing can be explained through the convergence or divergence of the examined regions or countries to/from each other. The concept of convergence for the EU means that economic disparities between the member states and the regions of the Union is decreased and their economic performance levels are drawn closer to each other as far as possible on a higher common ground rather than a lower one. Along with the impact of new regionalism concept, it is becoming more important that inter – regional development disparities are eliminated by improving the growth rates of under-developed regions effectively and ensuring convergence. During 1995 – 2005 period, a convergence process, albeit a slow one, was experienced in the regions of the EU. After 1990s, the changes in the regional policies and the new formations in the EU have started to achieve the objectives. However, the convergence results have been evaluated separately for each group. For instance, in the 4 th group regions consisting of the very recent members of the EU, although it has been determined that there was a strong divergence during 1995 – 2000 period, it has been found out that there was a strong convergence during 2000 – 2005 period which coincides with their EU accession processes. On the basis of the results of convergence analyses, it can be stated that a convergence process was generally experienced among the regions in the EU during the examined period and that process was rather a slow one. References Barro, R.J. & Sala-i- Martin, X. (1992). Convergence. Journal of Political Economy, Vol.100, No:2. Batchler, J. & Yuill, D. (2001). Policies and Strategies for Regional Development: A Shift in Paradigm?. Regional and Industrial Policy Research Paper, Number: 46, European Policies Research Centre, University of Strachclyde, UK, August. Berry, B. J. (1961). A Method for Deriving Multi-Factor Uniform Regions. Polish Geographical, 1961. Brasche, U. (2001). Avrupa Birliği‘nin Bölgesel Politikası ve Türkiye‘nin Uyumu. Ġstanbul, ĠKV Yayınları. Brasili, C. & Gutierrez, L. (2004). Regional Convergence Across European Union. Econpapers. Casellas, A. & Galley, C. C. (1999). Regional Definitions in the European Union: A Question of Disparities?. Regional Studies, Vol. 33, 6 Aug. Commission of the European Communities. (1985). The Region of Europe. Document, OFUPEC, Luxembourg. Dinan, D. (2005). Avrupa Birliği Ansiklopedisi. Trans.: Hale Akay, Kitap Yayınevi, Ġstanbul. Erkal, M. (1990). Bölge Açısından Az GeliĢmiĢlik. Der Yayınları, Ġstanbul. European Commission. (2005). European Regional and Urban Statistics. Reference Guide, Eurostat Methods and Nomenclature, Luxembourg. European Commission. (2007). Regions in the European Union, Nomenclature of Territorial Units for Statistics, NUTS 2006/EU27. Eurostat Methodologies and Working Papers, Luxembourg. European Commission. (2008). Key Figures on Europe. Eurostat Pocketbooks, Luxembourg. Gaynor, K. B. – Karakitsos, E. (1997). Economic Convergence in a Multispeed Europe. St. Martin‘s Pres, New York. 762 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Gren, J.(2002). New Regionalism and West Sweden: Change in The Regionalism Paradigm. Regional and Federal Studies, Vol.12, No.3. Karluk, R.(2007). Avrupa Birliği ve Türkiye. 9. Baskı, Beta Yayınları, Ġstanbul. Karlsson, I. (2007). Bölgeler Avrupası. Çev.: Turhan Kayaoğlu, Ġstanbul Bilgi Üniversitesi Yayınları, Ġstanbul. Quah, D. T. (1996). Twin peaks: Growth and Convergence in Models of Distribution Dynamics. Economic Journals, Centre for Economic Performance Discussion Paper No:280. Mengi, A. (2001). Avrupa Birliği‘nde Bölge, Bölge Planlaması ve Türkiye. GAP Dergisi, Sayı:15. Moussis, N. (2004). Avrupa Birliği Politikalarına GiriĢ Rehberi. Trans.: Ahmet Fethi, Mega Yayınları, Ġstanbul, Sala-i Martin, X. (1996). Regional Cohesion: Evidence and Theories of Regional Growth and Convergence. European Economic Review, 40. Scott, A. (2002). Constitutional Regions and the European Union. Richard Commission on the Powers and Electoral Arrangements of the NAW, University of Wales at Aberystwyth. Taneri, E. (1986). Bölge Planlama. Yıldız Üniversitesi Yayınları, Sayı:186, Ġstanbul. http://www.hri.org/docs/Rome57/Rome57.txt. http://ec.europa.eu/com/eurostat/ramon/nuts/home_regions_en.html. http://www.munimall.net/eos/2002/wallis_regionalism.nclk. ‗The New Regionalism‘. Allan Wallis . 763 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 230 Title A name given to the resource Regionalism Reality And Convergence Analysis In The European Union Author Author ALTUN, Ayşen Abstract A summary of the resource. The countries in the EU have entered into an essential localisation and reconstruction period. In this process, regions have come to the forefront as one of the most important actors of the EU and have acquired an ever-mounting impact area in the decisionmaking processes. There are two reasons for regional development model has been evaluated on the axis of EU. Differences among the regions have increased due to the enlargement of the Union and this subject has become an aspect that is emphasized after each enlargement process. First of all, European Commission has followed a policy that has a forward effect in order to decrease the instabilities since 1987 and has increased the size of its intervention force. Whether the form of change in the convergence model can be drawn or not, it gives a number of signs about the efficiency of regional policy. Secondly, some changes have occurred in the understanding of regional policy which is the common policy of the EU in the process after 1990s and the understanding of ―new regionalism‖ has come forward. In this understanding, the term of ―region‖ has become essential and acquired a new dimension. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/f84ffd0f35f1a9baea35b2284661b503.pdf dedac7ac1ba5317079e40339eb9c315e PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Overview of Human Capital In Turkey In The EU Process In Terms Of Education: An Analysis On The Axis Of Development Plans AyĢen ALTUN Dumlupinar University, Department of Economics,Turkey aysenaltun@mail.dumlupinar.edu.tr Ceren GĠDERLER ATALAY Dumlupinar University, Department of Administration ,Turkey giderler_ceren@hotmail.com Abstract: In the information age, countries that are considered to be developed owe their technological and economic advancement to their investments on human resources. Positive values that emphasize humane characters such as knowledge, skill, experience and dynamism are seen as human capital. These values, by ensuring more effective use of other factors used in production, increase the rationality in economic activities and enable the national economy to develop faster. Development plans have become much more important and necessary due to the multidimensional and rapid transformation, intensifying competition and increasing uncertainties. Turkey in the EU accession process attaches high importance to the human capital factor in its development plans due to the high density of young population it has. The aim of this study is to evaluate the human capital element in the framework of development plans which have been prepared by Turkey, a candidate of EU membership, from past to present. In this study, human capital element has been evaluated on the basis of the ―education sector‖ that is considerably important due to its positive impacts on the development process. As a result of the comparisons between the EU and Turkey, the necessary steps and suggestions to be followed by Turkey as regards to human capital establish the scope of this research. Introduction Achievement of a desired growth rate in a country is depended on the efficient use of all economic resources consisting of development and international competitiveness, physical capital and human capital. Countries that can use their human capital effectively and obtain sufficient quality for their human capital are regarded as advantageous countries in the global competition environment. As the physical capital in Turkey is limited, it has always been significant to adapt especially the unlimited source of human capital to the requirements of the economy. Therefore, it is of vital importance to evaluate the human capital aspect which is overemphasized in development plans in Turkey and to compare it with those in the EU. In this study, at the outset, "development plans" and ―human capital‖ concepts in Turkey are explained theoretically. Thereafter, the place of human capital is evaluated in the framework of all development plans and the human capital in Turkey and in the EU is compared in terms of ―education‖. Finally, some suggestions are made for Turkey. Development Plans in Turkey Turkey passed to planned period after 1960. Until the planned period, it had been aimed to achieve regional development in the leadership of State incentives and private sector via Ġzmir Economic Congress and Law for the Encouragement of Industry (Ergun, 2004, pp.72-74). However, due to the fact that the private sector could not make leadership because of undercapitalization revealed that this idea could not be realized. In the 1960s, regions were tried to be supported in the framework of the plans by taking into consideration the factors they already had in the beginning (Karluk, 2004, p.47). Nine Development Plans have been put into practice under the planning authority of State Planning Organisation. The most prominent characteristic of planning approach in Turkey is that it is mandatory for the public sector and instructive for the private sector. Development plans have objectives, such as ensuring capital accumulation, reaching a stable and high growth rate, mitigating the regional differences and integration with the world and improving human resources. The first plan of industrial policy is the First Five Year Development Plan (1963-1967) which is considered as the beginning of implementation of Etatism. It was expected to maintain an increase in consumption products and the signals of import substitution were given with this Plan. It was considered that the 323 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo import substitution would have to be carried out systematically by the State. In the First Five Year Development Plan, it was emphasized that the allocations of public investments had to be organised according to the regions in order to achieve equal opportunities and inter – regional balance in the country (I.BYKP, 1963, pp.57-58). Priority was attached to the national plan and the heavy industry in the Second Five Year Development Plan (1968-1972). The importance of using regional planning as an efficient instrument was highlighted (Dinler, 2001, p.194). Unlike the first two plans, the Third Five Year Development Plan (1973-1977) gave place to the development of priority regions for development instead of regional planning (Mengi and Algan, 2003, p.261). The long – term targets of this plan were improving the standards of living, industrialisation, decreasing the dependence on foreign resources, solving unemployment problem, and improving income distribution. The Fourth Five Year Development Plan (1979-1983) coincided with the foreign expansion period. It was decided that the rapid industrialisation would continue. It was aimed to increase exports in this plan which was in the transition period (IV.BYKP, 1979, pp.656-671 & Ekzen, 2009, p.48). It was determined to establish Organized Industrial Zones in the Fifth Five Year Development Plan (1985-1989). 16 regional development centres were designated. During this planning period, the strategy based on outward – oriented exportation manifested itself further (Özaslan and Akpınar, 2005, p.237). The Sixth Five Year Development Plan (1990-1994) and the plans in the aftermath period have been prepared under the influence of the EU as a result of the relations with the Union. The expression of regional planning gave its place to regional development in the Sixth Five Year Development Plan. The 16 regions in the Fifth Five Year Development Plan were left aside and regional planning was shifted to the priority regions for development. The main target of the plan was to increase welfare level in an independent and secure environment in line with the principles and fundamentals of open society and competitive economy (VI. BYKP, DPT, 1989, pp.318-358). The Seventh Five Year Development Plan (19962000) gave an extensive place to the adjustments concerning regional development, provincial planning and metropolitans under the title of achieving regional balances (VII. BYKP, 1995, pp. 170-184). This plan is the first plan prepared after joining the Customs Union. The Eighth Five Year Development Plan (2001-2005) envisaged a balance between development policies and regional development policies. The Plan was based on the principles of sustainability, inter – regional integration, achievement of social and economic balances, improvement of standards of living, equal opportunities, cultural development, and participation in the implementation of regional policies. Furthermore, the studies for the Provincial Development Plans, which are in harmony with the regional plans, were initiated on the basis of the provinces ( VIII. BYKP, 2000, pp.63-87). The Ninth Five Year Development Plan (2007-2013) coincided with a period during which multi - dimensional and rapid changes were experienced. The Plan has been prepared during the EU adaptation process as the main strategy document which will contribute to the membership process taking into account the characteristics of the transition period (IX. BYKP, 2008, p.16). The Concept of Human Capital Human capital is defined as the total of values such as experience, work experience, knowledge and skills of the individual participating in the production, in other words of the labour force. In the studies of Mincer, Becker, Nelson and Phelps (1996) and many other scholars, it is explained that human capital has an essential role for the economic development. This fundamental role has been more clearly explained in the researches carried out since 1980s and Lucas (1998) concluded that there is a positive relation between the long – term development and human capital. According to the model developed by Mankiw, Romer and Weil (1992), it is indicated that human capital is a much more important production factor than the physical capital and labour elements in the framework of the neoclassical thinking (Boughanmi, 2009, p.252). Theory of human capital focuses on the education concept basically and declares that education influences the experience, beliefs, perceptions and motivations of the human (Merwe, 2010, p.108). According to the development theory, human capital forms the fundamental element of development. The investments to be made in education, health and nutrition for developing the human capital affect the productivity at micro and macro levels and the earnings. Investments made into education at the state, firm and individual levels in line with the returns of education investments, which are more measurable than the other human capital investments and accepted as considerably significant due to their positive impacts on socio economic development process, is of vital importance (Tunç, 1998, p.83). The Place of Human Capital in Development Plans First Five Year Development Plan: The Plan accepted human capital as man power and attached the maintanence of growth rate to the qualified man power. It was specified that training qualified people could be enabled by giving priority to education and training. In this direction, the issues of human capital, employment and education were dealt with interdependently and concomitantly. Using human capital in the most productive manner possible was identified as the most important target by highlighting the fact that individuals should 324 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo benefit from possibilities of education according to their capabilities. Long - term projects were developed to achieve this target (I.BYKP, 1963). Second Five Year Development Plan: ―Human‖ factor appeared in the Plan as a significant element for economic development. As in the first plan, the Second Plan also dealt with human capital as a source of power and the issues of human capital,employment, education, science and research were discussed interdependtly and concomitantly. The aim was to put forward the best and most productive ways of using human capital resource to achieve economic and social targets and eliminate human capital bottleneck in the long – term. In this planning period, it was further emphasized that "human" is a quantitatively limited resource. Therefore, a working policy was determined in order to use this limited qualified human capital in a productive manner. In this Plan, programmes were prepared in order to solve the problems of inequal inter – sectoral distribution of human capital and incapacity of using human capital aptly as well as the problems concerning lack of qualified and quantified human capital in the medium and long – term. In these programmes, instruments such as the job evaluation technique, transfers, retraining, assignments, in-service training, incentive possibilities, opportunities, organisation and method units were used. Moreover, an extensive education policy was developed in order to generalize training with the aim of improving the quality of human capital. In this policy, several programmes were put into practice such as training the personnel having higher education diploma abroad and increasing the literacy rate in order to train qualified labour force (II.BYKP, 1968). Third Five Year Development Plan: During this planning period, even though the human capital reached the desired level in terms of quantity, it was not at the desired level in terms of quality and the proper usage. In the Plan, many targets like education, health, industrialisation targets were based on the human capital requirements. It was tried to provide consistency between fundamental policies such as employment, wages policy, research environment and working conditions in order to find solutions to the problem of qualified labour force migration. All the problems in the first two plans, except for the quantitative increase of "human capital" problem, continued. In this Plan, it was stated that it was necessary to train individuals sufficiently qualified to implement the technology transferred into the country. Besides, the main reasons of the problems appeared in the field of "human capital" were put forth and studies to eliminate these problems through some instruments like wages and employment policy, and new programmes were carried out (III.BYKP, 1972). Fourth Five Year Development Plan: During this planning period, the amount of human capital increase quantitavely. Yet, this increase did not create a balanced development between the levels. In this plan, priority was given to the training of qualified human capital needed for the use of technical assistance capacities. As long as the qualified human capital requirement needed by the economic and social development was fulfilled, technical assistance was transferred to the projects that would positively influence the social and economic development. In the Plan, appropriate and productive use of human capital in the employment and wages policies, and elimination of inter – sectoral and inter – regional disparities of human capital distribution were especially taken into account. Legal adjustments, especially for the compulsory working procedures of higher education graduates, were made in order to decrease inter – regional labour force disparities in the regions where qualified labour force was required. In the scope of the plan, taking care of the human health is at the forefront in order to assess the human capital in the most productive way possible (IV.BYKP, 1979). Fifth Five Year Development Plan: Projects to increase the employment rate of young human capital were prepared in the Plan. Human capital planning consistent with the macro - model and the employment distribution were prepared. In this planning period, the quantity of highly educated human capital increased to the desired level. It was given priority to the training of intermediate level technical human capital. The employment of qualified and experienced human capital in the sectors and the regions was enabled via the improvements in the wages policy and the working conditions. (V.BYKP, 1984). Sixth Five Year Development Plan: This Plan focused on the training of specialised labour force required in the field of information technology and it was decided to make a human capital planning which responded the qualified labour force need of the economy for the contunity of the growth. The requirement for taking necessary measures as the insufficiencies continued in the rational use of human capital resources was emphasized as well as the issues of making necessary adjustments to improve the cooperation between the universities, industrial vocational high schools and the industry so as to meet the qualified human capital requirements. It was mentioned that economic and social development could be ensured merely through well trained and educated human capital (VI.BYKP, 1989). Seventh Five Year Development Plan: The Plan covered the issues of improving the qualities of labour force according to the demand and making a coherent labour force market organisation in the policies related to employment and human resources, training of human capital that could internalize the national values, open to universal values, contribute to the information generation and use the information creatively since the well trained young population would be the greatest advantage for Turkey in the 2000s. It was mentioned in the plan that development of human resources was of vital importance for the institutional arrangements that could solve social problems, it was aimed to develop human resources through Structural Transformation Projects that would be realized in the plan at first, the economic and social development should be maintained, the social and 325 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo individual welfare level should be increased, and the natural and human resources should be used efficiently. In this framework, it was declared that well trained human resource increased the competitiveness of Turkey which was increasingly opening up to the world on the one hand, and on the other hand, it influenced the fact that Turkey could get a larger share from the added value created by the EU. According to the Plan, it was considered that investing in the human was the most productive way of investment and had a significant contribution for the rapid and sustainable economic growth and social development in Turkey having a young and dynamic population structure. Therefore, it was aimed at mobilizing all the possibilities that could be used in order to develop human resources in every period beginning from the pre - school period up to the post - retirement period as well as to develop and generalize the training of human capital in all age groups. It was overemphasized in this planning period that the most improtant sector was the education sector and it was also mentioned that well trained young population would be the most important advantage for increasing the competitiveness of Turkey and for her integration to the EU. The characteristics of well trained human capital were identified as having developed skills of thinking, perception, and problem solving; being open to the outside world, universal values and new ideas; having a developed personal responsibility feeling and developed social sensitivity; being prone to science and technology production; and having a high level of skills. In the Plan, it was referred that human capital was the most important resource of Turkey and therefore, the primary source of all kinds of breakthroughs was the human capital. The key role was given to human capital especially to increase the science and technology skills. In this respect, human capital was evaluated as an important strategic resource (VII.BYKP, 1995). Eighth Five Year Development Plan: The element of information society was particulary focused in the Plan and it was emphasized that the quality of the labour force was needed to be improved as the information was the most important production factor in the process of information society formation. Hence, it was indicated that the greatest contribution for the development of developing countries in the 21 st century would be investing in the human resources and improving the infrastructure. It was stated that the countries which could adapt to the rapid changes in the world, equip people with the qualities required by this new environment, access and produce information, and use this information would be effective and successful. Besides, the fundamental principle in the Plan was to improve human capital qualitatively, increase the living standards, and eliminate the disparities in these fields between the regions and the settlements. As mentioned in the preivous Plan, rapid development of the qualities of human capital which is one of the main elements of international competitiveness and particularly the improvement of cultural features maintained its importance in this Plan. Moreover, the Plan aimed the evaluation of human capital as a strategic resource and adjustment of human capital so that it would have problem solving and creative features (VIII.BYKP, 2000). Ninth Five Year Development Plan: When the fundamental principles of the Plan are regarded, it is observed that a human focused development and management conception forms the basis of the Plan. Hence, in order to train qualified human capital which is the most significant issue, it was stated in the Plan that educational possibilities should be extended, effective measures should be taken for traning the human resources required by new tasks and responsibilities, in this scope the number of especially qualified personnel should be increased in the public sector, and necessary measures should be taken for the continuous training of the existing personnel. During the planning period, it was decided to establish excellence centers at several universities in many strategical fields. Besides, the projects focused on training scientists and multi-partnered and interdisciplinary projects have been commenced to be supported respectively since 2002 and 2004. In 2005, ―Scientist Training and Development Programme‖ was initiated in the scope of ―Turkey Research Field Programme‖ implemented by TÜBĠTAK (The Scientific and Technological Research Council of Turkey). It was also mentioned in the Plan that there was a need for dealing with development agencies as an integrated regional development programme triggering local initiatives by benefiting from the common cooperation platform. In this scope, development of new policies to improve human resources was also drawn attention. It was also highlighted in the Plan that it was necessary to make an efficient human resources planning in the public institutions and authorities to achieve a competent level for the public staff, give sufficient in - service training to the public staff and achieve a desired level for the public staff in terms of knowledge and skills that would enable them to carry out their tasks productively. It was emphasized that the fact that the promotion issue of public employees had not been clearly and sufficiently defined in the legislation, there was not an effective awarding system in the public sector, and there was inequalities in the wages influenced the self – improvement of public employees negatively. "Investigator human capital" concept was touched upon in the Plan and referred that it was required to develop investigator human capital qualitatively and quantitatively and encourage investigator employment in the private sector. In this context, via the training programmes, it was aimed at training labour force that is prone to technology production and Research & Development. The other elements expressed about the human resources are as follows: in order to achieve social development; developing information systems about the labour force market, achieving a more flexible structure in the education and labour force market, training human capital demanded by the economy taking into consideration the life long training strategy in order to increase the employment level and the productivity of the labour force, training high – skilled, 326 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo productive and creative information age people having developed conception, perception and problem solving skills, open to new ideas, having personal responsibility feeling, contributing to the contemporary civilisation, prone to the use of science and technology and production, and appreciating art (IX.BYKP, 2006). Comparative Analysis of Human Capital in the EU and Turkey in terms of Education Human capital defines in the EU as the abilities, knowledge and skills embodied in people and acquired through education, training and experience. The European Council of Lisbon, by setting for the EU the overall goal to become the most competitive and dynamic knowledge based economy in the world, has set human capital at the heart of its development strategy (http://ec.europa.eu/). EU attaches great importance to ―education‖ so as to increase the human capital qualitatively. The cooperation in the filed of education between the EU and Member States came to agenda with Lisbon Strategy in 2000. Although there is not one single educational policy in the EU, there exists an exchange of opinions and implementations in this field between the member states. The opportunities offered by EU education programmes cover the introduction and implementation of new technologies in the education sector, exchange programmes, education opportunities abroad, and mutual recognition of diplomas. The education policy also covers the cadres of teachers, students, administrators in the education sector, academicians, and specialists. Thanks to her young population, Turkey will be a source for some part of the human capital needed by the EU. This can be achieved by developing human capital not only quantitatively but also qualitatively. Developing human capital qualitatively is possible through "education". The first introductory screening meeting of the Membership Negotiations, started in 2005 between Turkey and the EU, was realized under the Education and Culture Chapter. Furthermore, Turkey has signed "Culture 2000" programme of the EU in order to support the projects to be carried out in the field of education and culture. The EU negotiation process puts forward the human capital issue and offers opportunities for human capital development. It is indicated in the last development plans that the issues concerning the EU should be concentrated on especially in the higher education programmes in order to provide in – service training for the public staff and train the qualified human capital to be needed by Turkey during the EU integration process. Within the context of Bologna Process, significant works, particularly in the field of exchange of students and academic members, European Credit Transfer System and diploma supplement, have been carried our in the field of higher education. Increasing the number of graduates for the labour force and eliminating the education needs of children who are in need of special education as soon as possible are among the titles emphasized in the Progress Reports published by the EU for Turkey, Level of education Young workers (15-24) Low Medium High 3.4 5.8 1.2 Prime-age (25–54) and older workers (55–64)) 20.8 43.8 25.0 Table 1 : Highest education level attained in the EU, 2007 (share in total employment as %) Resource: Eurostat Table 1 presents the employment rates in terms of education levels in the EU compared with the total employment rates in the EU. If it is needed to evaluate the situation in Turkey within the same year, 63.2 % of the labour force is composed of the sub – medium level educated people and the illiterates. Moreover, 14.7 % of the labour force in Turkey consists of the college and faculty graduates. Again, in 2007, whereas the percantage of the population aged 25 to 64 having completed at least upper secondary education is 70.8 % in the EU 27, this rate is 25.8 % in Turkey. 327 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Years EU 27 Turkey 2000 2003 2006 2000 2003 2006 Public Expenditure on Education as % of GDP 4.88 5.14 5.04 2.59 2.96 2.86 Financial aid to Pupils and Students as % of Total Public Expenditure On Education 5.2 5.6 6.0 3.1 4.8 6.9 Ratio of Students to Teachers and Avarege Class Size 13,5 13,1 12,7 25.4 23.7 23.2 Table 2: Comparasion Avarage EU 27 and Turkey Resource: Eurostat Table 2 has been prepared to compare the EU and Turkey in terms of important ratios of education. While the public expenditure in Education in % of GDP was 4.88 in the EU in 2000, this rate increased to 5.04 in 2006. On the other hand, this rate was 2.59 in Turkey in 2000 and increased to 2.86 in 2006. While the highest rate among the EU countries belongs to Denmark, the lowest one belongs to Romania. Financial aid to Pupils and Students as % of Total Public Expenditure on Education in Turkey is at the average of the EU. It is seen that the amount of financial aid in Turkey increases by years. Denmark and Norway are the countries having the highest contribution rate whereas Poland and Switzerland have the lowest contribution rate. When the Ratio of Students to Teachers and Avarege Class Size is examined, it is observed that this rate which is considerably important for the qualified education owing to the lack of trainers in Turkey is over the EU average. The Member States of the EU float at the average of the EU in this ratio. Conclusions It has been emphasized in all the development plans in Turkey that human capital is of utmost importance and it is necessary to develop this capital. Thus, the education level of human capital has been improved in every passing planning period. Nevertheless, there are some shortcomings in the implementation; and the investments in the human capital and the budget share allocated to education services in Turkey still continue to be lower than the EU average. This situation creates an important problem in Turkey which requires high quality and high - skilled human capital. The starting of compulsory 8 – year education, the increase in the number of universities have been important steps in Turkey in terms of human capital accumulation and development. Turkey has a young population structure. Putting this young population through a high quality education and training system will not only meet the qualified labour force need of Turkey in the long term but also that of the EU which has a gradually aging population structure. In order to achieve this development, it is essential to ensure that low – income groups benefit from education services more by improving the quality and extensiveness of education services in Turkey. Otherwise, the EU will not regard this young population as a new source of blood for their economies, but as an unqualified unemployed army that will flood in their countries. Additionally, Turkey will not be able to have the capacity to compete in the EU market operating according to the free market conditions in the event of a potential full membership. The accession process to the EU offers some opportunities to develop the human capital in Turkey. Some of the more visible opportunities are the new financial resources that will be transferred from the EU for education services and the possibility of participating in the international academic exchange programmes. The opportunities, which are less visible but which have great importance for a permanent change, offered by the accession process are composed of the speed gained in the restructuring process of the ongoing education and the possibility of benefiting from the good examples implemented in Europe within this process. In conclusion, Turkey has not the same development level in terms of human capital compared with the EU countries. Turkey has to put into practice structural measures that will increase the quality of the human capital in order to catch up with the EU level. The investments made into human, especially in the "education", have to be increased and approximated to the level of the EU countries. In Turkey, the priorities in the allocation of resources have to be determined more rationally and more financial resources have to be allocated for education services from the budget. 328 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo References Boughanmi, A. (2009). Human Capital and Economic Growth. The Business Review, V.13, N.2. Dinler, Z.(2001). Bölgesel Ġktisat. Ekin Yayınları, Bursa. Birinci BeĢ Yıllık Kalkınma Planı 1963-1967, Onay Tarihi: 1963, DPT, Ankara. Ġkinci BeĢ Yıllık Kalkınma Planı 1968-1972, Onay Tarihi: 1968, DPT, Ankara. Üçüncü BeĢ Yıllık Kalkınma Planı 1973-1977, Onay Tarihi: 1972, DPT, Ankara. Dördüncü BeĢ Yıllık Kalkınma Planı 1979-1983, Onay Tarihi: 1979, DPT, Ankara. BeĢinci BeĢ Yıllık Kalkınma Planı 1985-1989, Onay Tarihi: 1984, DPT, Ankara. Altıncı BeĢ Yıllık Kalkınma Planı 1990-1994, Onay Tarihi: 1989, DPT, Ankara. Yedinci BeĢ Yıllık Kalkınma Planı 1996-2000, Onay Tarihi: 1995, DPT, Ankara. Uzun Vadeli Strateji ve Sekizinci BeĢ Yıllık Kalkınma Planı 2001-2005, Onay Tarihi: 2000, DPT, Ankara. Dokuzuncu Kalkınma Planı 2007 – 2013, Bölgesel GeliĢme Politikaları ve AB‘ye Ekonomik Sosyal Uyum Özel Ġhtisas Komisyonu Raporu, Onay Tarihi: 2006, Resmi Gazete, DPT, Ankara. Ekzen, N. (2009). Türkiye Kısa Ġktisat Tarihi 1946‘dan 2008‘e. ODTU Yayıncılık. Ergun, T. (2004). Kamu Yönetimi. TODAĠE Yayınları, Ankara. Karluk, R. (2004). Türkiye Ekonomisi. 8. Baskı, Beta Yayınları. Mengi, A. & Algan, N. (2003). KüreselleĢme ve YerelleĢme Çağında Bölgesel Sürdürülebilir GeliĢme, AB ve Türkiye Örneği. Siyasal Kitabevi, Ankara. Merwe, A. (2010). Does Human Capital Theory Explain The Value of Higher Education? A South African Case Study. American Journal of Business Education, V.3, N.1. Özaslan, M. & Akpınar R. (2005). Türkiye‘de Bölgesel GeliĢme Politikaları. I. Doğu Anadolu Sempozyumu, Elazığ. Tunç, M. (1998). Kalkınmada Ġnsan Sermayesi: Ġç Getiri Oranı YaklaĢımı ve Türkiye Uygulaması. Dokuz Eylül Üniversitesi Ġktisadi ve Ġdari Bilimler Dergisi, C.13, S.1. http://ec.europa.eu/social/main.jsp?catId=643&langId=en. (29.04.2010). http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database. (29.04.2010). 329 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 187 Title A name given to the resource Overview of Human Capital In Turkey In The EU Process In Terms Of Education: An Analysis On The Axis Of Development Plans Author Author ALTUN, Ayşen GİDERLER ATALAY, Ceren Abstract A summary of the resource. In the information age, countries that are considered to be developed owe their technological and economic advancement to their investments on human resources. Positive values that emphasize humane characters such as knowledge, skill, experience and dynamism are seen as human capital. These values, by ensuring more effective use of other factors used in production, increase the rationality in economic activities and enable the national economy to develop faster. Development plans have become much more important and necessary due to the multidimensional and rapid transformation, intensifying competition and increasing uncertainties. Turkey in the EU accession process attaches high importance to the human capital factor in its development plans due to the high density of young population it has. The aim of this study is to evaluate the human capital element in the framework of development plans which have been prepared by Turkey, a candidate of EU membership, from past to present. In this study, human capital element has been evaluated on the basis of the ―education sector‖ that is considerably important due to its positive impacts on the development process. As a result of the comparisons between the EU and Turkey, the necessary steps and suggestions to be followed by Turkey as regards to human capital establish the scope of this research. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/0f78baa19bf43aa445565e41d1f7a80a.pdf 366c0eee3d0899801678f75a6a9fa6a4 PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo The Role of Public and Private Investment to Ensure Sustainable Macroeconomic Stability in Turkey Ömer Faruk ALTUNÇ Mugla University, Department of Economics, Mugla, Turkey ofaltunc@mu.edu.tr Bilge ġENTÜRK Mugla University, Department of Economics, Mugla, Turkey bilge.senturk@hotmail.com Abstract: Private investment plays a vital role to promote sustainable economic growth and to reduce poverty in developing countries. The idea of using private sector investments intensively to boost growth in Turkey has started to emerge after 1980s. Despite a sizeable empirical literature, the impact of public investment in the developing countries gives inconsistent results on whether it complements or crowds out private investment. This paper makes use of Blejer and Khan Model (1984) for Turkey over the 1980-2009 periods estimating the effect of public investment on private sector. We employed time series analysis in this study. Our findings support the hypothesis that GDP growth stimulates private investment while public investment and private investment are complementary. The other finding of the study is that credit constraint is an important determinant of private investments in Turkey. Keywords: Private investment, Blejer and Khan Model, Crowding out/in, ARDL model. Introduction Private investment plays a vital role on the process of growth in developing countries. Even though private investment represents a small component of aggregate demand compared to consumption expenditures, it determines the rate of physical capital accumulation. Therefore private investment is a significant determinant for the expansion of production capacity and long run economic growth (Chibber et al., 1992). Blejer and Khan (1984) emphasize that public investment crowds out private investment because the public sector uses the limited physical or financial resources which are necessary for the production of private sector and it produces good and services which can also be produced by the private sector. Besides, they emphasize that the way of borrowing, taxing and inflation to finance the public investments crowd out private investment. Instead, supplying the infrastructural public investment and public goods can complete the private investments. This kind of public investment can develop the private investment opportunities and increase capital productivity. The investment behaviour is analyzed by using formal models in developed economies such as ‗Accelerator model‘, ‗Tobin‘s q theory of investment‘, ‗Neoclassical flexible accelerator theory‘. Because of the institutional problems and data constraints in Turkey and also in other developing countries, application of these models on these countries is very difficult if not impossible. Sundararajan and Thakur (1980), Wai and Wong (1982) and Blejer and Khan (1984) tried to develop applicable investment models for developing countries. The empirical literature is developed on two approaches which depend on the relationship between private investment and public investment. The first approach is based on the crowding out effect in which public investment expenditure decreases private investment. The second approach is that private investment and public investment are complements (crowding in) rather than rival to each other. Grene and Villanueva (1984) and Seven and Solimano (1991) find out a complementary relationship between public and private investment in developing countries. For African Countries Oshikayo (1994) and for developing countries Blejer and Khan (1984) give empirical evidence for the complementary relationship only between infrastructural public investment and infrastructural private investment. Nazmi and Ramirez (1997) shows that public investment crowds out private investment in Mexico. For the period of 1963-1993, Ghali (1998) finds that public investment has a negative effect on private investment in the short run while it has both negative and positive effect on economic growth and private investment in the long run for the Tunisian economy. The study of Ahmed and Miller (1999) for the OECD countries shows there is a negative relationship between public and private investment however there is a positive relationship between private 111 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo investment and government expenditures on transportation and communication. Ghura and Godwin (2000) shows that public investment crowds in private investment in Sub-Saharan African countries and there is a negative relationship between public and private investment in Asian and Latin American countries. Narayan (2004) tests whether public investment crowds out private investment for Fijian Economy for the period of 1950-2001. He focuses on two different periods as a complementary relation between public and private investment for the period of 1950-1975 and a weak relationship between public and private investment for the period of 1976-2001. The empirical findings show that the results differ across countries. The studies on the same countries have different results. The empirical studies on Turkey have different findings for the crowding in and crowding out hypothesis. Ismihan at al. (2002) emphasize that after the 1970s the relationship between public and private investment has started to show no clear relationship. After 1980s, the crowding in effect of the investments has reversed by the macroeconomic inconsistency and the growth of financial deficit. Taban and Kara (2006) finds out there is not any complementary relationship between public and private investment for the period of 1989:1 and 2004:4. Moreover, they focus on the effect of domestic public borrowing which crowds out private investment. Simsek (2003) studies the effect of different kinds of government expenditure on private investment. His empirical findings for the period of 1970-2001 show that government expenditure has crowding out effect on private expenditure. Bilgili (2003) analyzes the short run and the long run effects of financial policy for the period of 19882003 and he reaches the supporting results for both the crowding in and crowding out hypothesis. Kustepeli (2005) tests both direct and indirect effects of the government expenditures between 1963 and 2000. The results indicate that the real government expenditures crowd in real private investment while the real budget deficit crowds out private investment. Yavuz (2005) found evidence that public investment crowds in private investment for the period of 1980-2003 in Turkey. In this study, based on the Blejer and Khan Model (1984), the effects of the infrastructural and noninfrastructural public investment on private investment for the period of 1980-2009 are investigated by employing the time series techniques. This study will fill an important gap in the literature because there has not been any study that takes into account the effects of the infrastructural and non-infrastructural public investment on private investment. Economic Model Blejer and Khan (1984) investigate the relationship between public and private investment in developing countries and also they focus on the determinants of these investment categories. The model has two important policy variables. The public investment and the banking credits for the private sector are considered in the model which is associated with private investments. The model enables us to see the effects of government expenditure on inflation, rise of wages and crowding out effect. One of the contributions of the model is that it categorizes the public investments by two types as infrastructural and non-infrastructural investments. Moreover, Blejer and Khan (1984) assume the private investment is affected by the public investment categories in different ways. The starting point of Blejer and Khan model for the partial adjustment gross investment model is, (1) PI   ( PI *t  PI t 1 ) or PI t  PI *t  (1   ) PI t 1 (2) PI shows the level of domestic private investment, PI* shows the required level of domestic private investment , t is the time period and β is adjusting coefficient (0    1). The actual capital stock, which affects β, adjusts required level and the actual level in t-1 period. When there is a nonstationary process, the required level of private investment will be, (3) PI *t  1  (1   ) LCS *t CP* represents the required capital stock which is associated with output level in the next periods. (4) CS *t  aYt Combining equations (1) and (4), we get, (5) PI t  a 1  (1   ) LYt  (1   ) PI t 1 For the estimation of such a functional structure, domestic private investment is the only data to be need. Blejer and Khan (1984) denote there are three important factors affecting private investment such as business cycle, the available credits for private sector and the level of public investment. The net effect of public investment on the private investment depends on the size of the crowding out effect and the complementary effect between public and private investment. Crowding out effect is measured by unexpected change in banking credits for the private sector 112 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo (UPC ) which is counted as the difference between the real value and the one-year lagged value of private investments. Adjusting coefficient, β, depends on public investment (GI) and the unexpected change in the banking credits for the private sector: (b UPCt  b2 GI t )   b0  1 ( PI t*  PI t 1 ) (6) Substituting (6) into equation (2) we get: (7) Following PI  b0 ( PI t*  PI t 1 )  b1UPC  b2GI t Blejer and Khan, it can be shown that: PI t  b0 aYt 1  (1   )Yt 2   b1UPC  b2GI t  b3 GI t  (1  b0 ) PI t 1 (8) The effects of public policies on private investment are found by estimating the coefficient of the credit to the private sector (b1) and public investment (b2 ve b3). Blejer and Khan (1984) suggest a method to estimate the component of infrastructural and non infrastructural public investment. Infrastructural investment is assumed as a long-run concept and it becomes a proper representative variable by modelling the expected public investment. (9) GI t  p0  p1GI t 1 Expected values represent the component of infrastructural long run investment and the residual values represent the component of non-infrastructural short run public investment. Therefore the equation is written by, PI t  b0 aYt 1  (1   )Yt 2   b1UPCt  b2 EGI t  b3 UGIt (1  b0 ) PI t 1 (10) Based on the equation 10, the equation 11 is used to estimate the short run and long run coefficients: (11) PI t  b0Yt 1  b1UPCt  b2 EGI t  b3UGI tb4 PI t 1  ut ECI and UGI is the expected and unexpected public investment respectively. The negative sign of b 3 shows the crowding out effect of UGI. This equation is estimated for Turkey using annual data for the period 1980-2009. The infrastructural investment data is gathered from SPO and the others such as GDP, GDP price deflator (1987=100) and the credits to the private sector are gathered from annual statistical reports of TurkStat. Method and Empirical Findings The time series method investigates the non-stationary characteristics of data. It is expected to have a stationary process to have a statistically significant relationship between the variables. If the mean and the variance of the series change in over time, these series are called as non-stationary or unit root series. In order to test the unit root in time series, Augmented Dickey Fuller (ADF) Test is the most common method in literature. The equation which has lagged values in the dependent variable can be formulated with an intercept and time trend as fallows: k yt    t  yt 1    j yt  j   t (12) j 1  is the difference operator, t is the time trend,  is the error term, yt is the series investigated and k is the lag number. ADF assumes that the error term are statistically independently distributed and it has a constant variance. Besides, it is important to select the lag numbers correctly for the power of the test and significance level of the parameters (Said and Dicky, 1984). ADF test depends on the estimation of the parameter  . If  is different from zero and statistically significant, then the hypothesis which shows the series has a non stationary process is rejected. Philips-Perron test (1988) has been developed to control the high frequency correlation and it does not give way to the limitation of the assumptions. Therefore Philips-Perron test (1984) is a complementary unit root test for the ADF test. PP test does not include enough lag values of the dependent variable in the model, so Newey-West estimator is performed to remove the autocorrelation problem in the model. As the absolute value of  in ADF test is greater than the absolute value of Mac-Kinnon critical values, the series has a non-stationary process (Altunc, 2008: 118). Table 1 presents the ADF and PP test results for each series: 113 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Variables LPRI ADF Test Intercept and Intercept Trend -1.31(0) -1.67(0) Phillips-Perron Test Intercept and Intercept Trend -1.56(3) -1.98(3) LGDP -1.15(0) -3.09(0) -1.17(3) -3.11(1) LPI -2.17(1) -3.05(1) -1.61(5) -1.97(5) UPI -3.34(2)** -3.66(3)** -3.23(5)** -3.68(5)** LPC -2.71(4) -2.48(4) -1.37(4) -1.07(7) DLPRI -5.02(0)* -4.91(0)* -5.02(2)* -4.91(2)* DLGDP -4.66(0)* -4.44(0)* -4.16(4)** -3.87(4)** DLPI -4.05(1)* -3.96(1)* -3.11(13)** -3.66(14)** DLPC -3.73(0)* -3.89(0)* -3.60(27)** -5.11(27)* McKinnon (1996) Critical Values Significant Level Intercept Intercept and Trend 1% -3.68 -4.32 5% -2.97 -3.58 10% -2.62 -3.22 Table 1: Unit Root Test Results L denotes the logarithm of the variables and D shows the first-difference operator. Figures in the parentheses from the ADF test results are the lag values which show there is not an autocorrelation according to SIC. But for the PP test, the numbers in the parenthesis are the optimal Newey-West lag values. ADF test results confirm that all variables excluding UPI are integrated of I(1). The results of ADF and PP test which are related to the noninfrastructural public expenditures (UPI) shows that non-infrastructural public expenditures are stationary and statistically significant in 5% confidence level is I(0). When some of the series are stationary at level and some of them are stationary at first difference level I(1), we can not apply on the traditional cointegration test. This problem can be removed by the autoregressive distributed lag model and the bound test approach which is developed by Paseran, Shin and Smith (2001) to observe the long run relationship between the variables. The cointegration method used here, the Autoregressive Distrubuted Lag (ARDL) method allows testing for a long-run relationship between variables of mixed order of integration (Paseran et al., 2001). There are many advantages of using ARDL model for testing the private investment model on Turkey. The main advantage of this method is that ARDL avoid the pre-testing problems in data. Bound test approach can be applied to studies that have a small size while Engle and Granger (1987) and Johansen (1988, 1995) methods of cointegration are not reliable for small sample sizes. Finally, the ECM, which is derived from ARDL by a linearly simple transformation way, integrates the short run and long run dynamics without losing long run information (Banerjee vd., 1993). As the error correction term in the ARDL model does not have restricted error corrections, the ARDL model is an unrestricted error correction model (UECM). In the UECM, these statistics are used for testing if the lagged values of the variables are statistically significant (Faras and Ghali, 2009; Paseran et al. 2001). The form of the model can be written in our adapted model as: 114 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo m m m m i 1 i 0 i 0 i 0 LPRI   0    1i LPRI t i    2i LGDPt i    3i LPI t i    4i UPI t i m    5i LPC t i   6 LPRI t 1   7 LGDPt 1   8 LPI t 1   9UPI t 1   10 LPC t 1 (12) i 0  ut The cointegration relationship in equation 12 is performed by testing the hypothesis of H 0 :  6   7  8   9  10  0 . The null hypothesis of no cointegration will be rejected if the calculated F-statistic is greater than the upper bound critical value. If the computed F-statistics is less than the lower bound critical value, then we cannot reject the null of cointegration. Finally, the result is inconclusive if the computed F-statistic falls within the lower and upper bound critical values (Gurgur ve Karaca, 2007: 19). In ARDL model, firstly the lag orders of the dependent and independent variables in equation (12) that is represented by ―m‖ must be determined by AIC and SIC criteria. The lag order which gives the smallest critical values is selected as the lag order of the model. If the selected model has autocorrelation, then the second smallest value is selected. If the autocorrelation problem still exists, the same process is applied until autocorrelation is removed (Karagol at al., 2007: 76). In this study, the maximum lag length of two is chosen in ARDL model because of the annual data and limited observations. m AIC SBC 2  BG 1 2 3 -7.503501 -8.407829 -9.937074* -5.809910 -5.504529 -5.824066* 5.877** 4.518*** 1.120 Table 2: Determining the Lag Order for ARDL Notes: m denotes the lag order.  BG is Breusch-Godfrey autocorrelation test statistic. The superscript **,*** indicate that there is an autocorrelation among residuals at the 5% ve 10% levels, respectively. 2 Table 2 shows that the smallest value is obtained when the lag order of 3 by considering both AIC and SBC. The problem of autocorrelation has been also removed in the same lag order. Therefore the private investment model is estimated at lag 3. The ARDL approach is applied to test whether there is a long run relationship between private investment and other variables which affects private investment. The F statistics which is counted for testing the fundamental hypothesis of the long run relationship between variables in the model has higher values than Paseran et al (2001) critical values. According to Narayan (2005), the existing critical values reported in Pesaran et al. (2001) cannot be used for small sample sizes because they are based on large sample sizes. Narayan (2005) provides a set of critical values for sample sizes ranging from 30 to 80 observations. Given the relatively small sample size in this study, we also compare the calculated F-statistics with the critical values from Narayan (2005). Both of them give the same result. k 3 F-statistic 6.45 Critical Bound‘s Value (%1) Lower Upper I(0) I(1) 4.29 5.61 Critical Bound‘s Value (%5) Lower Upper I(0) I(1) 3.23 4.35 Table 3: ARDL Bound Testing for Cointegration Analysis Note: k indicate the number of regressors in the model. The appropriate lag lengths are selected by SBC. Breusch-Godfrey autocorrelation test statistic (  BG ) is 2.327(0.17) when the lag order of three (m=3). So we cannot reject the null hypothesis and conclude that there is not autocorrelation in the model. Source of critical values: Paseran at al., 2001 and Narayan, 2005. 2 By using the SBC criteria, the optimal lag length is selected to estimate the long run parameters of the relationship between private investment, GDP, total infrastructural public investment and credit to private investment. We select 2 lags for the private investment (PRI), 3 lags for the credit to private investment (PC), 0 lag for the public investment, 2 lags for the GDP and unexpected public investment (UPI). The estimation results of ARDL model (2, 3, 0, 2, 2) and the results of the descriptive tests are given in Table 4: 115 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Regressor Coefficients Stand. Eror LPRI(-1) 1.586 0.240 LPRI(-2) 0.902 0.283 LPC 0.487 0.135 LPC(-1) 0.387 0.181 LPC(-2) -0.034 0.182 LPC(-3) -0.588 0.176 LPI 1.031 0.523 LGDP 6.120 1.958 LGDP(-1) 13.578 3.938 LGDP(-2) 13.163 4.091 UPI 0.146 0.138 UPI(-1) -0.117 0.109 UPI(-2) 0.194 0.061 C 12.832 3.124 R2=0.887 Rd2=0.764 F-stat=7.220(0.001) Breusch Godfrey LM Test (1)= 0.935(0.333) Ramsey Reset Test(1)=1.013(0.314) Jarque Bera Test(2)=1.473(0.479) White Test(1)=1.158(0.362) t-Stat 6.611 3.181 3.609 2.136 -0.187 -3.338 1.972 3.126 3.445 3.218 1.055 -1.064 3.208 4.108 Prob. 0.000 0.008 0.004 0.054 0.855 0.006 0.072 0.009 0.005 0.007 0.312 0.308 0.008 0.001 Table 4: Estimation Results of ARDL (2,3,0,2,2) Model The test statistics indicate that there is not any problem in the ARDL model. To complement this study it is important to investigate whether the long run relationship among variables are stable for the entire period of study. In other words, we have to test for parameter stability. The test results of CUSUM and CUSUMQ in which the stability of the parameters is observed indicate that the residuals are stays within the 5 percent critical bound and there is not a structural change in the model (Figure 1). Plot of Cumulative Sum of Recursive Residuals (CUSUM Test, 5% significance) Plot of Cumulative Sum of Squares of Recursive Residuals (CUSUMSQ) 1.5 15 10 1.0 5 0.5 0 -5 0.0 -10 -15 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 -0.5 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Figure 1: Plot of Cumulative Sum of Squares of Recursive Residuals (CUSUM, CUSUMSQ) The long run coefficients in ARDL model (2, 3, 0, 2, 2) and diagnostic tests are given in Table 5. Due to some of the variables in the model are non-stationary, the assumption of normal distribution is invalidated or we can not attain normal distributed standard errors. The inference based on t statistics, therefore, will not be valid anymore. This problem can be removed by calculating the asymptotic standard errors of the long run coefficients by delta method (Paseran and Paseran, 1997; Caglayan, 2006; Erden and Saglam, 2009). 116 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Regressor LPI LPC LGDP UPI C Long Run Coefficient 0.295 0.072 9.420 0.064 2.789 Standard Error 0.143 0.032 1.852 0.021 0.336 t-Stat 2.056*** 2.238** 5.085* 3.054* 8.301* Table 5: Estimated Long Run Coefficients using the ARDL (2,3,0,2,2) Note: *, **, and *** denote significant at 1, 5, and 10% levels, respectively. Table 5 shows that all variables are statistically significant and their long run coefficients are positive. The long run results show that GDP growth has a strong and statistically significant positive effect on private investment. Also there is a complementary relationship between private investment and both total infrastructural and noninfrastructural investment. Likewise there is a positive and significant relationship between bank credit to private sector and private investment. The short run relationship between variables is analyzed by error correction model based on ARDL. The model, m m m m i 1 i 0 i 0 i 0 LPRI t   0    1i LPRI t 1    2i LGDPt 1   LPI t 1   UPI t 1 m   LPC t 1  ECTt 1  u t i 0 (13) ECT represents the error-correction term. The coefficient of ECT, (λ), shows that the disequilibrium is corrected in the current year. The functionality of the error correction model depends on its negative and significant coefficient. The short run relationship based on Model (13) is shown in Table 6. Regressor ∆LPRIt-1 ∆LPC ∆LPCt-1 ∆LPCt-2 ∆LPI ∆LGDP ∆LGDPt-1 ∆UPI ∆UPIt-1 ECMt-1 ∆C R2=0.939 Coefficient 0.902 0.486 0.622 0.588 1.031 6.119 -13.163 0.146 -0.194 -1.488 12.832 Rd2=0.873 Standard Error t-Stat 0.283 3.181* 0.135 3.609* 0.121 5.140* 0.176 3.338* 0.523 1.972** 1.958 3.126* 4.090 -3.218* 0.138 1.055 0.061 -3.207* 0.471 -3.157* 3.024 4.243* F-stat(10,15)=18.438(0.000) Prob. 0.006 0.003 0.000 0.004 0.067 0.007 0.006 0.308 0.006 0.006 0.001 Table 6: ARDL (2,3,0,2,2) Error Correction Model Presentation The coefficient of error correction term (ECT t-1) is determined as -1,488. The sign of the error correction term is negative and statistically significant as expected. The coefficient of the error correction variable is greater than 1 and this shows the system tends to equilibrium path by diminishing and fluctuating at every turn (Erden ve Saglam, 2009: 29; Karagol vd., 2007: 78; Paseran ve Paseran, 1997: 404). When the short run coefficients are analyzed, we see that all variables are statistically significant excluding non-infrastructural public investment (∆UPI). Short run estimating results indicate that there is a complementary relationship between private investment and infrastructural public investment. 117 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Conclusions In this study, total private investment, total infrastructural and non-infrastructural public investment, real GDP growth and the relationship among all these variables are estimated for the short and the long run, based on the Blejer and Khan Model (1984). The long run coefficients of all variables are positive in the ARDL model. The long run results show that the private investment is stimulated by the total infrastructural and non-infrastructural public investment. The empirical findings support that both of two descriptions of investment do not crowd out private investment, on the contrary they both crowd in (complement) private investment. Besides, we reach that the growth in private sector credits and the growth in GDP affect the private investment positively in the long run. These empirical findings are contrary to the studies for Turkey (Taban ve Kara, 2001; Yavuz, 2001; Ismihan vd., 2002; Simsek, 2003; Bilgili, 2003) but support the results of the studies of Yavuz (2005) and Kustepeli (2005) on the relationship between public and private investment. Many of the variables excluding total non-infrastructural public investment in the short run ARDL model are statistically significant. The error correction term is negative and statistically significant and it shows there is an error correction mechanism. The lagged values of the private investment are positive and statistically significant and this finding supports the estimation results of Blejer and Khan Model (1984). The capital stock adjustment model implies that private investment adjusts the actual level of the capital investments to the optimal level. The other finding shows that in the short run there is a complementary relationship between private investment and current value of the total non-infrastructural public investment. The short run coefficient of total non-infrastructural public investment has a negative sign that means the non-infrastructural public investments crowd out the private investments in the short run. The sustainability of the private sector investment and contributions of the private sector investment on GDP are possible with selective government policies. 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(1997), Working with Microfit 4.0, Interactive Econometric Analysis, Oxford University Press, Oxford. Said, E.S. and Dickey D.A. (1989), ―Testing for Unit Roots in ARMA(p,q) Models with Unknown p and q‖, Biometrika, No.71, 599-607. Serven L. and Solimano A. (1991), ―Adjustment Policies and Investments Performance in Developing Countries; Theory, Country Experiences, and Policy Implications‖, Paper 606, World Bank Country Economics Department. ġimĢek, M. (2003), ―Kamu Harcamalarının Özel Yatırımlara Etkileri, 1970-2001‖, C.Ü. Ġ.Ġ.B.F. Dergisi, 4(2). Taban, S. ve Kara A. (2006), ―Türkiye‘de Kamu Kesimi Ġç Borçlanmasının Özel Yatırım Harcamaları Üzerindeki Etkisi‖, EskiĢehir Osmangazi Üniversitesi Ġ.Ġ.B.F. Dergisi, 1(2), 11-26. Yavuz, N.Ç. (2005), ―Türkiye‘de Kamu Harcamalarının Özel Sektör Yatırım Harcamalarını DıĢlama Etkisinin Testi (19802003)‖, Marmara Üniversitesi Ġ.Ġ.B.F. Dergisi, 20(1), 269-284. . 119 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 195 Title A name given to the resource The Role of Public and Private Investment to Ensure Sustainable Macroeconomic Stability in Turkey Author Author ALTUNÇ, Ömer Faruk ŞENTÜRK, Bilge Abstract A summary of the resource. Private investment plays a vital role to promote sustainable economic growth and to reduce poverty in developing countries. The idea of using private sector investments intensively to boost growth in Turkey has started to emerge after 1980s. Despite a sizeable empirical literature, the impact of public investment in the developing countries gives inconsistent results on whether it complements or crowds out private investment. This paper makes use of Blejer and Khan Model (1984) for Turkey over the 1980-2009 periods estimating the effect of public investment on private sector. We employed time series analysis in this study. Our findings support the hypothesis that GDP growth stimulates private investment while public investment and private investment are complementary. The other finding of the study is that credit constraint is an important determinant of private investments in Turkey. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory https://omeka.ibu.edu.ba/files/original/f73d81cfa82f6eaedb1e342c8c4d82d2.pdf f9c9c792df96a55082a8f24e9051cde4 PDF Text Text The Use Of Building Models As An Educational Material And Their Impact On Learning Ahmet C. APAY Department of Construction, Sakarya University, Adapazari, Turkey, aapay@sakarya.edu.tr Emine AYDIN Department of Construction, Sakarya University, Adapazari, Turkey, emineb@sakarya.edu.tr Tahir AKGUL Department of Construction, Sakarya University, Adapazari, Turkey, takgul@sakarya.edu.tr Ali GURBUZ k.aligurbuz@gmail.com Abstract: Materials are an indispensable component of education and teaching and used for supporting teaching during the teaching-learning process. Aids and materials are employed in an attempt to fulfill the objectives of the teaching process during education-teaching activities. In today’s rapidly-changing and developing world, individuals are not supposed to obtain information from one single source and memorize it; in contrast, the objective is to school the type of individuals who can know how to access to information, how to use it and how to come up with ways to overcome problems encountered. The use of teaching materials designed in accordance with the principles of teaching technologies is vitally important for enabling individuals to develop such skills. A fundamental factor in increasing the level of achievement in courses, in ensuring a decent educational system and in enabling students to experience an enduring learning process is to get students to like the subject to be taught. Otherwise, students will not be interested enough to get the input and no enduring learning process will take place no matter how well-versed and experienced an instructor is in his/her field. This paper is a study into the effects of the use of educational materials on the level of students’ achievement and interest in courses. Furthermore, it includes a comparison between the efficiency of material-aided instruction and teacher-centered instruction. The effect of these two methods on the level at which particular concepts related to a lesson are learned has been analyzed through the use of experimental design with pretest-posttest control group. Keywords: Building models, education and teaching, educational materials 1. Introduction As a term the model denotes to doing a smaller or bigger copy of an object in a determined scale. Today the model usage is widespread in many fields. The models to examine human body used in biology and medicine, the earth model which is a minimized copy of the Earth used in geography, in machine sector the models with changing scales from ½ to 1/25 according to their dimensions and details, earthquake models, dynamic models showing the flow of a stream, military models, ship models, car models, airplane models, architectural models, training models, topographic models, terrain models, urban models, park-garden models, people models, building models, interior models, and etc can be given as examples. In terms of building education, the term of model brings “architectural models” such as topographic, building, furnished building interior into mind. Material use in education is a rapidly spreading application in permanently developing and renewing Turkish education system. Oral narrative technique centred and teacher-centred education model which are implemented widely until recently has started to loose its validity today. Oral narrative technique should be implemented with other education methods and supported with other materials in the education place. [1] 2. The Importance of Material Use in Education 838 �Materials are indispensable parts of education and training in our age. In order to realize educational objectives, equipment and materials are used in all of education and training studies. Artificial and natural substances are named as material when they serve for a virtual or actual purpose. When it is associated with education “education material” is named as “course material” and it defines all of the living, non-living, practical and theoretical information and affluences regarding to that course. The conception of material includes virtual, actual, artificial and natural data or affluences which serve for a purpose. [2] Material is an efficient education tool. It is possible to define the education tool as an environment to provide information sharing between a communication channel (teacher) and receivers (students) [3]. In today’s rapidly changing and developing world, it is not expected that individuals to obtain the information from one source and memorize this information, on the contrary it is intended to raise individuals who know ways to achieve information, who use them and when faced with a problem who can create solution methods by using that information. The use of education material which is prepared in accordance with the principles of the education technologies has significance for teachers to design an active and interactive learning environment which is necessary for individuals to acquire these above features. [4] 3. Using Building Model As An Education Material Department of Building Education is a department that theoretical and applied courses are taught together. In theoretical courses in order to be helpful for the correlation with applied courses and in order to develop the three dimensional thinking abilities of students, the building model is preferred as the material in this research. The achievement and attitudes of students toward Technical Drawing are examined with the designed building model. Cross-sectioning of the building plan is one of the parts for students that they densely need to use three dimensional thinking powers. Through the expression via model technique it is expected that for students to develop their perception ability better and perform a more efficient learning. The research is conducted with 60 students in total, as 30 from control group and 30 from experiment group, who are chosen according to random sampling methodology among the 1st year students who take Technical Drawing course in 2008-2009 Spring semesters and from Department of Building Education at Sakarya University Faculty of Technical Education. In this research two different learning methods are applied randomly to these two categories. No information is given to students in experiment and control groups regarding whether they are in experiment or control group. The application is done in the duration of “Cross-sectioning of a plan” which is specified in the Course Curriculum. In order to give the necessary information to students and to test their learning regarding to this course, a housing project which is constituted of the ground floor and a normal floor is prepared. Since some factors are thought such that the students meet with this issue as first time and the course hours are limited, the project is designed so simple. In order to teach the “Cross-sectioning of a plan” in a best way, two section lines are passed with “A-A Section” code on X axis of floor plans and with ““B-B Section” code on Y axis of floor plans and it is given importance that the section lines to touch to the stairs, low floor, door-window frames (Figure 1). Figure 1. Floor Plans 3.1. Preparation of the Model To express the selected issue in a best way by the model it is planned to break into horizontal pieces from 2/3 length of the height of floor and vertical pieces from the places that the A-A and B-B section lines pass in order to show the floor plans as in the project (Figure2,3,4 and 5). Hence, in this way floor plans and section lines can be understood more clearly in terms of what they mean. 839 �Figure 2. The First Floor of the Model Figure 3. The First Normal Floor of the Model Figure 4. The A-A Section View of Model Figure 5. The B-B Section View of Model A greater scale is selected compared to a standard scale and 1/20 scale is preferred in order to make all class to see the model during the course hour and more importantly to enable permanent learning which is our main objective. 3.2. Research Design In this research it is attempted to determine the effects of Expression and Teaching Activity and TeacherCentred Education Activity on students’ success and students’ attitudes toward Technical Drawing courses. For this purpose an experimental design which is suitable to “pre-test and post-test” model with control group is used. Groups Control Pre-test AT AI Education Activity Teacher-centred Education Activity Post-test AT AI Experiment AT AI Model Aided Education Activity AT AI Table 1. Research Design with Pre-test/Post-test Control Group AT: Achievement Test, AI: Attitude Inventory As seen on Table 1, the topic of “Cross-sectioning of a plan” of Technical Drawing Course is taught by Teachercentred Education Activity for control group whereas it is taught by Model Aided Education Activity for experiment group. In the research, the effects of Teacher-centred Education Activity and Model Aided Education Activity are compared in terms of learning of “Cross-sectioning of a plan” of Technical Drawing Course. Before the application of two different education activities both for experiment and control groups the Achievement Test (AT) is applied firstly as pre-test to evaluate their pre-information level toward “Cross-sectioning of a plan” and then applied as post-test after courses of experiment and control groups. And again, in order to determine the pre-attitudes of students toward Technical Drawing Courses “Technical Drawing Attitude Inventory” is applied firstly as pre-test and then applied as post-test after courses of experiment and control groups before the application of two different education techniques both to experiment and control groups . 3.3. Variables of Research 3.3.1. The Achievement Test The Achievement Test (AT) is prepared under the control of field specialists. It is constituted of drawings and questions which are prepared according to the “Cross-sectioning of a plan” unit of the Technical Drawing Course Curriculum which is prepared by the Head of Department of Building Education at Sakarya University Faculty of Technical Education. The Achievement Test is implemented two times for two groups in the form of pre-test and post-test as being before the education and after the education. Before the education activity the pre-test is applied in order to evaluate the pre-information level of students regarding to “Cross-sectioning of a plan” and after the education activity the post-test is applied to reveal the effect of these two different activities on students to learn this issue. 3.3.2. Technical Drawing Attitude Inventory Fivefold Likert-type attitude inventory (I strongly agree, I agree, I neither agree nor disagree, I don’t agree, I strongly disagree) toward Technical Drawing which comprises of 12 items as being 6 of them positive and 6 of 840 �them negative statements in order to determine the approaches of students toward the Technical Drawing Course. The scale results are evaluated by scoring the positive questions as “I strongly agree” (5 points), “I agree” (4 points), “I neither agree nor disagree” (3 points), “I don’t agree” (2 points),“I strongly disagree”(1 point) and the negative questions as “I strongly agree” (1 point), “I agree” (2 points), “I neither agree nor disagree” (3 points), “I don’t agree” (4 points),“I strongly disagree”(5 points). The pre-test before the education and the post-test after the education are implemented to the experiment and control groups of “Technical Drawing Attitude Inventory”. (Technical Drawing Attitude Inventory is given in Appendix-B). 3.4. Course Teaching for Control Group The achievement test and attitude scales are applied as pre-test in order to determine students’ pre-information, skills and attitudes regarding to this issue. Teaching of this issue is started after one week. During the course oral narrative, written expression and question-answer methods are applied. The topic is transferred to students with the classical method as oral and written by using blackboards. The questions regarding to the incoherent parts are answered after lecturing and the lecture is ended with a last repetition. After the course “Technical Drawing Achievement Test” and “Technical Drawing Attitude Inventory” are applied as post-test and the results are recorded. 3.5. Course Teaching for Experiment Group Before one week from the course the achievement test and attitude inventory pre-test applications are applied in order to determine the pre-information, skills and attitudes of students regarding to this topic as in the control group. The prepared model material is used actively during the course and showing the details regarding to this issue on the model as three dimensional become useful for students to animate plans and sections in their minds regarding to this issue. After course by preserving same conditions with control group The Achievement Test and The Attitude Inventory are applied as post-test and the results are recorded. The results of pre-test and posttest Achievement Test and Attitude Inventory for Experiment and Control Groups are given in APPENDIX C-F. 3.6. Data analysis For independent groups the t-test is performed in SPSS 16.0 package programme in order to reveal whether there is a statistical difference among the experiment and control groups in terms of readiness regarding to this issue and attitudes toward courses such as Technical Drawing and occupational drawing. For dependent groups the ttest is performed in package programme in order to reveal the effect of two different education methods (Teacher-centred Education Activity and Model-Aided Education Activity) on success and attitudes toward “Technical Drawing Course, Cross-sectioning of a Plan”. One Factor Covariance Analysis (ANCOVA) is performed in order to compare the effects on learning of two different education activities after performing the educational activities and after bringing the pre-information and readiness level of students under control. ANCOVA is recommended in order to show the effectiveness of the applied experimental operation in experimental designs with pre-test and post-test control group. The ANCOVA test is defined as a “powerful technique which allows comparison among the groups by providing the statistically control of another variable or variables which are related to the dependent variable and named as common variable, besides the independent variable which is tested in a research to observe its effect. ” [5]. 3.7. Findings The findings which are obtained through testing the data of experiment and control groups are given in this section. The hypothesis statements which are to evaluate changes in the points of achievement and attitude points of groups are tested with t-test by using SPSS 16.0 (Statistical Package for Social Sciences for Personal Computers) package programme. Arithmetic mean, standard deviation and t-test results for independent groups according to AT pre-test points, which is done to reveal the pre-information of experiment and control groups regarding to the issue of “Cross-sectioning of a plan” of Technical Drawing Course and to determine the difference between groups in terms of pre-information regarding to the specified topic, are summarized on Table 2. Group N X S.S Experiment 30 18.50 11.08 Control 30 15.83 9.20 t p 1,014 0,315 N: Number of students, X: Arithmetic mean, S.S: standard deviation, t: tscore , p: significant coefficient 841 �Table 2. Arithmetic mean, standard deviation and t-test results of groups according to AT pre-test points On Table 2, according to AT pre-test results of experiment and control groups t=1,014, p=0,315 values are obtained. Since p-value is greater than the significance level of 0.05 there is no statistically significant difference between experiment and control groups in terms of pre-information regarding to the “Cross-sectioning of a plan” topic of Technical Drawing Course. Arithmetic mean, standard deviation and t-test results for independent groups which are obtained according to pre-test results are summarized on Table 3 with the aim of determining the attitudes of experiment and control groups toward the Technical Drawing Course before educational activity. Group N X S.S Experiment 30 3,67 0,59 Control 30 3,37 0,83 t p 1,386 0,171 N: Number of students, X: Arithmetic mean, S.S: standard deviation, t: tscore , p: significant coefficient Table 3. Arithmetic mean, standard deviation and t-test results of groups which are obtained by Technical Drawing Course Attitude Inventory pre-test points Arithmetic mean, standard deviation and t-test results, which are obtained according to the pre-test points of Attitude Inventory toward Technical Drawing Courses, are seen on Table 3. According to this, t=1,386, p=0,171 values are obtained from pre-test points of Attitude Inventory toward Technical Drawing courses of experiment and control groups. Since founded p–value is greater than the significance level of 0.05, there is no statistically significant difference between experiment and control groups in terms of their attitudes toward Technical Drawing course. Hypothesis- 1: Hypothesis Sentence: The model-aided education activity has no effect on students to gain information and skills regarding to the issue of “Cross-sectioning of a plan” of Technical Drawing Course. In order to test the hypothesis the t-test is performed for dependent groups. Test type N X S.S AT Pre-test 30 17,50 11,08 AT Post-test 30 79,83 19,32 t p -13,160 0,000 N: Number of students, X: Arithmetic mean, S.S: standard deviation, t: tscore , p: significant coefficient Table 4. Arithmetic mean, standard deviation and t-test results of experiment group according to AT pre-test and post-test points According to Table 4, the model-aided education activity has an effect on students to gain information and skills regarding to the issue of “Cross-sectioning of a plan” of Technical Drawing Course. A significant difference is found between the pre-test points and post-test points of experiment group with model-aided education activity. Hypothesis-2: Hypothesis Sentence: Teacher-centred education activity does not have an effect on students in terms of gaining information and skill regarding to the topic of “Cross-sectioning from a plan” of Technical Drawing Course. In order to test the hypothesis the t-test is performed for dependent groups. Test type n X S.S t p AT Pre-test 30 15,83 9,20 -13,521 0,000 AT Post-test 30 65,00 18,98 N: Number of students, X: Arithmetic mean, S.S: Standard deviation, t: t score , p: significant coefficient Table 5. Arithmetic mean, standard deviation and t-test results of control group according to AT pre-test and post-test points 842 �According to Table 5 teacher-centred education activity has an effect on attainment of information and skills by students regarding to the topic of “Cross-sectioning of a plan” of Technical Drawing Course. A difference is found among the pre-test and post-test points of control groups with teacher-centred education activity. Hypothesis-3: Hypothesis Sentence: There is no significant difference between the model-aided education technique and teacher-centred education activity for students in terms of gaining information and skills regarding to the topic of “Cross-sectioning of a plan” of Technical Drawing Course. Group Experiment Control N X S.S 30 79,83 19,31 30 65,00 18,98 F p 9,701 0,003 N: Number of students, X: Arithmetic mean, S.S: Standard deviation, F: analysis points , p: significant coefficient Table 6. The covariance analysis results of experiment and control groups according to the AT post-test points According to Table 6, when the AT pre-test results of students are brought under control, the following result is achieved that there is a significant difference between the teacher-centred education activity and model-aided education activity in terms of their effects on learning. According to AT post-test results, with their higher achievement average the difference is in favour of the experiment group. Hypothesis-4:Hypothesis Sentence: “There is no statistically significant difference between the students educated with model-aided education activity and students educated with teacher-centred education activity in terms of attitudes toward Technical Drawing course after the education”. Group Experiment Control N X S.S 30 3,89 0,53 30 3,83 0,64 t p -0,374 0,711 N: Number of students, X: Arithmetic mean, S.S: Standard deviation, t: t score , p: significant coefficient Table 7. Arithmetic mean, standard deviation and t-test results of groups according to Technical Drawing Attitude Inventory post-test points According to Table 7, there is a significance difference between the experiment and control groups in their attitudes toward Technical Drawing Course. According to this result, both model-aided education activity and teacher-centred education activity affect students in terms of developing positive attitudes toward Technical Drawing course. Although the difference between the average points of groups is not statistically significant, it is in favour of control group with model-aided education. 4. Conclusion And Suggestions In this research according to the t-test results of independent groups which is performed to evaluate the AT pretest results of experiment and control groups, a statistically significant difference is not found in pre-information of experiment and control groups intended to the concepts regarding with the “Cross-sectioning of a plan”. In the Achievement Test post-test covariance analysis (ANCOVA) which is applied by controlling the preinformation regarding to the topic of “Cross-sectioning of a plan” of Technical Drawing course of experiment and control group, a significant difference is founded between the teacher–centred education and model-aided teaching activity. With higher achievement average in terms of the Achievement Test post-test results this difference is in favour of the experiment group. This result shows that the students that are educated with modelaided education activity are more successful than the students that are educated with the teacher-centred education activity. It is observed that students learn better and become more successful in the classroom where the model material is used. 843 �According to the t-test results which are performed for independent groups as a result of the pre-test results of Technical Drawing Attitude Inventory, a statistically significant difference is not found in terms of pre-attitudes of experiment and control groups regarding to the Technical Drawing course. According to the Attitude Inventory post-test results which are applied after two different education activities performed by controlling the pre-attitudes of students toward Technical Drawing course, a positive transformation is determined in the attitudes of students toward this course after both of these education techniques. A significant difference is not found by obtaining group averages as 3.83 and 3.89 for two groups according to the post-test results of attitude inventory. However, the average pre-test points of control group with the teacher-centred education techniques increases from 3.67 to 3.83 whereas the average of experiment group with model-aided education technique increases from 3.37 to 3.89. The increase rates in averages can be evaluated as in favour of the model-aided education activity. Since models and other visual materials which are used in education and training meet the conditions of education by doing and living, they provide permanence and will be helpful to raise successful individuals. Reference BUYUKOZTURK, S. (2001). Pre-Experimental Designs finaltest Control Group Designs and data analysis, Pagem A data analysis, (pp. 1-3), Ankara, TURKEY. DEMĐRKUŞ, N., (1999). “Fen Bilgisi Öğretim Yöntemleri ve Uygulamalarının Verimli Hale Getirilmesi”, Symposium on Teacher Education and Contemporary Perspectives, D.E.U. Buca Faculty of Education Journal Special Issue (11) (pp. 414425), Izmir, TURKEY. DOĞDU, S., ARSLAN, Z., (1993). Applications of Educational Technology and Education Appliances, (pp.40), Ankara, , TURKEY. YALIN, H. Đ., (2001). Instructional Technology and Material Development, Nobel publishing, (pp. 82), Ankara, TURKEY. ZAMAN, S. (2006). “Mitoz ve Mayoz Bölünme Konusunda Geliştirilen Bilgisayar Destekli Biyoloji Öğretim Materyalinin Değerlendirilmesi” KTÜ Science Institute, (pp. 129-131). 844 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 636 Title A name given to the resource The Use Of Building Models As An Educational Material And Their Impact On Learning Author Author APAY, Ahmet C. AYDIN, Emine AKGUL, Tahir GURBUZ, Ali Abstract A summary of the resource. Materials are an indispensable component of education and teaching and used for supporting teaching during the teaching-learning process. Aids and materials are employed in an attempt to fulfill the objectives of the teaching process during education-teaching activities. In today’s rapidly-changing and developing world, individuals are not supposed to obtain information from one single source and memorize it; in contrast, the objective is to school the type of individuals who can know how to access to information, how to use it and how to come up with ways to overcome problems encountered. The use of teaching materials designed in accordance with the principles of teaching technologies is vitally important for enabling individuals to develop such skills. A fundamental factor in increasing the level of achievement in courses, in ensuring a decent educational system and in enabling students to experience an enduring learning process is to get students to like the subject to be taught. Otherwise, students will not be interested enough to get the input and no enduring learning process will take place no matter how well-versed and experienced an instructor is in his/her field. This paper is a study into the effects of the use of educational materials on the level of students’ achievement and interest in courses. Furthermore, it includes a comparison between the efficiency of material-aided instruction and teacher-centered instruction. The effect of these two methods on the level at which particular concepts related to a lesson are learned has been analyzed through the use of experimental design with pretest-posttest control group. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed Q Science (General) https://omeka.ibu.edu.ba/files/original/6f7fbd72b0a3a619607ac62999ee3fb1.pdf 62cc6802b338b8d1e17b854ad0251817 PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo The Importance of Numerical Flexibility In Turkish Labor Market and Competition Policy M. Akif ARVAS Res. Assist.(PhD candidate), Economics, Hacettepe University, Ankara, Turkey aarvas@hacettepe.edu.tr Suleyman ĠÇ Dr., Department of Business, Gaziantep University, Gaziantep, Turkey icsuleyman@yahoo.com Mehmet AYGÜN Assoc. Prof., Department of Business, 100. Yıl University, Van, Turkey maygun@yyu.edu.tr Abstract: Numerical flexibility, which has been common since Atkinson (1984), can be defined as a situation where the number of staff and the number of hours worked can be increased or decreased depending on the demand for labour. Within the "flexible firm model", numerical flexibility is seen as being designed to facilitate a rapid adjustment in headcount, in line with short-term changes in the level of demand for labour so that the number employed equals the number required at any time. Based on Labour Law no 4857, Turkey has adopted this approach as a competition policy in order to provide flexibility into labor market and to promote the competition of Turkish firms. Therefore, in this study, flexibility-based tools are discussed and evaluated in terms of competition policy. Introduction The flexible firm model developed by Atkinson (1984) resulted from studies carried out on the changing nature of employment in the UK during the 1980s. Atkinson concluded that changes in technology, training costs, working time and labour supply were the factors influencing and driving change in UK employment policies and strategies. The changes in employment policies and strategies, Atkinson believed, resulted in the formation of two employee groups―the core and peripheral. The core group consisted of full-time permanent workers and the peripheral group consisted of part-time, temporary and contract workers ( collectively termed ―atypical‖ by Atkinson). Today, flexibility in labor market has been a new competition strategy for firms and there has been a significant growth in flexible or ―non-standard‖ forms of employment. Since laborforce is a variable factor of production and because of impossibility of perfect substitution of investment goods for laborforce using today‘s technology, forces dynamic conditions in goods and factor markets to have a more flexible structure in terms of employment forms of firms and restructuring the job schedule. Hence, flexibility in labor market as a competition strategy can be expressed in two ways; external flexibility and internal flexibility. External flexibility, which allows firms to adjust demand for labor to workload, and numerical flexibility which is called employment flexibility are strategic methods and policies for firms to harmonize to rapidly changing economic conjuncture. Firms who adjust the number employed to workload are defined as ―flexible firm‖ and together with core laborforce of these firms, they―depending on business conditions― employ other kinds of employment such as temporal worker, part-time worker and external service act, and peripheral labor (Felstead, 1999, p.10). Therefore, numerical flexibility will be obtained by firm from employment of peripheral laborforce. Numerical flexibility is defined an employment type which enables employment of part-time and temporary worker according to fixed-term non-standart employment contracts as well as full-time workers with open-ended employment contracts (Kutal, 2002, p.33). This aspect of numerical flexibility has been taken into consideration and 493 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo flexibility in competitive market economies means the required use of workers when needed (TĠSK, 1999, p.23). This definiton puts forward the importance of numerical flexibility to firms. On the other hand, it has been stated that the diffusion of flexible employment types helps developing countries to employ low-waged laborforce to accelerate their economic growth. Working hours flexibility known also as internal flexibility creates another dimension of labor market flexibility as a competition strategy. Flexibility in working hours, in case when normal work period does not response to labor supply and demand, is defined as flexibility in the period worked in response to a change in work load of employer and in workers‘ demand for income-leisure time―within normal working hours limits ( OECD, 1990, p.23-24). It is stated that working hours short-cut is a different application of working hours flexibility (Bosch, G, P. Dawkins and F. Michon, 1994, p. 25–27). This method enables firm to adjust its labor demand to a fluctuation in demand for its goods produced. According to the labor demand model, it is assumed that firm has to adjust its labor demand to a change in economic conditions ( Borjas, 1996, p.138). it is further assumed that working hours flexibility is a strategy in which firm aims to protect its competitive power accross firms (Kuzgun, 2005, p.34). Based on a OECD regulation in 1985, it is pointed out that flexible working hours constitutes the numerical aspect of laborforce flexibility and comes to the same manner with the flexibility in labor input costs (Bosch, G, P. Dawkins and F. Michon, 1994, p. 25). In the same point of view, flexibility in working hours gives an advantage to firm to give a quick response with a minimal input cost to fluctuations in demand in goods market. Further, while working hours flexibility allows firm to feasible use of laborforce in number and time needed ( Centel, 2002, p.239). On the other hand in terms of workers it means that ―...it is an aggrement between employer and employee so that working hours needs to be adjusted to employee‘s conditions‖ (Centel, 2002, p.243). 2. Flexibility in Turkish Labor Market As A Competition Strategy 2.1. Flexibility As a Firm’s Competition Strategy It has been seen that factors which determine managerial strategy of a firm are aggregated under the two headings as external and internal; across external factors the state of markets, competitive conditions, economic fluctuations and legal regulations are mentioned, as for internal factors the human source is pointed out (Ergin, 1992, p.50-56). In this respect, within the context of new Turkish Labor Law, regulation neccessity for numerical flexibility and flexible working hours constitutes the legal framework of firms‘ new competition policies. Within this framework, part-time working, on-call working, compensatory working, short working, temporary secondment and labor subcontractor applications are considered. Among these, though temporary working has been expensively applied in Turkish labor market, it had not been legaly arranged. On the contrary, on-call working, compensatory working and temporary secondment have found place within the new labor law context. In Turkey, the factor that improves the effectiveness of labor market flexibility on determining firm‘s competition strategy has been the legal permittance given to private employment aggencies to be established. In order to shorten the temporary unemployment period, importance is attached to the matching of unoccuppied jobs with the people looking for a job. Thus, the private employment agencies have been accepted as instruments of active employment policy for the improvement of the matching capability of the labour market besides the public employment institutions. ― The aim of the employment service is to enable employers to identify and employ workers who are equipped enough to perform their jobs, and to help individuals find their first jobs, change jobs during their career, and to find new jobs when they become unemployed.‖ (http://www.oas.org/udse/esponal/documentos/cancun/01developingefectivES-D,Fretwell-docum.pdf). As of April 2010, 277 private employment agencies have started to operate and they have been distributed among 19 provinces in Turkey. These provinces are Adana, Ankara, Antalya, Balıkesir, Bursa, Denizli, Diyarbakır, EskiĢehir, Gaziantep, Hatay, Ġstanbul, Ġzmir, Kayseri, Kocaeli, Konya, Muğla, Sakarya, Tekirdağ and Trabzon (http://statik.iskur.gov.tr/0252/iller/01T%c%3bcm%20Liste.pdf). Meanwhile, 126 of these private employment agencies have been closed and the licences of five agencies have been cancelled by ISKUR (http://www.iskur.gov.tr/loadExternalPage.aspx?uicode=statozeisthdamburodagi). These data show that private employment agencies in Turkey have created a new sector within the service sector. While there is no data on how many people are employed by private employment agencies in Turkey, it is supposed that they have created labor opportunities at a specific rate. The indirect contribution of private employment agencies appears at the stage of providing matching services. Structural unemployment is one of the features of the labor market in Turkey. It is considered that thanks to these agencies, the decrease in the period of looking for a job is a partial solution for the structural unemployment. It is possible to say that 1.5% of those applying to private employment agencies in Turkey are already engaged in a business (Kuzgun,2008:12). Life time of a firm is the outcoming factor and it is based on the economic activities in the effects on the employment level. It is observed that the fact that employment service is provided by private sector firms as well as public institutions has led to creation of a sub-sector within the service sector and to creation of new job opportunities. This sector has been accepted as 494 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo an emerging market by the EU countries and it is stated that new employment opportunities have been created for 1,3 million people in the European Union in this way and that this figure corresponds to 1,9% of total employment. (http://www.eurociett.org/fileadmin/templates/eurociett/docs /position_papers/EurociettPositionPaper_Lisbon_Staregy_March_2006.pdf) 2.2. The Reasons For Adoption of Flexibility in Labor Market As a Competition Strategy in Turkey These reasons can be classified into two sub-headings. 2.2.1. External Factors The first external factor is globalization and its effect on the decisions regarding productive organizations of firms in Turkey. The second is to adopt the flexible labor market approach as it did in EU in the adaptation process of Turkey to EU. 2.2.1.1. Globalization Since competition in domestic and international market has gained big importance, recent atypical or nonstandart job contracts are emerged as well as typical/standart or normally interpreted job relations and job contract concepts. It is pointed out that, in process of globalization, the effect of international trade on employment has been more improved ( Liemt, 1997: s.240). In terms of competition, in the short-run, benefiting from the nature of labor force being variable factor of production in order to enhance the competitive power , firms use peripheral labor force in which they employ labor force in accordance with the workload. In this regard, it is agreed that the types of PostFordist organizations has been recently appeared in developed and developing economies by the result of coercive nature of international trade (Felstead,1999, s.9). Taking into consideration further the fact that the pressure of globalization and competition leads firms to seek for reducing the costs, it is stated that flexibility in the general level of labor force costs is one aspect of flexibility in labor market ( Elliot, 1997, s.301). Notably in the stage of economic crisis, providing flexibility in adjusting the employment costs is critically important for competing firms. Furthermore, a relationship is constituted between the use of labor force and having a flexible position and, it is emphasized the importance of possessing a flexible structure during the crisis (Arıkboğa, 2001, s.54). In terms of Turkey, it is expressed that the flexibility in labor force has risen as a system driven by globalization (DPT, 2001b, p.38). 2.2.1.2. The Adaptation Process of Turkey to European Union (EU) According to Kuzgun (2004), another reason of introducing different types of flexible employment into the new Labor Law is the adaptation process of Turkey to EU and it plays an important role during this process. The same approach has also been followed in the Eight Five-Year Development Plan (DPT, 2001, p. 145). This adoption, globally, has proved the fact that the EU is influential in individualizing the work relationships by the case in Turkey. Besides that, together with some types of flexible employment, absence of legal regulations seemed to be a lack in Turkey. This lack is first put on the agenda in the project of improving employment and efficiency in labor markets. 2.2.2. Internal Factors These factors resource from the structural futures of Turkish economy and labour market. 2.2.2.1. The Ever-Growing Unemployment In the aftermath of World War II, the numerical flexibility concept in the labor market in industrialized economies is another factor in determining different types of flexible employment and subcontracting which enables labor market to become flexible. On the other hand, it has claimed that the oil crisis in the mid of 1970s had strengthened the relationship among flexible types of employment producing a new unemployment wave ( Tuncay, 1995, p.57) Therefore, a tie between widespreading flexible types of employment and unemployment is constructed and at the end of the 20th century, as types of flexible employment become widespread, so does the employment possibilities ( Felstad, 1999, p.3). Likewise the idea that holds that there is a linear correlation between flexibility and levels of unemployment rates and that reforms need to be done for a flexible labor market (Rodriguez, 2003, p.37) 495 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo runs parallel with the idea that maintains that reforms in job law which should make labor market more flexible in 2003 in Turkey comparing with the high level of unemployment rates. The reason of the ever-growing unemployment in Turkey is the long-lasting economic crisis as an influential factor stimulating unemployment ( Kazgan, 2002, p.19). Years Unemployment rate % Underemployment rate % Underutilisation rate % (Unemployment + Underemployment) 1995* 1999* 2008** 6.9 7.3 11 6.7 6.9 3,1 13.6 14.2 14,1 Source: * Obtained from 8th –Year Development Plan, DPT, p. 102, ** Obtained from Turkish Statistical Institute (TÜĠK) News Bulletin. Table 1: Changes in Unemployment and Underemployment rates in Turkish Labor Market (1995-2008) (15+ Age) As it can be seen from the Table 1, in the period of 2005-2008, as a consequence of effects of the global crisis and economic instability on Turkish economy, while unemployment rate was 6,9 % in 1995, it increased to 7.3% in 1999, and to 11% at the end of 2008. But, in contrast to realized rates of underemployment in 1995 and 1999―6.7% and 6.9%―, it decreased to 3.1% in 2008. Under these conditions, underutilisation rate of work force, which is the sum of unemployment rate plus underemployment rate, increased to 13.6 % and to 14.2 %, in 1995 and 1999 respectively, but in spite of a considerable decrease in 2008, it slightly decreased to 14.1 % at the end of 2008 ( due to increasing unemployment rates). 2.2.2.2. The Share of Service Sector in Total Employment It is stated that there is a linear correlation between flexibility and increasing share of service sector in total employment (Felstead, 1999, p.12). In Turkey, in the sectoral distribution of employment in urban areas, service sector ranks first and it is followed by industry and agriculture sectors. On the other hand, if we look at the long-run expectations of employment in Turkey, it is seen that service sector is leading sector which will create an employment capacity for labour suppliers (ĠġKUR, 2003, p.13). According to Household Work Force Survey results, in both 2008 and 2009, considerable part of employment is engaged in service sector. As of 2009, the share of service sector employment in total employment reached to 50 %. The economic crises has led industry sector to provide less employment comparing to the numbers of 2008 (Table 2). 2008 2009 Sectors Employment Share (%) Employment Share (%) 5016 23.7 5254 24.7 Agriculture 5682 26.8 5379 25.3 Industry 10495 49.5 10644 50.0 Service 21194 100 21277 100 TOTAL Source: http://bulten.tuik.gov.tr/PreHaberBultenleri.do?id=6198&tb_id=2, 19 April 2010 Table 2: Sectoral Distribution of Employment, 2008-2009 (in thousands, 15+ age) 2.2.2.3. The Share of Unregistered Employment in Total Employment Unregistered employment is generally keeping the workers away from awareness of the government, employing unskilled workers, violating the regulations such as minimum age level (child labour), minimum wage, overtime, workplace standards, health and security of workers. 496 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo It is generally agreed that, in Turkey, there is an informal economy as well as the informal one and an unregistered employment beside the registered. Today, it is obvious that one of the most challenging problems economies have faced is informal economy and unregistered employment (TUSIAD, 2002, p.96). In 2009, According to the latest published survey results, the ratio of persons who worked without any social security related to the main job inclined to 42.3 % with 1.5 percentage point increase. The share of persons who did not have any social security in agriculture increased from 84.5 % to 85.8 % and that in non-agriculture increased from 28.6 % to 28.7 % compared to the same period of the previous year (http://www.turkstat.gov.tr/PreHaberBultenleri.do?id=6229, 20 April 2010). By the expansion of types of flexible employment, employment of women, retired, young and handicapped labour force who are considered as secondary labour force have been increased, to participate in economic activities, in work place or at home. Besides that, it is observed that types of flexible employment are accumulated in product lines with low-demand of capital. For example, as a consequence of creating new job opportunities being restricted in Turkey, the labour force as unregistered are employed in product lines which do not require too much capital such as piece-rate wages system in return for producing at home (DPT, 2001a, p.46) Shifting production out of plant within the context of the organization of production means flexibility in organizing the job and provides an opportunity of reducing the production costs in terms of firm. Henceforth, flexibility in organization is seen by firm as a dominant competition strategy against its rivals (Ġġ KUR, 2003, p.35). In this respect, flexibility in production and in employment is an inevitable result of competition and is defined as realization of production out of plant employing outsider workers (TĠSK, 2004, p.34). Subcontractor application is another method to shift the production out of plant. The factors bringing about this application are changes in production process, expansion of small and medium-sized firms and the focus on privatization (Ekin, 2002, p.59). Since small and medium sized firms hold a near-position of subcontractor firm, they have a considerable share in total number of firms and in total employment and they emphasize the relationship between informal economy and firm size in Turkey. So, reshaping the subcontractor application within Labor Law carries considerable importance. Existence of small and medium-sized firms (SMEs) and shifting the production out of plant; are supported with the view of which classifies the capital system as dualist―primary and secondary― in acceptance of flexibility in labor market (Tai, 1994, p.16-17). When taking into consideration that subcontractor application enables firms to offset labor demand and to shift their production line into secondary sector, it would not be false to see the informal economy and subcontractor firms operating in this economy as secondary sector in Turkey. Furthermore, allowing for the operation of private employment agencies within this sector will speed up the tendency of firms towards the sector. In Turkey, basically, though subcontractor application became widespread in private sector, it also is becoming widespread in public sector. Among the reasons, decreasing the production costs in State Economic Enterprises (KĠT), willingness to work with problem-free worker groups and the thought in which easily privatizing the State Economic Enterprises are mentioned. Therefore, subcontracting is described the other way of privatization in public sector (Ekin, 2002, p.35). On the other hand, it is pointed out that subcontractor application is a key concept in international trade (Liemt, 1997, p.240). When looking at the examples of subcontractor applications in international field, it is observed that 32 percent of employers in excessively industrialized countries such as France, Germany and United Kingdom have shifted their own works to the subcontractors in the last three years and, in Turkey, the number of subcontractor employers and workers in the lines of business accounts for 15% of total labor force (Ekin, 2002, p.34) 2.2.2.4. Firm Size in Turkey Since small-sized firms have a more flexible structure, it possible to construct a relationship between flexibility in labor market and firm size. Firms having a flexible structure, in general, are small and medium sized. Owing to this structural feature, Firms in this size easily respond to changes in demand of goods and services. In this respect, the types of flexible employment as competition strategy are more important for these firms. According to the EU standards, firms employing 1 to 9 workers are defined as micro enterprise; and those employing 10 to 49 as macro enterprise (Kuruüzüm, 1998, p.37). But in Turkey, there is not a common standard on determining firm size taking number of workers employed as a basis. According to some determination, firms who employ 1 to 49 workers are considered small sized firms (http://www.kosgeb.gov.tr/kos.htm). Firms in this size, have a notably place in Turkish economy. In the same way, the abundance of small-sized firms in number is considered among structural features of Turkish economy (Bulutay, 1995, p.65). 497 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Size of Work Places (based on the Number of Compulsory Insured Person) 1-3 persons 4-6 persons 7-9 persons 10-19 persons 20-29 persons 30-49 persons 50-99 persons 100-499 persons 500-999 persons 1000+ persons TOTAL Number Compulsory Insured Person 1,228,315 855,295 613,074 1,198,952 699,524 898,516 848,127 1,753,236 408,122 371,805 8,874,966 of Share (%) 13.8 9.6 6.9 13.5 7.9 10.1 9.6 19.8 4.6 4.2 100 Source: www.ssk.gov.tr, Insured Person Statistics, January 2010, Table SS15, page 27, Table 3: Compulsory Insured Person Numbers According To Activity Branches and Work Place Size (4/a) According to Table 3, Firms, who employ 1-49 persons and defined as small sized in Turkey, account for 61 percent of total insured labor force. This founding shows, within the new Labor Law, the importance of arranging the types of flexible employment in terms of labor market in Turkey. Thus, in determining of employers‘ commitments, firm size is taken as basis and in general small firms have been legally protected ( Kuzgun, 2004, p.5-14). 2.2.2.5. Frequency of Cyclical Fluctuation In terms of firm, providing working hours to become more flexible during economic crises is crucial in relation with minimizing the labor costs. Because an anticipated crisis weakens the firms‘ adaptation and prevention mechanisms of cyclical fluctuations and threats firms‘ operational goals, values and predictions regarding sales and returns (Dinçer, 1998, p.385). The economic crises within the context of new Labor Law is accepted being one of the reasons of flexibilizing working hours and is arranged in scope of the article 65 in case of bringing short working in practice. In doing that, it is thought that cyclical and intense fluctuations experiencing in economic activities have been influential on this arrangement (Bulutay, 1995, p.87). In order to adopt a resolution for short working according to Labor Law, an economic crisis must be a general crises affecting the whole economy. By this approach, in paragraph (3) of article (3) in the act which regulates short working and the payment for short working, an economic crisis is defined as ―a situation in which events occurred in national and international economies give shock to the whole economy and establishments‖ (www.iskur.gov.tr/mydocu/mevzuat /yonetmelik45.html). A general economic crisis brings about changes in overall economic conditions in terms of firms. In this respect, it is argued that short working provides facilities to firms to cope with crisis and that short working during crisis is a key for feasible solutions in terms of firms (MESS, 1999, p.180). When analysing the demands for short working to Ministry of Labor and Social Security, as of 30 September 2004, it has seen that the whole demands have been made by firms operating in private sector, and that those firms according to the KOSGEB classification are mostly small and medium-sized (Kuzgun, 2005, p.45-46). According to Arıkboğa (2001), there is a relationship between the number of employees employed and firms‘ flexible structure and particularly in crisis period, flexibility is a feasible strategy. But, in arrangement of short working, firm size has not been taken a criterion (Kuzgun, 2005, p.47). This policy, regardless of how big firms are, is a result of the opinions to protect firms against economic crisis. While it has been aimed, by short working, to adjust firm‘s demand for labor to shrinking in the level of economic activities; the negative effects of employee‘s income loses caused by implementing of short working has been considered to be compensated by the payment for short working. The main determinant in employee‘s acquiring the rights of short working is the condition in that premium payment must be paid within the prescribed time limits. 498 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Conclusion Today, being connected to globalization, flexibility in labor market is adopted as a new competition strategy in terms of firm. By external and internal factors, the introduction of new regulations into the new Labor Law aiming at flexibilizing labor market has constituted the legal framework in determining firm‘s competition strategy in Turkey. The importance of new regulation based on numerical flexibility and flexibilizing labor market is vital in respect to determining competition policies. Labour market flexibility is seen as an important characteristic of a modern economy. Labor market flexibility decribes how labour markets function. A flexible and efficient labour market implies higher employment, and so an economy that is fairer (in terms of, for example, reducing social exclusion), as well as more competitive and more productive. It also implies an economy that is better able to adapt to the changing economic environment. External numerical flexibility refers to the adjustment of the labour intake, or the number of workers from the external market. This can be achieved by employing workers on temporary work or fixed-term contracts or through relaxed hiring and firing regulations or in other words relaxation of Employment Protection Legislation, where employers can hire and fire permanent employees according to the firms‘ needs. Internal numerical flexibility, sometimes known as working time flexibility or temporal flexibility. This flexibility achieved by adjusting working hours or schedules of workers already employed within the firm. This includes part-time, flexi time or flexible working hours/ shifts (including night shifts and weekend shifts), working time accounts, leaves such as parental leave, overtime. Arranging the both types of flexibility within the new Labor Law enables firms to determine their new competitive strategies. This arrangement, especially in private sector, will lead employment strategies based on the distinction between core and peripheral labor force to be emerged, and also will help this distinction to become common. Besides that, operations of private employment agencies and in general the demand for temporary employee by firms, both, will bring about a new expansion to the competition among rivals and will expand the application of the fixed-termed temporary working contracts. In this context, private employment agencies also will facilitate the applications of numerical flexibility as competition strategy. In the next stage, it is expected that expansion of flexibility would bring about a fragmented and more informal labor market in Turkey. References Arıkboğa, ġ. (2001). Business Management in Crises. Ġktisat Dergisi, Ġstanbul, p.410-411 Atkinson, J. (1984). Flexible manning – the way ahead. Institute of Employment Studies Bosch, G. (1994). Working Time in 14 Industrilies Countries. 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For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 260 Title A name given to the resource The Importance of Numerical Flexibility In Turkish Labor Market and Competition Policy Author Author ARVAS, M. Akif İÇ, Suleyman AYGÜN, Mehmet Abstract A summary of the resource. Numerical flexibility, which has been common since Atkinson (1984), can be defined as a situation where the number of staff and the number of hours worked can be increased or decreased depending on the demand for labour. Within the "flexible firm model", numerical flexibility is seen as being designed to facilitate a rapid adjustment in headcount, in line with short-term changes in the level of demand for labour so that the number employed equals the number required at any time. Based on Labour Law no 4857, Turkey has adopted this approach as a competition policy in order to provide flexibility into labor market and to promote the competition of Turkish firms. Therefore, in this study, flexibility-based tools are discussed and evaluated in terms of competition policy. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory