Alternative Models Used in Financing Innovation: An Evaluation on Turkey Practices

Innovation is the most important factor of economic growth. However, since innovation activities are risky and costly, financing innovation is one of the important obstacles for economic growth. Therefore, many methods have been developed to finance innovation. Traditional financing methods have often been insufficient or have problems in practice. Therefore, new and alternative methods for innovation financing have been developed all over the world. Among these new methods developed for the financing of innovation, the most frequently used ones are angel investment, venture capital and crowdfunding. In this study, an evaluation is presented on the applications of these methods, which have been increasingly used in the financing of innovation in Turkey in recent years. Although these methods of financing innovation have become used in Turkey in recent years, they are not considered sufficient in terms of innovation potential. For this reason, the policies implemented for the development and dissemination of angel investment, venture capital and crowdfunding in Turkey should be continued and increased. The aim of this study is to make an evaluation on the applications of the innovation financing methods, which are increasingly used in Turkey. In this context, the study primarily focused on the relationship between innovation and economic growth, then the financing of innovation was mentioned, and finally, a comparison was made in terms of Turkey by giving information about alternative financing methods.