In the world of economics, the quality of production, competitiveness of goods, and the generation of income through high-quality production all rely on Research and Development (R&D). The percentage of R&D expenditure as a share of Gross Domestic Product (GDP) is an important indicator used in many fields. It is a well-known fact that countries with a high percentage of R&D spending in GDP also have higher per capita income and welfare.

But what exactly is R&D? According to TUBITAK, R&D refers to "innovative activities systematically conducted with the aim of increasing scientific and technical knowledge, and the application of the resulting knowledge in new applications (products, processes)."

However, conducting R&D alone is not sufficient. What is essential is the ability of R&D to bring about changes in the economy's structure and production habits. TUBITAK defines innovation as "a series of scientific, technological, financial, and commercial activities aimed at transforming an idea into a developed, improved, or new and marketable product or process."

Therefore, the transformation of a developed product into a new and marketable product is likely to bring about changes in the economy's production structure and the country's welfare level.

In order to produce high-tech products, create value-added production, and ultimately make the economy more competitive, significant resources must be allocated to R&D. Investing in more R&D creates expectations for higher value-added production.

Allocating more resources to R&D will also translate to higher rates of economic growth. As per capita income increases due to increased economic growth, the threshold per capita income figures used to classify countries will rise, and the income group of the country's economy will change accordingly.

It is no coincidence that many advanced countries, particularly those in the high-income bracket, have a high percentage of R&D spending as a proportion of their GDP.

In 2021, Sweden had the highest proportion of R&D spending as a percentage of GDP at 3.35%, followed by Germany at 3.13%, and the Netherlands at 2.25%.

The EU average is around 2.27%.

Meanwhile, in the US, the figure was 3.45%, in Japan it was 3.26%, and in South Korea it was 4.81%.

In recent years, Turkey has also increased the amount of resources allocated to R&D. The share of R&D in GDP reached 1.40% in 2021.

With the resources allocated to R&D, particularly in defense industries and other sectors, the production structure of the country is changing, and there is a clear synergy in many sectors due to the emergence of value-added products.

Therefore, in order for Türkiye to have a more competitive economy, sustain its high-tech production, and move up from its middle-income status to the group of high-income countries, it must increase the amount of resources allocated to R&D even further.