Turkey’s struggle to achieve high-income status through adaptation to the knowledge economy

Mid-income countries must restructure their economies fundamentally to reach high-income levels. This restructuring process requires the most effective use of national resources, particularly higher education and national innovation institutions, among others. Only a handful of countries can achieve the requirements of economies of scale regarding the allocation of scarce funds to research and development (R&D) as is done by giant corporations, which channel billions of dollars to R&D; thus, within this competitive environment developing nations must concentrate on certain sectors. This study takes a political-economy approach to analyzing Turkey’s development policies with a special focus on its higher education institutions and national innovation system. Additionally, it aims to elaborate on its chances to escape the middle-income trap when making necessary reforms to reach higher rungs on the knowledge economy ladder.