February 19, 2023

Entrepreneurs picking up the pieces after the deadly earthquake. Economic reconstruction needed now.

© 2023, Tom Nicholson for SPARK

As rescue efforts turn to reconstruction, the impact of one of the most deadly earthquakes to hit Türkiye and Syria on entrepreneurs, SMEs and the wider business ecosystem becomes clearer.  

On 6th February, two consecutive earthquakes struck highly populated regions of southern Türkiye and northwestern Syria, with magnitudes of 7.8 and 7.7 respectively. To date, over 41,000 people are known to have died across Türkiye and Syria, with the total expected to rise. Twelve days on, as rescue efforts turn to reconstruction, the value of financial damage in Türkiye alone is reported to be up to $84 billion (USD), around 11% of the country’s GDP. In Syria, many have described the earthquake a ‘crisis within a crisis’, as the country grapples with decades of civil war, mass displacement and severe economic hardship. 

As SPARK begins efforts to restore higher education institutions to full capacity, support the existing entrepreneurial ecosystems and provide services for youth to rebuild their careers and companies, we’ve spoken to several of our partners and participants that have been impacted by the catastrophic earthquake. 

Entrepreneurship partners sheltering 800 people
Two of SPARK’s partners, Getham, an industrial design and modelling centre that is an affiliate of the Gaziantep Chamber of Commerce, and Gaziantep TechnoPark, an initiative of the University of Gaziantep that supports high-grade technological products and services, have been at the forefront of SPARK’s business development activities in Gaziantep, southern Türkiye. 

As homes lay in ruin, hundreds of thousands of people urgently needed shelter after the earthquake when temperatures were close to freezing. Getham’s General Director, Onur Akar, and Gaziantep TechnoPark’s General Director, Kazım Yıldırım, quickly turned their undamaged offices into temporary shelters. 

“TechnoPark’s research and development centre was in good condition, so we immediately turned it into a shelter centre. On the first night, we accommodated 800 people, providing food and heating thanks to on-site generators,” says Kazım Yıldırım. 

“Two hundred people stayed in our building and we provided them with food and shelter,” says Onur Akar. “We have been doing our best to be a part of the coordination efforts in the city, staying in contact with other local actors to develop the necessary response.” 

Expected impact on the business ecosystem
In addition to the thousands of buildings that have collapsed and anticipated 500,000 more that need to be urgently torn down in Türkiye alone, extensive damage to transportation, energy and internet infrastructure is reported. The impact on the economy is expected to be long-lasting and comes on top of hyperinflation in Syria as a result of the civil war and a 24-year high of 85% in Türkiye before the earthquake. 

According to Kazım Yıldırım, Gaziantep TechnoPark’s General Director, “many people fled the city of Gaziantep soon after the earthquake. We expect that this will be reflected in business in the city. Business owners may choose to leave the city entirely, relocating to other areas in the western parts of the country.” 

As consumers and business-owners choose to relocate from the affected regions, fewer jobs could become available and companies may find it more difficult to find qualified workers, dealing a second blow to the livelihoods of the crisis-affected community. Kazım Yıldırım says: “The development sector will have to support new emerging businesses and startups to make up for the relocation of companies outside the region.”

Conversely, Onur Akar predicts that many businesses from the heavily impacted cities of Hatay, Adıyaman and Kahramanmaraş may choose to move their operations to the city of Gaziantep, which was already very competitive before the earthquake. He anticipates there may be resistance to new outside competitors, advising that, “the development sector will have to focus on creating new business ventures and promote growth so that these new businesses operate in a more welcoming ecosystem, free of competition related friction between old and new businesses in the city.” 

Startups and SMEs hit hard
One former scholarship student and entrepreneur that has been supported by SPARK’s programmes described the impact on his company. The mechanical engineer who’s business prototypes and designs machinery products says his factory has been damaged and his 3D printing machine has been destroyed. As the sole provider for his family, he urgently needs to get his business up and running again to support them. “There is an ongoing economic crisis, we need new support programmes for startups to rebuild.”

“The private sector is hard-hit with this crisis,” says Onur Akar, General Director of Getham. “We see some small businesses donating their inventory to the relief efforts to meet immediate needs. These businesses are spending and donating their operational capital, and this will make these businesses more fragile.” He also worries that investors may also shift their investments outside the region. 

Damage to higher education institutions
All of SPARK’s partner universities in the region were affected by the earthquake. Many students, staff and faculty members have sadly lost their lives. Although their facilities and infrastructure are affected, the institutions are welcoming and hosting local communities in their premises. Higher education is expected to resume online soon. With our partners, SPARK is quickly working to provide resources and funds, as we did during the COVID-19 pandemic, to enable students to continue their higher education.

SPARK’s next steps to recover the economic ecosystem
Since 2015, SPARK has been active in supporting the growth of startups and SMEs in Gaziantep, Şanlıurfa, Hatay, Kahramanmaraş, Mersin and Adana. We are working with our local partners, as well as students, SMEs and entrepreneurs, to assess their needs and develop tailored support programmes to contribute to the economic reconstruction of affected areas. SPARK’s office, located in Gaziantep, is operational and our staff, while affected, are continuing to provide support to all students and entrepreneurs.

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