The Inevitable In The New World Order: Digital Transformation

The new digital world offers many technological opportunities to companies, investors and entrepreneurs

Today, technology is a determining factor in the economy as it is in almost every other field. And what should countries do to adapt to this change? What is Turkey’s position in this field? We talked to Dr. R. Erdem Erkul, Deputy General Manager for Public Sector and Investment of Microsoft Turkey, about these questions. “Shaped by data in Turkey and all over the world, the digital economy is calculated in billions of dollars. Considering that the digital economy is not only about information and communication technologies but also increases the efficiency of every sector affected by digital transformation, we can see how valuable the digital transformation and economy is for our country’s economy,” says Erkul.

You tell in your assessments that Turkey offers many opportunities for investors. Can you give details on these opportunities through Business Diplomacy?

We are talking about a new digital world, where transformation is inevitable. This new digital world offers many technological opportunities to companies, investors and entrepreneurs. This is also the case for Turkey. Thus, entrepreneurs in our country need to adapt to this digital change first in order to seize these opportunities and increase their competitive power. In Turkey, we are actually familiar with the digital world and its technologies and quickly embracing it. The statistics show us that there are 59 million active Internet users in Turkey. Our country’s e-commerce market has grown at an average of 33% annually since 2014, reaching TRY 60 billion by 2018. The shopping rates demonstrate that 67% of people in our country prefer online shopping, and this number is equal to more than 30 million people. The number of digital citizens we have is larger than the population of many European countries. We are a leading country in Europe for average social media usage times. This demographic structure creates an important domestic market for technological initiatives. And this makes it easier for entrepreneurs from almost all sectors to focus on solutions to digitalize the function of the middlemen and bring out innovative ideas. Based on this principle, the fact that numerous technological initiatives from retail to accommodation services have turned into “Unicorns” worth more than 1 billion dollars can be a proof of this. The newly-emerging technologies that will determine the future of digital economy such as cloud, internet of things, artificial intelligence, blockchain, mixed reality and 5G have already begun to change the course of the economy. In order to present the right solutions to the market at the right time, it is essential for entrepreneurs to closely follow this transformation and utilize technological opportunities at an early stage. At this point, initiating enterprises with the creative digitalization solutions by using our domestic market, which is already suitable for digitalization, and exporting our solutions to the world are listed as the keys to success.

Producing strong brands is a prerequisite for importing technology. Because if you can only provide a price advantage, you always have the risk of others offering lower prices. Therefore, exporting with a sense of high added value, high solutions and high quality is the key to success for entrepreneurs in the digital economy. We can easily say that we have entrepreneurs that have the potential and technical skills to pull that off.

We can’t deny that technological solutions reduce the workload. In fact, public institutions are also using technology effectively. Considering this fact, what can you say about the rate of the public’s use of technology in Turkey?

The support of public institutions is essential for our citizens to adapt to these new technologies. I can say that with the increased awareness in the public institutions, the transformation will gain speed, cities will be kept alive, and the economic competition power will be acquired. Supported with data analysis and artificial intelligence tools, services such as e-Devlet are frequently used in public institutions of Turkey. In this regard, Turkey’s statistics show us that in 2008, nine institutions provided services in 22 areas on e-Devlet and the number of users was 6990. In the past 11 years, the number of institutions in e-Devlet has become 561, the number of services 4 thousand 505, and the number of users has reached 41 million 943 thousand. These numbers show that half of our population are e-citizens. One of the biggest advantages of the digital transformation in public is being able to process the big data of the state and provide high added-value services based on these data. Thus, processing the data under public control will create significant economic value.

The support of public institutions is essential for our citizens to adapt to these new Technologies

What steps should countries take in this digital world to have a commanding presence in the digital structure of the future?

Malaysia and Singapore are good examples of this. At the time of these two countries’ separation, they had similar demographic structures and economic development levels; however, we can see that Singapore’s welfare level has been rapidly increasing due to its competitive presence in the digital economy. The Government of Singapore put its digitalization plans for 23 different sectors into practice in 2017. The digital economy was the most important topic for the country’s 2020 budget negotiations, and 72% of their economy was transferred into the service industry. Therefore, it is of vital importance to plan this digital transformation as being open to innovation in cooperation with the public and the private sectors and non-governmental organizations (NGOs) in order for us to have our share in the digital economy.

It is of vital importance to plan this digital transformation as being open to innovation in cooperation with the public and the private sectors and non-governmental organizations (NGOs) in order for us to have our share in the digital economy

Could you give more information about the current state of the digital economy market on a global scale? What are the factors that shape this market?

Today, the digital economy has doubled compared to 2000 and has increased its share in the global gross domestic product (GDP) to over 11.5 trillion dollars. This figure corresponds to 15.5 percent of the total global GDP. By 2025, the share of the digital economy in global GDP is expected to be 25 percent. In other words, the size of the digital economy will be worth as much as the GDP of the USA by 2025. This rate has already reached up to 35 percent in the developed countries. In this massive market, digital transformation technologies such as big data, internet of things, artificial intelligence, broadband access will be listed as the building blocks of growth and innovation in the digital economy. And countries’ investments in these technological fields will increase their economic growth and determine their place in the financial balance of the world.

Countries’ investments in the technological fields will increase their economic growth and determine their place in the financial balance of the World

What can you say about Turkey’s position in the digital economy market? Could you tell us what to do to get a share from this market in today’s conditions?

Our leading sectors such as construction, automotive, tourism and defence industries can carry the growth in the short term. But, if we want to ensure sustainable development in the future, we must compete in the digital economy. By 2023, Turkey aims to become one of the top 10 countries in the field of e-transformation, and there are many works carried out to accomplish this. Personally, I think our goal is realistic. Indeed, 2 of 10 great technology mergers taking place in the world last year were in Turkey. Our country is also working on exporting information and communication technologies (ICT) and technology transfer to increase domestic capacity. Turkey aims to increase its ICT sector’s share in the GDP from 2.9% to 8% by 2023. These works and the adoption of digital transformation will increase the potential of our country and aid its competitive power in the global market. Turkey currently follows the transformation brought by the digital economy and quickly adapts to the opportunities this economy creates in the world. It is possible to experience this transformation in the fields of e-commerce, banking and e-Devlet. Shaped by data in Turkey and all over the world, the digital economy is calculated in billions of dollars. Considering that the digital economy is not only about information and communication technologies but also increases the efficiency of every sector affected by digital transformation, we can see how valuable digital transformation and economy is for our country’s economy.

The Deputy General Manager for Public Sector and Investment of Microsoft Turkey Dr. R. Erdem Erkul