Agenda

Turkey’s Level Of Digital Development Will Determine Its Future

Current research shows that generations that will produce, use, and design the future of technology within the next 10-20 years will be the new leaders of the world.

Most people who study the history of the world and humanity already define 2021 as the beginning of a new normal. It is obvious that this new era comes with the need for repositioning not only in individuals and institutions but in countries as well, thanks to the game-changing impacts of digital transformation. And the main factor that will determine this new positioning will, no doubt, be the new criteria that can be called the “level of digital development.” As a matter of fact, current research shows that generations that will produce, use, and design the future of technology within the next 10-20 years will be the new leaders of the world. The digital development level of the countries will keep the score of the race of embracing the new generations. If we could address this level in terms of two aspects as existing assets and potentials, we can come up with game-changing perspectives towards Turkey’s position in the new era. We encounter a cautious optimism when we look at the assets of the information, the sector that carries digitalisation in Turkey on its shoulders.

OUR INFORMATION TECHNOLOGIES MARKET IS GROWING

According to the Information and Communication Technologies Sector 2019 Market Data report that published by the Informatics Industry Association (TÜBİSAD), Turkey’s information sector had seen an average of 17% growth rate on a TRY basis in the four-year period between 2015-2019. And if we specifically look at the 2019 table of this steady growth, which was the last turning point in terms of new normal, we see that the information technologies market has reached a volume of TRY 152.7 billion ($26.8 billion) with a growth rate of 14%. Another field that will directly affect Turkey’s level of digital development as of 2021, e-commerce had a 35% growth in the same four-year period. The export performance of the IT sector went at the level of $1.1 billion in 2019, with an 8% increase compared to the previous year. And 75% of our total exports were made to the European Union (EU) countries.

WE OWE THIS STEADY GROWTH TO FARSIGHTED INVESTMENTS

Turkey’s steady growth in the course of the information sector is, surely, the result of the farsighted investments of visionary individuals and institutions of the field. Pandemic actually opened a window for the opportunity to test these investments by showing that the information sector was more than a need, rather an indispensable element of sustainability. We could have seen fractions in many areas of life from social connection to the supply chain if we were to be devoid of the opportunities provided by information and communication technologies. But the information sector was ready for remote working with its own infrastructure and processes. So, it was not fully affected by the restrictions and provided the services and support required by institutions. When the pandemic accelerated the digital infrastructure development activities of companies and companies jumped on the bandwagon to use the rising e-commerce platforms, severe losses were prevented in the economic activities.

WE PASSED THE DIGITAL TRANSFORMATION TEST SUCCESSFULLY

2020 data of the Turkey Statistical Institute (TÜIK) revealed around 80% internet use rate, with activities particularly noticeable in the use of social media platforms in Turkey. From this perspective, we can say that as a society that is as open to innovation and has high adaptability as ours, we have passed the digital transformation test successfully, especially in business life. This successful but cautious optimism on our existing information assets and their impacts, as well as the current economic risks, present a much brighter picture in terms of our potentials. Because we can witness the achievements of Turkey’s young and free-thinking generations in this entrepreneurship ecosystem. We see that the areas nourished by this ecosystem the best are e-commerce, financial technologies, and game-software.

GROWTH IN TECHNOCITIES SHOWS THE POTENTIAL OF THE IT SECTOR

Even in 2018, Turkey had the three largest venture procurements, supported by the venture capitals of Europe. And in 2020, Turkey released its first “unicorn” with a $1.8 billion valuation. Behind these significant achievements in the field of entrepreneurship, technocities in which the foundations of private sector-academy-entrepreneurship collaborations are laid stand out besides visionary investments. The turnover recorded in technocities in 2019 reached TRY 22.9 billion, increasing by 43% compared to the previous year, with 14% of the total sector volume held by technocities. The growth achieved by technocities shows the high potential of the IT sector in terms of both companies and the number of employees, and it reflects positively on the export figures. This exciting entrepreneurial ecosystem will assume important roles in connecting Turkey with digital ties as well as logistics, cultural, and strategic ties. We can witness the first examples of this in the Belt & Road Initiative.

It is both the result of the shifting of the world’s economic centre of gravity from the West to the East and development that accelerates this process much more. The infrastructure investments as part of the Belt & Road Initiative will greatly contribute to the digitalisation of countries and the world economy. The 11 states within the Belt & Road Initiative are ranked among the least developed countries in the world by the United Nations (UN). The infrastructure investments that could not be carried out in those countries due to financing constraints will be realized thanks to this initiative. These investments will accelerate development and increase the export opportunities for countries. However, Belt & Road is not only about infrastructure investments and trade. These infrastructure investments also include technology and corporate culture exports to more than 60 countries within the scope of the BRI initiative.

DIGITAL SILK ROAD WILL ESTABLISH A COMMUNICATION NETWORK TO DEVELOPING COUNTRIES

This project, which we can call the “digital silk road”, means the establishment of a communication network in developing countries. As well as building telecommunication systems, infrastructure will be created for smart cities and the Internet of Things, and e-commerce channels will be developed. The common culture and common business perceptions of the countries as well as their business capacities will increase and become more sustainable. Many technology companies started to work on establishing transborder communication networks and e-commerce ties. Transborder data flow and trade are developing rapidly. And the entrepreneurial ecosystem will help to build new bridges in this area.

SOCIETAL DIGITALISATION IS ESSENTIAL FOR ALL SECTORS

We can support the level of digital development in Turkey with regulations to pave the way for the digital investments of companies. The digitalisation of society and all sectors are very important as well. Digital transformation awareness will be decisive in Turkey’s goal of transitioning to a digital transformation economy. According to Turkey’s Digital Transformation Index Report published by TÜBİSAD, we had an average level of digital transformation performance among 139 countries in 2019. Despite the improvement we saw in 2020 compared to the previous year, we certainly need to rise to higher levels.

We can produce solutions for our future problems with our innovative, creative, critical, and interdisciplinary analytical thinking capacity… We need to raise our young population, which is our most important asset, with the capacity to solve future problems. In an environment where information changes and becomes irrelevant pretty quickly, we need to put programs to develop digital competencies in action. It is our biggest responsibility to take it upon ourselves to develop and disseminate digital competencies for everyone to allow the use of digital products and services among our citizens…

Informatics Industry Association (TÜBİSAD) President K. Erman Karaca

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