TÜBISAD Manifesto
The IT sector will determine Türkiye's future, and the transition to an ecosystem economy will determine the IT sector's future
Rachel Carson, one of the most important female scientists in history and an environmental activist, once said that “in nature, nothing exists alone.”
This statement, which emphasizes the interdependence of each component in nature, also applies to today's organizations and economies.
Organizations and economies are ecosystems that interact with each other based on advancing technologies and scope, existing in an interplay which contains a balance and focus on sustainability.
We're committed to carrying out important work to raise awareness of this concept the “Ecosystem Economy”, and to shape our perspectives through this awareness.
Looking back as the first quarter of the 21st century comes to a close, we can see from the developments we have experienced that a country's future is intricately tied to the technology ecosystem they have created and the share they get from global markets with the power of said ecosystem.
Considering that Türkiye is the safest, most scaled and most developed country in terms of competencies within our region, we would like to outline and emphasize the steps we need to take to turn this into value.
As the Informatics Industry Association (TÜBİSAD), we addressed necessary steps to be taken by the public, private sector and the technology ecosystem to ensure that Türkiye's technology ecosystem is an effective power at a meeting titled “The Future of the IT Sector and Ecosystem Economy,” held at İş Towers on November 18.
Taking into consideration that the future of our industry will determine the future of our country, it is critical that we address growth under three headings: Growing with Technology, Growing with Ecosystems and Growing with Investment...
It is quite clear that the future of our country will be shaped by technology. Shaping the future of technology in turn requires a great national mobilization. Turning our technology ecosystem into a powerhouse should be a non-partisan, essential duty for all of us. We must act with a strong sense of unity in light of this goal.
As Mr. Hakan Aran said, “It is the duty of all of us to grow the ecosystem”. Anyone who produces technology, uses technology, is a stakeholder of the technology sector, serves the effective use of technology, and is a stakeholder of technology in any capacity, should be a part of this mobilization.
How can we accomplish this?
- From In-house to Outhouse: By productizing the sectoral solutions developed in-house by institutions and participating in the ecosystem economy
- From Data Centers to Value Centers: By moving institutional data centers into the ecosystem to transform them into value centers
- From Price Competition to Value Competition: By transforming data into economic value, starting with the fastest growing areas (Data and AI) and gaining a share of global markets
- From Technical Services to Managed Services: Ensure that our ecosystem companies are able to create or transform into scaled service companies in the world's fastest growing innovative service markets
- From Brain Drain to Reverse Company Migration: By improving the incentive system and investment environment; focusing on transforming brain power into value and encouraging company migrations into Türkiye, instead of focusing on brain drain
- From Invested to Investing: Developing an investment environment that will pave the way for reverse acquisitions in order to transform investee companies into companies that can invest in the future, and encouraging the ecosystem with strategies to be determined specifically for this issue
- From singular and small structures to scaling through mergers: By implementing effective incentive methods that will enable our companies to grow and scale by merging, paving the way for their transformation into regional and global brand companies.
To make these happen, we need:
- The IT sector's ecosystem management structure and stakeholder relations should be reorganized and a strategy specific to the IT sector should be built,
- Studies such as the Ministry of Trade's “Potential E-Export Markets” report should be taken as reference and similar studies should be conducted,
- Scaled incentive mechanisms that support productization and growth rather than incentives that support projects or customers should be created,
- In order to develop the cloud and data center market regionally and to create specialized players in this field, incentives should be provided–especially in terms of energy–and customized incentives that support growth and account for the needs of the sector should be created.
- Based on the fact that “without data, there is no artificial intelligence”, regulations to support “open data” should be implemented,
- The success and incentive mechanisms of technopolises should measure the extent of university-industry cooperation and the value they will create,
- R&D should be supported in high volumes, as it often is in global success stories, and patent support and applications should be increased,
- Strategies that prioritize e-exports should be created.
All stakeholders have a role to play in this mobilization:
Ecosystem:
- Growing and scaling by merging,
- Strengthening corporate structures and being ready to receive investment,
- To be able to offer the services of global technology manufacturers at a global level,
- Putting the acquisition of companies abroad for growth and globalization on the agenda,
- Believing that the way to productization and becoming a global brand is to get investment at scale
Technology decision makers across all sectors:
- Being open to collaborating with the ecosystem instead of developing technology solutions inhouse
- To move towards value competition rather than price competition when acquiring or providing Technology
- Prioritizing the purchase of services over resources, products over projects
Public:
- Scaling up sector-specific incentive mechanisms
- To improve the country's investment climate and facilitate the investment of scaled funds in our country
- Measuring University-Technopolis cooperation with criteria that will increase the value talent pool
- Develop new and tailored incentives for growth and expansion at scale
- Facilitating and encouraging technology companies to invest in our country
- To take part in creating and supporting ecosystems in technology verticals
Analytical studies focused on growth through the ecosystem:
Below are summaries of the analyses prepared by Deloitte Türkiye, KPMG Türkiye and PwC Türkiye on the role of the ecosystem economy in increasing the share of the Turkish ICT sector in the global market.
PwC Türkiye: “Türkiye's transition to a technology ecosystem economy should be achieved by becoming a center of attraction for foreign investments and increasing competitiveness and integration in the international arena”
- Türkiye has a very limited share in the global ICT economy at the global level.
- While ICT sector FDI is a small fraction of all FDI, it has gained a permanent foothold in the Turkish economy.
- According to the Norwegian Wealth Fund's annual report for 2023, the largest portion of the Fund's international equity investments was made in the technology sector with 22.3%, and 51.9% of the total return on investments was obtained from this sector. The Technology and Telecom sector accounts for only 4.3% of the Türkiye Wealth Fund portfolio.
- Scaling up the high value-added ICT sector in the economy can trigger the digital transformation of other sectors, leading to overall productivity growth and increased competitiveness.
- Strategic incentives for the ICT sector not only boost high value-added production, but also support the sustainable growth of the economy.
- Incentive and support mechanisms should be restructured to cover not only manufacturing and innovation-oriented ventures but also services and service exports, taking into account the current dynamics of the ICT sector.
Deloitte Turkiye: “While cloud computing and artificial intelligence stand out as two important elements of the ecosystem economy, developing these elements requires a strong connectivity infrastructure”
- In Türkiye, the share of the digital economy in the national economy is below potential.
- One of the most important reasons why Türkiye lags behind in the digital economy is the lack of an ecosystem
- In the US, Germany and the UK, the digital economy accounts for more than 65% of the national economy. In Türkiye, the digital economy accounts for 6% of the country's economy, while our share in the traditional economy is 0.85%.
- In Türkiye the digital economy, and cloud computing and artificial intelligence are two important elements of the ecosystem economy and a strong connectivity infrastructure is required to develop them.
- It is necessary to expand digital accessibility in order to extend equal opportunities to all parts of the country.
- Long-term and low-interest loans can be offered for infrastructure investments with high costs and long payback periods.
- With government incentives, attractive financing options can be offered for projects that meet certain criteria, reducing investors' risks and enabling projects to be realized quickly.
- Banks can invest directly in the technology and infrastructure ecosystem by financing large infrastructure projects or forming strategic partnerships.
KPMG Türkiye: “Organizations can successfully productize the solutions they develop in-house, bring them to a strong position in the sector and contribute to the ecosystem”
- Opening up the solutions developed by organizations for their own needs to the sector can support innovations in the sector and promote competition and innovation.
- In order for Türkiye's IT ecosystem to become a global competitor, a strong governance structure must be established, synergies must be created among stakeholders, and unique solutions must be developed by taking inspiration from global examples.
- Ecosystem Management and Coordination: Organizations that manage the ecosystem can coordinate firms' projects and play an active role to prevent them from working on similar solutions.
- Roadmap Development: Ecosystem managers can create a sector-wide innovation roadmap. This map would show which areas have gaps and which areas require more collaboration to help decide focus points and avoid clashes.
- Collaboration Platforms: Platforms can be created to encourage communication and collaboration between companies within the ecosystem. On these platforms, companies can avoid working on the same product by sharing projects they are developing, existing solutions and future plans.
- Incentive Programs: Incentive programs can be created for the development of different and innovative products.
- Innovation Competitions: Innovation competitions organized among companies within the ecosystem can encourage companies to stand out in different areas and reduce competition on the same product.
- Privatization Incentive: Firms in the ecosystem can be encouraged to specialize in certain areas.
- Cluster Approach: Firms working on similar products can be gathered in certain clusters, creating a common product or service collaboration environment.
- Patenting and Intellectual Property Rights: Firms can patent the innovative solutions they develop.
- Joint Development and Licensing Models: Joint development and licensing models can be established between companies for specific technologies or solutions.