September 5, 2022

TÜBİSAD announces Türkiye’s digitalization grade

According to the “Türkiye’s Digitalization Index Report” prepared by the Informatics Industry Association (TÜBİSAD), Türkiye’s digitalization rating rose from 2.94 out of 5 in 2019 to 3.06 in 2020. Türkiye, although as all the components of the index showed an improvement compared to last year, took place in “average” category in digitalization within international benchmarking. At the meeting where the report was evaluated, it was noted that Türkiye should take a rapid strides toward digital transformation in order to take advantage of the new opportunities opened in front of it. 

Informatics Industry Association (TÜBİSAD) shared the “Türkiye’s Digitalization Index Report”, which examines the digitalization status of Türkiye’s economy and society, at a meeting attended by representatives of the IT sector and Deputy Minister of Industry and Technology Mehmet Fatih Kacır. The report, created by analyzing the views of private sector and public representatives, surveys filled by members of the business world and data from 139 countries, reveals four main components: transformation, ecosystem, competence, usage, and Türkiye’s Digital Transformation Index in10 different dimensions.

Türkiye’s digital transformation grade

This index study, which will be repeated every year, reveals the point at which the Turkish economy and society are at, Türkiye’s digital transformation performance, factors that negatively affect performance and what needs to be done to improve performance.

According to the report, Turkey’s Digital Transformation Index is calculated as 2.94 in 2019 and 3.06 in 2020. Türkiye’s rating is defined as “average” in the evaluation of a score between 1 and 5. Noting that there is an improvement from 2019 to 2020, TÜBİSAD Chairperson K. Erman Karaca said, “We all observe that developments in the field of Information and Communication Technologies lead to significant transformations in all areas of economic and social life. Perhaps the most striking indication of this was the COVID-19 outbreak process that we lived with the whole world. Information and communication technologies played a very important role in the fight against the pandemic and in the continuation of the usual flow of life from education to the economy. Looking at the situation in terms of Türkiye’s information and communication technologies, although being ahead of many countries, we see that there is a lot of distance between the leading countries. If we examine this average performance of Türkiye in some detail, we see that the capacity to benefit from new technologies in the country varies greatly according to regions, sectors and company types.”

“Türkiye needs a serious package about technological moves”

Karaca said “Technology will be the biggest factor in the return of economic and social life to normal. The post-pandemic economic order will depend much more on the use of technology than before. Technology policies will be as important as money and finance policies to compensate for the destruction of the pandemic in our economy. These days, with the announcement of Türkiye’s serious technological move package;

• As a first effect, financial markets will be given a very positive message. In this way, an important move will be made in the formation of investor confidence.
• Secondly, such a package will be important in wounding our SMEs and tradesmen who have been in a difficult situation during the outbreak.
• Third, the technology move will rapidly lift our country after the epidemic; it will accelerate the return of both economic and social life to normal.
• Fourth, strengthening the digital hardware and software infrastructure will strengthen both our economic and healthcare systems and strengthen our structure in the face of undesirable situations such as the resumption of the outbreak.

Since information and communication technologies will play a key role in overcoming the harm caused by the pandemic, it is clear that we should be trying to close our performance gap as soon as possible. I wish that this index, which we have announced, will make significant contributions to Türkiye’s digitalization performance.”

Speaking at the Panel section of the meeting, TÜBİSAD Board Member Mehmet Ali Akarca said, “We live in an ‘individual digital consumption’ society in Türkiye where individuals spend an average of three hours a day on the internet and social media. By moving information technologies outside the use of devices or social media in the individual; we should support the transition to ‘individual digital producers’, which implements innovations brought by digital technologies in business models, entrepreneurship ecosystem and creates added value in the economy.”  Akarca also stated that 66 percent of the country’s population uses 5,180 services offered at the e-Government Gateway, and that in 2023 it is aimed to reach 80 percent, “This shows that almost all adult individuals in the next three years will be using digital services. From social security service scheme to questioning case files, tax debt, deed information, we are able to access many digital services that make our daily lives easier. This shows us that many successful and exemplary applications are being implemented in our public institutions. The progress of our country especially in e-Government services and its ability to use technology is at world standards. The digital transformation of public institutions in our country is admirable. We need to catch the public institutions in digitalization, especially in private institutions,” he said.

Speaking at the panel TÜBİSAD Board Member Serdar Urçar said that “What is really critical for the Turkish economy is the ability of traditional and successful companies to achieve digital transformation. If the main backbone cannot be transformed, it is impossible for us to become a digital economy and get to the point we deserve in global competition. On the other side of the coin, there’s startup ecosystem. We need to increase the number of digital borns at great speed and create a climate that will increase their chances of success. Building a technology ecosystem that will create step-by-step successful global initiatives should be one of our most strategic goals as a country.  Finally, we should not be mistaken for seeing all this digital transformation move as a technology initiative. There are people at the center of this strategic transformation. The increase in digital literacy and competence should be one of our most important goals and we should update our education and training policies accordingly.”

Namık Kemal University Faculty Member Assoc.  Dr. Ümit İzmen pointed out that in order to benefit from new opportunities opened up after the pandemic in the world, Türkiye needs to rapidly gain ground about digital transformation.  İzmen made the following statements about the restrictions and solutions that stand out in the report for Türkiye’s Digital Transformation: 

Vision Needs for Information and Communication Technologies: 48% of firms see the lack of vision in both the public and private sectors as one of the top 5 constraints. It’s not enough for the government to have awareness about it. As a whole society, we need to be ready for this process.

Suggestions:  

• The highest level of ownership of the necessity of digital transformation and the design of digitalization policies not only for the public services but for the whole country
• Compliance of the regulations with international standards
• Creating regulations by taking into account sectoral differences
• The integrity of public institutions and organizations in their projects
• Adopting an approach as libertarian as possible in accessing the Internet

Development of the Entrepreneurial Ecosystem: 33% of the sector sees the lack of development of the entrepreneurial ecosystem as one of the major constraints to digitalization. 

Suggestions:  

• Improving the competitive environment, especially in public procurement,
• Supporting the institutionalization of companies
• Active use of the incentive system and supporting the sector with tax relief and exemption
• Following a R&D policy focused for the design of technology and R&D supports
• Supporting projects with high likelihood of success in high-tech product and service development
• Taking into account international trends in regulations and tax rates 

Improvement of infrastructure: The development of fiber infrastructure will transform the whole economy

Suggestions:  

• The state to play a facilitative and accelerating role about common infrastructure
• Optimizing the infrastructure facilities of public institutions affiliated with different ministries
• Enabling firms to move through platforms to reduce data retention and processing costs
• Improving the competitive environment for the development of infrastructure

Development of Qualified Workforce Resources: 73% of firms see the lack of qualified labor as one of the top five constraints

Suggestions: 

• Carrying out studies to increase digital literacy
• The activities carried out by the Ministry of Industry and Technology within the framework of the development of digital competencies, university-industry cooperation, R&D and TÜBİTAK supports are important.
• Education and human resource improvements should be made taking into account the needs of not only Türkiye but also of the region
• Changing, updating curriculum and opening new programs in high schools and universities taking into account the needs of the sector
• Promoting women’s employment in the field of ICT
• Development of wage and migration policies that will ensure that people with high digital competencies stay in the country and attract human resources from abroad

Ensuring Economic and Social Transformation: Economic difficulties in recent years, especially the decrease in the value of TL has had a negative impact on technology investments. The financial pressure on firms sparked by the outbreak  could lead to the postponement of technology investments even if they were requested.

Suggestions:

• Although the needs and priorities of different sectors are different, the macro framework would be primarily improved and the competitive environment be ensured
• The need to act simultaneously in both areas between options to empower domestic suppliers and make digital transformation quickly
• Developing models that bring companies together to scale data and take advantage of network impact
• With digital transformation, consumption patterns, habits and forms change. Dissemination of digital literacy for demand for digital products
• Launching a comprehensive education and awareness campaign to embrace the entire society
• In this campaign, important tasks would be also given to NGOs.  

Supporting Digital Transformation Processes of SMEs: SMEs are the segment where the destructive effects as well as the positive effects of digital transformation will be felt most intensely.

• Informing SMEs about the requirements and processes of digital transformation
• Support for digitization of SMEs to change traditional ways of doing business
• Development and promotion of business models that will bring SMEs together so that SMEs can benefit from economies of scale

Source: Informatics Industry Association of Türkiye (TÜBİSAD)
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