TÜBİSAD/Kızıltan: Incentives should be given to high value-added production

HANDE BERKTAN

Levent Kızıltan, Chairman of the Board of the Information Industry Association (TÜBİSAD), said that the growth in the information and communication sector, which reached a market size of 12 billion dollars in 2022, could not make the same positive contribution to the digital transformation processes of small and medium-sized enterprises.

The digital transformation index of companies in Turkey decreased from 3.21 to 3.12 in 2022 compared to the previous year.

TUBISAD President emphasized that SMEs and entrepreneurs developing products with high added value cannot reach sufficient funds and that although we are one of the countries with the most incentives, incentives should be given to entrepreneurs who produce more qualified products.

“The information and communication sector has grown by 8 percent in dollar terms in 2022”

Regarding the growth in the information and communication sector, Levent Kızıltan said, “The information and communication sector was a sector that could not achieve rapid growth until four years ago. Entrepreneurship ecosystem entry into this sector, technology development zones and R&D centers providing features for entrepreneurs and our companies, the development of technological equipment developed with the defense industry, and the need for technology equipment due to the pandemic have changed the sector in a positive way. The industry entered a growth trend and reached a market size of 12 billion dollars in 2021 from 10 billion dollars.

This growth continued in 2022 and we will see 8 percent growth in the sector on dollar basis again. We will announce the market size of the information and communication sector in May. In the first 3 months of 2023, in parallel with the expectation of an increase in foreign currency, the sector continued to grow due to the earlier demand of consumers and the needs.”

“Foreign investors avoid investing in a country where the rules change in a day”

Stating that qualified foreign investors who will provide production with high technology pay great attention to the business and entrepreneurship ecosystem in the country where they will invest, Kızıltan said, “Foreign investors are uncomfortable because the rules change from one day to the next, then I will invest here instead of investing in structures with developed ecosystems in Europe. He says that he will invest in countries such as Estonia and Poland. For example, when it comes to taxing the investments that entrepreneurs receive with emission premiums, of course, they should be taxed when money is to be earned, but the real story is that taxation of the investment they receive, that is, the capital, when they need resources at the stage of making money, is against the spirit and nature of the business. “Taking tax from the new small entrepreneur who has not yet made a profit will have negative effects on the business world and the ecosystem,” he said.

‘Leaving aside, we have to provide good education to more of our young people’

Regarding the problems in the entrepreneurship ecosystem, TÜBİSAD President Kızıltan said, “The main problem stems from not being able to reach the point we want in the use of technology. We are developing good things, for example, applications in the banking sector are far ahead of many other countries. When we come to today, we are on the brink of a wave of technological transformation. If we are to address today’s problems, first of all, we have a human resource problem. We need much more technology workers and well-educated young people. Far from losing, we have to develop and train new technology workers. We should develop human resources not as today’s human resources, but as the future human resources. If you train as the human resource of yesterday, you cannot go to the future,” he said.

“The innovation world is not the indoor world”

Pointing to innovation as the second problem to be solved, TÜİSAD President said, “It is necessary to create the elements that will create innovation. Innovation does not happen from today to tomorrow. People’s minds should not be in a frame, it is necessary to bring systems that can work in much more open environments. It is necessary to develop environments that will create innovation.

Cultural change is needed. It is necessary to develop environments that will create innovation. Today’s technology R&D centers are not enough to develop new generation technologies. Then our suggestion is that Türkiye should be considered as a technology development zone as a whole. It is not possible for people to work at 9 am and 6 pm like blue collar workers. We have extended the obligation to work in these technoparks until the end of the year with the regulations, but as in the world examples, the obligation should be abolished. Technoparks should not be seen as just physical entrance and exit places.” he said.

“Technology Bank of Türkiye should be established to provide funds to technology entrepreneurs”

Emphasizing the necessity of establishing mechanisms that provide qualified funding, Kızıltan said, “When we say which of the enterprises and SMEs need funding, this should be properly analyzed and those producing high value-added products should be identified and funded. Establish the Technology Bank of Türkiye. Let it evolve into a model that supports entrepreneurs who develop technology in Turkey, together with venture capital investment funds and the stakeholders that make up these funds. Today, many public institutions in Turkey create funds, there is an incentive mechanism.

Can the entrepreneurship ecosystem take full advantage of these incentives? We have to make it healthier, much more qualified.” made its assessment.

“Update, competitiveness and transformation in the export model are a must”

TUBISAD President: “We must be competitive in digital transformation. We can give an example of our favorite automotive industry. We must become a country that will produce high-tech products. If we do not think about electric vehicles and their sub-industry today, we will fall behind. All these must be linked to the economic program. The export model today is the export model introduced 30 years ago. The world is transforming, economic models, export model should be updated. The production and export model should transform into high added value, which can be achieved by SMEs producing high value added products. SMEs should be supported in this transformative direction. The supports should be well identified and given to qualified productions.” made the statement.