Hosted by OSTİM, chambers of industry and commerce, integrator firms, telecommunication operators, technopark managements, academics, and SMEs came together at the Information and Communication Technologies Sector Cooperation and Development of Domestic Production Consultation Meeting.
The program, which saw broad participation, was also attended by Gazali Çiçek, Deputy Chairman of the Information and Communication Technologies Authority (BTK). In addition to sector analyses, companies also introduced themselves through presentations at the meeting.
The meeting was moderated by Abdullah Raşit Gülhan, Chairman of the Board of Directors of SinerjiTürk Foundation, and Mehmet Ali İnceefe, Secretary of the Information Security Association.
“We need to prioritize production”
In his opening speech at the meeting, Abdullah Raşit Gülhan stated that the most fundamental element of healthy development is production. He noted that the strong will to develop in Turkey since the 1930s was rooted in industrialization, saying, “Today, we are in a place that is the heart of production, whose foundations were laid in 1967. OSTİM was founded in 1967 by a handful of entrepreneurs, and it has become such a massive place with 5,200 employees. There are many such Organized Industrial Zones in our country. To prevent the repetition of past events, we need to learn from them at the right point. If we don't learn those lessons, history will inevitably repeat itself. If we don't learn from those mistakes, they will come back to haunt us again and again. We cannot avoid this. We must prioritize production. In the cycle of societal prosperity, if you produce low, you will create low income, and if you produce high, you will create high income and high employment.”
Abdullah Raşit Gülhan stated that in international competition, there is no chance of success without combining R&D and production and establishing pre-competitive collaborations, and that they want to create collaborations that will generate synergy together.
“The domestic content requirement introduced in the 4.5G tender is a significant opportunity”
OSTİM Board Chairman Orhan Aydın stated that when examining the development methodologies of developed countries worldwide, one encounters the phenomenon of clustering. Explaining that ministries are also focusing on this issue, Aydın said, “One of the priority and specialized sectors in Turkey is defense. Turkey has accomplished many things in this sector that the world hasn't been able to. We highly value small businesses, SMEs, and industry. There is no other way or method to exceed $10,000 in our country. I thank the Ministry of Transport, Maritime Affairs and Communications. The Undersecretariat of Defense Industry is behind the work done in the defense industry. There has been years of effort, and their work touches even our SMEs in OSTİM. Currently, the R&D Department and the Industrialization Department of the Undersecretariat are aware of what the SMEs in OSTİM are doing. Because they are involved, they follow what they are doing, and they manage that sector.”
Orhan Aydın, describing the domestic content requirement in the 4.5G tender as a "significant opportunity," continued: "Our Ministry of Transport, Maritime Affairs and Communications has accomplished something very important during the 4.5G tender, and I want to emphasize this very carefully; it's critical. This isn't something that just goes by. The clause '45% will be manufactured by domestic industry' is revolutionary. It's very important. We experienced this in rail systems. In the Ankara Metro tender, one sentence stated: '51% of these products will be manufactured by domestic manufacturers.' This sentence changed the order of the transportation sector in Turkey and the world. It changed the perspective, stance, manner of speaking, and overall relationship of all foreign companies with Turkey."
“We must bring this sector to our country”
President Aydın, explaining that OSTİM has clearly observed how a single sentence can change things, touched upon the following points: “Therefore, when this 4.5G issue came up, we saw the same scenario. We said, ‘Thank God, it will be done by a very conscious person, with 45% by domestic industrialists.’ It's a strategically written document. We must all stand behind it. We must do whatever needs to be done without leaving it solely to the mercy and favor of the companies to whom we awarded the tender. We must bring this technology and sector to our country. Because this sector is an area where Turkey spends the most money. Why can't we do here what we did in defense? So how will we do it?”
Companies make individual efforts, they compete, but that's not enough. First, our companies need to come together. If we want prosperity and solutions to problems, our companies must come together. We need a tighter network, closer cooperation, and we need to be aware of what each other is doing. We built our rail systems exactly like that. We gathered all the talent in Turkey, and we saw what could be done in the country.
"Companies should come together and form a collaborative network. Our aim and desire is for our country to demonstrate a competitive stance in this sector and embark on a journey. Let's embark on a technological journey where we can meet our own needs in the future. We can do this. This is an important opportunity. Turkey is currently talking about technology, R&D, and exceeding $10,000 per capita income. If we don't produce this solution in telecommunications, Turkey cannot exceed $10,000 per capita income."
“Competition increases with production”
Gazali Çiçek, Deputy Chairman of the Information Technologies Authority, also emphasized that in a country, prosperity and living standards can only rise by increasing competitiveness.
Stating that increasing productivity is necessary to enhance competitiveness, Çiçek said, “The most important tool for increasing productivity is innovation. Therefore, innovation is the key to economic growth, increased employment, and quality of life for countries. Only through this can the resources of the country and society be transformed into products and services, and economic and social value be obtained from these products and services. Research shows that countries can only grow for a certain period thanks to increases in export rates or domestic demand; however, the long-term and sustainable nature of this growth depends on the country's innovation performance.”
Reminding that the economic development of our country depends especially on the production and export of high-tech products, Gazali Çiçek stated, “According to World Bank data, while the export of high-tech products in our country is around 1.8 percent, this rate is 16 percent in Germany, 18 percent in the USA, and 26 percent in Korea. If we consider the electronic communications sector as a sector that generally uses high-tech products, it will be more clearly understood that the goal we have set with the 4.5G authorization is a step towards increasing the number of SMEs in the manufacturing industry and especially developing SMEs that produce high-tech products.”
Gazali Çiçek pointed out that innovation efforts should move beyond focusing on individual projects and instead concentrate on developing and sustaining a collaborative system.
“Relationships should be strengthened through clustering”
Çiçek stated, "In order to move our economy to the next level, it is of great importance to improve investment opportunities and conditions, accelerate and prioritize the establishment of innovation systems, and create synergy that will strengthen and activate close cooperation-based relationships such as clustering initiatives."
"Aware that SMEs are the lifeblood of our economy and of their importance to it, significant targets for SMEs have been set in our country's policy documents. In order to support SMEs in our own sector, mobile operators have been obliged to purchase products and systems from SMEs established in Turkey for this purpose," he said, underlining the importance of SMEs.
Vice President Çiçek explained the obligations imposed on domestic industry in the 3G and 4.5G tenders as follows:
“As part of the 3G authorization, we imposed an obligation on our mobile operators to procure at least 10% of their investments in electronic communication networks (hardware, software, etc.) from SMEs established in Turkey to develop products or systems. Our operators have successfully fulfilled this obligation from the beginning. Thus, by ensuring that a significant portion of the substantial investments in the mobile network are sourced from SMEs, our SMEs have become an integral part of this sector.”
As a result of the tender held in 2015, we took another step forward and imposed an obligation on our authorized 4.5G operators to source at least 10% of their investments in electronic communication networks from products manufactured in Turkey by SMEs established in Turkey to develop products or systems. In this way, we took our second step towards achieving our goal of creating a production ecosystem.
Our operators are also required to procure at least 30 percent of their 4.5G investments from domestic products within the first year following authorization, at least 40 percent within the second year, and at least 45 percent within the third and subsequent years.”
“The sector failed to capitalize on the opportunity”
Gazali Çiçek stated that, as of now, the sector has not been able to fully benefit from this opportunity in terms of the domestic product obligation, and continued his speech by saying, “Our operators appear to have fallen far short of expectations and obligations in the first year regarding the domestic product and SME-sourced product ratios that they are expected to fulfill under the 4.5G authorization. However, our institution is continuing its work to investigate the reasons for this, and I want all parties to know that we will be following up on this issue.”
Therefore, I believe that in order for 4.5G operators to fulfill the aforementioned obligations in accordance with the relevant legislation, and to create a domestic and national ecosystem in the strategically important electronic communications sector, it would be beneficial to initiate an effort, primarily involving companies and operators operating in the electronic communications sector,” he concluded.
