Türkiye is a "major manufacturing base" globally, Treasury and Finance Minister Mehmet Şimşek stated Saturday, adding that the country is investing "significantly" in AI preparedness, which he said was key in terms of human capital and digital infrastructure.
The minister delivered these remarks at the Doha Forum 2024, where he was one of the speakers on the panel "Competitiveness in the Era of Intelligent Economies."
He said that when it comes to basic metrics such as fiber optics length, internet penetration, broadband subscriptions, Türkiye was "in good shape," citing the AI preparedness index by the International Monetary Fund (IMF).
"We are ahead of the emerging market average," he said, adding, however, that "clearly more investment is needed" in areas such as hyperscale data centers.
"The U.N. also does an index on readiness in frontier technologies and again relative to our per capita GDP (gross domestic product), which is upper high middle-income status, we are ahead of our peers," he said.
"When it comes to manufacturing, I think, the challenge for us is to enhance complexity, economic complexity, meaning moving up the value chain," he further pointed out.
"That's why when you look at last decade or so, we have almost doubled our R&D spending as a percent of GDP," he added, noting that it is slightly over 1.4% and still low compared to advanced economies.
He highlighted the spending of the private sector in this regard, which he said accounted for over half of it, but also suggested that the government provides "huge incentives."
Şimşek said Türkiye has some 1,300 R&D centers, over 300 design centers and over 100 technoparks, calling them some of the engines of this ecosystem which would help them move up the value chain and stay competitive.
"For us, the key is really SMEs (small- and medium-sized enterprises), the digitalization of SMEs, because that is where the productivity gap comes in," he assessed.
"Relatively large companies or medium-sized companies are, you know, they are capable and they are fairly competitive but smaller companies, this is really where digital skills are going to be very important," Şimşek explained.
He went on to say they are trying to design programs to help smaller companies boost productivity through digitalization, adding that this is the "key challenge" going forward.
