Turkey's software exports on the rise, ICT industry grows 18 percent

TIMUR SIRT
ISTANBUL
Published 03.06.2016 23:23
Updated 03.06.2016 23:26
Turkey's software exports on the rise, ICT industry grows 18 percent

The latest report by Turkey's Informatics Industry Association shows that the information and communications technology industry achieved 18 percent growth and software exports take the biggest share with a 49 percent increase

The information economy challenges companies that are more than 100 years old by putting customers at the center of business systems. The digital transformation has become one of the most fashionable concepts both in Turkey and around the world. Leaving unworthy agricultural products to rot was an ordinary practice in Turkey only 17 years ago. The most important reason why tomatoes do not fill the shopping baskets in Istanbul while they flow into the sea in Antalya is the incapability of software programs. To make it more explicit, it will be possible to prevent agricultural product loss through better planning in terms of logistics, agricultural practices, smart storing, distributing and marketing operations. A recent study revealed the latest numbers and current situation of the information industry in Turkey.

Workforce capability

The software sector, which will prepare for a digital transformation for all sectors in Turkey, has made a move. While the growth in software and service sectors draws attention, information technology exports have reached TL 2.2 billion ($745.5 million), TL 1.36 billion of which comes from the software sector. According to the Informatics Industry Association's (TÜBİSAD) information and communication sector market data from 2015, the sector realized TL 83.1 billion in revenues and grew by 18 percent. Employing 113,000 people in total, the sector's exports reached TL 2.2 billion as well. The number of entrepreneurs needs to increase, however, rather than the number of employees. Turkey only has three companies whose total value has reached TL 1 billion over the past 15 years. Apart from the companies including Yemeksepeti, Gittigidiyor and Pozitron, Turkey has not yet undersigned an important enterprise. Additionally, these companies were only acquired by international corporations.

TL 2.2 billion in exports

There is an urgent need for information enterprise capital in Turkey. In 2015, the sector's total exports amounted to TL 2.2 billion, doubling the previous year's export. More than 60 percent of the total export came from the software industry with TL 1.360 billion. Software exports have grown 49 percent compared to previous year, and 14 percent of the turnover obtained from software industry comes from export while 30 percent of total exports come from techno cities. According to the report, the countries with the largest export volume are Azerbaijan, the United States, Cyprus, the United Kingdom and the United Arab Emirates. Evaluating the situation in dollars, the total amount of exports in 2015 reached $788 million. The hardware and software industries accounted for the largest amount of growth in terms of dollar-denominated values, with 29 percent and 20 percent, respectively.

Information sector grows 18 percent

The total sector growth of information and communication technologies reached TL 83.1 billion with an 18 percent growth in 2015. While the growth of information technology, one of the two main factors responsible for total sector growth, rose to TL 27.4 billion, increasing 19 percent, communication technologies rose up to TL 55.7 billion, increasing 17 percent. Moreover, the share of information technologies within the total market reached 33 percent.

Information technologies reach TL 27.4 billion

The largest amount of growth in the category of information technologies went to the services sector with 25 percent, achieving the highest increase compared to previous year. Therefore, the share of the information technology software and services sectors achieved 53 percent growth. The increase in the quality and quantity of the techno cities made positive contributions to the information sector's growth as well. Reaching up to TL 27.4 billion in growth in 2015, the information technology sector's subcategories grew as follows:

- Information technology hardware: TL 13 billion

- Information technology software: TL 9.7 billion

- Information technology services: TL 4.7 billion

Communications technology surpasses 55 billion TL

Last year, the domestic production rate in information technology software and services was around 83 percent, while it was only 18 percent in terms of hardware. Turkey's communications technology industry achieved TL 55.7 billion growth in 2015.

- Communications technology hardware growth: TL 16.1 billion

- Electronic communications growth: TL 39.6 billion

Growth will continue

Based on the study results, a growth rate between 5 percent and 9 percent denominated in dollars and 15 percent to 20 percent denominated in Turkish lira is expected in the industry this year. As usual, innovation as well as research and development investments play a big role in facilitating such growth. Compared to 2014, employment increased 2.2 percent and reached 113,000 employees in 2015. With a 66 percent share in total, the information technology sector employed more than 74,000 people last year.

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