The advent of Turkey’s Industry 4.0
Today, the concept known as Industry 4.0, or the fourth Industrial Revolution, is a natural extension of the technological evolution that has been going on for years. The Industry 4.0 concept engages in work on common use and benefit, particularly to facilitate the digital transformation process for small and medium-sized businesses (SMBs).
The digitalization of Turkey’s industry will have an effect on and contribute to the growth of our manufacturing. Approximately 30 percent of our manufacturing and 37 percent of our exports consist of medium and high-tech products, while medium and high-tech products comprise 63 percent of EU exports. One of our priorities is to increase our exports of medium and high-tech products and achieve the EU average.
High-tech sectors are those most affected by digitalization. Therefore, it is absolutely essential that Turkey digitizes its industry in order to increase high-tech manufacturing and exports. Labor force markets will also be affected by the fourth Industrial Revolution, as digital and advanced manufacturing technologies have the potential to render many jobs and professions obsolete. The most important capital in the new era will be educated and qualified human resources. Therefore, it is critical that we create a qualified labor force that has the competencies required today and can design and manage their own systems.
We also expect the fourth Industrial Revolution to affect the flow of global trade. As I stated earlier, the spread of advanced manufacturing technologies such as layered manufacturing technologies and trade - which went global during the third Industrial Revolution - will begin to be rapidly regionalized, at least in certain sectors.
Turkey’s manufacturing industry is at a fork in the road. If we do not invest in smart manufacturing systems or if we delay these investments, our low added value manufacturing trend will remain largely unchanged, which means that we will lose our competitive edge. The result will be that our share of the global market will quickly erode and our manufacturers will also begin to struggle in the domestic market. Producing and utilizing smart manufacturing systems will facilitate our transition to high value-added manufacturing and help increase our country’s competitive edge in a sustainable fashion.
In order to achieve the digital transformation of our manufacturing industry, we must on the one hand, strengthen our capacity for generating technology, and on the other hand, pave the way to digital transformation for our businesses. Within the framework of these two strategic goals, we plan to continue our work taking into consideration aspects of competency, financing, and infrastructure.
When it comes to developing competencies, we will develop enterprise and professional competencies that will ensure we not only produce technology, but use it in the most effective way. As for financing the transformation, we will ensure that digital technologies and advanced manufacturing technologies are developed by providing more focused support for R&D and innovation. On the other hand, we will assist the digital transformation of our industrial organizations, especially SMBs. Similarly, strengthening infrastructure will include both the development and the use of technology.
We must also develop a sectoral perspective in this endeavor. Digital technologies and advanced manufacturing techniques will impact different sectors in different ways. The impact of digital transformation will not be limited to our industry, industrialists, and industrial workforce, but will have a significant effect in every area of our lives and every individual. If we do not produce technology or fail to effectively utilize technology, our technology deficit will grow, which means our current account deficit will continue to rise.
In the first quarter of 2017, Turkey achieved important success by growing by five percent. Increased domestic demand as well as our exports played a key role in this growth. As the locomotive for growth, the industrial sector determined both the direction and pace of growth. In this new era, we expect our industry to achieve a very high sustainable growth rate.
Dr. Faruk Özlü is the Minister of Science, Industry and Technology of Turkey from the Justice and Development Party (AKP). This is an abridged version of the original article published in Turkish Policy Quarterly’s (TPQ) Summer 2017 issue.