Turkey cannot improve its domestic value added unless solid applicable steps are taken about intellectual property rights.

What is the similarity between Turkey and China? “Our growth performance, obviously” is not the answer. There is no similarity in that regard. I believe that Turkey can compare to China with respect to low value added. Take the iPod production in China, for instance. We used to listen to music with cassettes on our Walkmans. Now it is the era of iPods and online audio downloads. According to one study, China sells iPods for 150 USD each. Out of this amount, the value added of Chinese workers is only 4 USD. That is, the value added is substantially low. An iPad also involves components with high value added, but those are imported. Is the issue any different in Turkey? No, it is not. Let me tell you why.

Thanks to the Customs Union agreement, Turkey has become one of world’s important automobile producers. Turkey is the sixteenth biggest automobile producer in the world and the sixth in Europe. Eight different brands of automobiles are produced in the country. Turkey produces automobiles worth thousands of dollars each; but the domestic value added in each automobile produced is only around 250 Euros. Domestic value added constitutes a small proportion of the total value added. Then, Turkey in automobile production is like China in iPod production.

Nowadays everyone is discussing on various platforms how to devise steps that will improve the domestic value added. It is emphasized that efforts should concentrate on the higher segments of the value chain that generate higher value added. The key importance of innovation is stressed on all occasions in this context. But the core of the matter is ignored. I think that Turkey cannot improve its domestic value added unless solid applicable steps are taken about intellectual property rights. A country that gives credit to banditry cannot improve its value added or concentrate domestic production into high-value added sectors. Where bandits rule, lawlessness goes over your head. In such an environment, human knowledge and high value added cannot be attained. Neither can intellectual rights be protected. What happens? You develop an innovation or formulize a medicine, apply to the ministry and someone copies your formula. Then what happens? No one ever tries to develop a new medicine.

Turkey hastily has been wandering here and there to advance the R&D and prioritize innovation-based production. But it seems that we do not know exactly at what we are aiming. It appears that it is an integrative strategy that Turkey lacks. Everyone is taking a step that goes in vain since the steps that should have preceded it have not been taken. In my consideration, Turkey is in need of a mechanism that will conduct the orchestra. In this context, Turkey has to prove that it has the operational capacity needed to fulfill the promises made. Otherwise, large international companies and global value chains will locate only their marketing units in Turkey while production and R&D will be secondary concerns. Otherwise, technology transfer offices in Turkish universities will be useless and industry-university partnerships will remain in name only. Turkey will not be able to mobilize its knowledge and all the accomplishments will be wasted. Human knowledge will escape to other countries. Humanity wins while Turkey loses.

This commentary was published in Radikal daily on 30.09.2011