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How can fiberoptic cables reduce migration from the east to the west? 19/09/2011 - Viewed 3447 times

I do not know about politics, but technology definitely has the power to make dreams come true. Let’s say that you are in Istanbul and you want to order kebab from the restaurant two blocks away. You pick up the phone and a young employee in Diyarbakır receives your order. The same person receives an order for sushi for a restaurant in Ankara and diverts the order to that restaurant. Maybe that employee also records the appointments made for a hospital in Arbil.

Ten years ago, having this job would have been only a dream for this young person. Now, this dream has come true. He or she now has an alternative option to migrating to Istanbul, which is 1,363 kilometers away from home, and working as a waitperson in a restaurant there. Call centers prove that the desired leap in the eastern parts of Turkey can be accomplished via the service sector, creating a new window of opportunity for the young population living there. Of course, call centers are not the formula for development, but they offer an interesting case through which a new perspective about the service sector and the relevant infrastructure can be developed.

For years, we had the belief that industrialization was the key to the development of the least-developed provinces of Turkey. We thought that development would come automatically as we constructed roads, provided electricity, connected the eastern provinces to ports and the eastern markets and offered tax relief and industrial investment subsidies. So we took this path. The formula worked in some provinces while the desired outcomes have never been reached in some others. After all, geography is a critical factor when it comes to industrialization. As the distance to markets increases, competitiveness deteriorates due to the rise in transportation costs.

However, examining the case of the call centers that started to be established in eastern Turkey in 2005 requires reconsidering the link between geography and competitiveness. This year we conducted a study at TEPAV on the impacts of Turkcell's call center in Erzurum on the local economy (you can read the news article in Turkish: http://www.tepav.org.tr/tr/haberler/s/2326). In 2005, Erzurum had the convenient potential for the call center project with its matured university, trained unemployed human capital in the 18-30 age group, suitable communication infrastructure, location at the intersection of fiberoptic webs as well as a number of factors including relatively low building and land costs and the presence of subsidies. This potential turning into a reality in the last five years seems to have started a new process of private sector-driven transformation in the city which lived in a recession and even decline for years.

The study revealed that provinces like Erzurum, which is quite distant from the markets in eastern Turkey, can become competitive through the service sector, generate employment opportunities for the young population and reverse the brain drain. As an alternative to making large investments in highway or railway construction with the aim to transport goods produced in Erzurum to Istanbul, the latter provides services for the former via fiberoptic cables, which are much cheaper. This is done via call centers today. In the future, we may witness the spread of new software firms, accounting offices, financial analysis services towards Erzurum and other eastern provinces of Turkey.

The way to the leap of Istanbul to a higher league in the service sector is in fact to enable eastern Turkey to share the load and undertake a part of the business processes. The newly blossoming call center sector provides us with a framework within which we can elaborate on the development axis that is just a dream for now.

Before 2005, there were call centers in only five provinces, in Istanbul, Izmir, Ankara, Antalya and Uşak. Due to the rapid increase in costs in Istanbul, Turkcell opened a call center in Erzurum, which served as the first example of the transfer of services from the east to the west. Since 2005, the call center sector has doubled in size and the call center investments of 91 different companies have spread to 23 provinces. The sector currently employs more than 55,000 young people and creates a value over USD 1 billion. Employment in the sector among the Anatolian provinces is expected to reach 20,000 soon. Currently call centers are used rarely by the public sector. But with the growth of the sector into health, tax and infrastructure services, and the employment generated by call centers in the eastern provinces might reach as high as 100,000.[1] The map below shows the provinces in which call centers were opened before 2005 (denoted with yellow) and after 2005 (denoted with green). The activity in the eastern Turkey is really pleasing.

If supported with policies in the right direction, we will be able to witness a shift from the west to the east in service sector investments in the coming period as was the case in industrial sector investments. A company located in Gaziantep receives the support of its call center in Trabzon in solving the problems of a customer who lives in Istanbul. Why not? Entrepreneurs who are faced with high rents for an office space in the technoparks in Istanbul today might in the future establish cooperation with a software firm in Iğdır. The revenue collections of a company in Ankara might be monitored by an office in Hakkari. Whether these dreams come true depends on the implementation of policies in the right direction in many fields, education and information and communication technologies to begin with. Evidently, local administrators, municipalities in particular, have to assume critical roles in selecting suitable technologies and focusing on attracting investors.

If you said in the early 1990s that a mobile network operator would establish a center in Erzurum that employed a thousand young people and responded to your needs regarding mobile phone receipts, you would either have been called crazy or have been misunderstood because, at that point, mobile phones did not exist. From this perspective, it would be great if we begin preparing the eastern provinces for newly emerging technologies and the service fields in advance.

Map: Turkish Provinces in Which a Call Center Is Located

(Provinces in which a call center was opened before 2005 are shown in yellow and after 2005 in green)

Source: The Association for Call Centers.

[1] Information and data on the sector are accessible on the website of the Association for Call Centers at http://cagrimerkezleridernegi.org/

*Esen Çağlar, TEPAV Economic Policy Analyst, http://www.tepav.org.tr/en/ekibimiz/s/1025/Esen+Caglar