Attended by around 500 businesspeople, the event brought together speakers from government, academia and industry to discuss how this fast growing sector was having an impact on the economy.
Unlikely as it seems, Turkey has been one of the rare economic success stories of the last couple of years as the rest of the World emerges from recession.
Led by its charismatic leader, President Recep Tayyip Erdoğan, the country’s relative wealth grown by six per cent in 2011 whilst its neighbours to the west have been in the doldrums. In fact, whilst much of the European Union looks set to fall back into recession next year, the Turkish economy looks set to grow again in 2012, albeit at a rate of three per cent.
There are numerous reasons to explain this growth, such as the fact that the country has a diversified industrial base, a fairly stable political environment and a strong domestic market. Of course, there remain a number of key factors that could be a drag on the Turkish economy if they are not resolved. These include limited access to capital, especially for young people, as well as a lack of an entrepreneurial culture. There are also difficulties in hiring and firing, with Turkey ranking among the most difficult countries in this element of business.
Despite these issues, the digital economy continues to grow in Turkey, and whilst the e-commerce market in 2010 was worth £10.4 billion, it had already hit £6.8 billion in the first six months of 2011. In addition, the twenty largest Turkish e-commerce companies have grown by an average of 60 per cent in the last twelve months.
And investors are beginning to take notice of Turkey as a fast emerging market in this area after years of neglect. For example, online specialists eBay recently acquired 93 percent of Turkey’s largest auction site, GittiGidiyor, in a deal which valued the company at £137 million.
The microchip maker Intel has also made its first investments in Turkey this year, backing a leading online media company Nokta as well as the shopping site Grupanya. In addition to corporate takeovers, venture capitalists and business angels are also taking a closer look at the Turkish economy. Kleiner Perkins, one of Silicon Valley’s major venture capital firms, recently invested £17 million into Trendyol, a large private shopping site whilst social gaming site Peak Games, seen as company to watch by analysts, attracted £8 million from various investors.
So why is this all coming together now?
First of all, Turkey has around 35 million Internet users, ranking the country as twelfth in the World and the fifth largest in Europe, after Germany, UK, Russia and France. In addition, not only do Turks spend more time online than the average European, they are also more interactive when they get online, being the fourth most active in the world on Facebook and the eighth most active on Twitter. In terms of online shopping, the availability of credit and easy logistics are key to the development of one of the fastest growing sectors of the digital economy.
In Turkey, there is 62 per cent credit-card penetration rate among consumers, second only to the UK in Europe, and there is a group of shipping firms is already active that can deliver products anywhere in a radius of more than 350 miles around Istanbul within 24 hours. More importantly, it is expected that the digital economy will continue to develop at a faster rate than many other nations in this country of 73 million people.
Consider the fact that half of Turkey’s population are under the age of twenty eight, ensuring that a digital culture where social media is part of the majority of the population’s everyday lives will become embedded very quickly. It is also worth noting that despite the relative lack of broadband penetration, the use of the social networking has developed at a rapid pace.
With plans for considerable investment in the country’s high-speed communication capability over the next few years, the demand for new products and services will grow even further. With the relentless march of social media affecting everyone’s daily lives, the digital world is changing quickly and who would have thought that a country at the edge of Europe would be seen as being one of the leading advocates in embracing the new opportunities of the future.
Certainly, Turkey will be an economy to watch over the next few years, not only as a political exemplar to those nations emerging from the Jasmine Revolution in the Arab World but also as a place where a major digital revolution is taking place. I can only hope that Welsh business will take advantage of this and develop trade links with a vibrant nation that is making great strides in the development of its economy.
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