Industry 4.0 in Turkey

In a study conducted by TÜSİAD and Boston Consulting Group (BCG) in 2016;

industry 4.0 applications in automotive, white goods, textile, chemicals, food and

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machinery industries were examined. According to the study; information and material flow, integration with suppliers, simulation of the product and production process at the design stage, smart products that increase flexibility and predictability in production and production lines come to the forefront as opportunities. During the interviews with industry representatives, it is said to be observed that there is a high level of awareness about opportunities, and many industrial organizations have already begun to move forward at different levels of maturity in industry 4.0 applications. The common conclusion is that it is believed that the transformation process can be achieved only with the contribution of all stakeholders and the establishment of holistic policies (TÜSİAD, 2016).

According to the analysis conducted by BCG within the scope of the same study, industry 4.0 applications are expected to trigger an increase of up to 3% per year in industrial production. This GDP growth of 1% and above in Turkey means additional revenue growth and an additional 150-200 billion TL. In addition, it is estimated by the study that Turkish producers should invest approximately 10-15 billion TL annually in the next decade to incorporate the industry 4.0 technologies into the production process. Finally, it is expected by the study that with low-qualified employees replacing automated systems the rate of exposure to this change will be 20-30% at certain points of the value chain in the long term. However, the possible increase in production efficiencies in other countries with the fourth industrial revolution may reduce Turkey's competitiveness in a global sense (TÜSİAD, 2016).

On the other hand, according to a report published by TÜSİAD in 2017, in order to measure the digital transformation level of competence of companies that use technology in Turkey, to identify the areas of competence of technology supplier companies and to determine the point to be focused, a comprehensive research was conducted with 108 technology users and 110 technology suppliers companies.

According to the results of the study; there is a high level of knowledge and interest in digital transformation of companies, but the proportion of companies thinks that they are ready for transformation is relatively low. In addition, industrial companies are in the process of implementing pilot projects in the fields of digital transformation

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and companies have low competence in determining strategic road maps in Turkey.

The research suggest that digital transformation competency levels of large scale companies are higher than small ones and the biggest obstacles to digital transformation are high investment costs and uncertainty of return on investment.

In this context, the study driven by TÜSİAD suggests that leading the investments according to the target and prioritizing technology investments that are easily accessible and quick to apply, identifying the problems that may be encountered in the way of transformation and taking the necessary measures, the successful completion of institutionalization of domestic suppliers and the development of mechanisms to eliminate the communication gap between the supplier and user companies are the most important issues to be considered (TÜSİAD, 2017).

The former minister of Ministry of Industry and Science (MIT) Faruk Özlü (2017) states that in the Turkish industry, the majority of which is composed of SMEs, the added value of employees in manufacturing is one third of the EU average. Therefore, he draws attention to the fact that the productivity in the industry is much lower than that of the EU countries, and that the industrial 4.0 revolution could further deepen this gap if the necessary priorities are not taken (Özlü, 2017). Medium and high-tech products constitutes the 30% of Turkey’s manufacturing and 37% of exports, it is 63% of EU’s exports. Therefore, since digitalization could affect the high-tech sectors more than others it is critical to adopt new technologies to increase our high-tech products and exports (Özlü, 2017). According to the former Minister (2017), to reveal the digital transformation of Turkish manufacturing industry, capacity for generating technology should be supported and a sectoral perspective in industry 4.0 must be formed.

Bulut (2017) states that in order to increase the strength of Turkey's ability to compete on a global scale, the development of new technology products and increasing exports of technology has a vital importance. Priority measure that can be done within the industry 4.0 for Turkey's economy is to create a commission for the fourth industrial revolution as well as Germany and the United States have done. The primary objective of this commission should be to determine exactly the measures to

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be taken in Turkey for Industry 4.0, the direction of R&D expenditures and innovation (Bulut, 2017).

Koca (2018) states that in order to prevent Turkey from missing the train in this new industrial revolution, techno parks should be established; in particular companies should establish industry 4.0 departments and employ 4.0 industrial engineers in these departments. Compared to neighboring countries Turkey has a comparative advantage in many areas that it is possible to increase the speed of growth of the economy with the industry's 4.0 (Koca, 2017).

Sayar and Yüksel (2018) suggest that with the Industry 4.0 transformation in the public sector; error rates, wastes, waiting times and paper usage will be reduced and processes will be simplified, quality level of public services will be increased and government spending will be greatly reduced. He also states that all units, processes and operations of the government will be monitored in real time, most processes will be automated thanks to artificial intelligence applications, resources will be managed in an optimum level and real-time reports will be obtained for investments.

The literature review on Turkey's position to industry 4.0 indicates that Turkey is at the beginning of the technological transformation journey yet. It is understood that each sector needs to be examined separately in this journey; however, it is necessary to have a total work throughout the country in order to realize the transformation with the participation of all actors like public and private sector and universities.