Turkish SMEs must succeed in digital transformation

Just like their peers in the rest of the world, Turkish companies must focus more closely on technological developments and digital transformation.

Within this context, digital transformation in large firms as well as in small and medium sized companies (SMEs) is crucial both for their own interests and for the Turkish economy as a whole. I recently attended a meeting in Antalya, organized jointly by the Turkish Enterprise and Business Confederation (TÜRKONFED) and İş Bankası, which brought together digital leaders and SMEs as part of the “Digital Anatolia” project.

From the high attendance I could see that SMEs are aware of the importance of this transformation. As part of the project, reports on the state of digital transformation in the world and Turkey have been published and digital leaders have organized meetings in several provinces across the country to raise awareness of the issue among SMEs.

A report, produced in cooperation with Boğaziçi Counseling for Business (BCB), will be published assessing the current state of digitalization and problems regarding digitalization in the agriculture, automotive and textile industries, identified as pilot sectors and in their sub-sectors.

The report will also include recommendations regarding the digital transformation process. Ahead of the meeting, TÜRKONFED president Tarkan Kadooğlu appeared very enthusiastic about the project while speaking to journalists.

In his speech at the meeting, Kadooğlu requested incentives for digital infrastructure investments such as “cloud computing, industry 4.0, the internet of things, and artificial intelligence” in the industrial, services and agriculture sectors.

He said the use of information technologies in SMEs should be encouraged through incentives and support, while also calling for more investment in human resources, education, e-commerce and mobile commerce. The latter two elements constitute the backbone of the “Digital Anatolia” project.

“Turkey should develop the appropriate transformation model by itself,” Kadooğlu said. Şahismail Şimşek from İş Bankası noted that the term “digitalization” was once associated only with tech companies but now it is used by everyone. Digital transformation has had an impact on all industries and companies, and the way banking transactions are conducted has also been transformed, he said.

Discipline, obedience and intelligence

TÜRKONFED vice president Ali Eroğlu pointed to opportunities that the agriculture sector offers for digitalization.

He particular referred to New Zealand and Australia as exemplifying how value added was increased by employing digital technologies in agriculture and stock farming.

Before the experts delivered their speeches regarding the digital transformation, digital marketing, digital farming, cloud computing and payment systems, Özyeğin University’s founding rector Prof. Dr. Erhan Erkut gave a presentation on “the transformation of institutions.”

Erkut began his presentation by stating that “the values of the 20th century - discipline, obedience and intelligence – have now become commonplace. In the 21st century, taking the initiative, creativity, and passion are required in order to compete.”

Erkut stated that the most important job of a manager is to identify staff at the organization with entrepreneurial skills and hiring people with such skills, clearing the way for them to move forward. He also suggested that “the game has changed,” as startup costs have declined, the ranking of large companies are changing fast, and tech companies are boosting their capital accumulation.

As always, Erkut’s speech was colorful and attracted great attention.

But in order to make progress in the areas he mentioned, first of all SME owners themselves must change. This is the reality: SEMs must either change their mindset to pave the way for innovations and creativity or they will disappear.