SOFTWARE INDUSTRY IN TURKEY DOĞAN UFUK GÜNEŞ CHAIRMAN, YASAD

Transcription

1 SOFTWARE INDUSTRY IN TURKEY DOĞAN UFUK GÜNEŞ CHAIRMAN, YASAD 1

2 Board of Directors Doğan Ufuk Güneş Chairman Korgün Yazılım Gönül Kamalı Vice Chairman Netaş Zeynep Sarılar Vice Chairman Mobilera Atila Zeybek Accountant Model Kurumsal Çözümler D. Zafer İnkaya Board Member Bilin Yazılım Bülent Erbaş Board Member Koç Sistem Bilgi ve İletişim Nejat Sağtekin Board Member Likom Yazılım Sadun Anık Board Member Logo Yazılım Hayguyi Antikacıoğlu Board Member Link Bilgisayar 2

3 Agenda YASAD Turkish Software Industry Association Turkish ICT, Telecom and SW Markets Why to Invest in Turkey? Turkey s 2023 Vision 3

4 YASAD - Turkish Software Industry Association A non-governmental organization representing the software sector in Turkey Established in 1992; celebrating 21 st anniversary with 367 members comprising most of the local software producers, including the leading, the fastest growing and the largest software companies.. 50% of total software revenues in Turkish market 75% of software export revenue holders 65% of Deloitte Technology Fast50 Turkey software companies 45% of Turkish companies in Deloitte Technology Fast500 EMEA are members Mision: To place Turkey in the list of major global players who export software and related high value-added technological products, and continuously improve its position Converting the sector into one of the driving forces of the Turkish economy 4

5 YASAD: As an active leader Well connected with Ministries - Ministry of Transport, Maritime Affairs and - Communications - Turkcell, Vodafone and AVEA meetings with YASAD members - Ministry of Economy - Regulations and Incentives for Software Export - Ministry of Science, Industry and Technology - Working on state of art technologies for various ministries as Health, Justice Well connected with other organizations as - Exporters' Associations Common projects to increase SW Export with Istanbul Electrical Electronics, Machinery & ICT Exporters' Association, IEEMBIB & TET - Trade Office of Istanbul - ITO - The Union of Chambers and Commodity Exchange of Turkey TOBB - Universities CO-OP (Cooperative Education) with Bahcesehir Unv. 5

6 YASAD: The Power in Turkish Software Market The largest sector companies with the highest revenues by covering all sectors are members Source: 2011 Turkey Top 500 ICT Companies Report by Interpromedya 6

7 Turkish ICT, Telecom and SW Markets 7

8 Turkey: An attractive ICT market Huge ICT market growth - 14% CAGR between 2002 and 2010, reaching 20 billion in 2010 (9 th in all Europe and 2 nd in Eastern Europe) and estimated 22.3 billion for 2012* Increased interest in the ICT sector - Started the necessary studies such as new regulations, initiatives and R&D law The young and dynamic population of Turkey - Continuous demand for new products Much more ICT users than most of EU countries Excellent subscriber numbers and penetration rates** Broadband Internet: 19.3 million subscribers, increased more than three times in last four years (6 million subscribers in 2008), which corresponds to almost 50 million Internet users and 67% penetration rate Mobile: Total 67.2 million subscribers (40.3 million 3G and 26.9 million 2G) and 90% penetration rate Fastest growing ICT companies - 29 of the 500 ICT companies in the EMEA region in 2012 Deloitte Technology Fast500 EMEA Survey Others - More than 1.5 M Small and Medium Sized Enterprises who have the capacity to use IT Sources: * EITO 2011 European Information Technology Observatory ** Turkish Information and Communication Technologies Authority (ICTA) Q3 12 Annual Report 8

9 ICT Market in Turkey Total ICT Market Volume (in Billion ) and Growth Rate (%) % 9.6% 4.4% % 9 th in all Europe and 2 nd in Eastern Europe * Estimated Source: EITO 2011 European Information Technology Observatory ICT Market Volumes of EU25, Turkey, Russia and Switzerland in 2010 (in million ) Market size anticipated to surpass 22.3 billion in 2012 with 6.5% increase Telecom market is the largest piece, 78.7% in total ICT, 2010 Software and IT services are growing rapidly in aligment with overall ICT growth 9

10 ICT Market in Turkey IT and Telecom Total IT Market Volume Total IT Market Volume 2012* Total Telecom Market Volume Total Telecom Market Volume * * Estimated Source: EITO 2011 European Information Technology Observatory 10

11 Telecom Market in Turkey Increase in the number of internet users in Turkey Compared to EU average** EU Average Turkey Usage Average: 186 7th greatest Telecom Market in Europe in 2010*** Rate of Mobile Phone Usage over than EU Average with the 1 st highest rate* Mobile subscribers reached 67.2 million with the 90% penetration rate in Q3 12**** Tremendous growth in 3G subscribers; from 7.1 million to 40.3 million within 3 years**** 168% 245% 5646% 7778% 2069% 2922% 1730% 421% 535% 632% 757% 833% Sources: * Wireless Intelligence ** 2011 ITU -- ICT Indicators Database, Eurostat, SocialBakers *** EITO 2011 European Information Technology Observatory **** Turkish Information and Communication Technologies Authority (ICTA) Q3 12 Annual Report Internet users incread rapidly to 50 million** 3 rd place at social media following 43 million Web users 35 million Facebook users 11

12 Turkish Economy - A Rising Star Foreign Direct Investment Confidence Index 2012* Booming Economy - more than tripling its GDP, reaching 772 B$ in 2011, up from 231 B$ in 2002** 18 th largest economy in the world and 7 th when compared to the EU Countries in 2011 (IMF, GDP at current prices) Stable Economic Growth - an average annual real GDP growth rate of 5.2 percent over the last 9 years Promising Economy - with a bright future as it is expected to become the fastest growing economy among the OECD members during with an annual average real GDP growth rate of 6.7 percent (OECD Economic Outlook No. 86) Attractive Economy - fueled by 110 B$ of FDI in the last 9 years and ranked as the 13th most attractive FDI destination in 2012 (A.T. Kearney FDI Confidence Index) A Dynamic and Mature Private Sector - with 135 B$ worth of exports and an increase of 275 percent between 2002 and 2011** Confident, Big, Stable, Promising, Attractive, and Dynamic Economy Sources: * A.T. Kearney ** Turkey s Statistical Yearbook 2011 (TurkStat) 12

13 TURKEY s Position: Fastest growing ICT companies in the EMEA region Country Performance Trends in Deloitte Technology Fast500 EMEA Surveys Order Country Ave France United Kingdom Netherlands Sweden Norway TURKEY Germany Finland Israel Republic of Ireland Poland Hungary Czech Republic Portugal Belgium Romania Denmark Russia Slovak Republic Italy Rest of Europe Other According to Deloitte Technology Fast500 EMEA 2012 Survey - 29 companies in Fast500, two of them in the Top 10: ELKOTEK, 5 th and TEKTRONIK, 6 th 13

14 Competitiveness in Different Aspects Labor Market & Management Practices Infrastructure Basic Infrastructure Well Educated Engineers Young Population and Big Market Size Infrastructure Technological Infrastructure Doing Business Technology Usage High Doing Business so Easy Number of days required to register a property Number of days required to establish the company Source: IMD World Competitiveness Yearbook 2012, IMD WCY executive survey based on an index from 0 to 10 Turkey has got great investment opportunities 14

15 Resources in ICT- Highly Qualified 15,858 graduates from Engineering and Engineering Sciences in 2012* Total 274,000 employees working in ICT sector as of Dec 2012** Availability of Qualified Engineers 2011, 0-10*** Availability of IT Skills 2011, 0-10*** Sources: * Turkey s Statistical Yearbook 2012 (TurkStat) ** Turkish ICT Report by International Investors Association (YASED) *** IMD World Competitiveness Yearbook 2011, IMD WCY executive survey based on an index from 0 to 10 15

16 The Key Comparisons: Globalization, Flexibility, Adaptability Great Business Efficiency Best scores in Attitudes toward Globalization Flexibility and Adaptability Source: IMD World Competitiveness Yearbook 2012, IMD WCY executive survey based on an index from 0 to 10 16

17 Productive and Cost-effective Labor Force Source: EIU, February 2011; Average cost of labor per hour (pay and non-pay costs) 17

18 Turkey as Near-Shore Outsourcing Location Gartner view 2011: Key Findings Turkey is an attractive option for foreign direct investors due to its low cost of living, low labor rates and relatively low cost of travel to the country. There is also a relatively short travel time to Turkey from anywhere in Europe. It is therefore fast emerging as a low-cost destination to handle Pan-European outsourcing work. The government has plans to work with private organizations to promote IT education in The Turkish government has continued consistent investment during the past few years in information and communication technology (ICT). It also has introduced tax incentives to boost the local IT industry. Many Turkish workers speak English as well as the other European languages, German, French and Dutch. Recommendations Consider Turkey as an outsourcing destination for its convenient location and cultural compatibility with many countries. Turkey has made efforts with several countries around the world to boost economic and cultural cooperation. Consider Turkey as an outsourcing destination for low-cost software development services. 18

19 Intensity of Computer Use during Language of Instruction Lessons Turkey - over the average Minutes per week Turkey has one of the highest intensity of computer use during language of instruction lessons, 5 th one Using technology during education is the key aspect in Turkey Source: OECD, Notes: OECD average 29 is the average value for the non-oecd participating countries in this survey. 19

20 Turkey initiates huge ICT projects E-Learning/Teaching/School Mobile Information System FATIH - Education system with tablet and interactive boards 15 million tablets to be bought and Completely digitalized content Intel Teach&Learn Programs for Teachers and Students respectively Cisco Networking Academy Project, Microsoft Innovate Teaching Program WEB Based Educational Content Development Project and Dyned Language Project GEN6 - Governments ENabled with IPv6 - IPv6 upgrade of e-government Network Infrastructures, e-identification, Services and Applications (Germany, Spain, Netherlands and Turkey) PARDUS - National Operating System Satellite - First National Communications Satellite: TURKSAT 5A Automotive - A local car brand A consortium to be built to implement a local car brand in Turkey Healthcare - A medicine tracking system First version launched with a 2D barcode system, Second to track each medicine box on its way Defense - Developing a local defense vehicle First version delivered and exported to Malaysia, Second version is on its way 20

21 Why to Invest in Turkey? 21

22 Access to Multiple Markets 22

23 Why to Invest in Turkey? Successful Economy Population 18 th largest economy in the world and 7 th when compared to the EU Countries in 2011 (IMF) Centrally Located A natural bridge between both East- West and North-South axes, hence creating an efficient and cost effective outlet to major markets having 1.5 billion customers, worth USD 25 trillion of GDP Qualified and Cost-effective Labor Force The largest youth population when compared to the EU countries, with continuous demand for new products Large Domestic Market 50M internet users in 2012, up from 4 million in M GSM users in M credit card users in M airline passengers in M international tourist arrivals in 2011 Infrastructure Best in people skills and availability scores in Eastern European countries ~274,000 employees working in ICT sector Customs Union with the EU since 1996 Customs Union with the EU since 1996, and a total of 22 Free Trade Agreements (FTAs), 19 in force, 3 pending ratification and more FTAs underway Accession negotiations with the EU since 2005 Low Taxes & Incentives Tax benefits and incentives in Technology Development Zones, and Free Zones New R&D and Innovation Support Law R&D grants from different bodies Incentives for strategic investments New and highly developed technological infrastructure in transportation, telecom and energy Liberal and Reformist Investment Climate The second biggest reformer 23 among OECD countries in terms of its restrictions on FDI since 1997 Business-friendly environment with average of 6 days to set up a company (ECD average is more than 12 days) Around 30,000 companies with international capital

24 Advantages of Turkey Jeopolitic, Demographic status and Incentives Young Population: Average age is 30.1 and 49.9% of population is under age 29 Strong Communication and Internet Network: 50M Internet Users, 4th highest in Europe Important Jeopolitic Position of Turkey: Gateway to the Middle East and Caucasus Religious, ethnic and commercial relationships in Europe, Turkish Republics and Middle East markets Important Tax Exemptions for Software Developers placed in 34 TechnoParks, 19 Free Trade Zones, 35 R&D Centers Subsidies for R&D Projects and Sales & Marketing of Software Export Research and Development Law 5746 boost local R&D also attracting R&D sections of global corporations to the Turkey Incentives for ICT Export Very Flexible and Enthusiastic Government Approach 24

25 Structural Reforms - Low Taxes & Incentives Public Sector Reform Financial Sector Reform Social Security Reform Tax Reform Enhancing Private Sector s Role in the Economy Opening the Key Markets to Competition, and Regulation by Independent Agencies Improving the Investment Environment Accelerated Privatization Comprehensive Incentives Investment Incentives R&D and Innovation Supports Incentives for ICT Export 25

26 Investment Incentives 26

27 R&D and Innovation Supports Supporting Research and Development Activities (Law No: 5746) - Boost local R&D also attracting R&D sections of global corporations to the Turkey, such as Ericsson, Alcatel Lucent, Huawei, Genband Certification as R&D Center 35 R&D Centers in the context of ICT as of July 2012 R&D Deductions, Tax and Stamp Duty Exemptions, and Insurance Premium Supports Technology Development Zones, TDZs (Law No: 4691) - The development of special investment areas for investments involving high technology 34 TDZs currently operational as of Jan 2013 Income tax, corporate tax and value added tax exemptions R&D fund provided by The Scientific and Technological Research Council of Turkey (TÜBİTAK) 10 National Industry Programs and International Programs (EU Framework Programs, EUREKA, ERA-NET and EUROSTARS) Grants to R&D Projects in the rate of 40%-75% 1.5 B$ delivered between 1995 and 2011, 80% of it in SME Supports provided by Republic of Turkey Small and Medium Enterprises Development Organization (KOSGEB) Comprehensive scope: Grants from R&D and Innovation to export, training, fair, etc. R&D Supprts provided by Republic of Turkey, Ministry of Transport, Maritime Affairs and Communications - Grants up to 100% and 10 MTL per an R&D Projects 27

28 Incentives for ICT Export Incentives for Service Export - Outsourced SW services by foreign companies to Turkish Companies Corporate tax and value added tax exemptions Promoting Trade in Foreign Exchange Receiver Services, including ICT sector (2012/4) Market Entry Supports Report, Computer Games, Mobile Phone and Tablet Applications International Promotion, Organization (Fair, Convention, etc.) and Search Engine Supports Rental Support against International Units Certification Support to take international document, certificate and accreditation Supports for Trade Commitee and Purchasing Committee Consultancy Support Improvement of International Competitiveness (URGE) - A Cluster Project with approx. 5 M$ budget Training and/or Consultancy, including Requirement Analysis Employment International Marketing and Purchasing Committee Consultancy on the company basis Turquality The first and only government-backed brandization program in the world Aims to develop global Turkish brands - 10 global Turkish brands within 10 years Supports in the rate of 50% without upper limit; 127 brands into two programmes About 125 M$ financial support as of Nov 2009 Also offers an opportunity to SW companies: Sell services (ERP, CRM, SCM, etc.) to the companies in the scope of Turquality when accredited as ICT Consultancy into 3 groups 28

29 Turkey s 2023 Vision 29

30 ICT in Turkey Target 2023 In the top 10 economies of the world in 2023 Economic size = 1,700 Billion USD ICT share = 160 Billion USD Export = 500 Billion USD Preferred sectors = Software, Optics, Bio-Technology, Nano-Technology Expected Software Export in 2023 = 10 Billion USD Till 2023, yearly increase rates shall be: Total Income 6.7 % Export 12.1 % ICT 13.8 % 30

31 ICT in Turkey Target 2023 Reaching 30 million broadband subscribers Supplying 50 percent of the ICT sector with domestic products and services Reaching 8 percent of GDP as the ICT sector s share Becoming one of the top 10 countries in e-transformation Providing all public services electronically by 2019 Having 80 percent of population computer literate 31

32 Thank you 32