Transforming Turkey’s economy through the Internet

Turkey represents a dramatic economic success story. While much of the rest of the world struggled with recession in 2011, its GDP expanded by 8.5 percent. Growth continued last year, with the OECD estimated at 2.9 percent, more than twice the OECD average. Within a decade, Turkey aims to become one of world’s the ten biggest economies.

To achieve this ambitious goal, we’re convinced that the country needs to embrace the Internet. The Turkish Minister of Development Cevdet Yilmaz, the US Ambassador to Turkey Francis J. Ricciardone, and a wide representation from the Turkish business and civil society recently joined us to launch Boston Consulting Group's report Turkey Online: How the Internet Is Transforming The Turkish Economy.

The study contained both promising news about the Internet’s impact in Turkey - and, crucially, recommendations on how to improve.

First the good news: the share of Turkish households with online access soared to 47.2 percent in 2012, up from 19.7 percent in 2007. Turkey’s Internet economy is expected to grow by 19 percent annually through 2017.

Much remains to be done. The Internet contributes an estimated 22 billion Turkish Lira to GDP - a mere 1.7% of Turkey’s overall GDP. A deep digital divide exists, with Istanbul and Ankara ahead in adopting the Internet while eastern Anatolia lags.

How could Turkey do better? Boston Consulting urges swift government action to bring the entire country online, by encouraging private-public partnerships and increasing school programs that teach digital literacy. Efficient e-government services should be built. Such initiatives will encourage entrepreneurs to improve productivity by using e-procurement and other web-based services.

As Turkey’s economy grows and mature, it needs to move from a manufacturing-based to an information-oriented society. Policy makers have a key part to play in creating an environment that unleashes the Internet’s growth opportunities.

Posted by Pelin Kuzey, Public Policy & Government Relations Manager Turkey