As the president of the Investment Office of the Presidency of the Republic of Turkey, Burak Dağlıoğlu leads national investment promotion efforts and reports directly to president Recep Tayyip Erdoğan. He talks to fDi about Turkey’s priorities and support for research and development (R&D) activities.
Q: Could you briefly outline Turkey’s latest FDI strategy?
A: In the overall picture, the Turkish economy currently accounts for roughly 1% of the global economy, in terms of gross domestic product, exports and FDI flows. The main target is to increase our share of global FDI flows to 1.5% by 2023.
The global conditions are changing and the capabilities of Turkey are also improving. Our FDI strategy takes this into consideration and focuses on three main elements.
First, we would like to contribute to the digital transformation of the country. This includes bringing tech-oriented, R&D and more innovative projects.
The second aspect is the creation of employment. This is a must for Turkey, when you consider that every year the population is growing by one million people and we have around 1.1 million university graduates. We are focusing on large-scale projects which require thousands of workers as well as R&D projects with 30 engineers.
The third aspect is the current account deficit. Due to the current account deficit, the Turkish economy has experienced some fragile moments. This issue is important for us because of financial stability, price stability and supply security. We have to make sure that [sufficient] raw materials and intermediary goods are available in the country.
Q: How are you creating an enabling environment for hi-tech projects?
A: We have a good R&D incentive scheme. First, companies are able to establish standalone R&D centres. In Turkey we have more than 1200 R&D centres, and around 210 of them are run by companies with international capital – either a fully-owned foreign subsidiary or joint venture with a Turkish company.
Second, companies can get incentives in technoparks. Currently there are around 7000 companies established in technology development zones in Turkey and close to 500 companies with international capital.
For hi-tech investments, Turkey has the talent pool already, but we also support companies to bring highly qualified labour. If a company needs international expertise in a specific area, the Turkish government will pay for a portion of the wage up to about $7000 per month for five years. There are other incentives that are valid for all types of labour, such as social security exemptions, but this is exclusive to hi-tech projects.
Q: How are you improving the sustainability profile of Turkey?
A: We are pushing projects in line with sustainability practices and green manufacturing processes. For example, Turkey is one of a few countries that have a whole supply chain for wind turbines – we manufacture the tower, blades, turbines and other parts in the country. We have been investing in renewable energy, with almost 50% of our installed power capacity coming from renewables.
Q: Any final comments?
A: Many companies are targeting Europe. Since Turkey is part of the EU Customs Union and has geographical proximity, we are an optimum candidate [for their investments]. In the past two decades, we developed a very sophisticated industrial powerhouse in the region. We are part of the global value chains in the automotive, textiles, fast-moving consumer goods and other industries. Turkey is a fast-growing economy, offering a business-friendly environment at a geostrategic position at the nexus of Africa, Europe and Asia.
In association with Investment Office of the Presidency of the Republic of Turkey. Writing and editing were carried out independently by fDi Intelligence.
This article was first published in the December 2021/January 2022 edition of fDi Intelligence magazine. Read the online edition here.