Güven Sak: The fundamental issue for Turkish industry is technological renewal

Economist and academic Güven Sak stated that the fundamental issue facing Turkish industry today is technological renewal. In his article published in Ekonomim, Sak emphasized that while Turkey has built significant industrial capacity over the last 60 years, a stronger investment and trust environment is needed to protect and develop this capacity in the new era.

According to Sak, while Turkey was a country with limited production capabilities and a need for strategic choices in the 1960s, it strengthened its industrial identity through opening up to foreign markets and export incentives in the 1980s, and through the Customs Union agreement with the European Union on industrial products in 1996. Sak noted that there were concerns at the time that the Customs Union would harm the industry, but ultimately, Turkey's character as an industrial country was solidified.

The article also referenced views arguing that the Armenian industry would suffer if the Armenia-Turkey border were opened. Addressing these debates, Sak recalled Turkey's 1996 Customs Union experience, conveying the message that opening up to competition can strengthen industrial capacity if accompanied by the right policies.

EMPHASIS ON NEW TRANSFORMATION IN INDUSTRY

Sak pointed out that today, electrification is becoming widespread in industrial heating and cooling processes, and the global technological race is accelerating. He wrote that for Turkey to maintain its position in the European Union market, it must renew its product range and adapt to new technologies.

According to Sak, this transformation implies a capital-intensive process. Therefore, conditions that will enable domestic and foreign investors to invest more in Turkey need to be strengthened. The article listed macroeconomic stability, the rule of law, a reliable judicial system that ensures compliance with contracts, and judicial independence as the fundamental elements of a "right policy" foundation.

Sak argued that Turkey needs to correct the negative perception that has formed internationally since 2015. According to the data he presented, Turkey ranked sixth among the top 20 countries that regressed the most in the rule of law index during the 2015-2025 period. It was also noted that Turkey was among the top 20 in the decline of the academic freedom index during the same period.

The article assessed that in an era where markets are changing through technological renewal and electrification, it will become difficult for Turkey to maintain its market share by selling the same goods to the same countries. While emphasizing the industry's need for transformation, Sak expressed criticism that there is not enough dynamism on the side of economic management and public policy, using the phrase "there is no excitement in Ankara."