The Turkish economy and the challenge of technology: a trade perspective

Abstract

AbstractThis article provides an analysis of Turkish trade deficits from the perspective of technology, with particular focus on the period that began with the new millennium. It draws special attention to the technological structure of Turkish exports vis-à-vis Turkey’s major trade partners and illustrates how Turkish trade deficits are primarily structural in nature and essentially caused by weak technology as compared with Turkey’s partners. Turkish products lack competitiveness, particularly in the case of relatively higher technology goods. The future prospects for Turkey are discussed in relation to the present level of the country’s technology infrastructure, and it is emphasized that, if Turkey is to achieve a better trade balance and a prominent share of world exports in the future, merely increasing its business sector’s weak R&D expenditures will not be sufficient, as the country needs also to provide a sufficient number of researchers in order to increase its technological capacity. Moreover, in the case of both R&D expenditures and researchers, quality as well as quantity is required, with the number and quality of the latter in particular being crucial both for innovating and for absorbing foreign technology.