The Industrial Production Index (IPI) peaked in December when it reached 130.5 points. As pleasing as this data is, let’s take a look at the development of the index in the last quarter in order to understand the pace of industrial development.

In this context, even if the index peaked in December, the average for Q4 2014 shows that the annual increase was not great. The IPI, which increased by 2.5 percent compared to 2013, still registered its poorest quarterly performance of the year.

When 2014 is taken as a whole, the IPI rose by 3.6 percent. While there is an increase when the rate of growth for 2012 and 2013 is compared, which was 2.5 percent and 3 percent respectively; we still need to achieve better pace.

Both the contribution of industry to the Gross Domestic Product and general speed of development are not satisfactory in the current situation. It cannot be denied that factors related to demand lie behind such a situation, but a paradigm shift that will make the internal dynamics of industry more efficient is also needed.

What needs to be done to vitalize industry, which should be our pride and joy? Although this question deserves hundreds of answers, let’s touch upon the subject in a general sense.

WHY SHOULD I BECOME AN INDUSTRIALIST?

Looking at it in the simplest manner, we should first put ourselves in the shoes of an industrialist or a potential industrialist. Every sub sector operates on different dynamics but let’s ask questions that are valid for all of them:

Why should I become or remain an industrialist?

Or, why should I remain and struggle in industry when I can move to another area with higher profits and which appears to be or is easier?

The basic criteria that would determine the decision of a rational individual or institution are clear: Profitability, competitiveness and business environment. All of these are interlinked at the same time…

KEEPING INDUSTRIALISTS HAPPY

Turkey has made great strides in industry. Our industrialists did particularly well in the 2000s. But as is constantly mentioned, the need for infusing new blood arose after reaching a certain level. This is what I mean by paradigm shift.

It is fundamental to address the problems that industrialists face regarding profits and competitiveness. Finance, taxation, incentives and support have a critical role to play in this regard.

Various solutions are needed, ranging from development banking, which will allow for more frequent and effective use of resources, to a tender model for public purchases that allows increased competitiveness with foreign bids.

It is clear that creating such opportunities and conditions are a must to increase the appetite for industrial and related investments…

STRESS REDUCTION

Emotions aside, issues that cause frustration that leads to stress should be tackled. I previously mentioned the need to improve the business environment. Parallel to this runs the topic of “management and implementation,” frequently mentioned by industrialists. Our industrialists voice the need for administrative institutions that protect the sub sectors. This is because each sector has its own specific set of problems.

Such a system that would address specific sub sectors, if designed properly, has the potential to result in better management and revitalize various sectors.

Moreover, the creation of a network infrastructure alongside this system could create synergy in the supply chain by strengthening cooperation.

Such sector-focused studies will allow for healthier development of mesoeconomic policies and their implementation. The micro-meso-macro chain will also be strengthened as a result.

SHIFT TO KNOWLEDGE ECONOMY

The aim of course is to have an industry that both grows and adds value. This is why comprehensive and sector-focused regulations are a must; but it is a knowledge economy that will strengthen the content.

This brings us to the topic of technology, which has always been a priority in this column. I believe that in order for industry to become technology-intensive and for technology to be widespread, we need to make progress in regard to our approach.

I want to stress that one element of this – since we are already talking about sectors – is the need for special focus on industry based on advanced technology.

Serious focus, organization and support are necessary for biotechnology, which in some countries is no longer a field of the future but of the present.

R&D CENTER

Again in this light, we need to make the concept of a research and development center for industry more feasible. While our industry was motivated by the advantages such centers provide, it was limited to a certain section due to the low numbers of such centers.

One of the reasons for so few centers is the minimum staff requirements set for R&D staff… The minimum number of staff to run a center was reduced from 50 to 30 in 2014, and although this was the correct move in this regard, even this figure remains high for many firms.

When it is taken into account that small and medium-sized enterprises comprise a significant amount of our industry, there are many who are deprived of this right despite being in need of it… A ratio-based approach dependant on scale could be adopted in this regard.

As I said, there are hundreds of answers to this question. I managed to only provide a few in my column today.

What remains is to hope that healthy steps are taken regarding all relevant issues of the transformation program. 

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