by Prema Nakra, Ph.D.

Strategically located at the crossroads of Southwestern Asia and Southeastern Europe and bordering the Black and Mediterranean seas, Turkey is well-positioned to offer and take advantage of global business opportunities. In part 2 of this series of articles, I discussed the industries and corporations that have already found a home in Turkey. In this article I examine the demographic and other factors that make it an attractive place to do business.

 

TURKEY'S VALUE PROPOSITION

 

Turkey's value proposition is reflected in its relatively cheap but well-educated and skilled workforce, well-developed financial sector, proximity to important markets, economic growth rates, absence of major regulatory barriers, strong industry infrastructure, and rapid urbanization and Westernization of urban men and women. Key features of these variables are discussed below:

 

Workforce

 

Turkey's youthful, well educated, competitive and flexible work force has turned the country into a workshop for export industries such as automobiles, aerospace, appliances and textiles. A sophisticated management style and a dynamic work environment along with a very strong service culture is a strong incentive for potential investors to give it a second look.

 

Location

 

The country is perfectly situated to establish itself as one of the world's logistics hubs, as it sits on the crossroads between Europe, Asia, the Middle East and Africa.

 

Financial Sector

 

The Turkish financial sector is well developed in both technology and legal procedures. Its financial sector is primarily built upon universal banking systems and related areas like insurance, leasing, factoring and stock brokerage. The Turkish Lira is transferrable and convertible, exchange controls are liberal, and capital earnings after taxes can be repatriated.

 

Economy

 

Turkey's economy tripled between 2002 and 2008, and by 2015 it is projected to pass $1 trillion in size, up from $720 billion in 2010. According to the Organisation for Economic Cooperation and Development (OECD) Turkey is expected to grow at an annual average growth rate of 6.7% during 2011-2017.

 

Regulation

 

The current government in Turkey has encouraged foreign direct investment (FDI) by abolishing barriers to that investment.

 

Political System

 

This country is one of the Muslim world's few stable secular democracies and is being led by a stable government focused on long-term growth of the economy. Turkish public policies emphasize infrastructure investments as well as large-scale privatization.

 

Consumer Demand

 

Turkey has a population of 74 million, half of them under age 29, and a fast growing middle class. It has a very fast-moving urban population, mainly due to rural-urban migration. Urbanization has greatly influenced the demand for consumer goods such as cars, deep freezers, refrigerators, microwave ovens and other user-friendly cooking and other kitchen and laundry appliances. Urban consumers are well aware of international trends and have higher discretionary incomes.

 

Tourism and Hospitality

 

Turkey's tourism industry is flourishing. In 2010 alone 28 million tourists visited the country. Turkey is also becoming a major center for conference tourism. Consequently demand for quality hotels is increasing.

 

Retailing

 

Over the past decade modern, sophisticated retailers have grown to command a market share of about 30%.

 

Turkey's demographic and human resource advantages combined with a vast wealth of natural resources, under-exploited markets, a dynamic business environment, and increasing Westernization of business culture sets the tone for a lucrative atmosphere for international trade and investment in this emerging market.