Overview
Türkiye’s young, sizeable population, dynamic entrepreneurial class, and advantageous geographic position as a bridge between Europe and Asia have made the country an important manufacturing and distribution hub. Türkiye positions itself in the global value chain by leveraging lower labor costs and flexible production capabilities. Manufacturing’s share of GDP has increased to 22.2% in 2022 up from 19.1% in 2020.
Early adopters of advanced manufacturing in Türkiye include the automotive and aviation industries, both dominated by major international companies with many local suppliers who must meet the latest standards and technological requirements. In addition, the consumer goods, electronics, chemicals, machinery, steel, construction, textiles, energy, and mining industries are focused on adopting advanced manufacturing technologies to remain competitive.
Currently, 39% of Türkiye’s manufacturing exports consist of medium-tech products and 5% consist of high-tech products. Türkiye aims to increase the former to 44% and the latter to 6% by 2023. In 2021, the EU adopted the Carbon Border Adjustment Mechanism, which imposes taxes on imports if their carbon intensity exceeds EU emissions standards. Türkiye needs to heavily invest in cleantech solutions to meet the new EU standards and continue exporting to the EU, its largest trade partner. The GoT generally supports technology initiatives and major procurements, creating new opportunities for international technology companies. Over the next decade, Türkiye is expected to invest between $1 to $1.5 billion, annually, to integrate industry 4.0 solutions (referring to the fourth industrial revolution and the digital transformation across manufacturing industries) into the manufacturing process. Further investment is needed to upgrade Türkiye’s technological infrastructure, including funding for fixed and mobile broadband services, and fiber optics. Türkiye’s path towards digitalization will also require prioritizing science, technology, engineering and math (STEM) skills in education. If Türkiye fully adapts the industry 4.0 concept, it could save $10 billion a year in current manufacturing costs based on an estimated 4-7% increase in productivity.
In 2019, the Ministry of Industry and Technology announced Türkiye’s 2023 Industry and Technology Strategy detailing incentives for R&D and digital transformation of industrial enterprises. Türkiye is investing heavily in over 300 product groups in the machinery, semiconductor, aerospace, defense, transportation technology, software, electronics, chemistry, and pharmaceutical industries. The Ministry of Industry and Technology is providing incentives for the development of new technologies involving artificial intelligence, 5G, big data and data analytics, IoT, blockchain, robotics and autonomy, UAV’s, biotechnology, nanotechnology, cybersecurity, additive manufacturing, quantum computing, ag-tech, and energy technologies. The GoT is establishing digital transformation centers piloting new technologies within organized industrial zones and technology development zones (Technoparks) across Türkiye. MEXT, located in Istanbul, is Türkiye’s largest digital transformation center, showcasing over thirty new technologies. Due to Türkiye’s Customs Union with the European Union, Türkiye has access to EU Horizon Industry 4.0 funds. These funds provide $0.5-$2.5 million in support for private sector projects in various Industry 4.0 categories.
Leading Sub-Sectors
Innovative Materials / Technical Textiles
Innovative materials/technical textiles are used in sectors such as aviation, agriculture, construction and infrastructure, medical, energy, transportation, and marine and defense. Türkiye’s total imports in this category (including composites) is around $2.58 billion. The market is expected to grow around 5% annually.
Additive Manufacturing
The automotive, aerospace and defense, household appliances, machinery, jewelry, and medical/dental industries began using additive manufacturing in Türkiye in 2014. SMEs seek additive manufacturing primarily for the molding/sampling process and typically outsource this service. Türkiye accounts for 1.3% of global additive manufacturing use as of 2021 with a market size of $336 million. Over 500 mostly polymer-based 3D printers are used in manufacturing. There is growing demand for advanced 3D printers and CAD and CAM programs, advanced printing materials (including biomaterials), and large-scale additive production capabilities. In 2022, Turkish Aerospace Industries acquired the world’s largest electron beam 3D printer, enabling it to print large sized titanium aerostructures.
Industrial Automation
According to the Industrial Automation Association (ENOSAD), the industrial automation market in Türkiye was valued at $1.8 billion in 2022, with an annual growth rate of roughly 15%. The market is expected to reach $2.5 billion within the next three years. Collaborative robots, modular automation systems, and in-factory 5G networks are the latest industrial automation trends in 2022.
Many international companies present in Türkiye also serve the Eurasian, Middle Eastern, and North African markets, with an annual regional business volume of around $2.5 billion.
IoT / Big Data and Analytics
Some of the big data and analytics usages common in Türkiye include:
- Supply chain and warehouse management processes: Real-time tracking of demand, order fulfillment, manufacturing flow, returns, etc.
- Production lines: Real-time control of performance, product durability, and safety
- Predictive maintenance: Real-time monitoring of industrial manufacturing devices allowing companies to predict when maintenance is required
In 2021, IoT sales in Türkiye totaled $1.2 billion, up 20% compared to 2020. There are 7.4 million M2M subscriptions in Türkiye.
Robotics
There are 20,150 operational industrial robots in Türkiye, with about 35% in the automotive industry. According to 2021 statistics, countries with robotic capabilities in manufacturing use, on average, 80 robots per 10,000 workers. Türkiye uses 36 robots per 10,000 workers, leaving significant potential growth opportunity. Robots in Türkiye are most often used in the automotive industry, with over 230 robots per 10,000 workers (making it a top ten global market for robots used in the production of automobiles). Türkiye is also a growing market for secondhand robots. Germany and the United States are the main sources of secondhand models.
Augmented and Virtual Reality
In the aviation, defense, automotive, electronics, durable goods, and textile industries, several large companies use AR and/or VR to select parts in their respective warehouses, transmit repair instructions over mobile devices, simulate products and production processes, and train workers. Further development of 5G networks will increase the markety for industrial AR and/or VR aplications.
Opportunities
According to the U.S. Department of Commerce’s International Trade Administration (ITA), Türkiye ranks 16th for U.S. manufacturing technology exports, Companies with the greatest demand for advanced manufacturing technology solutions in Türkiye include the automotive, aviation, defense, durable consumer goods, electronics, chemical, machinery, steel, construction, textile, food processing, energy, and mining industries.
For advanced manufacturing applications, there are emerging opportunities in product simulation and modeling, RPA technologies, advanced materials design, flexible production solutions, big data analytics and AI, enhanced cybersecurity, and predictive maintenance. In addition, there is a significant need for qualified solution partners and systems integrators in Türkiye.
For further information on this section or for more on potential opportunities, contact:
Perim Akguner
Commercial Specialist
U.S. Commercial Service Türkiye