Industry is for the big league, trade is for the little men

Turkish Exporters’ Assembly’s soon-to-be-released report, “2020 Export Report” has been drawn up both as a road map for the exporters and as an assessment of the Turkey’s exporting activities. As one of the editors of the report, I’d like to say that it’s been a great pleasure for me to read this well-structured report since it will serve as a great asset for everyone.

I would like to share here a small chapter of the report, which comprises numerous analyses on expectations until, so as to arouse a little bit your interest and shed some light on the readers’ perspective.

According to TurkStat data, 56.6% of $157 billion export volume in 2017 has been generated by industrial sector while trade sector was accountable for 40% and other sectors produced 3.4% of total Turkish export value. Turkish industrial sector achieved a 57.5% performance in a total of $168 billion export in 2018 while 38.9% was carried out by trade sector and 3.6% by the rest of the sectors. The contribution of trade sectors seems to have diminished in 2018 compared to 2017 while industrial sector has showed a better performance.

Now let’s see the scales of companies that displayed such high performance: When we take a look at the sectoral breakdown of total exports, we notice that companies larger than SMEs have showed their best export performance in industry both in 2017 and 2018. In 2017, 89.6% of their export has been realized in industrial sector, 7.3% in trade sector, and the remaining 3.1% in other sectors. In 2018, 89.3% of their export has been realized in industrial sector, 7.5% in trade sector, and the remaining 3.2% in other sectors, which goes to show that large corporations achieved their best export performance in the industrial sector.

The activity of the medium-sized enterprises, on the other hand, seems to have been carried out in more balanced manner. In 2017, 63.2% of their export has been actualized in industrial sector, 33.3% in trade sector, and the remaining 3.5% in other sectors, while in 2018, 61.9% of their export has been actualized in industrial sector, 34.5% in trade sector, and the remaining 3.7% in other sectors.

In 2017, Turkish small-sized enterprises’ export performance in industrial sector was around 27.9%, in trade sector, it was around 68.5% and, 3.6% in other sectors. In 2018, their performance in industrial sector hit 26.7% while achieving a total performance of 70.2% in trade sector, and 3% in the rest of the sectors.

Regarding micro-enterprises, they achieved an export performance of 10.1% in industrial sector, 86.1% in trade sector and 3.8% in the rest of the sectors during 2017, while in 2018, their export performance in industrial sector stood at 11.8%, in trade sector at 83.5% and in other sectors at 4.7%.

I can easily say that while micro-enterprises and small-sized enterprises seem to have greatly concentrated on the trade sector while medium-sized enterprises and larger companies have focused the industrial sector.

So, we can assume that the smaller scale becomes, enterprises tend to move away from industry and focus more on trading activities. The interesting part is a majority of Turkey’s export consists of industrial products classified as final goods but small-sized enterprises seem to be focused on a different part of the export.

I strongly suggest banking professionals, corporate executives who have been collaborating with different sectors for years to read Turkish Exporters’ Assembly’s soon-to-be-released 2020 Export Report before jumping into conclusions.

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