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Istanbul high tech coup grabs IT from India
(Turkish Daily News Via Thomson Dialog NewsEdge) The flight from India to Istanbul's up-and-coming Sisli district by the research and development arm of the Netherlands' information technology giant Cat Logic sent excitement through Turkey's own high technology circles Friday with the hope it may herald a new dawn in the realm of IT and software programming
The news was particularly heartening as it came the same day as word from pharmaceutical giant Roche that it is selling off its manufacture assets in Turkey and cancelling plans to expand here into bio-technology. Roche's facilities in Istanbul's industrial district of Gebze on the outskirts of Istanbul were opened amid fanfare -- and controversy over local pricing practices -- just two years ago and will be taken over the the generic drugs maker Sandoz, a division Novartis
But Roche's departure news was overshadowed by a tone of celebration that Turkey's fledgling and long-struggling IT sector had staged a coup on powerhouse India, convincing company executive that Turkish professional can produce a better quality product than their famed Indian counterparts
"Turkey will play a critical role in our efforts to become Europe's No.1," said Marcel Bakker, CEO of the Dutch firm which provides programming services to logistics companies such as DHL, Hoyer and Sutten. While investment terms were not disclosed, the company revealed plans to hire some 50 programmers initially for new facilities in Sisli. Local IT executives said the shift will bolster efforts to woo other European firms to Turkey's own small but fast-growing IT sector
"Many IT giants are in the process of shifting their base towards Turkey, said Yasin Altunkaya of Data Expert Human Resources, who helped Cat Logic recruit specialists for its new Turkey office."Software companies are constantly knocking on our door. Nothing like this had ever happened before. There will be a huge growth in this sector soon. There will be 10,000 new jobs in this sector." News of Cat Logic's decision followed by a day the prediction by the founder and chairman of Switzerland's World Economic Forum, Klaus Schwab, that Turkey is on the verge of joining the world's emerging tiger economies whose growth is fueled in large part by a savvy strategy embracing information technologies
"People in development and investment circles talks of the BRIC's, the lands of opportunity that are Brazil, Russia, India and China," Schwab told a Davos regional "mini-summit" that concluded yesterday in Istanbul. "I propose that we call them T-BRIC's, for Turkey is one of the great areas of potential in the world." Turkey's own IT sector is tiny in comparison to India high tech tiger economy and represented just $617 million in 2005. But with a current growth rate exceeding 35 percent, the sector is expected to toward $800 million this year
Suffering a shortage of skilled IT personnel, Europeans have in recent years shifted many of their programming branches to India, a country home to almost half the IT professionals in the world. However, problems in quality, sourcing and distribution has directed the gaze closer to home and it may be landing on Turkey. Bakker cited Turkey's huge growth potential and better communications network and a driver of CAT Logic's decision-making. Founded in 1989, the company has bases in Holland, Britan and Germany
"We initiated a new expansion process in 1996 and opened a bureau in India in 2002," Baker said, noting his firm is not alone in taking a second look at the wisdom of outscoucing to India with Turkey close at hand. "Other European companies are also considering shifting their base to Turkey. From now on, bases in Europe will concentrate on sales. Development will be in Turkey." He continued that the company's decision to choose Turkey over India was due to serious time difference and managerial problems. "Turkey is different. The time difference is only two hours. In emergencies, it takes almost two days to go to India or bring some one over here. There are serious cultural differences too. Work is not done on time. We believe Turkey will provide a solid base in this context," he said. "It has become almost impossible to find IT personnel in Europe. Not a single person applied to our ad for job vacancy." He said lack of personnel constituted a huge risk for all IT companies and additionally, the cost of hiring an IT expert had skyrocketed
HH] Microsoft aware of the shift to Turkey: Mustafa Cagan, Microsoft Corp.'s business development deputy seconded Bakker's optimism about Turkey and its appeal to European firms for both economic and lifestyle reasons.
"The interest towards Turkey is no accident," Cagan said. "In terms of information society-based competitiveness, Turkey will soon become a regional leader. It is currently providing the highest quality and quantity of software in the region. Turkey has more than 35,000 programmers. In terms of attracting the European knowledge on IT, which is exiting the continent due to lack of human resources, Turkey has a huge potential. If we add Turkey's location, young population, Turkish entrepreneurship and creativity to this advantage, we face a very positive picture." Turkey is among the top users of Microsoft's MSN messenger service with 15 million members, he noted: "This development did not escape the headquarters' attention. The Turkish market is now included among the BRIC+ countries with very high potential.' Other countries in this category are Russia, Poland and India."
Since the visit by Microsoft foudner Bill Gates to Turkey earlier this year, he was followed by company CEO Kevin Turner was was here earlier this month to exchange ideas with partners. Next up for a visit is Microsoft International President Jean Phillipe Courtoise who is coming here in the near future
Local programmers achieving global success: Fethi Demir of the Turkish Programmers Association (YASAD) said the Turkish programming sector had grown by leaps and bounds in the past few years, noting that such huge growth did not escape the eyes of foreign companies
The number of foreign companies in the local market will increase in the near future, he predicted Demir. "Not only IT companies, but also huge companies are considering shifting their IT departments to Turkey. Fortis, which purchased Disbank in 2005, has already voiced it intends to do just that." Demir said the experience of both Irish and Indian IT firms should send a strong message to Turkey that what counts is high quality, not just cheap labor
On the front of pharmaceutical and life sciences technology, observers offered a similar warning that Roche's decision, while formally announced as a decision made in light of global strategic plans, is a bad omen. Foreign, research-based drugs companies complain bitterly of foot-dragging in new product approvals, bureacratic delays hampering new investment and a reimbursement for drugs procured by state hospitals that can take as much a year
"The loss of one drug maker may not make a trend, but it is hard to escape the conclusion that an investment environment that is perceived as hostile is part of Roche's decision," said one pharmaceutical executive who spoke on condition of anonymity
(Referans medical economics reporter Nazli Topcuoglu contributed to this report)
Copyright 2006 Turkish Daily News. Source: Financial Times Information Limited - Middle East Intelligence Wire.
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