As it prepares to celebrate 160 years of business activities in Turkey, Siemens is very much looking to a future based on digitalization, automation and electrification. Siemens Turkey President and CEO, Hüseyin Gelis, talks about the Turkish climate for innovation and his company’s own contribution to “inventing the future” of Turkey.
In one of your blog posts, you wrote: “Thinking of the turbulences in our world today, I believe that humans are capable through their thinking and actions to improve this world.” What are your thoughts on the actions that can be taken to allow Turkey to recover the momentum it experienced in the early parts of this decade, and fulfill its ambitious 2023 targets?
Turkey is a global center and it is an essential part of the global economy. We can never assess Turkey only within our own borders; we are constantly being affected by what is happening outside of Turkey.
From my point of view, Turkey has performed well over the past decade. It will continue on a growth path, but no one can be sure of the percentage of global growth in the future.
We need to be aware of the core factors which will affect each country in the world in the years to come. For example, energy consumption, climate change, agriculture, and the results of the 20th and the 21st century’s capitalistic system which has created social divides and turbulence.
Then you have Turkey, an interesting center, which looks towards Europe. But Europe has its own problems. I am not talking only about Greece; overall, the European idea of its future needs to be discussed and reinvented.
If you look to the East you will see all the turbulences not only coming from Syria, for instance, and but also from other parts of the region. Another example is Russia, which is a very close neighbor and we all know the problems they need to solve.
If you look across the Mediterranean you have the beautiful African continent and their turbulences. All are affecting Turkey as well. So when you talk about “Turkey’s Vision 2023”, for me Vision 2023 is a pathway and not a fixed target. Turkey is on the right path and that is what matters.
The last OECD report in April 2015 points out that the global economy will actually stagnate in the 21st century and we won’t see those big growth rates anymore. We need to consider that Turkey’s growth will not be as high as it was five or six years ago.
It will be less because we are also affected by our environment and the region. But despite all these facts Turkey is doomed to grow.
Why? Well, we have some competitive factors: we have a very young population; we are building the necessary infrastructure; and we are associated so closely to Europe and its norms and standards.
Turkey is using its current association with Europe and the European Community and its flexibilities to boost the economy and technological capabilities by macro incentives.
On the other hand fast growing evolving economies have in their nature the risk of fragility.
An evaluation of science, technology and innovation in G20 countries was published by TEPAV earlier this year. In this evaluation, Turkey was ranked in the bottom group of countries that has not showed any significant development in transitioning to high-tech industry over recent years. What factors have held back this transition to a high-tech structure in Turkish industry and exports?
One important topic is related to the “catching up” phase of an economy or a country. For example, whenever I talk about technology and innovation, I divide the issue into revolutionary and evolutionary innovation.
At which stage is a country innovative? How do they evolve into the next steps? How long does it take? What is required? I remember encountering companies from Japan at German trade shows in the 1970s.
I was fascinated by them, because they were always standing in the exhibition halls doing beautiful drawings. They learnt, they caught up, but they had to evolve in the innovation process, and then later, they came up with revolutionary ideas.
In Turkey, we are finding our own way of evolving innovation and then, one day, we will move onto revolutionary innovation as well. There are many key aspects required to open up a society for innovation.
I would just mention one of them; it is education, which will produce a generation of creative thinking people. That is easier said than done.
In regards to this, a positive trend in Turkey is the increase of universities in the last 10 years. More than 100 new universities were opened in Turkey; that is significant. This will be global future not a local future.
That is what we all are witnessing. The Turkish incentive system towards innovation is one the most attractive in the world.
I will give you an example: we have a factory in Turkey for medium voltage systems, and when we started it we said we also need an R&D location. So we applied to the government and we said we would like to have two floors at that site with one being an R&D center.
Very quickly, we had that approved; in a few months they approved the site and people working at that location have a tax-free position.
You can ask “is it more R or D?” And many times is D, which stands for “Development”, but then it will attract “Research”, the R. As pointed out earlier, it is not only education; much more is required for innovation.
You also have to create the environment for people to come up with ideas to start companies and even if you fail, you don’t have to consider yourself a loser. But this is in fact a cultural topic.
To create revolutionary innovations you need young people, creative people and a free environment.
How is Siemens supporting innovation at the grassroots level in Turkey to encourage the next generations to believe in their power to “invent the future?
We support 11 universities in Turkey, all over the country. We give scholarships. We have research projects with some of these universities, where we provide equipment.
Students experiment with that equipment in order to find something new. We also have strategic agreements with them. We support universities which are in fields like mechatronics.
We are supporting high school students as well by trying to guide them with engineering research projects. Then we are trying to involve and attract students to Siemens itself through internships and we intend to give them mentorships at various levels too.
Siemens saw the investment potential in Turkey some 160 years ago and is now one of the most established and profitable international investors in the country. However, sometimes people speak of a clash between the German and Turkish business mentality. So what are the foundations and strengths of Siemens’ long-term, successful relationship with Turkey?
Clashes are not always negative. They can bring something new as well. Think about this: What is the classic German way of doing business?
When you analyze this you will see the words most associated with German business: long-term, security, quality, sustainability… all these aspects.
So before you start a business you need to be sure that everything is very transparent in the German way of doing business without excluding that the Turkish companies might do that as well.
The overall Turkish mentality is different: as soon as an opportunity appears, you go for it. Turkish businessmen and businesswomen traditionally come from textiles, and then they move to tourism, sometimes they move onto construction and nowadays, to energy.
Maybe a customer comes and says, “I want to build a wind park”. And what do they know about operating a wind park? Maybe not too much, but they have the courage to do it.
Now put these two mentalities together: they clash but it is actually the perfect match. So the relationship is beneficial and enhancing.
I prefer to use often the word ‘trust’ to illustrate this combination. For example, Siemens’ motto is “Trusted partner of all stakeholders”. If our customers trust us, they will come to us again.
If our employees trust us, they will stick with us and help us grow; and when our headquarters trust us, they will also support investment in our country.
My role as a CEO in Turkey is always to convince all those stakeholders that their association with us results in the best return for their money.
I believe the word” trust” was and is for this reason, the most important concept in these 160 years of Siemens in Turkey.
Siemens has a global 2020 vision. How is this being reflected in your activities here in Turkey?
Well, I will have been in Siemens, next year, for 40 years. If I think of this company today, I can say that we have constantly reinvented ourselves because our environment is constantly changing.
I am particularly proud of being in a company which is not stuck in a determined framework. In these 40 years, we constantly changed dynamics and reinvented ourselves.
As the last OECD report says, if the worldwide economy does not grow, then what are we going to do? How are we going prepare ourselves for the future? That is what vision 2020 is all about.
To make us fit for the future. In this regard, we are investing for the benefits of all the stakeholders I mentioned before.
We want to create more innovative products to give solutions in the areas of electrification, automation and digitalization; a creative working environment for our employees; and for headquarters a trusted local partner in Turkey with a strategic role in this part of the world.
Digitalization will dominate the world and Turkey in the years to come. This in particular is a big opportunity for Turkey itself. Why? People in Turkey are among the top five active in social media worldwide.
Why are emerging countries so active in social media? You have to analyze this very carefully because there is a huge opportunity there. You have a lot of young people and society constantly creating data.
We will see more young people creating new business solutions and services from their home. The list is endless: healthcare, energy, education. All new jobs in this new digital world can be done from home or rural areas creating more flexibility.
Maybe this is also an answer for the urbanization not only in Turkey. Worldwide, 50% of the population lives in large cities. In Turkey, today that number is 72%. In 2023, it will be over 80%.
What role do you envision that Siemens Turkey will play in helping this country meet its growing energy needs, in line with your global 2020 vision?
Looking into our history in Turkey, we have already played a role in this area over 100 years ago. In 1906 we built İstanbul’s first energy plant.
In 1911, we built the thermoelectric power plant for the larger Istanbul Municipality which was used until the early 1980s. In recent years, we helped the governments write a white paper for energy efficiency in Turkey.
This is not only to produce and generate energy and energy solutions, but also to ensure the production of energy efficient solutions and combine it with a sophisticated smart grid.
Here we played a key role in the Turkish market. We do not stop here. We never forget education. This is one of our most important contributions: we go to schools, we educate kids to understand what energy is all about and we published a book on sustainable energy which was distributed all over the country in elementary schools.
I read another quote from you that resonated. You said, “We cannot predict the future; we have to invent it.” The leaders of the most powerful countries in the world will meet in Antalya in November and discuss this year’s agenda and decide what concrete actions can be taken. As one of the most well-known and respected CEOs in the country: What single piece of advice would you offer to G20 leaders regarding the future of the global economy?
I’m sure I was not the first one to use this quote but I believe that the future of the world economy is based on trust. We very often think about investments in a country, in a region.
But what is the investment climate based on? From my experience, it is based on trust. In the global economy no country is automatically entitled to any good wealth from an investor.
Each country’s government should work on earning a solid reputation and win the trust of the world community.
The second thing is that nobody should think that one can cluster the world in the same traditional ways anymore. Cultures, traditions and economical borders are constantly changing.
Ultimately, we live in a global economy. Again, trust is essential and we have to trust in the ‘new’. This is what I would recommend.
We have to find new areas where we can learn from each other and not try to dominate each other. We also have to give the younger generations the opportunity to interact and talk in their own way.
One last question: what makes Mr Gelis different from other CEOs in Turkey?
You should ask my colleagues. However, I believe in utilizing and using resources. We are constantly confronted with new problems in our daily lives. I believe we need different resources to solve such problems.
We can only solve problems by looking at them from different angles. Looking at different angles and utilizing resources is maybe what I do differently. Maybe...