IMPORTANCE OF SERVICES TRADE AND A CASE ON COMPETITIVE ADVANTAGES OF TURKEY

Abstract

Purpose: The services sector has been emerging as a key driver of global trade rather than merchandise trade. Together with the re-shaping role of digitalization, ICT and ICT enabled services have been of high importance for the global growth and presenting opportunities both for developed and even more for developing economies. Telecommunications, computer and information, insurance and pension, financial services, intellectual property are emphasized for being more efficient on economic growth and after the Covid-19 pandemic outbroke, the importance of ICT and related services were highlighted due to the rapid digital transformation the pandemic has triggered. The purpose of this paper is to analyze Turkey’s foreign trade competitiveness in ICT and ICT-enabled services comparing with the major exporters of aforementioned services. Method: Competitiveness of Turkey, USA, India and China are compared in the trade in services by using competitive advantage indices RCA, RXA, RMP, RTA, RC. Findings: Turkey has a surplus in its services trade, however, the sectors Turkey has competitiveness are travel and transport but not the ICT and ICT-enabled services. Digital transformation may help Turkey to both enable sustainable trade and faster recovery from pandemic. Originality: Originality of the paper comes from the indication of necessity to change the mixture of Turkey’s trade in services and the literature lacks this kind of research.