How to finance the digital transformation: Two policy recommendations for two components of digital transformation

Digital transformation is a concept that expresses the adaptation to digital technologies and profoundly affects the economy of our age with its cost-reducing, value-increasing, and innovation-triggering features. Many countries allocate resources and take initiatives at the national level for this transformation that determines competitiveness. Technology investments that will transform the capital and programs that will adapt the workforce to this transformation are envisaged. However, financing digital transformation does not seem easy for some countries, including Turkey. In this study, the world literature and the three developed countries' current policies were examined to develop alternatives to conventional methods such as direct use of the public budget or commercial loans for the financing of digital transformation. Accordingly, the strategy documents of the United Kingdom, Germany, and South Korea were analyzed and presented in comparable templates. By compiling the findings, alternative policy recommendations for Turkey were created. Individual tax-deductible training programs were suggested to transform the labor, and it has been proposed to evaluate the accrued severance pay for technology investments. It has been stated that a training program whose framework is determined by public authorities and left to individual preferences can be more effective in developing digital skills. It has been noted that the employee's waiver of the accrued severance pay in return for the shareholding in their company will both create a new source for investments and solve some ethical dilemmas. The policy recommendations presented are justified, and weaknesses that need improvement are also discussed in this thesis.