German-Turkish industrial policies within the framework of the industrial policy of the European Union: A research on the manufacturing industry

In this study, it is aimed to examine the reflections of the current conditions on the industrial policy of the European Union and the effects of these reflections on the German-Turkish industrial policies; identifying possible impacts of the Industry 4.0 process on German-Turkish industries; as a result of the analysis conducted within the framework of the Balassa index to determine the competitiveness of exports in terms of technology densities of the German-Turkish manufacturing industries, it is aimed to determine whether the problems experienced by the Turkish industry in creating added value stem from the asymmetric disadvantages after the Customs Union or other domestic and foreign political effects. In this context, in the first chapter of the study, the concepts of industry and industrial policy, industrial and competition policies of the European Union have been approached from the theoretical and historical perspective; in the second and third chapters, the historical development of German-Turkish industrial policies in parallel with the industrial policy of the European Union is examined in detail in terms of their approaches, including the basic approach of Industry 4.0, and their relations with the main policy areas; in the last and application chapter Germany and Turkey, two countries covered by the survey have been analyzed in terms of the process of bringing to today's international position; the manufacturing industries of both countries were analyzed comparatively in terms of productivity, capacity utilization rates, value added, production index, R & D expenditures and employment indicators and finally the competitiveness of German-Turkish manufacturing industries in exports was analyzed for the years 1996-2018 covering the post-Customs Union process. SITC Rev.3, 3 digit product and/or product groups included in the UN Commercial Statistics Database (UN Comtrade) was used as data set for the analysis; competitiveness values of 134 products and/or product groups in total with low, medium and high technology density according to technology levels have been calculated separately for both countries and technology groups using the competitiveness measurement method the Balassa Index (RCA), which was developed by Béla Balassa in 1965. The study has shown that in order to obtain added value and product diversity in industry, industrial policy should be encouraged by the main policy areas determined as competition policy, trade policy, innovation policy and education policy in order to show parallelism with the industrial policy tools of the European Union. The monitoring of the Industry 4.0 process by Turkey, which was launched in Germany will create economical, ecological and social impacts and efforts should have been made to make positive progress in terms of economic, social and other important indicators. It was emphasized that the asymmetric disadvantages arising from the Customs Union might have hampered the efforts of Turkish industry to create added value, but this was not the only reason and especially R & D investments are important at this point. It is known that Germany has superiority to Turkey in the manufacturing industry by the indicators such as productivity, capacity utilization rates, value added (except for the years between 1996-1998), production, R & D expenditures and employment. In this respect, the answer of the question why German manufacturing industry exports between 1996 and 2018 is not strong or moderate and only weak compatitive in high technology density can be given with the shift of the production to Eastern countries especially to China due to the economic and geographical cost advantages. Germany also has a disadvantage in terms of competitiveness in exports at low technology density and has weak comparative advantage in exports according to medium technology intensity. Turkey has moderate comparative advantage in exports by low technology intensity and weak competitive comparative advantage in exports according to medium technology intensity. Turkey has comparative disadvantage in exports by high technology intensity. Key words: European Union, Germany, Turkey, Industrial Policy, Revealed Comparative Advantage Index