Competitiveness of Turkey in the Sectoral Transformation Process: A Comparative Analysis with the BRIC Countries

The Industrial Transformation Process And Competitiveness

Technological advances, increased international competition, and the decline of transportation costs and tariffs creates the opportunity for different processes to be performed in different countries by dividing major production activities with different levels of intensity into smaller sub-processes. Global business division increases the export of industrial products of the developed countries and the leads them to use more imported capital and intermediate goods by integrating national economies into the world economy. Thus, while the comparative advantages of the developed countries have become great in terms of intermediate goods, the relative advantages of the developing countries have increased in terms of finished goods. With these increasing comparative advantages, the developing countries are able to allocate resources for infrastructure investments, follow technological improvements more closely, and begin to pay attention to the quality of labor power.

Therefore, new production techniques are being applied in the industrial sector by which costs are reduced and higher shares of international markets are obtained. Additionally, the advanced economies, while leaving the production and hence the trade of a number of industrial goods and turning to the services sector, are specializing in the technology, knowledge, and skilled-labor-intensive phases of the production processes (Rojec & Damijan, 2008).