EMRE BERKİN

Chairman, Microsoft Middle East and Africa

İyi günler. Saygılarımı sunarım. Microsoft’un Ortadoğu ve Afrika Başkanı, Avrupa Başkan Yardımcısıyım. Mehmet Bey bana da İstanbul’a hoş geldin dedi diğer panelistlerle birlikte. Ben de İstanbul’da olmaktan çok mutluyum. İstanbul’da yaşamama rağmen, işim beni % 60-70 zamanımda maalesef yollarda tutuyor. Bugün bu panelde olmaktan çok gurur duyuyorum ve mutluyum. Teşekkür ederim.

Ben sizlere daha iyi bir oturum sunabilmek için panelistler olarak aramızda iyi bir uyum sağlamamız gerektiğine inanıyorum. Onun için müsaadenize sığınaraktan konuşmamı İngilizce yapacağım.

Knowledge economy or knowledge society we use the term in an interchangeable way, I define it as society where means and measurement of production vibrant economic activity and good effective governance is based on knowledge and through knowledge creation knowledge discrimination and sharing this knowledge, accumulating this knowledge and most importantly applying this knowledge, attaining high level of socio-economic development and raising the standards of living in that particular society. Actually the branding is not that important whether we talk about this society or that society, we are basically referring to a society that is economically well off with high standards of living and more importantly achieving all of this by being very very very competitive in the global landscape. When we talk about knowledge society I think in order to discuss it well and in an all around manner we have to look what was before the knowledge society. If you go back little over 200 years ago we’ll be looking at agricultural society and agricultural economy where land was the most important thing and here I would like to use analogy from Alvin Toflin, he claims the land was the most important and it took brut force to produce then as the humanity transformed into an industrial society the living standards improved and the way people behaved and lived their lives, life pattern dramatically changed and in case of industrial society the capital was very important because that capital was used to set up factories, to build railroads, ports and whatnot and again here money was the power behind this economy and behind this society. When we look at knowledge society…….of industrial production or agricultural production, the land or the money, the financing can be concentrated, managed and controlled by a few either powers or centers or organizations or countries nobody, no country, no organization can monopolize knowledge because knowledge is created and it comes out of people’s hearts and minds, it is the fruit of people’s not as we know as the traditional labor, not fruit of muscle but again hearts and mind. So today the most important power and the wealth that goes with it is the knowledge, not the physical property or financial wealth. My company is one of the leading examples of a knowledge organization we call our employees knowledge workers so in a knowledge society, in a knowledge business environment, in knowledge economy the differentiation between white-collar workers and blue collar workers is pretty much diminishing and we start talking about knowledge workers. The importance and power of knowledge and wealth that it brings again my company is a very good example of that are market capitalization or our market value is always either number 1 or number 2 depending on the world economy and today we are number 2. our market cap, market valuation is roughly about 8 times of our annual revenues at its peak it was 40 times in the late 90’s, in the good old internet bubble days, where does this in today’s numbers 300 billion dollars worth of value comes from? Microsoft does not own very negligible, very little, any fixed assets, all of this wealth that price tag is put on to it by the free market comes from the intellectual property we own. We use knowledge to create knowledge, we use knowledge to create intellectual property then we turn around and moneytize that. So today knowledge has become more important then land, more important then tools and machinery and labor and since the days of industrial revolution two leader factors of production as I mention labor and capital, today knowledge, productivity, education and intellectual capital, they are replacing the old forms of necessary means to produce. The barrier of entry into knowledge economy or a business to create or start up a business based on knowledge the barrier of entry into this is very very low compared to many other leading industries of the recent decades or today take it highly integrated electronics, aerospace or even very futuristic industries like biotech, the fruits of biotech, the moneytizing of biotech may be is happening today and is going to pick up at a very fast phase in the days and years ahead of us but results are the fruits of work that has been going on for 20-30-40 years and to close this gap is not possible because that is how much time it takes to do lab work, how much time it takes to do research and experimenting with biotech.

So today knowledge is basic and the most important form of capital, creation accumulation, sharing and application of knowledge drive economic growth and social welfare. May be I would like to conclude this first round by giving you what World Economic Forum sees as the layers that make up knowledge based society information society, knowledge economy at the very bottom World Economic Forum puts rule of law so legal environment and legal framework. I’ll give you 2 examples, something that’s proactive and defensive which is IPR (intellectual property rights) protection and the laws governing that and a practical one is digital electronic signature. In Turkey we have them both in place. Second layer is telecom infrastructure and telecom networks, I am sure my co-panelists are going to get into that and it is their expertise so I am not going to touch that any further. Internet, spread and use of internet, when it comes to using internet like again drove analogy at war time in the armies there is a commitment, soldiers commit themselves to saying there is going to be no men left behind whether wounded, live or dead. During his presidency President Clinton started a campaign like that saying ‘no child left behind’ spreading Internet usage into every school in the US so that kind of infrastructure layer World Economic Forum thinks is necessary. Computer hardware, another piece of infrastructure, the ease of access to computer hardware, the economic affordability of computer hardware, tariffs and taxes around, VAT’s around it there are those that need to be worked and looked. One before the last layer is the software, e-business, e-government and contact so giving people compelling reasons to transition into the knowledge based society, knowledge based way of working, showing them the benefit and the last but definitely not the least is education and training including life time learning so these layers in other words I also grouped them to simplify things in 3 pillars of knowledge based society which is;

the infrastructure and hardware,

the capacity building,

all the education the content, the e-applications

policies and procedures,

all the legal framework and

all the processes.

Thank you very much.

Mehmet Öğütçü: Sanırım Sayın Emre Berkin oldukça önemli konulara değindi ve aynı zamanda biraz tartışılacak beyanlarda da bulundu. Belki bazı panelcilerimiz kendisine cevap vermeyi isterler.

Still you didn’t respond to the question of key policy message to the political leaders, if you have to give just one key message in terms of policy action, what would it be?

I think in case of Turkey, it will be in a very brief way would be two things, first education and adaptation of technology is second because education, the capacity building is the key, it also entails in an implied way, states making use of new technology as a nation, as a country we have to face and embrace new technologies other wise new technologies are very rude, they don’t say please and it doesn’t say excuse me. It goes right by you, if you don’t embrace it, as brand children of a big nation or empire we have missed the print, technology of Guttenberg and we pretty much missed the industrial revolution so we cannot afford to miss the knowledge revolution.

Question: Thank you very much, my name is Mory special advisor to the Japanese government and my question is to Mr. Berkin, Turkey is in the sense credit card society, I think people use credit card so often but on the contrary e-commerce through the internet is not popular at all so what is the main program from the stand point of technology and secondly and more importantly how can we solve this issue? Thank you very much.

If we look at the internet penetration in terms of usage in Turkey, it is estimated to be about 8% with an optimistic estimate and pc penetration is less then that it is about 6% and then as my fellow panelist very rightfully pointed out now besides pc’s we are having other devices come into the market to access into internet and to access information. I think the lag between that usage and e-commerce in Turkey is a temporary thing, we see that take-up in the more developed countries because of the culture buying or trading something remotely over the phones and even TV channels was already there and existed, it just moved on to much better, richer and more effective and productive environment which is internet. There has been an issue again around the legal framework in Turkey which now has been to a greater extend resolved so I think it is eminent for e-commerce also in Turkey to take-off. I just would like to give you one other example when we talk about 8% and 6% I say they are estimates because I rely on market data but some of the numbers I know very well because they our numbers, hotmail usage which is our free e-mail service over the internet in Turkey is at 3,5 million people, messenger user in Turkey is also about 3.4 million people and the messenger usage over the last year more then tripled in 12 months time. From January to March it went up by 500.000 people so I think we are just at the verge of also seeing this take of in space of e-commerce. Thank you.

Question: Merhabalar, Tevfik Uyar. İTÜ’den geliyorum. Türkiye’de e-ticaretin bu kadar yaygın olmamasının sebebini ben e-ticarete duyulan güvenin azlığı olarak görüyorum fakat yazılım şirketlerinin olsun, e-ticaret şirketlerinin olsun e-ticaretin aslında güvenli olduğunu, kredi kartı bilgilerinin kolaylıkla paylaşılamadığını ve buna yönelik güvenlik sistemlerinin var olduğunu anlatması gerekmez mi veya yapılıyor mu?

Çok doğru ve çok haklısınız ve internet şu anda zaten 100% emin bir yer de değil fakat internet üzerinde kredi kartı tansaction’ı yapmak sizin bir restorana gidip garsonun kredi kartınızla 5 dakikalığına gidip gelmesine göre belki 10, 20, 50, nerede yemek yediğinize bağlı daha emin ve daha güvenli ama haklı olduğunuz bir nokta var bunun bilincinin yayılması lazım çünkü sahiden Türkiyede gerek kredi kartı olsun gerek ATM kartı olsun kullanımı bayağı yaygın ve kredi kartı kullanımına oranla internet üzerindeki alışveriş ve ticaret hacmi şu anda düşük. Ama ben bunun patlamasının an meselesi olduğuna inanıyorum ama bu sadece kredi kartı ve güvenlik meselesi değil aynı zamanda internet üstündeki içeriğin Türkçeleşmesinin ve daha zengin seçenekler sunulmasının da bunda payı var. Ben genelde iyimser değilimdir ama bu konuda çok iyimserim.

On two points I respectfully disagree with my fellow panelists, one is the role state or the government has to play, I strongly believe in our country’s governments, they have to play a role and they have to really lead and I am very open to challenge to making the statement because my fellow panelists are from two countries which I myself would place in top 5 of countries being closest to knowledge societies and I represent a business that is one of the ultimate private entrepreneurship so not in defense of any government or state, both in the US and now the EU we are at the courts with the governments and I myself as a person and as a businessman I am nova nir devletci but in this case in our environments I truly believe state and government has very impactful role to play and secondly I again respectfully disagree with you Lordship the 2010 Lisbon agenda, I think it is a OK plan but even if you have the best plan with bad execution you don’t get good results so I think countries like ours they have benefit to be realized those plans but execute much better because I personally prefer being approximately right then being precisely wrong so think the experiences gained with the 2010 e-Europe mission or vision I think countries like ours we have a lot to benefit from.