Offshoring to and from Turkey as an Emerging Economy: IT and other sectors

The aim of this paper is to determine the reasons and strategic drivers of offshoring activities of multinational companies (MNCs) in Turkey and compare those reasons with the ones found in other emerging countries. The primary data source is a series of in-depth interviews with professionals from several industries in Turkey. It was found that similar to other offshoring destinations, the reasons and strategic drivers for offshoring are market penetration and cost minimization. However three main points came up across all industries on why especially Turkey had been chosen as a offshore destination even though India and China are much more competitive in cost and market size: An ability to produce quality output in western norms; existence of motivated, flexible and highly educated work force which also has a passion for winning and an entrepreneurship spirit; and stable legal and technical infrastructure, serving as an international safe hub for MNCs to enter emerging markets in east and south. It was also found that mid to small size local firms tend to offshore out of Turkey because of competitive incentives and tax regulations in the neighboring countries.