< PreviousAUGUST 2021 69 Sectoral Turnover Ratios - 2020 Sectors Asset Turnover RatioEquity Turnover Ratio Operating Capital (Working Capital) Turnover Ratio Top 500 Private Enterprises Public Enterprises Top 500 Private Enterprises Public Enterprises Top 500 Private Enterprises Public Enterprises 05-08 Mining and quarrying 0.400.640.200.761.130.411.131.101.20 10Manufacture of food products1.391.480.704.784.53102.691.932.100.81 11Manufacture of beverages0.470.47-1.541.54-1.051.05- 12Manufacture of tobacco products 0.930.93-3.623.62-1.231.23- 13Manufacture of textiles 0.650.65-2.362.36-1.001.00- 14Manufacture of wearing apparel 1.391.39-3.673.67-1.981.98- 16 Manufacture of wood and of products of wood and cork (except furniture) 0.750.75-4.184.18-1.351.35- 17Manufacture of paper and paper products1.131.13-2.972.97-1.691.69- 19Manufacture of coke and refined petroleum products1.101.10-38.8038.80-2.272.27- 20Manufacture of chemicals and chemical products0.820.830.692.272.610.771.251.251.36 21 Manufacture of basic pharmaceutical products and pharmaceutical preparations 0.780.78-1.251.25-1.191.19- 22Manufacture of rubber and plastic products 0.980.98-3.163.16-1.391.39- 23Manufacture of other non-metallic mineral products 0.520.511.051.481.481.971.011.011.30 24Manufacture of basic metals 1.351.35-4.174.17-1.911.91- 25 Manufacture of fabricated metal products (except machinery and equipment) 0.960.990.722.352.571.291.211.250.95 26Manufacture of computer, electronic and optical products 0.500.50-1.401.40-0.630.63- 27Manufacture of electrical equipment 1.251.25-3.823.82-1.631.63- 28Manufacture of machinery and equipment N.E.C. 0.970.97-1.741.74-1.191.19- 29Manufacture of motor vehicles, trailers and semi-trailers 1.851.85-6.726.72-2.502.50- 30Manufacture of other transport equipment 0.260.26-1.341.34-0.320.32- 31Manufacture of furniture 1.171.17-1.971.97-1.761.76- 32Other manufacturing 8.098.09-21.8621.86-8.998.99- 32.1Manufacture of jewellery, bijouterie and related articles 8.098.09-21.8621.86-8.998.99- 35Electricity, gas, steam and air conditioning supply 0.640.560.801.873.961.082.273.291.59 Total 1.031.070.503.253.590.961.611.641.20 EFFICIENCY AND PRODUCTIVITY70 AUGUST 2021 Labor productivity rose by 11.8 percent. Labor productivity is an important productivity indicator for the industry as well as industrial enterprises. The ISO 500 survey calculates labor productivity as the ratio of production-based sales to the number of employees. The ISO 500’s net production-based sales per employee surged by 31.3 percent in 2018 to TL 1,271,218 and by 15.4 percent in 2019 to TL 1,466,534. In 2020, net production-based sales per employee grew by 12.1 percent to hit TL 1,643,882. This was the lowest rate of increase in labor productivity in the last three ye- ars. Although production-based sales per employee re- corded a nominal increase, they decreased by 2.2 percent in real terms when adjusted to CPI. 2020 was a challenging year in terms of labor produc- tivity. Due to the pandemic, production operations were frequently disrupted, employees experienced health NET PRODUCTION-BASED SALES PER EMPLOYEE BY SECTORS (TL) problems, and working hours were reduced. For this rea- son, it was only natural for labor productivity to decline in real terms in 2020. Net production-based sales per employee vary greatly among sub-sectors. In 2020, net production-based sales per employee increased YoY in absolute terms across all sub-sectors except for the manufacture of refined pet- roleum products, the manufacture of computers, elect- ronic and optical products, and the manufacture of other transport equipment. Based on their net production-ba- sed sales per employee, the sectors with the highest la- bor productivity in 2020 were, in order, the manufacture of jewelry, the manufacture of refined petroleum products, and the manufacture of basic metals. The manufacture of basic metals replaced the manufacture of tobacco produ- cts, which was the third most productive sector last year. Manufacture of jewellery, bijouterie and related articles Manufacture of coke and refined petroleum products Manufacture of basic metals Manufacture of tobacco products Electricity, gas, steam and air conditioning supply Manufacture of chemicals and chemical products Manufacture of beverages Manufacture of motor vehicles, trailers and semi-trailers Manufacture of wood and of products of wood and cork (except furniture) Manufacture of paper and paper products Mining and quarrying Manufacture of electrical equipment Manufacture of computer, electronic and optical products Manufacture of food products Manufacture of other non-metallic mineral products Manufacture of fabricated metal products (except machinery and equipment) Manufacture of rubber and plastic products Manufacture of machinery and equipment, not elsewhere classified Manufacture of basic pharmaceutical products and pharmaceutical preparations Manufacture of other transport equipment Manufacture of textiles Manufacture of furniture Manufacture of wearing apparel 05,000,00010,000,00015,000,00020,000,000 18,894,836 10,988,495 3,439,320 3,151,999 3,013,164 2,082,604 1,977,360 1,939,769 1,840,330 1,706,468 1,444,864 1,315,060 1,313,458 1,189,673 1,168,683 1,139,461 1,109,227 1,069,448 814,920 789,840 612,577 501,849 405,479AUGUST 2021 71 Labor Productivity [Production-based Sales (Net) / Number of Employees] (at Current Prices, TL) Sectors20192020 05-08Mining and quarrying1,088,7161,444,864 10Manufacture of food products990,7931,189,673 11Manufacture of beverages1,731,6861,977,360 12Manufacture of tobacco products3,056,1093,151,999 13Manufacture of textiles506,689612,577 14Manufacture of wearing apparel386,048405,479 16 Manufacture of wood and of products of wood and cork (except furniture) 1,563,1921,840,330 17Manufacture of paper and paper products1,448,7461,706,468 19Manufacture of coke and refined petroleum products12,581,25710,988,495 20Manufacture of chemicals and chemical products1,970,8742,082,604 21 Manufacture of basic pharmaceutical products and pharmaceutical preparations 709,711814,920 22Manufacture of rubber and plastic products920,5531,109,227 23Manufacture of other non-metallic mineral products936,3241,168,683 24Manufacture of basic metals2,824,7293,439,320 25 Manufacture of fabricated metal products (except machinery and equipment) 907,6201,139,461 26Manufacture of computer, electronic and optical products1,381,3701,313,458 27Manufacture of electrical equipment1,192,8161,315,060 28Manufacture of machinery and equipment N,E,C,773,4351,069,448 29Manufacture of motor vehicles, trailers and semi-trailers1,625,8721,939,769 30Manufacture of other transport equipment1,054,741789,840 31Manufacture of furniture432,607501,849 32Other manufacturing11,288,76618,894,836 32.1Manufacture of jewellery, bijouterie and related articles 11,288,76618,894,836 35Electricity, gas, steam and air conditioning supply2,255,5493,013,164 Total1,466,5341,643,882 EFFICIENCY AND PRODUCTIVITYTECHNOLOGICAL ACTIVITIES Technological activities have become one of the leading factors shaping the competitiveness and hence the profitability and productivity of industry and industrial enterprises.AUGUST 2021 73 Technological activities have become one of the leading factors shaping the competitiveness and hence the profitability and productivity of the industry and industrial enterprises. Technological activities have been assessed as a separa- te topic of the ISO 500 survey since 2013. The technological activities section of ISO 500 contains two main sets of data. The first is the R&D expenses of the ISO 500. The second data set is the breakdown of the ISO 500 sectors by technology intensity. The ratio of R&D expenses to producti- on-based sales was slightly down. The ISO 500 survey also compiles data on the R&D expen- ses of industrial enterprises and conducts sector-specific analyses. The survey data for 2020 reveals that the R&D expenses of the ISO 500 was TL 6.2 billion, indicating a rise of 4.9 percent over 2019. Indicating a decline in real terms when adjusted for inflation, the ratio of R&D expenses to produ- ction-based sales, which was 0.58 percent in 2019, saw a slight drop in 2020, stopping at 0.53 percent. According to the survey data, the three sectors with the highest R&D expenses in 2020 did not change YoY and were, in order, the manufacture of motor vehicles, the manufacture of computer, electronic and optical produ- cts, and the manufacture of electrical equipment. It is worth noting that the enterprises in these top three sec- tors accounted for 65 percent of the total R&D expenses of the ISO 500 in 2020. Enterprises within the manufacture of motor vehicles, which have increased their R&D expenditures significant- ly in recent years, also made the highest contribution to the increase in the total R&D expenses of the ISO 500 in 2020. CHANGES IN R&D EXPENSES 3,837.4 %0.44 2018 6,237.3 0.53% 2020 5,945.5 0.58% 2019 3,472.8 0.53% 2017 R&D EXPENSES (TL MILLION) Survey Data R&D EXPENSES / PRODUCTION-BASED SALES (NET) (%)74 AUGUST 2021 The number of enterprises engaged in R&D increased. The gradual increase in the number of ISO 500 enterpri- ses with R&D expenses since 2013 continued despite the negative economic and financial conditions that emerged in 2018 and the number of enterprises engaged in R&D climbed to 276. Their numbers, which decreased to 262 in 2019, incre- ased by 9 in 2020 to 271. While industrial enterprises faced highly material and new risks in 2020, their R&D tendencies strengthened. The importance of technology and digitalization increased even more in the new nor- mal that emerged during the pandemic. Acknowledging the pivotal roles they played, more enterprises started to engage in R&D. NUMBER OF ENTERPRISES ENGAGED IN R&D 0 45 32 24 22 21 20 17 15 12 12 9 6 6 6 5 5 4 2 2 2 3 5101520253035404550 Manufacture of food products Manufacture of motor vehicles, trailers and semi-trailers Manufacture of chemicals and chemical products Manufacture of basic metals Manufacture of electrical equipment Manufacture of textiles Manufacture of rubber and plastic products Manufacture of fabricated metal products (except machinery and equipment) Manufacture of machinery and equipment, not elsewhere classified Manufacture of other non-metallic mineral products Manufacture of wearing apparel Manufacture of basic pharmaceutical products and pharmaceutical preparations Manufacture of paper and paper products Mining and quarrying Manufacture of other transport equipment Manufacture of computer, electronic and optical products Manufacture of furniture Manufacture of beverages Electricity, gas, steam and air conditioning supply Manufacture of coke and refined petroleum products Manufacture of wood and of products of wood and cork (except furniture) 300 250 200 150 100 50 0 NUMBER OF ENTERPRISES ENGAGED IN R&D 201720182019202020162015 239 254 276 262 271 243AUGUST 2021 75 R&D Expenses (TL) Sectors Number of Enterprises Engaged in R&D R&D Expenses Number of Enterprises Engaged in R&D R&D Expenses 05-08 Mining and quarrying628,232,300640,780,130 10 Manufacture of food products 40240,570,72445199,638,521 11 Manufacture of beverages37,424,87934,941,453 12 Manufacture of tobacco products---- 13 Manufacture of textiles21106,843,16620113,587,867 14 Manufacture of wearing apparel981,688,340959,863,898 16 Manufacture of wood and of products of wood and cork (except furniture) 29,064,56928,583,454 17 Manufacture of paper and paper products713,140,134614,182,614 19 Manufacture of coke and refined petroleum products237,228,879240,683,376 20 Manufacture of chemicals and chemical products25213,646,30124221,701,235 21 Manufacture of basic pharmaceutical products and pharmaceutical preparations 5151,457,6496194,864,883 22 Manufacture of rubber and plastic products1590,783,9551796,065,000 23 Manufacture of other non-metallic mineral products948,181,57112114,155,392 24 Manufacture of basic metals2389,933,95322140,021,423 25 Manufacture of fabricated metal products (except machinery and equipment) 13235,227,74415229,295,397 26 Manufacture of computer, electronic and optical products4898,844,4965998,654,122 27 Manufacture of electrical equipment20668,867,57921753,701,952 28 Manufacture of machinery and equipment N.E.C.10237,220,41912195,158,943 29 Manufacture of motor vehicles, trailers and semi-trailers352,019,984,869322,314,420,761 30 Manufacture of other transport equipment6733,929,1125468,282,849 31 Manufacture of furniture429,882,065426,769,293 32 Other manufacturing---- 32.1 Manufacture of jewellery, bijouterie and related articles ---- 35 Electricity, gas, steam and air conditioning supply1160,0002174,000 Total2625,945,465,1462716,237,295,893 2019 Survey Data 202076 AUGUST 2021 VALUE ADDED GENERATED BY TECHNOLOGY INTENSITY The ISO 500 survey analyzes the value-added generated by enterprises based on sector groups of different tech- nology intensities. This analysis only covers manufacturing industry enterp- rises. In other words, the mining and quarrying and elect- ricity, gas, steam and air conditioning supply sectors are excluded. Therefore, the calculations and classifications are based on data from 477 manufacturers. Technology intensity is divided into four sectoral groups. These are low-tech, mid-to-low-tech, mid-to-high-tech, and high-tech. The table shows the technology intensive industrial sectors according to the NACE Rev. 2 industrial classification. The value-added is the indicator used for technology in- tensive sectoral groups. The value-added is an indicator of “gross value-added at producers’ prices” (payment for factors of production [wages and salaries paid + interest paid + profit as national income] + amortization set aside for the year + total indirect taxes - subsidies). The technology intensive sectors are divided into su- bgroups. Accordingly, in 2020, low-tech industries ac- counted for the highest share of value-added with 37.3 percent, however, this share was down by 2.7 points com- pared to 2019. In the same period, the share of mid-to- low-tech industries increased by 1.9 points to 31.5 per- cent and the share of mid-to-high-tech industries incre- ased by 1.3 points to 24.8 percent. The share of high-tech industries dropped from 6.9 percent in 2019 to 6.4 percent in 2020. The share of high-tech industries showed a limi- ted decline in 2020 following a noteworthy increase in the previous two years. In 2020, 205 out of 477 manufacturers were operating in low-tech industries. 134 enterprises are in the mid-to-low- tech and 122 are in the mid-to-high-tech industries. There were 16 enterprises engaged in high-tech industries. BREAKDOWN OF VALUE ADDED BY TECHNOLOGY INTENSITY (%) Low-tech Industries Mid-low-tech Industries Mid-high-tech Industries High-tech Industries 2017 2018 2019 2020 36.2 37.5 40.0 37.3 39.9 35.0 29.6 31.5 20.2 22.2 23.5 24.8 3.6 5.3 6.9 6.4AUGUST 2021 77 There is an ongoing need for Turkey to transform its in- dustry towards high value-added and high-tech sectors. The ISO 500 results pointed to a noticeable increase in the share of high-tech sectors in 2018 and 2019 for the first time in the last eight years considered as part of the survey. In 2020, this share saw a limited decline. Nevert- heless, the share of ISO 500 enterprises within the mid- to-high-tech and high-tech sectors in value-added exce- eded 30 percent for the first time in 2019, reaching 30.4 percent, and further climbed to 31.2 percent in 2020. Generated Value Added by Technology Intensity Sectoral Groups Based on Technology Intensity Total Gross Value Added Share in Total Gross Value Added (%) CodeSectors Number of Companies Gross Value Added (TL) Share in Total Gross Value Added (%) Industries with Low Technology Intensity 120,247,805,06037.3 10Manufacture of food products 10926,452,615,2728.2 11Manufacture of beverages 615,843,250,1024.9 12Manufacture of tobacco products 351,124,245,70215.9 13Manufacture of textiles4111,885,948,4303.7 14Manufacture of wearing apparel132,803,592,7880.9 15Manufacture of leather and related products--- 16 Manufacture of wood and of products of wood and cork (except furniture) 73,700,202,4151.1 17Manufacture of paper and paper products155,654,229,3061.8 18Printing and reproduction of recorded media (excl. 18.2)--- 31Manufacture of furniture41,913,006,4220.6 32Other manufacturing (excl. 32.5) 5506,355,5180.2 18.2Reproduction of recorded media--- 19Manufacture of coke and refined petroleum products446,429,823,03714.4 22Manufacture of rubber and plastic products218,393,459,2272.6 23Manufacture of other non-metallic mineral products 2412,071,717,4763.7 24Manufacture of basic metals6627,521,040,1858.5 25Manufacture of fabricated metal products (excl. 25.4)176,230,640,1441.9 30.1Building of ships and boats2839,169,7700.3 Industries with Medium-to-High Technology Intensity 79,975,091,24624.8 20Manufacture of chemicals and chemical products3320,114,937,1836.2 25.4Manufacture of weapons and ammunition 24,052,588,4471.3 27Manufacture of electrical equipment3115,420,529,8764.8 28 Manufacture of machinery and equipment, not elsewhere classified 146,420,325,8542.0 29Manufacture of motor vehicles, trailers and semi-trailers 4133,756,374,84010.5 30Manufacture of other transport equipment (excl. 30.1 and 30.3)1210,335,0460.1 32.5Manufacture of medical and dental instruments and supplies --- Industries with High Technology Intensity 20,482,615,8026.4 21 Manufacture of basic pharmaceutical products and pharmaceutical preparations 75,594,721,3781.7 26Manufacture of computer, electronic and optical products610,741,580,3193.3 30.3Manufacture of air and spacecraft and related machinery34,146,314,1051.3 477322,191,361,947 Industries with Low-to-Medium Technology Intensity 101,485,849,83931.578 AUGUST 2021 2020 was a year when the vulnerability of the industrial sector in the face of global pandemic conditions and its capacity to manage them were put to test. The industrial sector made great efforts to preserve its financial health and liquidity as a response to the stagnation in domestic and foreign demand. Growing financial fragility and disrupted price stability in 2020, a year when the world struggled with the pandemic, had a negative impact on the industrial sector in 2H20. Yet, in the same period, the industrial sector, striving to rapidly adapt to this new normal emerging as a byproduct of the pandemic, was presented with new demand opportunities, especially fueled by the transformation in global supply chains. Industrial enterprises focused on current assets to sustain cash flow and liquidity under the pandemic conditions. Hence, the share of current assets in total assets declined to the lowest level ever recorded. In 2020, the performances of individual sectors followed different trajectories. While the contraction in domestic and foreign demand had a negative impact on all sectors, and to an equal degree, the industries of medical products, textiles, food products, paper packaging and drugs-pharmaceutical products managed to achieve a growth trend, breaking away from the rest. In 2020, industrial enterprises focused on preserving their financial structures, with their asset growth mirroring the increase in their equity capital. RESULTS: FUTURE OUTLOOK Against the negative backdrop of the pandemic, firms prioritized their core activities more. These efforts culminated in a significant and absolute EBITDA growth, with the number of enterprises with positive EBITDA peaking. Firms leveraged the drops in production costs effectively and maximized their savings in operating expenses, which resulted in an increase in both profitability and the number of profitable enterprises. Increases in exchange rates contributed to enterprises’ net FX gains and consolidated income statements. However, there is still a strong need for improvements in productivity. Labor productivity declined in real terms due to the adverse impact of the pandemic on working life in 2020. Boosting labor productivity by adopting new ways of working would be in the best interest of enterprises. Exports and the number of foreign-invested enterprises saw the sharpest decline of recent periods. The pandemic hit these two areas the hardest. The rise in R&D expenses has shown that technological activities are becoming increasingly independent of external conditions. Furthermore, the growing significance of technology and digitalization in this new normal triggered an appetite for spending in these areas. The shares of mid-to-high-tech and high-tech industries maintained their growth momentum. Yet, there is still a need for new initiatives that will facilitate a shift in technology intensity. The 2020 edition of Turkey’s Top 500 Industrial Enterprises (ISO 500) survey reveals some key findings about the current situation and outlook of the industry. Highlights of these key findings are analyzed briefly below.Next >