Economic globalization, driven by rapid development of technology in all
sectors, has increased competition among economic players around the world. As
a high level of competitiveness and an attractive investment climate are
essential for the development of a thriving ICT industry, MCIT is working to
create these conditions in Egypt. Its efforts are centered on the need to
reform all elements that will improve the business climate for both SMEs and
large companies in order to achieve industrial growth, create new job
opportunities and raise national income levels.
MCIT’s ICT industry development strategy begins with recognition that much has
already been achieved, but that much also remains to be done. It examines the
problems facing the further development of the ICT industry and the
opportunities that present themselves. It identifies the work required to
create an encouraging climate for business and sets out the steps necessary for
the advancement of a competitive national ICT and ICT-related industry in the
global economy.
The strategy addresses issues of capacity building and its promotion, pushing
forward research and innovation, and branding Egypt as a destination for
investment in ICT. This is to be achieved through realizing MCIT’s vision of
Egypt as a country where knowledge, innovation, applied research and investment
drive the ICT industry into the global economy.
Development of the
Export-Oriented IT-Enabled Services
Industry
Focusing on the development of the export-oriented IT-enabled service industry
in the global market, MCIT engaged the US management consulting firm A.T.
Kearney to conduct an objective assessment of Egypt’s positioning as a location
for off shoring IT and IT-enabled services, including business process
outsourcing (BPO) and call centers. The study highlighted the growing success
that Egypt is already enjoying, both in terms of major multinationals choosing
Egypt as an offshore destination and local companies exporting IT solutions and
other services to international clients. The study also revealed that Egypt
offers a very attractive combination of competitive costs, skilled labor and
supportive government policies. However, very few global companies are aware of
these assets.
A.T. Kearney positioned Egypt number 12 in the offshore business and identified
key segments for offshore service in the country as IT services and products,
contact centers, engineering/technical support centers, BPO, localization and
language services, content development and management, knowledge process
outsoursing (KPO), and research and development engineering. The study
recommended that IT services and technical support centers should be the
largest growth targets, estimating that they will account for around 50% of the
revenue target for 2010. Accordingly, a vision and targets for each segment
were identified.
MCIT has adopted several mechanisms to realize its targets for the IT-enabled
service industry. These include the introduction of legislation to support and
regulate the sector, such as in the areas of IPR and e-signatures, as well as
through deregulation – with the collaboration of the NTRA and the Information
Technology Industry Development Agency (ITIDA). ITIDA has also developed a
national strategy for export growth in the IT industry that focuses on creating
a market-driven industry that follows international standards through
public-private partnership.
MCIT will work to expand the infrastructure supporting the IT-enabled service
industry in Egypt. This includes expanding the Smart Village as well as
establishing a new technology park in Damietta and a call center park in Maadi.
The ministry will further work on providing a uniform and streamlined
telecommunication infrastructure nationwide and ensuring the availability of
cost-effective, high-speed and reliable broadband connectivity that meets the
current and future needs of industry and the country at large.
In addition to investing heavily in the establishment of state-of-the-art
infrastructure, such as in the Smart Village, MCIT’s efforts to promote Egypt’s
IT-enabled service sector include the formulation of frame agreements and
various promotional activities at home and abroad.
A culture of entrepreneurship and innovation is essential to the development of
a strong IT-enabled service industry. Capacity-building programs have a role to
play in stimulating attitudes and behavior that promote collaboration,
creativity and innovation, especially among young people. Other strategies will
systematically support the promotion of this culture by creating opportunities.
Within this context, an Entrepreneurial Business Development Center will be set
up to help emerging establishments satisfy the requirements of investors and
financial institutions. It will also create a base of training institutes and
instructors through a Training of Trainers initiative to create a solid
entrepreneurship-training base.
Objectives:
To
build niche strengths for the IT-enabled service
sector
MCIT championed the establishment of Nile University, a high-tech,
not-for-profit research and development institution specialized in engineering
technology and business administration. The university’s Executive Development
Program, designed in collaboration with the Egyptian Foundation for Technology
Education Development (EFTED), provides general management training for middle
to senior level managers working in both private and public sector companies in
the Middle East.
The Software Engineering Competence Center (SECC) is providing Capability
Maturity Model (CMM) and Capability Maturity Model Integrated (CMMI) services
to local software companies, offering them technical and financial support to
help them achieve Level 2 and 3 CMMI accreditation. Project staff provide
consulting advice, training and pre-appraisal and formal appraisal services.
The project’s goal is to train software engineers to apply software standards
as part of the system development life cycle, as well as provide training in
data collection and analysis, strategic planning and business models. SECC, in
partnership with the Customer Operations Performance Center (COPC), is also
involved in providing technical and financial support to Egypt’s contact center
industry to help it compete worldwide.
Other efforts that address both capacity building and entrepreneurship support
include the Egyptian Information, Telecommunications, Electronics and Software
Alliance (EITESAL), which focuses on bridging the gap between academia and the
ICT industry. EITESAL helps young talent develop practical and industrial
skills within educational programs. ITIDA has also recently launched a program
to promote industry and university collaboration, linking academic research
with industry and market needs. These programs are part of the Information
Technology Academia Collaboration (ITAC) initiative, which brings value to IT
companies, universities, researchers and the technology community through
development of e-business applications.
Another priority for MCIT is support of ICT start-ups. The incubator initiative
was created to assist small pioneer institutions facing difficulties in
starting up and developing business skills and managerial efficiency, as well
as to attract multinational companies to invest in developmental activities in
Egypt. The three main funding mechanisms currently considered for incubators
are angel funds, soft loans and venture capital. The services provided by the
incubation initiative, in coordination with the Technology Development Fund
(TDF), are not limited to financing alone, but cover various areas such as
international and local marketing, management, manpower, and legal and facility
development.
MCIT will continue to provide services to build the capacity of local ICT SMEs,
providing them with accreditation as well as financial support programs,
expanding incubation initiatives, widening the outreach of the Entrepreneurial
Business Development Center (EBDC) to help growing IT firms satisfy the
requirements of investors and financial institutions, and assisting in
promoting the Egyptian IT industry in the global market.
Objectives:
To leverage the
capacity of the local business community to
enhance their global competitiveness
|
|
| A. |
Increasing the number of innovative start-up companies while creating a new
cycle for innovation for industry development. |
|
|
| B. |
Supporting NGOs working in the ICT sector.
|
|
|
| C. |
Facilitating the emergence of new enterprises in the ICT sector through
expanding industrial support programs. |
|
|
To sustain the supply
of skilled individuals needed for a growing ICT
Industry
|
|
| A. |
Expanding specialized capacity-building and certification programs addressing
the needs of individuals, institutions and industry. |
|
|
| B. |
Strengthening the relationship between the ICT industry and academic and
research institutions to increase the flow of trained individuals into the
labor market. |
|
|
Research and
Innovation
For a country that has set itself the goal of achieving a full knowledge
society, research, development and innovation are fundamental. For this reason,
MCIT is committed to furnishing the instruments that guarantee maximum quality
in this area. It is within this framework that MCIT drew up the Research and
Innovation Strategic Plan 2007-10, which is, above all, an instrument that will
provide the basis for a solid research, development and innovation system
capable of fostering forward-looking initiatives and positioning Egypt, in the
medium term, in the scientific and technological vanguard in the ICT sector
both regionally and globally.
The essential advances in Egypt’s capacity for research and innovation in the
ICT sector will only take place if there is a large increase in resources and
if the system’s scientific and business bodies are suitably organized. The
Research and Innovation Plan seeks to foster greater coordination between
relevant agents to create an atmosphere conducive to innovation and economic
growth. In fact, innovation is a complex process dependant on multiple
relationships between the agents that make up the business, scientific and
technological environments and the public administration.
In 2005, MCIT announced a plan to fund and manage Research and Development
Centers of Excellence in various ICT-related areas. These centers, by focusing
on research in key areas of national and global interest, simultaneously
generate highly qualified human resource capacity. They concentrate and build
on existing capacity and resources and enable researchers to collaborate across
disciplines on long-term projects that are locally relevant and internationally
competitive. An integral aspect of this endeavor is the creation of channels
between the scientific and business communities. The project will also help
create start-up companies specialized in the domains of these centers. Thus,
these centers also play the role of “pre-incubator”.
The centers of excellence include a network of experts who overlook the
different research directions while MCIT acts as a catalyst by helping bring
together members of industry, researchers, international experts, private and
public sector players, universities and research institutions, etc. The
ministry also provides input regarding local as well as world market conditions
in the domain of ICT, and supports the establishment of these centers with cash
and/or in-kind contributions. The first such center, the Data Mining and
Computer Modeling Center of Excellence, has achieved great success since its
launch in 2005.
Raising the level of innovation in the Egyptian economy will require better
transfer of knowledge from universities and research centers to enterprises and
a significant increase in the number of innovative, technology-based companies.
To attain this goal, a new entrepreneurial culture and the necessary
instruments to encourage the transfer of knowledge and technology from
universities and research centers to companies must be put in place. It is for
this reason that the business plan competition was created. The competition
aims to find talented entrepreneurs in the Egyptian ICT field and award and
support their innovative business ideas. This mechanism is closely linked to
the Technology Development Fund, Egypt’s first ICT venture capital fund,
focusing on seed and early-stage financing. The fund is a public-private
partnership established to invest venture capital in promising Egyptian
technology companies and start-ups. In addition to financing, the fund provides
access to a range of support services and incubation facilities offered by fund
advisers and sponsors.
Through the support of MCIT, multinational companies operating in the Egyptian
market are encouraged to invest in research and innovation activities.
Additionally, MCIT focuses on augmenting the innovation capabilities of
businesses in Egypt, as well as scientific establishments working in ICT, to
foster internationalization projects. With organized efforts, it is expected
that the participation of Egypt in partnerships revolving around research and
innovation will increase.
Objectives:
To increase the
quantity and quality of research and technology
development activities undertaken in Egypt
|
|
| A. |
Developing centers of excellence through coordination between the different
agents involved in research and innovation |
|
|
| B. |
Fostering improvements in the quality of research and innovation conducted in
Egypt as a prerequisite for global competitiveness |
|
|
To develop a favorable
environment for innovation and foster links and
improved coordination between the various public
and private agents in the Egyptian research and
innovation system
|
|
| A. |
Consolidating the research, technology transfer and innovation system in
Egypt’s ICT sector |
| B. |
Developing strategic partnerships with multinationals to increase investment,
exports and employment and to support technology transfer |
|
|
To define and
coordinate research and innovation promotion
policies and foster a scientific and
technological culture in Egypt
A. Leveraging the capacity of the local business community to enhance its
global competitiveness
B. Keeping the public informed of developments in science and technology in
order to increase awareness of the importance of research, development and
innovation C. Establishing a multilevel communications campaign and a coherent
long-term strategy to promote Egypt as an offshore and outsourcing service
destination
Promoting ICT Investment
and FDI
Many of the world’s most prominent international ICT companies have invested in
Egypt’s future by locating branch offices and Middle East headquarters in
Cairo. Egypt also has many homegrown success stories that show the strength of
its ICT industry. Orascom Telecom has become one of the largest telecom
companies in the world, with external operations in Iraq, Pakistan, Italy,
Algeria, Tunisia, Bangladesh and Zimbabwe. ITworx, ITsoft, Sakhr, Harf and
Arabize are just a few of the many Egyptian software companies successfully
competing in the international marketplace. Xceed, Raya and other contact
centers’ recent growth shows that Egypt is becoming a prime destination for
outsourcing.
The GoE has worked hard to improve the investment climate with a number of
recent reforms. These include (i) WTO agreements that slashed trade barriers
for ICT products and services, (ii) a new investment regime that allows full
repatriation of profits, unrestricted ownership of investment capital,
elimination of price controls and reduced tax rates, (iii) partial
privatization of Telecom Egypt and other state-owned enterprises, and (iv) free
zones and special economic zones that provide even more incentives for ICT
companies including low-cost real estate, low tax rates and other benefits.
The coming years in Egypt will see many investment opportunities. In the
immediate future, there is great demand for the development of backbone
infrastructure, public data and Internet services, wireless local loop
networks, expanded and enhanced mobile access, WiMax and a variety of off
shoring opportunities.
Objectives:
develop an ICT
environment attractive to FDI and BPO
|
|
| A. |
Providing favorable conditions and facilitating the procedures for setting up
business in Egypt, including through enhancement of the legal and regulatory
framework by formulating and deploying relevant legislation |
|
|
| B. |
Extending infrastructure and attractive zones and technology parks |
|
|
| C. |
Developing incentive packages and a favorable climate to attract FDI |
|
|
To develop strategic
partnerships with multinationals to increase
investment, exports and employment and to
support technology transfer
|
|
| A. |
Increasing technology transfer through strategic partnerships with
multinationals aiming to encourage them to invest and use local companies |
|
|
| B. |
Encouraging multinationals to establish outsourcing and offshore operations in
Egypt and developing partnerships to support research and innovation centers of
excellence |
|
|
| C. |
Attracting multinationals to establish manufacturing operations in Egypt |
|
|
|
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Related
Documents
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| Egypt's Information Society
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|
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An outline of the initiatives implemented to bolster Egypt's transition into a
fully-fledged information society while simultaneously addressing internal
development issues through R&D, total domestic e-Access as well as the
implementation of adaptable regulatory procedures in order to attract foreign
investment.
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First Published :
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Dec 2003
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Updated :
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April 2004
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| Egypt’s Vision of the Information Society |
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The document outlines Egypt's vision of building the Information Society and
bridging the digital divide together with a closer look at the country's
Egyptian Information Society Initiative (EISI), structured around seven major
tracks: e-readiness, e-learning, e-government, e-business, e-health, e-culture
and ICT export initiative.
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First Published :
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May 2005
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Updated :
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Oct 2005
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|
|
|
|
Introduction
ICT Sector
Reform
ICT
for Development
Innovation and ICT Industry Development
Conclusion