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The Information Technology Industry Development Agency
- Software Engineering Competence Centre
- The Smart Village
- Contact Centres
- Frame Agreements
- Business and Promotional Events
‘Governments should take action, in the framework of national development
policies, in order to support an enabling and competitive environment for the
necessary investment in ICT infrastructure, and for the development of new
services.’
WSIS Plan of Action, December 2003
Egypt’s primary goals in industry development stem from trying to promote
foreign investment to Egypt so that it can act as a hub for the Middle East and
Africa region. Private sector initiatives are encouraged to flourish, and the
government is maintaining its commitment of continuing investment in human
resources. One of the principal areas of industry development the government is
concerned with is creating an effective framework for e-Commerce that will
allow international markets to thrive, attract multinationals to locate to
Egypt, and establish new ICT industries such as Contact Centres.
A parallel objective is to improve the international competitiveness of
companies (existing exporters or companies with export potential based on their
stages of development), so that they will have the capacity to successfully
manage the market led development, production, and selling process of products
and services that will suit their target segments in potential export markets.
Ultimately this should result in improved export capability, penetration of new
markets and increased market share in existing export markets.
In November 2002, the ministry formed the ICT Industry Development Working
Group, charged with the task of exploring ideas and industry suggestions for
development of the ICT sector. After a series of workshops with members of the
industry and MCIT representatives, the group formulated an action plan for
capacity building. The plan received a critical impetus in the form of a two
million Euro fund created by the Industrial Modernisation Programme (IMP)
managed by the EU and the Ministry of Trade and Industry in October
2004. The programme is envisaged to complement and contribute to MCIT’s
integrated plan and proposes a number of support activities to be delivered to
a minimum of fifty local companies. The beneficiaries of the programme are
eligible IT companies, who are export oriented or possess a potentially
exportable product or service, and are committed to taking the necessary steps
to complete the upgrade process.
With a goal of raising sectorial exports to US$ 500 million, MCIT has developed
an integrated plan for the development of the IT industry, including export
promotion, growing the local market, partnering with multinationals and
building the capacity of Egyptian companies.
The Information Technology Industry Development Agency
The newly formed Information Technology Industry Development Agency (ITIDA)
is implementing the development and expansion of business applications,
together with efficient governmental services. The authority has been made
responsible for overseeing the new e-Signature Law and encourage development of
IT exports. In an effort to work towards a paperless society, particular
attention is being made to establish firm systems to govern electronic
transactions.
ITIDA’s main objectives are for developing IT & IT Enabled industries in
Egypt through crafting and executing ‘strategy and programmes’ to help
stimulate the local market and industries. The companies are hoped to build
their capacities, grow their exports and achieve set objectives, together with
coordinating, focusing efforts and maintaining interest of different stake
holders. Particular stress is being made on caring for the interests of Small
Medium Enterprises (SMEs). ITIDA's funding extends from government allocations,
and a 1 percent duty on selected ICT services, licensing, and income from its
own services. It is hoped that while generally improving government services
for all stakeholders, ITIDA will be able to increase the flow of hard currency
into Egypt by opening new channels for export.
ITIDA's organisational structure is market driven, dynamic and lean. Its
management structure remains 'flat' with only a permanent core team to oversee
developmental and regulatory missions.
e-Signature Activities
ITIDA is responsible for launching, organising, and regulating e-Signature
activities through issuing and renewing the licenses required for entities
operating in the field of e-Signature services and electronic transactions.
Also ITIDA is set up to deal with complaints related to these services, and
acting as a mediator between disputing parties. ITIDA will also function as the
entry lodging and registration centre for original versions of computer
software and databases with the objective of protecting their intellectual
property rights. Special incentive programmes for export oriented large
investments are being created to present Egypt as the first destination of
choice for multinationals and outsourcing IT and IT enabled services, and
research and development in the ICT sector.
Market Research
ITIDA also acts as an IT industry information centre with an aim to gather and
maintain up to date information on relevant market data, research, and
statistics. Areas of information that will be collected are listed as follows:
- Talent pool statistics
- Economic indicators
- Local companies profile database
- National skills database
- Export measurement system
- International contacts
- Egyptian expatriates
- Services for brokers
- ICT Tools
Intellectual Property Rights
In a similar way to its responsibilities towards e-Commerce, ITIDA extends its
duties to the registration and protection of intellectual property rights for
IT products. These are new fields of work and there is limited experience in
these matters within Egypt, so a partnering arrangement with a European
Regulatory Authority is being considered as the best way of establishing
effective procedures. The project will support negotiations and initial work on
establishing procedural guidelines.
ICT Industry Ombudsman
Disputes resolution by traditional legal means is often too time consuming to
serve the needs of the modern IT industry. ITIDA is to act as a mediator and
ombudsman to the industry, offering technical counselling to disputing parties,
dealing with complaints related to the use of e-Signatures and electronic
transactions. An expert committee will be formed to review international
arbitration models and other disputes resolution mechanisms and the committee's
recommendations are expected to lead to an IT industry disputes resolution
mechanism.
Software Engineering Competence Centre
In June 2001, the Software Engineering Competence Centre (SECC) was set up
by MCIT as the first centre of its kind in the Middle East and Africa, and is
now affiliated with the Information Technology Industry Development Agency
(ITIDA).
The centre's main objective is to promote and support software development by
nurturing engineering practices to a highly progressed level, and to achieve a
strong presence in the international market. The main focus is to capture ideas
that have been successful elsewhere, and pass them on to Egyptian IT companies
via a series of workshops, training courses, and ongoing consultations. Courses
and workshops have now been attended by over 3000 software engineers, IT
specialists, and experts from over 150 different Egyptian companies. With the
software industry currently expanding slowly but steadily in Egypt, SECC hopes
to act as a catalyst to produce more rapid growth. SECC has adopted six main
goals to support its mission within the framework of its business plan as
follows:
- Adopt standards for software development in Egypt.
- Improve IT capabilities and marketing skills of Egyptian IT companies.
- Raise the awareness and promote the use of contemporary software
engineering. Also to disseminate management procedures
with an emphasis on
agile methods and web enabled applications.
- Provide change management guidelines to enable compliance with up to
date
software engineering standards and procedures.
- Support the transfer of information technology.
- Enable the export of software assets and offshore development.
Another major objective of SECC is to qualify a number of Egyptian
professionals as SEI authorised SCAMPI Lead Appraisers and Certified
Instructors for the ‘Introduction to CMMI’ qualification. This will spur growth
in the domestic software industry by providing qualified personnel to evaluate
local software companies. In a similar vein, ten of the largest software
companies in Egypt have asked SECC to assist in establishing a rigorous
internal software evaluation process, six of which have already achieved Level
2 and Level 3 of the SW-CMM and CMMI accreditation. In addition, a project
which was started in June 2005 and was developed in collaboration with the
Industrial Modernisation Centre (IMC), is concerned with providing CMMI
Level-II and Level-III related services to presently twenty Egyptian software
development companies.
SECC has also now begun a project for Small and Medium Enterprises in Egypt.
The Software Process Implementation Guide (SPIG) has been developed and issued
as a guide for SMEs to encourage small to medium sized software companies to
follow a coherent process for software development. A following project,
beginning in September 2005, provides Software Process Improvement for
approximately twenty Egyptian SMEs in applying SPIG.
SECC is in the process of establishing the Embedded Software Centre in
cooperation with the Korea International Cooperation (KOICA). This centre will
serve both the automation and telecommunication sectors in Egypt by developing
embedded software for control and monitoring devices, as well as communication
equipment. South Korea will provide the knowledge and offshore and onsite
training to build capacity, while SECC will provide the place and manpower.
A feasibility study for establishing a Software Testing Centre was developed by
SECC with the support of the United Nations Development Program (UNDP). Its
purpose would be to either help software companies to test their final products
or to provide consultations and training services to the companies. The
services would include preparing test plans, helping to prepare test suites,
and providing access to testing tools available in the centre.
The Smart Village
In a manner that reflects partnership between public institutions and
private ventures, a three hundred acre high tech business park was established
only twenty minutes away from central Cairo. The business park, named Smart
Village, is being developed by a private company. Integrating the commitment
and support of the government with the flexibility and professionalism of the
private sector, the Smart Village provides state of the art facilities to
organisations depending on ICT in delivering value. Government, technology
suppliers, service providers, firms operating in sectors with extensive ICT
demands like finance, banking and the stock exchange are all residents of the
Smart Village.
Currently, the Smart Village hosts around six thousand professionals working in
government and the private sector. Government ICT policy makers and regulators
include the Ministry of Communications and Information Technology (MCIT), the
National Telecommunication Regulatory Authority (NTRA) and the Information
Technology Industry Development Agency (ITIDA). Egypt's Centre for the
Documentation of Natural and Cultural Heritage (CultNat), also relocated to the
Smart Village.
The development services its resident with modern, resilient and redundant
infrastructure such as wire and wireless broadband communications networks, an
onsite power station in addition to the main power supply from the national
electricity grid, and availability of environmental control through an onsite
cooling station. The Smart Village is seen to be providing a superior location
compared to those found elsewhere in the region through excellent provision of
infrastructure. The scheme is attracting multinationals working in ICT software
and hardware such as Microsoft, Alcatel, Ericsson, Vodafone, and HP (see text
box opposite). Telecom Egypt will also establish their regional and national
presence in the Smart Village in the near future. In addition, one of Egypt's
most promising industries has a presence in the Smart Village, namely Contact
Centres. They are leveraging excellent infrastructure with competent human
resources to provide world class services. The Smart Village provides an
environment conducive to innovation with ICT incubation programmes and the
Technology Development Fund also operating from the Smart Village. An
e-Learning Competence Centre as well as a number of small and medium Egyptian
ICT ventures are also located there.
Hewlett Packard Imaging and Printing Technology Centre
Hewlett Packard (HP) has recently launched an Imaging and Printing Technology
Centre in Cairo, as a regional hub serving HP customers and partners and
governmental bodies in Egypt and the Middle East. The centre is located in the
Smart Village and HP has outsourced the operation of the technology centre to
its local partner Online Modern Solutions.
The centre exhibits the latest HP imaging and printing technologies in both the
consumer and commercial space. It is divided into several areas with each
section having a distinct purpose, concept and solution and each meeting the
specific requirements of an ever changing business environment. It offers
quality training facilities and certification processes for business partners
as well as serving as a training facility for students, providing them with
access to up to the minute technologies, and so increasing their prospects in
the market. |
Contact Centres
The Contact Centre industry is already employing some six thousand agents,
and is drawing on the abundant workforce in the country. The world class
telecommunications infrastructure is another aspect of success in Egypt's value
proposition,. Egypt's central location is very strategic for investors and the
country enjoys a great level of political stability. The financial format
generally consists of an investment of US$ 20,000 to 25,000 per seat, with
yearly revenues per seat in the region of US$ 30,000 to 40,000.
A training programme related to the Contact Centre industry is the MCIT
sponsored Contact Centre Development Programme which trains up to 800 agents,
supervisors, and trainers annually. The training is related to ten fields
including banking, communications, IT, and medical services through recognized
educational institutes. The second phase of the programme will focus on
management training and certification.
Egypt's aggressive focus on developing a world-class IT and communications
industry bodes well for Contact Centre outsourcing. Since 1999 MCIT has
invested heavily in telephone networks, making certain that the communications
infrastructure is solid and reliable. Egypt’s core infrastructure is based on
optical fibre 10 Gbps and 2.5 Gbps rings. This huge infrastructure is the
fundamental layer that connects and delivers services over PSTN, mobile and
packet-based networks across the country. In addition to Class-4 voice switches
around the country interconnected via optical fibre, there are IP and ATM-based
Class-4 switches in Cairo and Alexandria.
Five Egyptian companies currently offer outsourced offshore services to giant
multinationals worldwide, and there are at present around two thousand seats
Full Time Equivalent (FTE) directed to outsourced offshore business. This
number is expected to rise rapidly over the next five years at a compounded
annual growth rate of over 50 percent, to 11,300 FTE by 2009.
Egypt's central location between the US, Europe, and Asia, has always been an
asset to investors worldwide wishing to expand their business across the globe.
The location offers a number of advantages including a convenient time
difference with North America enabling overnight delivery of services. This
unique advantage helps American organisations achieve true twenty four hour
internal operations and customer service. The time zone advantage provided by
Egypt can also become a strategic enabler for many West Europe and Asia Pacific
based organisations.
The Egyptian government is committed to boost the Contact Centre industry and
foster its export potentials. Incentives such as tax breaks and free trade
zones are enticing companies to establish operations. Subsidies are also
available to customer care specialists such as Contact Centre agent training at
recognised educational institutes throughout Egypt. The government is working
closely with the Egyptian industry association to promote the Contact Centre
industry through MCIT’s Contact Centre Industry Initiative, a joint effort
between various stakeholders to reach policies and action plans that meet the
industry’s requirements.
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Success Stories
Several Global companies found that Egypt, with its inherent strengths, is a
strategic place to transfer their call management activities. They saw the
tremendous opportunities in Egypt due to its vast resource base and have
already set up their own Contact Centres, as listed below:
Wall Street Journal Europe.
Equant
Microsoft
General Motors
Oracle
Tele-2
Banque de Poste Belge
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Frame Agreements
The government aims to develop the local industry and maximise the local
value added potential in telecommunication projects to serve the local market
and create an opportunity for exports, MCIT has opted for a win-win strategy in
its relations with leading companies doing business in Egypt. Leading
international and local companies are given incentives that would support them
building a long term presence in Egypt in the form of creating some favourable
factor conditions or by providing them with medium to long term contracts for
development of ICT infrastructure. Factor conditions include the support of
MCIT in training of new graduates to develop their expertise with a certain
technology to some desirable level or providing infrastructure at globally
competitive rates. The contracts are primarily for supply of hardware and
services to upgrade the infrastructure and services in Egypt according to the
requirements set in the Telecommunications Master Plan, as well as the National
ICT Plan. In return, the companies commit to technology transfer into the
Egyptian market through hiring and training local human resources and
undertaking investments in value added that result in exportable services and
equipment to serve neighbouring markets.
A number of agreements have been signed with multinational and local companies
since this framework was established in 2002 as well as some services firms.
The list of companies include QuickTel, an Egyptian company who signed a
cooperation agreement with MCIT in 2004. In addition, other big multinational
companies include Alcatel, Siemens, Nortel, Lucent and Motorola who have
committed to expand their presence in Egypt through a number of activities that
aim towards the transfer of technology and exporting to neighbouring countries.
Such examples include establishing or expanding training centres to qualify a
new generation of engineers and computer scientists trained on design and
installation of state of the art wireless and IP networks, development of value
added services, in addition to maintenance and upgrade of traditional
technologies of wire line networks. Such investments would result in creating
almost five hundred new high quality engineering jobs in the implementation of
activities related to MCIT and Telecom Egypt agreements, in addition to all the
necessary support jobs.
An agreement was signed with Equant, a subsidiary of France Telecom, in 2004
for hosting an operations support and customer care centre for its global
operations in Egypt. The agreement has resulted in creating more than 1000 jobs
for fresh graduates from engineering and science disciplines in Equant's centre
in Cairo, in addition to a considerable number in other companies who provide
services to the centre. Currently, Equant's centre in Cairo is the largest
worldwide, hosting about 10 percent of the company's total workforce. The
Centre is making use of the pool of highly qualified multi lingual graduates of
the professional training programmes. In addition, Equant's centre is making
use of the reliable and cost effective telecommunications infrastructure in
Egypt, especially after the volume discounts that Telecom Egypt is providing
for support centres who are making use of VoIP technology.
The companies would be expected to continue their investments in Egypt to
implement activities related to the expansion of their presence in Egypt. Also
to establish their bases within the region to serve customer base in more than
twenty countries in the Arab, African, and Mediterranean region. This have the
value of achieving exports with a total of US$ 390 million through export of
services and equipment of Egyptian origin to the region.
Case Study: Siemens Egypt
Siemens Egypt has now well established branding within Egypt synonymous with
technology, innovation and quality. A large portion of the technology used for
any call made through Telecom Egypt is supplied by Siemens, and ICT represents
the strongest of all Siemens businesses in Egypt. The company has had a long
history in Egypt since 1859, when Werner Siemens came to Suez to link Europe
and India with telegraph cables running through the Red Sea and two years later
Siemens Egypt was established. However Siemens most influential contribution to
the Egyptian ICT infrastructure began only 15 years ago, concurrently with the
states policy to make telecom services available nationwide. Siemens strategy
depended primarily on positioning itself as a local partner to all its clients.
It reacts and interacts with the community it is operating within by developing
a strong local identity and partnering with local companies. Growth in
telecommunications has been huge. Ten years ago Egypt had only 80,000 fixed
lines and it has now reached ten million. Such an extraordinary growth rate was
made possible in a relatively short time by partnering initiatives and by the
measures the government has been taking to spread the telecommunication
services.
Most Egyptian citizens today, whether in the middle of Cairo or in remote
villages can now have access to voice and data communications. Siemens deployed
10 Gbps transmission systems into Telecom Egypt’s network, which made Egypt the
first user of this type of system in the MENA region and established Telecom
Egypt as a leading operator. In 1990, Egyptian German Telecommunications
Industries (EGTI) began the production of EWSD digital exchanges and was
established as a joint venture with Siemens Egypt, Telecom Egypt and the
National Bank of Egypt. Now EGTI has recently started expanding on a regional
scale. The Cairo based network care centre serves the Middle East and African
regions. Siemens and EGTI have installed more than 3.5 million fixed telephone
lines for Telecom Egypt, bringing telecommunication access all over Egypt.
Siemens and EGTI are an exemplary example of the Public Private Partnership
policy the government adopts to enhance Egyptian ICT. |
Business and Promotional Events
One of the key issues of development is seen to be branding Egypt and
building its image internationally. Highlighting its strengths, competitive
advantages, and success stories to the world is reflected in companies'
development. The government has considered direct marketing through
participation and hosting of events and exhibitions of crucial importance, with
the aid of both the public and private sectors, with particular relevance to
gaining interest from Small Medium Enterprises (SMEs).
Recent Business and Promotional Events
World Economic Forum on the Middle East, Sharm El-Sheikh, Egypt
2006
World Economic Forum Middle East, Dead Sea 2005
CeBIT
Hanover 2005
World Economic Forum Annual Meeting, Davos 2004
GITEX
Outsource World
Asia Telecom
CeBIT
Hanover 2004
Egypt’s Trade Mission to the United Kingdom
Telecom
Africa 2004
Citegypt.com
Citegypt.com, the Internet portal for the Egyptian ICT industry, aims to
provide both a meeting point for the ICT community and a comprehensive source
for information about the industry. The portal is a valuable resource for
regularly updated indicators and sector news, giving a comprehensive profile of
ICT businesses in Egypt. The site contains interviews with industry leaders and
details of new initiatives being planned and launched within this fast growing
sector. The site also contains a calendar of local and international events, as
well as a specific calendar informing users of related events, working groups
and conferences initiated by MCIT. Moreover, Citegypt.com contains a section
devoted to investors in the ICT sector with brief information on the Egyptian
economy, the ICT infrastructure, and rules and regulations governing the
industry in Egypt.
Responding to the growing interest in the ICT industry, the portal features a
section on active ICT associations in the community and a section for
employment opportunities. The portal is an important resource for today’s ICT
community and for international investors looking to acquaint themselves in
detail with the ICT sector in Egypt and the significant investment potential it
offers.
Cooperation with Egyptian Expatriates in the ICT
Sector
The government has instigated cooperative ties to be formed with Egyptian
expatriates and local ICT industry to create a transfer of knowledge and
experiences. Expatriates are being actively encourage to engage in ICT
opportunities in Egypt through partnering methods. The process is increasing
investment and outsourcing potentials. So far, a database has been created that
includes 350 individuals in the USA and Canada, and promotional events were
carried out along the East and West coasts of America in June to encourage
interest by expatriates.
MCIT launched a new online portal that allows Egyptian expatriates working in
the ICT sector to exchange their views and discuss relevant topics. The portal
includes forums where participants can hold monthly online discussions. Also
surveys and virtual workgroups are available online. Updated information on the
ICT industry and investment regulations in Egypt are also present.
Introduction
The
Foundation for the Information Society
e-Access
Innovation
Capacity Building
Enabling
Environment
Industry Development
ICT
Applications: Benefits in All Aspects of Life
International and Regional Cooperation
Conclusion
References
Appendix
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