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Home	>	Egypt's Information Society	>	Innovation

Innovation

- CIT Research and Development Centres of Excellence
- Incubators

‘Encourage continuing research within the Information Society, including innovative forms of networking, adaptation of infrastructure, and the tools that facilitate universal access.’

WSIS Plan of Action, December 2003

The government has pushed to place great emphasis on innovation and the associated building of intellectual property and the consequent emerging number of Start Ups. Innovation in the form of research and development is crucial in the production of technologies and services that can be offered as exports, and allow competitiveness on the world market. Innovation allows application of ICT technologies across the whole of Egypt at all levels of business and industry. The government is keen to see its progress towards an Information Society permeate to all levels of society, and traditional and new industries benefit from ICT development in a sustainable way.

As a Private Public Partnership the ICT Technology Development Fund was established to invest venture capital in Egyptian Start Ups. With a combination of an enabling economic environment, a sustained effort towards mainstreaming information technologies, and a dynamic education system encouraging innovation, the government is confident real steps forward can be made in the near future to an Information Society.

CIT Research and Development Centres of Excellence

Establishment of the CIT Research and Development Centres of Excellence is now a crucial step in building an environment where ICT innovation and excellence can thrive. It is hoped they will provide leadership and guidance for transforming the creation and commercialisation of ICT to a new level. The process is hoped to offer a magnet to attract world class researchers to Egypt including many of Egypt's best and brightest researchers who are currently working overseas.

The purpose of these Centres is to provide a platform for performing Research and Development (R&D) conducted by Egyptian experts in their respective fields of specialisation. Such R&D can be performed in favour of local as well as multinational institutions. This activity will also help create start up companies, specialised in the domains of these Centres. The Centres of Excellence shall also play the role of a ‘pre-incubator,’ as explained in the next section of the report.

The Centres will be created in the form of consortiums consisting of leading local and multinational industrial organisations operating in Egypt. In addition to this, both private and public sectors will collaborate with Egyptian universities, research institutions, and the Ministry of Scientific Research . One of such universities or research institutes will act as the lead on a given Centre and focal point for coordination with MCIT. The latter will act as a catalyst by helping bring the various participants to the consortium, by giving its input about local as well as world market conditions in the domain of CIT, and by supporting the establishment of the Centres by cash or ‘in kind’ contributions. The four centres of excellence are illustrated and described below.

Data Mining and Computer Modelling
The purpose of this type of Centre will be to enhance the R&D capabilities within Egypt to use computer tools and models in order to maximise the analytical capabilities within various sectors. This effort would deploy IT specialists, programmers, mathematicians and physicists in the development of Data Mining tools as well as computer simulation models. It would also have an experimental role with existing tools from various vendors. The current funding cycle, which started in September 2005 and will last three years, concentrates on data mining within the fields of tourism and the oil industry, and also within text mining of the Arabic language. Basic research is also taking place within the fields of outliers and visualisation Invitations for proposals from the various stakeholders were issued in June 2005, and consortium selection has now been undertaken.

Data Mining is defined within the industry as the extraction of hidden predictive information from large databases. It is a powerful new technology with great potential to help companies focus on the most important information in their data warehouses. Data Mining tools predict future trends and behaviours, allowing businesses to make proactive, knowledge driven decisions. The automated and prospective analyses offered by Data Mining move beyond the traditional analyses of past events provided by retrospective tools typical of decision support systems. Data Mining tools can answer business questions that were historically too time-consuming to resolve. They scour databases for hidden patterns, finding predictive information that experts may miss because it lies outside their expectations.

Self development or readily available tools and models would be harnessed in various sectors. This effort would by definition be multidisciplinary. The deployment of such models would tend to lend itself to areas such as financial planning, pharmaceutical as well as health-related research.

The Centre would host computer programmers, mathematicians and physicists on a permanent basis. It would also accommodate scientists, biomedical engineers, medical doctors, pharmacists, economists, and financial analysts, who would collaborate with the former group in developing applications in their various fields.

In its initial phase, the Centre would be started by a core team that decides on the most appropriate tools to be purchased, as well as a development plan. The core team would reach out to the remainder of the stakeholders in order to form a suitable consortium. It is envisaged that the stakeholders would be divided into three categories: those who make use of the applications resulting from such R&D; those who build and develop the applications; and those who would participate in the research.

Examples of those who belong to the first category are the local pharmaceutical industry, the banking and investment institutions, and health institutions such as the National Cancer Institute. The Information and Decision Support Centre, by virtue of its mandate belongs both to the first and second category. IT companies at large would also participate in this Centre, representing the second category. The third category would be predominantly represented by faculty members of various universities and research institutions.

Wireless Communication
Wireless Access is also included on Egypt’s Broadband Agenda, as it stands like an attractive candidate for availing broadband services nationwide, particularly in rural areas and new satellites where infrastructure may not be as developed as in the urban areas. One of the recommendations the broadband initiative has come up with is that MCIT together with National Telecom Regulatory Authority (NTRA), Telecom Egypt and the private sector are collectively mandated to boost up the wireless telecommunication industry in Egypt. During 2004 and 2005 Egypt has witnessed developments in this direction, particularly in CDMA WLL, WiFi public hotspots as well as WiMAX.

Broadband Fixed Wireless (BFW) access has gained increasing importance in the last few years. It offers wireless access to wired networks for rural areas. It also allows thousands of users to share the bandwidth that can provide not only voice, but integrated voice data and video. Broadband serves a double purpose. The first is cheap Public Switched Telephone Networks (PSTN) connection to new and far areas without the cost of extending wires to these areas. The second is high speed Internet access that can serve as a higher speed alternative to DSL, or when DSL is not suitable due to the distance from the central office or old wirings. BFW networks can be extended easily by deploying base stations, such as for example, on top of buildings.

While providing BFW access is important for developed countries, it is even more important for the developing world where wired infrastructure is limited. In particular, the deployment of WMAN would most probably provide a boost in the educational and human resource development. It can also be harnessed to provide cost effective voice communication to remote areas. Furthermore, it can provide mobile connectivity of voice, streaming video, and data using a single network.

With respect to WiFi, the NTRA has already set recommendations and guidelines for the establishment of public hotspots using WiFi (Hotspot Numbers from NTRA). Initiating a WiMAX field trial is one short term action that has been put on the broadband initiative’s roadmap, and pursued by MCIT as a preliminary step toward a more profound broadband wireless programme. The field trial has been taking place at the Smart Village and lasted for six months ended May 2005. The field trial connected five buildings within the Smart Village to the Internet using WiMAX and also connected by Internet with the MCIT offices 20km outside of central Cairo. The project serviced two other remote locations using the same technology. The scope of the trial is not only to test the technology with the applications running on top of it, but also to address the regulatory framework that is appropriate to the Egyptian market, as well as the viability of the business model so that commercial deployments of WiMAX can begin.

Telecom Egypt is currently expanding the use of WLL networks, as this presents a solution that eliminates time, effort and cost associated with the installation of copper cables to currently poorly served areas. During the first phase, the project covers nineteen governorates with 102,000 WLLs based on CDMA2000-1x. During phase two, the project is expected to extend coverage to twenty four governorates via 500,000 lines. Although the prime objective of this project is to deliver basic fixed telephone services to rural areas, there is a real opportunity to expand WLL services to urban districts as well as new residential neighbourhoods to provide voice and broadband data access. Telecom Egypt expects to have around 3 million CDMA lines in Egypt in the next four years. This seems to be pragmatic since the technology itself goes far beyond and utilises Inter Working Functions (IWF) to offer data and Internet service via fixed and mobile phones as well.

The opportunities in this area can be divided into two main categories. The first related to the application side, namely the deployment of wireless networks and the content it can carry, and the second related to the design and development of such systems, down to the hardware and software levels.

In its initial phase, the Centre would be started by two core teams, one concerned with the network deployment side, which also comprises the network management and content-related issues. The second is focused on research leading to the development of new and improved standards. The two core teams would reach out to the remainder of the stakeholders in order to form a consortium of those. It is expected that the stakeholders will be divided into three categories: those who make use of the applications resulting from such R&D; those who build and develop the applications; and those who participate in the research.

Examples of those who belong to the first category are the educational and training sector at large, as well as SMEs. ISPs as well as Telecom Egypt (TE) belong to the second category of those who can put the network together. The third category would be predominantly represented by faculty members of various universities and research institutions.

Mobile and e-Services
This research presents a knowledge services framework, founded on the Web Services Architecture, to enable the transparent exchange of knowledge between intelligent software systems. This is particularly pertinent to managing processes of organisations engaged in e-Business in a knowledge based economy. The objective is to enable informed and knowledge based discovery of business partners from among the multitude online, and to support knowledge rich e-Business processes that cut across the value chain and deliver the value. This would apply to PC access as well as to mobile phone access. Furthermore, services related to geographic positioning can be easily combined with the mobile access.

The success of mobile and e-Services is typically measured by how much efficiency they add to the various operations. Efficiency can be in terms of saving cost, time, manpower, or a combination thereof. Examples for that can be found in mobile banking, cab dispatch, and Global Positioning System (GPS) based solutions such as traffic monitoring. Of particular importance to Egypt is the sector of tourism, which can benefit significantly from offering such services to foreign visitors.

The Centre’s core team would consist mostly of system analysts and software programmers, in general, and embedded system developers, in particular, forming consortiums in a similar way to the above. Stakeholders would be divided into three categories: those who make use of the applications resulting from such R&D, those who build and develop the applications, and those who would participate in the research.

Examples of those who belong to the first category are banks, the transportation sector, and the tourism sector. Mobile service providers developing networks and offering new services belong to the second category. The third category would be predominantly represented by faculty members of various universities and research institutions.

Electronic Design
This Centre of Electronic Design is focused on the design of electronic components and related systems to facilitate the development of low cost equipment for commercial use. Some design services are outsourced abroad. The Centre is intended to participate in the development of Electronic Design Application (EDA) tools that can be sold or outsourced by some of the multinational EDA tool companies. The company Mentor Graphics has already demonstrated such success in Egypt, but the service is still not being provided widely, particular relating to ‘open source’ design tools that are becoming more readily available. Developed designs can be deployed in commercial electronic and electric equipment, and can be harnessed as well in other industries, such as the automotive industry. Typical components would be programmable devices, general purpose processors, digital signal processors, or towards application specific designs

The centre would be started by forming three core teams, one focused on tool development, the second team concerned with system and equipment design based on standard components, and the third would focus on application specific design. Application specific work would concentrate in areas of analogue and mixed signal design, which is in international demand from the increasing deployment of wireless technology.

Stakeholders would primarily consist of those who make use of the applications resulting from such research and development such as the Arab Organization of Industries who position themselves as local manufacturers of electronic as well as automotive industries. Also included would be those who build and develop the applications, such as EDA tool companies. Further stakeholders would include faculty members of various universities and research institutions.

Efforts of the Ministry of Scientific Research
The Ministry of Scientific Research (MSR) adopts an integrated strategy to develop its relevant sectors which include research centres and institutions, and the Academy for Scientific Research and Technology (ASRT). Over the past few years, the various State agencies have achieved a pioneering success in the efforts of transition into an Information Society. This was demonstrated by the dissemination of information to allow effective research, and an additional incentive to nurture projects that are beneficial to all levels of society, particularly in the field of medicine.

The Academy for Scientific Research and Technology (ASRT) ASRT has for many years been laying strong foundations to lead the scientific research sector towards the digital era, and built up databases aiming at gathering, certifying, and storing Egyptian intellectual production, and making it available for researchers and decision makers through ICT tools. To assist in any research project the Academy set up the Egyptian Bibliography for Natural Sciences Database, which contains numerous documentaries about medical sciences, agricultural sciences, engineering, and technology. Also developed was the Scientific Theses Database which is similar to the above but concerning itself mainly in the fields of science and technology.

National Information Network
ASRT first implemented the National Information Network to provide information services through scientific databases built with state of the art technologies. The Network develops the means of searching information through more than one hundred international databases in various scientific fields to make available research material. Some example areas of its activity are listed below
   - Collection and development of information about governorates in the Delta
     region and the New Valley.
   - Certification of theses in the universities.
   - Setting up and developing communications between the Energy Information
     Centre and the information and research centres working in the same field.
   - Designing a national information system for the policy, planning, and
     management of the activities of science and technology.
   - Holding the National Campaign for Promoting the Scientific and Technological
     Information.
   - The establishment of the rural development information system.
   - Extracting and certification of the scientific periodicals in the fields of science
     and technology.

Video Conference Services
The National Network for Scientific and Technological Information is generally providing videoconferencing system technology in Egypt, making alternative communication between research centres and institutes possible. The technology has been used successfully by medical consultations to monitor cancer patients from different governorates, advise remotely on medical procedures, and in a pioneering experience doctors are being connected visually at the national and international levels. The project was developed as a cooperation between the ASRT represented in the National Information Network, and the National Institute for Tumours at Cairo University.

Incubators

The government has decided to focus on supporting the start up of local companies in the field of CIT. An Incubator initiative is intending to provide support and a strengthening role to existing companies, as well as attracting multinational companies to invest in developmental activities in Egypt. It is hoped that this will increase the job opportunities in the CIT sector, enhance its competitiveness, increase the exports from that sector, and positively affect the economy at large.

There are a variety of ways to support the local CIT industry in Egypt as follows:
   - Increase the participation of the government in CIT projects.
   - Encourage growth in existing Egyptian companies currently engaged in CIT
     projects.
   - Attracting multinational companies to participate in this activity, given their
     ability to define the markets and the corresponding products on a global scale.
   - Support start up companies through the establishment of CIT Incubators.

In its initial phase, this project will be driven by a Public Private Partnership, in order to allow each to play the role it does best. Start up companies typically experience a tremendous growth rate, at least during their initial phase, and allow the generation of a large number of job opportunities. They are also characterised by relying on innovation and intellectual property, and thus can generate wealth in a relatively short time frame, and without huge investment requirements.

There are three main funding mechanisms that are currently considered for incubators. They are distinguished in terms of the size, risk, and investment requirements of their corresponding start up companies and are illustrated in Figure 5.2 below.

Figure 4.2: Proposed incubator funding mechanisms

The Developmental Fund would be fully supported by MCIT and/or NGOs. This will help small groups of young, talented individuals, who do not necessarily have a lot of experience in starting up companies. There is thus a relatively high risk in such projects, but in return they normally require relatively low investments. Successful start up companies under this type of funding would be eligible for the other two types of funding in a second round financing round.

Soft Loans are provided primarily by the Social Fund for Development (SFD). The SFD is providing assistance to small and traditional businesses in establishing and financing successful small franchises as well as introducing international franchisors to the Egyptian market. Start Ups applying to it should primarily take a lower risk. In other words, they should have a very clear business case, and ideally already an existing potential customer base. The objective is to develop local franchisers to export their products, and also provide technical, legal, and business support to SMEs. Business and technology Incubators were established to assist the small pioneer institutions in facing difficulties on starting business, and develop business skills and managerial efficiency.

SFD established a network of Egyptian Small Business Development Centres in 2000 to encourage and support SMEs with objectives in developing an appropriate database for SME development. The SFD established sector specific technology centres to support major industrial sectors, and coordinating with Egyptian and international programmes engaged in small business and technology development. Examples of successful assistance that SFD has provided to traditional industry in Egypt is that of the establishment of the Shoe and Leather Industry Centre, which serves the leather sector with relevant business related consultancy services.

In terms of Venture Capital there are already several funds available, some of them financing various sectors, and others focused on the CIT sector such as IT-Invest and the High Technology Development Fund which has resources of approximately LE 50 million. In this case, a very strong business plan is required, and a clear upside for the investors has to be presented.

The following areas have been already identified as prerequisites for a successful environment conducive to start up activities:
   - Education on entrepreneurship incorporated into university curricula.
   - Education on product development incorporated into university curricula.
   - Accounting and legal guidance
   - Local and international marketing support.
   - Yearly competition for best business plan.

The government has expressed an interest to finance and support these activities. The services provided by successful incubators are not limited to financing, but should cover various areas such as marketing, management, and the like, and are illustrated in Figure 4.3 below.

Figure 4.3: The Technology Incubator