Despite tough economic conditions, Egypt is continuing to strengthen its position not only as one of the world's leading outsourcing destinations but also as a successful business location.
Reports published recently by the World Economic Forum and the World Bank reveal that Egypt is becoming an increasingly competitive and growing economy. It is also proving easier for local and multinational companies to set up business operations in the country.
The recent reports seem to be consistent with the positive developments witnessed by the Egyptian economy especially in the ICT sector where multi-nationals like IBM, CISCO, Google, and HSBC have opted to use the wide array of competitive advantages offered by the country.
In the ‘IFC-World Bank Doing Business’ 2010 report, Egypt has risen sharply from 116th to 106th in the ranking on the ease of doing business, driven by regulatory reforms that have made it easier to start and operate a business in the country.
The report highlights that governments in the Middle East and Africa are reforming at a rate similar to those in Eastern Europe and Central Asia, and Egypt was highlighted as one of the region's most active reformers. In the past year, Egypt's reforms have made it easier to start a business, deal with construction permits, secure credit and enforce contracts.
One of Egypt's biggest growth areas is the communications and information technology sector, which grew by 14.6% in the fiscal year to June 2009. Reductions in piracy levels, the introduction of an e-signature law and anti-corruption initiatives have seen Egypt establish itself as one of the world's leading outsourcing destinations.
The Information Technology Industry Development Agency (ITIDA) is a governmental entity affiliated to Egypt's Ministry of Communications and Information Technology. It is responsible for growing and developing Egypt's position as a leading global outsourcing location by attracting foreign direct investment to the industry and maximising the exports of IT services and applications.
Located in the heart of the modern business environment at Smart Village, the six hundred acre business park on the outskirts of Cairo, ITIDA is a self sustainable entity that drives the IT industry in Egypt and raises awareness among the Egyptian people of the benefits and uses of ICT to advance the socio-economic welfare of the whole community.
In June 2009, Egypt launched the country’s first centre dedicated to promoting entrepreneurship and supporting small and medium enterprises (SMEs).
Enterprise Egypt, or Bedayah as it will be known in Arabic (which literally means ‘start’), has the support of Egypt’s Social Development Fund (SDF), the Arab Gulf Program for United Nations Development (AGFUND) and the United Nations Industrial Development Organization (UNIDO).
Bedayah will be built as a one-stop shop, a single office where investors can access all the services needed to set up a new business. Several branches of Enterprise Egypt will be open on the campuses of universities across Egypt, and it will work with other local institutions to provide entrepreneurs with training, information about investment opportunities and access to finance.
It will contain three units — Central BDS Unit, Incubation Unit and Access to Finance Unit — which will each be tasked with different activities. The centre will also provide legal consultancy services to entrepreneurs in the process of establishing their small businesses. It will shift the emphasis from enterprises to entrepreneurs, and transform youth from job seekers to job makers.
The ultimate goal is to increase SME contributions to Egypt’s GDP, from the current 25% to 40% in 2015 and, eventually, 50% in 2025, according to GAFI figures. The SME sector in Egypt is expected to employ around 12 million people by 2015, or 42% of the country’s total labour force, which is expected to reach 28.6 million at this time.
Enterprise Egypt will operate on the premise that investment is the main driver for job creation, taking a different approach from the piecemeal and inadequate programmes targeting SMEs in order to create a solid career path, especially for young people.
The pilot project of Bedayah in the Arab world was established in Bahrain in 2001, and the office has since generated hundreds of success stories. “Since its establishment in Bahrain, 10,000 jobs have been created, 900 entrepreneurs benefited from [its services] and 300 enterprises were established,” said Dan Liang, China’s representative and head of investment promotion and technology at UNIDO.
Other countries have adopted this model, such as Jordan, Kuwait, Tunisia, Yemen, Sudan, and now have similar offices.
Source: The Daily News
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