Egypt's Bid for Global Technology Relevance

Posted by: Steve Hamm on July 02

Practically any developing nation with more than an iota of applicable resources and economic ambition wants to put itself on the global IT map. After all, India showed what the combination of talented young people, Internet access, and reasonable broadband data communications tariffs can do for a country’s self esteem and GDP growth. Egypt, it turns out, is making a particularly aggressive play for attention. I met recently with Tarek Kamel, Egypt’s minister of Communications and Information Technology. He gave me an earful about Egypt’s plans and ambitions. And this isn’t just talk. The country is starting to get traction—and has put a foundation in place that could lead to some pretty significant progress a few years down the road. Egypt’s ambition is nothing less than to be the IT hub for Saharan Africa and the Middle East.

Egypt dipped its toes in the IT waters starting in 1999 by creating a ministry of information technology. The first minister was Ahmed Nazif, who is now the prime minister. Kamel was his top aide in the early years and took over as minister in 2004. The country established a technology park, called Smart Village, which now employs 20,000 people directly in IT jobs and another 20,000 indirectly. While Egypt's economy is expected to grow about 4 1/2 percent in the fiscal year just now ending, the tech economy will grow by 15 percent. It now represents about 4 percent of Egypt's GDP. "The tech sector is becoming one of the drivers of economic growth in Egypt," Kamel told me.

Egypt offers a package of incentives and guaranteed government sales for tech companies that set up operations there. It has attracted the likes of IBM, Oracle, Microsoft, Wipro, TCS, and Infosys. These companies aren't dummies. The incentives may be attractive, but they wouldn't operate in Egypt unless they knew they could get the talented people they need to do programming, call center, and back office work.

Kamel and his colleagues are crafting or helping to craft some pretty innovative deals. The government recently agreed to invest $10 million in running a advertising campaign on Google to promote Egyptian products and services--with the agreement that Google will reinvest 25 percent of the money back into the local economy. Cisco is opening a customer support center in Cairo with a local partner, and in addition is launching a new venture with Mobinil, the country's largest mobile carrier, to provide 16 million subscribers with advanced services. Kamel is developing centers of excellence in specific technologies with the likes of IBM and Microsoft--and is searching for more partners. The lure for foreign companies is not just the Egypt but the entire market of 350 million Arabic speaking people in the world. "At the end of the day, we don't want aid. We want partnerships," he said.

What became clear to me as we spoke is that this isn't just an offshoring play. Kamel & Co. aim to take IT deep into Egyptian society. It's a tall order. With 80 million people and right financial resources, there's plenty of work to do in educating the population and making technology accessible to the masses.

But they have a vision. They're putting lots of creativity into it. And that's a very good way to start.

TrackBack URL for this entry: http://blogs.businessweek.com/mt/mt-tb.cgi/