AN APPROACH TO ENHANCE THE HIGH-TECH ENTREPRENEURIAL CULTURE IN EGYPT AND ITS IMPACT ON THE ECONOMIC GROWTH
Rania S. Abdel Halim
[1] Bachelor of Pharmaceutical Sciences, Faculty of Pharmacy, Misr International University.
[2] Master of business administration Researcher, Arab Academy for Science, Technology & Maritime Transport (AASTMT). Cairo.
1. ABSTRACT
The high-tech industry is one of the most up-and-coming areas of industrialization in countries seeking competence. Moreover, the high-tech modernization concept is the cornerstone of innovative entrepreneurship. Hence, the development of successful high-tech models may evolve a revolution in the entrepreneurial culture and local economy as well. The research considers imitating (863) Program of China for developing high-tech projects that may be a key to successful innovative entrepreneurship in developing countries especially Egypt. In addition, the results investigate the innovation Network Readiness Index of Egypt as well as its worldwide ranking. The main massive challenges that have been detected to imply technological programs are the lack of technological knowledge and lack of high-qualified human resources making it difficult for Egypt to start high-tech industrialization within the currently established infrastructure. The purpose of the approach is to determine the factors affecting the massive implication of high-tech projects in the SMEs programs if launched by the Egyptian government under the name of (vision 2030) leading to innovative entrepreneurship in Egypt. The authors have analyzed the program (863) adopted by china and will find perceptions for the success of high-tech enterprises in Egypt in addition to the transitional effect on economic development. The literature review reveals the lack of ideal project management practices together with the expert responsibility system applied in SMEs in Egypt. Hence, the data analyzed from the survey show that countries that use valuable metrics related to innovation in their high-tech projects have success levels higher than countries that lack effective systems and measurements. Thus, the critical knowledge areas for high-tech project success in developing countries as Egypt are project management integrated with risk and quality control, communication management, best information practices, and performance tracking measurements. The approach suggests focusing on these factors during raising high-tech entrepreneurship in developing countries because these factors have a severe impact on high-tech project success dimensions.
2. KEYWORDS
High-tech entrepreneurship, high-tech project success, high-tech projects in developing countries, high-tech impact on economic growth, program (863) China.
3. INTRODUCTION
Customer needs and wants are in a rapid dynamic change through the past decades in correspondence to the aggressive high-tech competitions. Technology and innovation have diversified market demands by introducing the most updated technological and innovative products and services (Rafinejad, 2007). High-tech applied sciences are converted into economic profits leading to local economic development (Van Roy and Nepelski, 2017). Technology adoption drives industrialization for the country as seen in Indonesia and other developing countries (Hal hill, 2006). Hall Hill also mentioned in his book that seeking high-tech industrialization is the turning point of economic development. High-tech projects may drive entrepreneurs to many horizons leading to further development, for example as seen nowadays corona (COVID-19) pandemic outbreak has revealed several technological inventions that include a human-sized nursing robot made for dealing with infected patients (www.see-news.net). For developing countries like Egypt, a transition process from a high-tech consumer to a high-tech producer is a challenging process. The main technical challenging factor is finding and training the human resources' skills as well as the main economic and political challenging factor is the transition process from "labor surplus" to "labor scarce" economies.
This approach is discussing the optimum conditions to promote the establishment of high-tech projects through entrepreneurs adopting innovative industrialization strategy in Egypt. Authors choose china as a model for a developing country that is undergoing a radical economic change over the last three decades by relying on technology. Since 1986 china has elevated high-tech research and development to another level calling it (863) Program with a total of eight fields and twenty subjects to be completed in the future (www.newyork.china-consulate.org).
4. RESEARCH STATEMENT
It had been witnessed the economic gap between countries establishing high-tech enterprises and countries that are not adopting this strategy. Thus industrialization of high technology and reforming traditional industries are focal points that should be studied and implemented. Hence, this research will handle the factors promoting high-tech industrialization in addition to concentrating and improving resources on strategic projects while endorsing the guiding principle of the 863 program of china which is "Combine military use with civil use, with stress on the latter". As a consequence, the national economy and social aspects will be developed decreasing the gap between Egypt and developed countries.
5. RESEARCH OBJECTIVES
1- Invest in research and development which is the cornerstone of the technological transformation.
- Review obstacles accompanied by developing countries during establishing high-tech ventures.
- Launching a developed program in priority fields in a scheduled timeline.
- Promote advanced science and technology implementation to reform traditional industries.
2- Establish the developed program as a vision for the upcoming century linking it with other governmental and non-governmental programs related to SMEs in Egypt resulting in an enhanced shifting of the economic and social aspects to another level.
3- Developing technical support for the established high-tech projects ensuring a smooth operation over the years.
6. RESEARCH QUESTIONS
a) What are the focal issues to establish high-tech governmental and non-governmental ventures in Egypt and how to encourage entrepreneurs to invest in technological projects?
b) What are the keys to success for government and private sector interventions altogether in such visions? And to which extent the high-tech industrialization vision can affect the economy and social standards in Egypt?
c) What are the levels of critical knowledge needed to run technological ventures in Egypt? And how to promote technical support in Egypt?
7. LITERATURE REVIEW
Egypt’s entrepreneurial environment is an area of interest where entrepreneurs find challenges and success. Statistics data in 2015 find that the total early-stage entrepreneurial activity rate in Egypt was 7.4% compared to a global average of 13.0% (www.gemconsortium.org), so Egypt is striving for encouraging entrepreneurship in the act of investing in industrialization bringing high innovative ventures to the Egyptian market. To promote and launch high-tech projects in Egypt, Egypt must revitalize the education and research systems (www.bibalex.gov.eg). Hence, Egypt must invest more in research and development as they are the cornerstone of establishing modernization of the industrial market.
Part of the objectives mentions the obstacles of high-tech startups and how to overcome them. Recent sciences have stated that emerging innovation to product development through establishing high-tech ventures cannot be effective without applying the project management approach (Pokharel, et al., 2006). Project managers in developing countries work differently from those of the industrialized countries and also face different affairs (Avots, 1972). The major complicated affairs in developing countries including Egypt are conducted with: issues assigned to the industry infrastructure; lack of information and data insufficiency along with continual adjustments in instructions and also the deterioration of meeting obligations for both clients and advisors; furthermore, problems introduced by their shortcomings (Ogunlana 1996).
Although Egypt is well resourced it has been known for several years as a developing country that depends on innovative affluent countries for technology. Ahmed Zewail, Farouk El-Baz, Samera Moussa, and an endless list of Egyptian scientists including both eras the past as well as the present times were abandoned to other countries thus, it is not a matter of caliber insufficiency but it is a matter of the absence of valuable human resources allocation.
Literature reveals the absence of valuable project management together with the expert responsibility system applied in SMEs in Egypt. Therefore, Egypt must simulate a successful innovative model that incorporates raising the high-tech concepts of entrepreneurship among entrepreneurs. Program 863 planned in china is worth to be studied well and imitated as this program has led to an astonishing economic shift in China with an uninterrupted annual economic growth rate of over 9% on average since the mid-1990s while reforming the traditional industrialization to technological modernization (Cao, 2006). Technological development has driven China to be the second-largest economy in the world in 2010 (www.hbr.org).
High tech priority fields in program 863 are listed as the following: advanced manufacturing and automation technology, advanced materials technology, IT, biotechnology, advanced agricultural technology, energy technology as well as resource and environment technology (www.newyork.china-consulate.org). Accordingly, the Egyptian government can gather the most efficient experts from various fields in a committee engaging their full role as technical decision-makers and start discussing launching priority projects that conduct R&D in various focal fields with 20 subjects or more with a scheduled timeline.
This approach scrutinizes the appropriate system that encourages high-tech entrepreneurship. Professor Daniel Isenberg outlined several “prescriptions” for the ecosystem formation in high-tech entrepreneurship. The first prescription was to stop imitate Silicon Valley the headquarter of innovation and technology where Apple, Google, Netflix …etc., are located. The second prescription was to build the ecosystem regarding the local conditions and reforming existing industries rather than starting from the beginning. The third prescription was engaging the private sector with the governmental sector with stressing on the last playing an indirect role as a facilitator only not a directing manager (www.weforum.org).
The major key factor leading to the success of high-tech projects in any market is the emerging of local enterprises with international enterprises resulting in “Expansion through Internationalization” that could be done by adopting either of the following strategies: International Strategy, Multi domestic Strategy, Global Strategy, Transnational Strategy (www.businessjargons.com).
Moreover, the Egyptian ministers should direct all the government sectors to set up effective broadly-focused policies and solve and any issues conducted with technological ventures. To reform high-tech industrialization in the Egyptian market such this approach should be adopted as a national vision in Egypt and should be conducted with the upcoming startups.
Small and medium enterprises that concentrate on innovation are the source of new job creation with more developed skills in addition to being the source of economic growth and social life modernization (www.cairn.info).
Human resources associated with technological entrepreneurship must have specialized skills linked to their ability in understanding sciences and implementing technological development that add value to the firm (www.timreview.ca). However, it is a must to invest in developing the technical support to ensure the establishment as well as the security of the newly performed high-tech projects by training a new array of highly talented young leaders with strategic thinking who are capable to manage and operate technological enterprises for the upcoming decades.
8. RESEARCH HYPOTHESES AND PROPOSITIONS
(CONCEPTUAL MODEL)
H1: if the project management concepts are professionally applied, then the high-tech small and medium enterprises will find their way to success.
H2: if the education system becomes well developed, then high-tech entrepreneurship will be increased.
H3: if the investment in the research and development department is increased, then the innovative high-tech entrepreneurship will be increased.
H4: if the new generations are guided towards the government vision, then high-tech entrepreneurship will be overwhelmed.
H5: if the strategic management sciences are enforced by experts, then high-tech entrepreneurship will be grown.
H6: if the industry infrastructure is improved, then the high-tech entrepreneurial advancement will be positively affected.
H7: if the information and data sufficiency are abundantly available, then high-tech entrepreneurship will be widely established.
H8: if the technical support is provided proficiently, then the high-tech entrepreneurship will be steady and secure.
H9: if the human resources’ skills are technologically developed, then the high-tech entrepreneurial culture will be escalated.
H10: if the venture internationalization is facilitated, then the high-tech entrepreneurship in developing countries will be upgraded to a higher level of innovation and exportation.
H11: if modern industrialization incorporates private sectors with the government as a facilitator only, then high-tech entrepreneurship will be successfully entrenched.
H12: if the financial situations of the country and the industry are stable, then the investment in high-tech entrepreneurship will be increased.
H13: if the country is politically stable, then high-tech entrepreneurship will be rooted and further developed.
P1: if the developing country has an efficient supply chain customized for technological industries, then the number of entrepreneurs financing high-tech firms will be raised accordingly.
9. RESEARCH DESIGN
9.1. RESEARCH METHODOLOGY
9.1.1. THE MODEL
This study uses program (863) of China to evaluate high-tech enterprises’ success levels in developing countries especially Egypt. The 863 program is valid and reliable for measuring the quality of this approach to enhance the high-tech entrepreneurial culture in Egypt and its dimensions of success. The government must appraise firms seeking high-tech industrialization as they reflect positively on the country as a competitor and to be the regional hub of innovation.
The principal step to initiate supporting innovation; the Egyptian government should analyze the Network Readiness Index structure of innovation in the established ICT firms.
NETWORK READINESS INDEX STRUCTURE
9.1.2. DATA GATHERING TECHNIQUES
The goal of the approach is to imitate the successful program of china. Accordingly, the best approach to ask experts in Egypt is through conducting interviews with them (Appendix 1). Series of interviews were conducted with the key players in the ICT center in Egypt under the topic of technology, innovation, and entrepreneurship strategy 2011-2014. The data collected from the interviews was based on evidence from the ground. Those interviews were complemented with a questionnaire sent to more than 30 ICT firms. The questionnaire was intended to quantify the prevailing level of technology and innovation in firms and what needs to be improved in Egypt. The objective was to identify the obstacles and constraints in firms directed to industrialization in addition to acknowledge the factors that trigger firms to Egypt (Appendix 2) (www.mcit.gov.eg)
9.1.3. SAMPLE SIZE AND SAMPLING TECHNIQUES
Sample Size
Interviews complemented with a questionnaire were sent to a sample size of more than 30 ICT firms.
Sampling Technique
The sampling technique is based on a convenient approach.
9.2. DATA ANALYSIS AND INTERPRETATION
The ability of organizations to innovate successfully is ranked by the Innovation Readiness Model (IRM). The survey indicated the following:
First of all, a high level of confidence in employees being encouraged to learn and experiment. Secondly, relatively few “hard” metrics (data and indicators) around innovation or intellectual property creation being used. Thirdly, a strong focus on collaboration as a business practice. Last but not least, low emphasis on using innovation as a way of “leapfrogging” the competition through new business models.
For the sake of deepening the analysis, the data collected from the survey are compared with results from a global database in previous research (www. innovationmanagement.se)
10. RESEARCH FINDINGS AND DISCUSSION
The data gathered from experts in the firms reveals that regarding Egypt’s strength in network readiness index (2009) ICT- related variables as government prioritization (variable: 6.01 – for which Egypt ranks 41st in the world), business internet use (variable: 8.04 –Egypt ranks 45th in the world) and laws relating to ICT (variable: 2.02 –Egypt ranks 48th in the world). On the other hand, some other strengths are more relevant to innovation so they are non-ICT specific strengths. These strengths cover venture capital availability (variable: 1.01 – for which Egypt ranks 34th in the world), state of cluster development (variable: 1.04 –Egypt ranks 41st in the world), and firm-level technology absorption (variable: 8.02 –Egypt ranks 48th in the world). Handling the massive area in which Egypt has challenges is “education”. Education in Egypt is the core of NRI weaknesses affecting its economic and social potential. Some ICT related weaknesses emerge from government success in ICT promotion (variable: 9.01 –Egypt ranks 121st in the world), high-tech exports (variable: 8.07 –Egypt ranks 121st in the world), personal computers (variable: 7.02 –Egypt ranks 89th in the world) and broadband internet subscribers (variable: 7.03 –Egypt ranks 88th in the world) (www.mcit.gov.eg). Thus, supporting the provision of entrepreneurial training by providing special programs on focus areas for undergraduate, postgraduate, and non-degree executive training is necessary. Egypt’s NRI performance (70th) is comparable with countries of higher income levels such as turkey (69th), Indonesia (67th), or even Poland (65th), and Brazil (61st). Based on the latest global innovation index rankings it is not fundamental to be a large economy for being an innovating one. In the Global Innovation Index report in 2009, Egypt ranks 74th out of 132 countries separated as the following: on the innovation input index including “institutions, human capacity, ICT and the uptake of infrastructure, market sophistication and business sophistication) Egypt’s rank was 84th. Moreover, on the innovation output index including “scientific outputs in addition to creative output and wellbeing” Egypt’s rank was 68th (www.itu.int).
11. CONCLUSION, RECOMMENDATIONS AND FUTURE WORK
The research succeeded in answering the questions asked to show the approach objectives, 1) the issues accompanied by “high-tech SMEs” to be supported by the hypotheses that handle the critical areas for high-tech project success in developing countries as Egypt which are education, R&D, project management, strategic management, generation guidance, industry infrastructure, information, and data sufficiency, technical support, human capital, venture internationalization, financial stability, political stability and government support acting as a facilitator only to encourage innovative entrepreneurs to invest in innovative enterprises. 2) Moreover, the approach reveals a significant positive relationship between innovation and high-tech entrepreneurship with the local economy as a consequence of establishing a scheduled high-tech program in many fields by the government to proceed in the upcoming century. 3) launching training programs for undergraduates, postgraduates, and non-certified technicians to develop and maintain technical support for high-tech projects.
Results show that however, Egypt is a developing country but its readiness for innovation is comparable to many high-income countries giving a positive push towards industrialization in addition to the proposition of the valuable supply chain which in turn massively affect high-tech projects leading to innovation in products and quality competence as the survey had revealed.
The results of the approach help to conclude that developing countries lag behind developed countries in the high-tech entrepreneurial culture. Therefore, a theoretical recommendation for such countries with lower NRI ranks is to investigate the experience of developed countries to guarantee success in high-tech entrepreneurship using modern software tools, risk, and quality management technics (www. citeseerx.ist.psu.edu).
The limitation is that research focuses only on findings related to the year 2009. Unfortunately, there is a massive lack of updated data based on recent surveys. Hence, future research work can be done based on up to date progress, surveys as well as supported data.
APPENDIX
Appendix 1
Appendix 2
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Assistant Professor of Microbiology and Immunology, Faculty of Pharmacy, Al-Azhar University, Cairo
3 年Excellent work ?? Go on, wish you best of luck