Egypt's Journey to Becoming a Global Technological Hub

Across the globe, countries are engaged in fierce competition, striving to position themselves as highly appealing destinations for the technology sector. While some nations are achieving this by offering abundant job opportunities, others are investing in infrastructure to entice private enterprises. Egypt, however, stands out by adopting a distinctive approach, integrating both of these approaches while nurturing a culture of innovation.

This multifaceted strategy serves as a pivotal component within the broader mission of the IT Industry Development Agency (ITIDA) to enhance the reliability and efficiency of business operations. At the core of this endeavor lies ITIDA's unwavering commitment to fostering innovation, operational excellence, skill and talent development, and its profound societal impact. Consequently, Egypt has emerged as an enticing hub for foreign investments in Information Technology Services (ITS), Business Process Outsourcing (BPO), and Engineering Research & Development (ER&D). Moreover, it has proven to be fertile ground for the flourishing of innovative startups.

Innovation Infrastructure

This has been made possible by a series of carefully thought-out policies and has helped to establish and foster a spirit of innovation in the country’s IT tech sector. It is little wonder, therefore, that Egypt is rated as a top 10 country for C&B costs, according to Reuters. Egypt is an extremely affordable destination for the tech sector, with Cairo landing in the top 10 affordable cities worldwide in terms of rent + cost of living index. In fact, the OPEX per FTE incentive in 2022 was in the range of USD403 to USD1,292 per new hire.?

This has spurred real growth within the ITS and BPO sectors currently accounting for 5% of the country’s GDP with the aim of raising it to 8% over the coming three years. In 2021/2022 digital exports grew from US$4.1 billion in 2019/2020 to US$4.9 billion. Further boosting this trend is the Egyptian government's latest strategy, in cooperation with Ernst & Young, to triple the size of BPO and ITO exports over the next five years.?

It has also helped to create an environment of creativity and innovation in Egypt with the country now having the fastest growing start-up ecosystem in the MENA region thanks to a significant investment in technology innovation. It is unsurprising then that global and local investor support for Egypt-based start-ups almost doubled between 2020 and 2021 with more than 50% being international investors.?

This proactive approach is quickly enabling Egypt to become the go-to destination for Information Technology (ITS),? Business Process Outsourcing (BPO) services, and Engineering Research & Development (ER&D).

Continuous Infrastructure Investment

According to the Destinations Egypt 2.0 Outsourcing Destination Guide from the German Outsourcing Association, Egypt has been committed to developing the local physical infrastructure required to provide better utilities and telecommunications connectivity to offshoring companies.?

The current focus of this work has been to complete the fiber optics rollout and position the country as a ‘Digital Canal’. The 2 Billion USD investment in infrastructure has seen the quality of internet connectivity significantly improve through the use of scalable international submarine cables in combination with Egypt’s location at the center of the worldwide cables network.

This in turn allows Egypt to provide offshore cloud services with the lowest latencies and highest speeds to Europe, Africa, and the Middle East.

Technology Parks

During this process, the Egyptian government has also been building a series of technology parks dotted around the country to encourage multinational companies to establish local operations with best-in-class technologies and facilities. These include Maadi Technology Park in Cairo, and Smart Village on the 6th of October City. Silicon WAHA features four tech parks in Beni Suef, Sadat, Borg Al Arab and Assiut, and more along with plans for several more. By spotting the trend to inter-dependencies between mobile computing, social media, cloud computing, information and analytics, and the Internet of Things (IoT), Egypt took a multi-faceted approach to fast-track its existing ITS and BPO onto the digital transformation path.

Knowledge City

Egypt’s new administrative capital east of Cairo is a smart city project on a huge scale and will involve all the new city’s facilities being managed using technology. As such, huge investments are being poured into Artificial Intelligence, IoT, and big data analytics to create a solid pool of resources in these technologies. The administrative capital will also be home to “Knowledge City” which will be home to various branches of foreign universities and research, innovation and entrepreneurship centers along with a science park. ITIDA has been working closely to support this project and is actively developing ICT capabilities both in the new city and across the country.

MCIT and the Technology Innovation & Entrepreneurship Center ( TIEC ) are providing extensive support for innovation and to incubate businesses through a number of programs, while offering co-working space to technopreneurs, investors, and tech start-ups. All of this is being done with the aim of helping Egypt’s youth to build successful enterprises based on new and emerging technologies.?

Egypt is one of the fastest-growing offshore destinations in the world. Indeed, over time, Egypt’s IT and BPO offshore industry has gradually gained a share in global markets. By continuing to emphasize innovation and the further development of infrastructure – both digital and physical – Egypt has laid the foundations to quickly scale up and realize its potential to become a vital global technological hub.?